The government has insisted it is on track with its shared-services programme following criticism that progress so far has been patchy and delivered few real savings.
Last week, a report by the CBI said needless duplication of administrative functions – including HR – in the public sector was costing taxpayers millions of pounds a year, and damaging the effectiveness of service delivery.
The business lobby group said central government departments alone could save as much as £560m over the next two years if they implemented ‘best in class’ HR and finance shared services.
Sir Digby Jones, CBI director-general, said: “There has been a lot of talk about shared services, but not much action. The government should press forward with this agenda, which its own Gershon [efficiency] report set out.
”But the Cabinet Office, the department co-ordinating the government’s shared-services drive, denied it had got off to a stuttering start.
Andrew Budge, from the Cabinet Office’s shared-services team, insisted there were several examples of public sector bodies running successful HR shared-services projects, including the Ministry of Defence and Transport for London, and that progress was being made.
“There is a lot of energy and enthusiasm within Whitehall about the concept of shared services. The government has sought to learn the lessons from elsewhere and be more focused on what will work and what won’t,” he said.
The CBI also called for Whitehall departments, local authorities and other public bodies to collaborate more effectively. Budge said this was happening. He said every branch of the public sector had been told to draft a plan for projects, including sharing customer service centres and back-office function, by November.
Budge said the government also recognised the need to engage with business to maintain progress. “The government can’t make the shift towards shared services without input from the private sector,” he said.
He acknowledged that certain cultural barriers existed within the Civil Service and that these could slow implementation of future projects. “Some managers are actually paid according to the number of staff who work for them,” he said. “So addressing this type of issue is very important, and we are engaging with senior managers to effectively implement the shared-services agenda.”
John Roberston, head of public sector consulting at IT services consultancy LogicaCMG, said engaging with this “pivotal” level of management was vital to the future success of shared-service initiatives. “There is so much change going on in government that we are not really seeing that at the moment,” he said. Part of the problem, he added, was that the potential savings available from sharing back-office functions were not that significant as a percentage of the overall budgets of big government departments.
He called for greater recognition that Whitehall’s “legacy” systems – those that have always been there, including HR – were nothing more than “corporate cholesterol” that clogged up organisations and prevented them transforming.Robertson said next year’s comprehensive spending review would be a much bigger driver for shared-services as pressure to cut costs and boost efficiency intensified.
Local government set to hit efficiency target
Local government in England is on course to meet its £3bn efficiency target a year ahead of schedule, new figures from the Department for Communities and Local Government suggest.
Local authorities are expecting to deliver a further £1.3bn worth of efficiency gains in 2006-07, according to councils’ annual forward looking efficiency statements.
These expected savings compare with £760m in 2004-05 and £1.1bn in 2005-06. If the reported gains are delivered, local government will be well on its way to meeting its overall £3bn target set by the Gershon Efficiency Review in summer 2004. The figures exclude efficiency gains for schools, police and fire authorities.