Shared services failing to deliver value for money, says NAO

The government shared services strategy has delivered savings but has failed to to achieve value for money, according to a report from the National Audit Office (NAO).

The project looked to transfer back office functions for up to 14 departments and arm’s-length bodies to two shared services centres.

The NAO has said that, while the two centres have led to some cost savings, the project is not progressing as planned. The centres have delivered savings of £90 million to date, but operation costs are at £94 million. This is significantly less savings that the £128 projected, but the Cabinet Office still estimates that the two centres will generate savings of £484 million in total by 2023-24, will total costs at £159 million.

A central part of achieving these savings will require the migration of all customers to a single operating platform where systems and processes would be standardised. However, the report found that delays in designing, building and testing the systems have significantly increased costs and mean that so far only 2 of the 26 planned customers have joined the single platform.

Amyas Morse, head of the NAO, said: “The Cabinet Office’s failure to manage the risks around the move to two independent shared service centres from the outset means that the programme has not achieved the significant anticipated savings and benefits to date. The Cabinet Office has begun to find its role in leading the programme but the delays have meant that technology has moved on significantly. The programme will only achieve value for money in future if the Cabinet Office shows clear leadership, and government accepts the need for collaborative and flexible behaviours from all departments involved.”

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