Government must improve services management to unlock savings

8 May 2008
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09 May 2008 | Jake Kanter

The government needs to know more about the performance and cost of its back-office functions if it is to encourage joint working and make savings.

A report by MPs on the Public Accounts Committee (PAC) said the government lacks accurate information on what corporate services, such as IT, HR and procurement, cost to run and how well they work. It said poor management is undermining the move towards greater sharing of services between government departments and the potential savings it could unlock.

The Cabinet Office believes £1.4 billion can be saved every year if the smaller government departments share services with that of the larger ones, but the PAC report said it does not have a timeline for realising the reductions. In addition, many departments don't have baselines for costs or performance, which makes it difficult to assess progress.

Edward Leigh, chairman of the PAC, said the £1.4 billion savings target was "flimsy at best" and the government needs a firmer grip on services spend.

The PAC urged the Cabinet Office to develop standard definitions for what constitutes a "corporate service" and outline how their costs and activities should be reported. It also said public bodies should receive clear and regular information on prices and performance of services.


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