The government last week failed to substantiate to
aPublic Accounts Committee(PAC)
hearing claims that it will save £1.4bn on finance and HR by having
departments share data processing services.
A National Audit
Office (NAO) report published in November said the figure
lacked a clear baseline of existing costs, which would have allowed
it to better estimate potential savings. "The Cabinet Office found
it impossible to obtain such a baseline figure," the NAO said.
Alexis Cleveland, the Cabinet Office's director general for
transformational government, told the PAC hearing that the original
data came from a survey that showed some government departments
could save 20% of their finance and staff costs if they shared IT
services such as electronic invoice payments and HR services.
"We took the available information and grossed it up," Cleveland
said. However, she could not provide the calculations used to
estimate the potential savings.
The government said it currently spends about £7bn a year on
finance and staff costs.
The NAO report said, "Many departments cited outdated systems, a
lack of transparent information and clouded organisational
definitions as reasons why they could not analyse current
costs."
The Cabinet Office has agreed to look for the background
material that underpins the cost estimates. However, as the NAO
noted, this will not give it an accurate baseline figure with which
to measure savings.
The government has implemented two shared services operations,
one in the
National Health Service and one in HM Prison Service, since
2005 and 2006 respectively. The Cabinet Office is expected to start
buying some services from the Department for Work and Pensions
soon.
Since it was set up in July 2005, the Cabinet Office's shared
services team has cost £4m, and has the equivalent of four
full-time staff.