Government predictions that Whitehall organisations could save £1.4bn annually through sharing corporate services, such as human resources and finance, are “flimsy”, MPs have warned.
A report by the Public Accounts Committee said the government lacked accurate information on what corporate services cost and how they performed. There were no centrally agreed benchmarks against which to measure performance, and the Cabinet Office did not have a timetable for achieving this level of saving, the report said.
Committee chairman Edward Leigh said: “This is not just a point about poor management information and a lack of grip on detail undermining the move towards greater sharing of services. Whether or not public bodies move to shared services, they must know whether they are receiving value for money from their corporate functions. Without that knowledge, there can be no driving out waste and freeing up money to improve services to citizens.”
Shared services are designed to improve efficiency and service by combining transactional activities across different parts of an organisation, or across separate organisations. The report said departments also needed to manage the risk of damage to staff morale, for example, where changes in the work lead to reduced customer contact.
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The shared services team based within the Cabinet Office also came in for criticism. Officials were unable to explain how it had spent its budget and the National Audit Office was called in to review spending.
The Public and Commercial Services Union (PCS) echoed the committee’s concerns. General secretary Mark Serwotka said: “Our experience of shared services is that the emphasis is on cutting costs and not improving quality, which in turn affects the smooth running of organisations such as the Prison Service.”
