DfT to spend £750m on move to shared services

The Department for Transport (DfT) is to spend up to £750m in a shared services move.

The Department for Transport (DfT) is to spend up to £750m in a shared services move.

The contract will last up to 10 years to allow time for a shared services centre to be established in the private sector to provide shared services to central UK government, said the tender notice. It will cover the central Department for Transport, along with four agencies: the Driving Standards Agency, the Driver and Vehicle Licensing Agency, the Vehicle Certification Agency, and the Highways Agency.

The tender follows a previous move by the department to create a shared services centre in 2005, which was subsequently slammed by a Public Accounts Committee (PAC) as showing "stupendous incompetence". At the time, officials did not hold a competitive tender, did not specify the project's requirements clearly, managed suppliers poorly, and did not leave enough time for testing, said the PAC in December 2008.

Jessica Hawkins, public sector analyst at Ovum, said the framework's size is likely to reflect the ambitious scope of the project, with a possible view to extending it beyond the DfT and its four executive agencies.

But Hawkins said there is a misconception that shared services as a means to save money will deliver in a short timeframe. "To implement properly so as to realise cost efficiencies there has to be some degree of upfront investment. Agency processes and systems were never designed to be multi-tenant so there is often a struggle to support multiple agencies without needing customisation, which adds to costs and complexity," she said.

Success can usually be found through bringing together agencies with similar profiles, added Hawkins.

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