The Cabinet Office is working with Steria to create a joint venture that will consolidate government back-office functions, in a deal worth up to £1bn.
Steria will take a 75% share and the government 25%. A total of 1200 staff in government departments have transferred to the new organisation as of today (1 November).
Shared Services Connected Ltd (SSCL), as the joint venture is known, will provide shared procurement, finance and HR services to government customers including Department for Work and Pensions (DWP), Defra, and the Environment Agency. This could extend to other public and private sector organisations in the future.
The 10-year deal is part of the government’s Next Generation Shared Services (NGSS) programme. Through NGSS the government aims to save £600m per year in a plan the Cabinet Office has described as "ambitious but not without risks".
Under the plan, Whitehall will create two shared services centres, one of which will be provided through the divestment of the Department for Transport (DfT) Shared Service Centre (SSC) to an outsourced provider, with the other provided through the DWP centre.
Steria will work with the government to consolidate existing service centres for DWP, Defra, and the Environment Agency. The joint venture will deliver a new ICT platform.
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“Shared Services Connected Ltd will be a UK tax-paying business that will contribute to growth and job creation in this country,” said Steria in a statement.
“SSCL will invest in technologies and skills to create UK centres of excellence which will not only improve levels of service, but will stimulate innovation, create high-value jobs and develop skills in the UK.”
Francis Maude, minister for the Cabinet Office, said: “A key part of the Civil Service Reform plan is making government more unified, and enabling civil servants to focus on delivering exceptional public services. It makes sense for government departments, agencies and public bodies to share services and pool expertise.”
Steria already runs a joint venture with the Department of Health, known as NHS SBS (shared business service) which uses an Oracle platform and a single set of processes to run the back offices of NHS trusts. This is often cited as a great example of a successful shared services which has been able to reinvest money into the NHS. It promises trusts up to 30% cost savings and has even paid millions of pounds back to the NHS.
When Steria was named as preferred bidder for the shared services role in September it was met with “grave concerns” from the union representing staff. The Public and Commercial Services Union (PCS) union has expressed concerns that data – such as HR and procurement information – and jobs could end up in offshore locations.