Shared Services, UK, Government, Efficiency
UK Government's shared services plan faces challenges
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The UK Cabinet Office started tendering for an IT services provider last week. Initially, the new deal will simply replace an existing contract that is about to expire, but in the longer term it is hoped the service will be made available to other organizations.
The department is the latest in a growing list of public sector organizations embarking on such projects to develop centralized administrative functions.
Shared services is the latest holy grail of Whitehall reform, viewed by its exponents as the route to joined-up government and the end of the silo culture. It is central to the Efficiency Review, the Transformational Government (TG) plan and the departmental budget round.
It also has the endorsement of the Prime Minister’s Delivery Unit (PMDU), the Treasury and Cabinet Secretary Gus O’Donnell.
The government estimates potential annual savings of 20 per cent, or £1.4bn, through sharing human resources (HR) and finance across the public sector. But it is not just the money.
‘There are big numbers in terms of efficiency gains, but there is an even bigger impact in terms of the effect of improved, higher-quality internal processes,’ said Ian Watmore, head of the PMDU.
There are no easy wins, but local government will likely be the most difficult area because the complexities multiply when one authority has to give up responsibility and instead receive a service from another.
Senior political backing and the TG strategy’s formal link to departmental budget setting will do much to enforce an agenda with no explicit mandate. That 10 permanent secretaries are committed to the Whitehall2 plan is, rightly, considered a major step forward. But the real battle has barely begun.
The changes to working practice will be significant. And the impact on staff numbers is unlikely to go uncontested. The Efficiency Review has already faced trade union criticism over redundancies, and shared services is the review’s successor.
The predicted 20 per cent cost savings include staff reductions of similar proportion. And while the aim is for staff to be re-deployed to frontline services, reality is rarely so neat.
With these issues the political impetus of the agenda will be truly tested.
‘If this is going to work it will be a considerable re-organization and that will be painful,’ said Eric Woods, government practice director at analyst Ovum.
‘It will be crucial to get some early successes because if shared services is shown to be too painful the political will dissolve,’ he said.
Source: www.vnunet.com
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