a recent National Audit Office (NAO) report on shared back-office services in central government departments found that these systems were not delivering enough value for money. It found that, while £1.4 billion has been spent since 2003/04 on delivering back office functions such as HR, finance, procurement and payroll across five data centres (there are eight in total), only £159 million of savings were achieved by these centres by the end of 2010/11. Only one centre broke even within five years.A report from the National Audit Office shows that shared back-office services may not be delivering all the benefits that they should. If an enterprise resource planning (ERP) system were a car, it would require several pairs of hands to turn the wheel, would head where it wants, and consume more petrol than a fuel-injected Lamborghini. This may be an exaggeration, but
[pullquote]It is our judgement that many of the benefits generated could have been achieved by other means or with lower investment." – National Audit Office report[/pullquote]The drive to share HR and other back office services began after the 2004 Gershon review recommended the policy. The Cabinet Office encouraged individual departments to establish their own arrangements, but, in July 2011, it issued a new vision for shared services based on two core cross-government shared service centres, plus a small number of standalone centres. The five data centres assessed by the NAO were the Departments for Work and Pensions (DWP), Transport (DfT), and Environment and Food and Rural Affairs, plus the Ministry of Justice and Research Councils UK. The spending from 2003/04 to 2010/11 included:
- £1.9 million on building and operating the five centres.
- £648 million on set-up costs.
- £200 million plus each to build the DfT and Research Councils data centres.
- £63.2 million to run the DWP data centre in 2010/11.