Government Shared Services: tunnel vision or myopia: did authors read evidence to PASC enquiry?

The day after the PASC report “Government IT: a recipe for rip-off”  we have the release of the strategic vision for Government shared Services . The good news is that it is very short so there is no excuse for not reading it.

The bad news is the mix of tunnel vision, inconsistancy and myopia in the “lessons learned” to date and the consequent two part strategy. There is a need for robust input to the Cabinet Office ERG team looking at plans to migrate to the future “model” lest this grow into another “rip-off”.

Lessons 1 and 5) simplify to a contradiction. independence is an important incentive but efficiency gains are proportionate to the level of mandation. If you have to “compel” then it is probable that the incentives are wrong, or the policy is wrong, or both.

Lesson 2) Delivery of shared services is no more a core Government skill than the delivery of anything else, but Government has greater potential for economies of scale than anyone in the private sector. Most of the savings form shared services relate to HR and Payroll. The private sector has outsourced these because of the complexity of government imposed tax and employment legislation. The savings from a holistic approach to simplification and standardisation in co-operation with a panel of major private sector employers (not consultants) would be worth a tax cut of tens of billions in helping stimulate UK economic recovery – as well as cutting tens, perhaps hundreds, of millions from HMG spend.

Lesson 3) Charging structures are indeed one of the main excuses for not sharing services across departments – but that is because of the lack of incentives for finding efficient and equitable solutions compared to those for resisting change. The answer is to change the blance by providing more interesting, secure and/or better paid futures for all who help.

Lesson 4) Shared services do indeed comprise a range of standardised components – and the way to bring this about is to focus on inter-operability standards so that the components currently available can be brought together in solutions that evolve over time.

There is also a need to look at the lessons from local government and  the private sector with regard to those “sharing” exercises which led to improved service at lower cost and those which did not. There is also the experience of major private sector players like IBM, which came back from near death by spinning out, rather than outsourcing, functions that were not core to its business. The motivational effects of such a policy are very different. So too is the subsequent quality of service.  


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