Efficiency and reform in government corporate functions through shared service centres: cross government
The Stationery Office, Mar 7, 2012 - Business & Economics - 53 pages
In 2004, the Gershon Review recommended that the Government pursue the sharing of services, including human resources, finance, procurement and payroll, to achieve cost savings. It has been up to individual departments to establish their own arrangements and, between 2004 and 2011, eight major shared service centres emerged. The five centres examined by the NAO were expected to cost £0.9 billion to build and operate but, to date, they have cost £1.4 billion. They were also expected to have saved £159 million by the end of 2010-11. While, in one instance Government has achieved break-even in a time consistent with the private sector, its overall performance has been varied and the two centres that are still tracking benefits report a measured net cost of £255 million. Most departmental customers have not acted as 'intelligent customers' and they will need to build in-house capability with enough business and technical understanding to manage the services and work with the centres to achieve efficiencies. Among other findings are that the software systems used in the centres have added complexity and cost; and that, as the use of the centres has been voluntary, departments have struggled to roll-out shared services fully across all their business units and arm's length bodies. The Cabinet Office has recently gained approval for a new strategy and business case. The NAO considers the approach is ambitious and has challenging timescales. The Cabinet Office is actively working with departments on its implementation.
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1.4 billion Actual set-up cost agencies analysis and-or assess back-Office services benchmarks best practice break-even Budget set-up cost Business Model business processes Cabinet Office Centre staff FTP Civil Service Steering Comptroller and Auditor core back-Office functions corporate functions corporate services cost per customer Councils UK Centre customer FTP customer to Centre customer users deliver core Department for Environment Department for Transport Dft Centre efficiencies ensure Enterprise Resource Planning ERP systems Figure Finance five Centres Food and Rural Framework Gershon Review government shared services HM Treasury HMRC Home Office human resources implementing shared services intelligent customer investment Ministry of Justice National Audit Office Number of Centre Number of staff Operating cost operational performance Oracle v12 organisation payroll and procurement private sector Research Councils UK Resource Planning System running costs savings Service Steering Board shared service centres shared services strategy standardised strategic vision target operating model value for money