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NAO calls for clarity over shared services savings

Charlotte Jee Published 01 April 2014

Report says Cabinet Office needs to work with other departments to make the most of shared services programme


The Cabinet Office's Next Generation Shared Services programme is 'broadly on track', according to a report by the National Audit Office (NAO).

The plan, launched in December 2012 and led by the Cabinet Office, is for Whitehall departments to save money by sharing back-office administration functions such as finance, human resources and procurement services.

The government has launched two of the five shared service centres it is due to set up.

The first centre was created from the existing Swansea-based Department for Transport (DfT) shared service centre and is run by Arvato, with the second run by Steria, incorporating the current shared service centres of the Department for Work and Pensions, the Department for Environment, Food and Rural Affairs and the Department for Business, Innovation and Skills.

However, the Cabinet Office needs to work with departments to help them become 'intelligent customers' of shared services to ensure Whitehall gets the most value from the initiative, the NAO says.

The spending watchdog estimates that the implementation cost was between £44m and £95m, of which the Cabinet Office contributed £9.8m, though full implementation of the plan is expected to save £128m every year. The report says departments will need to be clear in their reporting of savings achieved through the initiative, as well as the savings that would have been achieved by reduced activity as a result of spending cuts.

The NAO recommends that the Cabinet Office works to make sure departments sign up to the standard operating model and do not implement unnecessary variations to service. It also says that the Cabinet Office needs to make sure it has access to robust, timely and comparable management information on the project, to monitor it and show that it has achieved value for money.

However, the report cautions that 'previous NAO studies have found that the government, as a whole, had not been able to demonstrate value for money from these initiatives' and says that the Cabinet Office has only implemented two of the seven recommendations made by the Public Accounts Committee in 2012.

In response to the report, a Cabinet Office spokesperson said, "We are reforming Whitehall as part of our long-term economic plan to save taxpayers' money and ensure the country lives within its means.

"The National Audit Office says that our shared services programme is broadly on track. We will consider their recommendations in detail but we already know that there's more to do to slash duplication and ensure value for the taxpayer."

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