Depts to share services by 2014

Most Whitehall departments will have to move their transaction services – meaning HR, payroll, and accounts processes – into a shared service project by 2014, according to the Cabinet Office’s shared services strategy, published in December.

By Civil Service World

23 Jan 2013

The plan envisages the creation of two large shared services, called ISSC 1 and ISSC 2. Departments will start to move their processes over into these new systems from April this year.

The departments for communities, culture and international development, plus the Office for National Statistics, will all move into the ISSC 1 shared service structure already being managed by the Department for Transport. Meanwhile, the work and pensions, environment, education, business and energy departments, plus the Cabinet Office and the Environment Agency, will move into the new ISSC 2 shared service structure.

The strategy expects to achieve savings of at least £128m a year, plus a one-off saving of £32m. If the shared service centres can reach the highest levels of efficiency attained in the private sector, the strategy says that savings could reach £400-600m per annum.

However, the government does not have a good track record on shared services. The National Audit Office reported last year that the civil service has spent £1.4bn on shared service centres, but at that time most were still losing much more than they saved; only one of them broke even.

Asked what was different about the new strategy, Stephen Kelly, the government’s chief operating officer and senior responsible owner for the strategy, said the project has ministerial leadership, visibility – because it is a part of the Civil Service Reform Plan – and strong central governance structures, and “the reality is, we’ll be talking in a couple of years’ time and I’ll be able to report to you that the project’s delivered and the savings are achieved.”

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