The government is unlikely to be able to justify its
claim of saving £1.4bn from £7bn costs through sharing
data-processing services for financial and staff applications
between government departments, MPs warned today.
The
Public
Accounts Committee found the government "lacks reliable
information on the cost of corporate services". Furthermore, it was
unclear how it would achieve the savings as it lacked a time-scale
for the project and comparative costs for alternative
solutions.
In today's report, Improving Corporate Functions Using Shared
Services, the parliamentary watchdog said, "The
Cabinet Office
[which is running the shared services project] does not have
sufficient grip on the cost of its activities to promote shared
services."
It said the Cabinet Office's Shared Services project team "was
unable to explain how the team has spent its budget for 2005-06 and
2006-07", a sum of some £3m, of which £1m had been allocated
incorrectly.
The PAC also looked in detail at shared services projects run by
the NHS and the Prison Service. It found that two-thirds of the 416
potentially eligible NHS bodies would have to use
NHS Shared Business Services,
jointly owned by the NHS and Xansa, if it was to save £250m by
2014-15. Just over one in five does now, it said.
It also found that the NHS matched fewer than one in three
invoices it paid against purchase orders. This increased the risk
of wrong or unjustified payments, it said.
Regarding savings on staff costs at the Prison Service, the PAC
found "inconclusive evidence" to support claims. "The Prison
Service needs to have better information to track reductions in
staff costs, which should be validated by internal audit or other
assurance arrangements," it said.
The PAC said economies of scale were possible provided the
government's two designated sellers of shared services, HM Revenue
& Customs and the Department for Work and Pensions, developed
the capacity to provide shared services and to market them to
smaller public sector bodies.
A Cabinet Office spokesman said, "Over half of all central
government employees now benefit from shared corporate services,
releasing people and resources to focus on delivering top-quality
public services. We welcome the PAC's report, which raises some
important points that will help us continue to improve our work in
this area."