First independently-run shared service centre opens

The government has signed an agreement with private-sector partner arvato to manage an independently-run shared service centre, which will run back-office transactions to government departments. The move is intended to create savings of up to £600m a year over seven years.

Arvato has acquired the Department for Transport’s (DfT) shared service centre, based in Swansea, and will turn this into Independent Shared Service Centre One (ISSC1) as part of a seven-year outsourcing contract. ISSC1 will begin by providing services such as HR, payroll and finance processing to the DfT, but the contract also includes a framework agreement through which the centre will be able to provide services across central government.

The agreement marks the first step towards achieving the government’s shared services strategy, published in 2011, which set out plans to consolidate existing shared service provision across Whitehall.

It is hoped that ISSC1 will provide shared services to smaller departments such as the culture, media and sport department. A second shared service centre – ISSC2 – will provide services to larger organisations such as the work and pensions department.

Stephen Kelly, head of the Cabinet Office Efficiency and Reform Group (pictured above) said: “Appointing a private sector partner to run the first new Independent Shared Service Centre will allow us to maximise the economies of scale that arise when departments pull together.
Read CSW’s interview with Paul Marriner, the Cabinet Office’s executive director of shared services.

Suzannah Brecknell
Suzannah Brecknell is senior reporter at Civil Service World.