it services

Government seeks partner for £2bn shared services centre deal

Kathleen Hall

The UK government is seeking a private sector partner to deliver its second shared services centre in a deal estimated to be worth £2bn.

The five-year joint venture is due to go live next year and is the second of two independent shared service centres under the Cabinet Office’s strategic plan for next-generation shared services, which aims to save £600m per year.

The first shared services centre will operate under an outsourced model, in a 10-year deal with Arvato. The Department for Transport will ditch its existing SAP platform as part of this plan.

A Cabinet Office spokesman said the joint venture model would give government greater power in the second shared services centre as a minority partner. Plans for the IT architecture will be made once a partner had been chosen, he added.

Previous attempts to create shared services in government have not succeeded, with the National Audit Office having reported that the last government’s £1.4bn shared services centres failed to achieve value for money.

But Stephen Kelly, government chief operating officer, said: “Lessons have been learned from previous attempts to consolidate back-office functions, and we’ve listened carefully to outside scrutiny.”

The Department for Work and Pensions (DWP) will be the biggest department in the second shared services centre, which will deliver payroll, human resources (HR), finance and procurement services to DWP’s existing customers.

Further government departments expected to join include the Department for Environment, Food and Rural Affairs, the Department for Education, the Cabinet Office, the Environmental Agency, and the Department for Business Innovation and Skills.

However, the Ministry of Defence, Ministry of Justice and HM Revenue & Customs will retain standalone shared services centres, as they are deemed to have sufficiently large critical mass.

 


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