The government’s Shared Services Strategy is "unlikely to reach its full potential" because of IT compatibility, governance and funding issues, the National Audit Office has warned.
Under the current version of the strategy, five “clusters” of departments and agencies are being created to drive back-office efficiencies through the introduction of cloud-based shared services platforms.
HM Treasury has committed £1.15bn to shared services since 2021, when the programme’s delivery model was refreshed, and the government is targeting £1bn in "expected lifetime benefits” from the programme. The five shared-services platforms are supposed to go live by 2028.
However, an NAO update on the programme published today says some departments have not yet fully committed to delivery plans that programme driver the Cabinet Office views as compulsory. It adds that efforts to standardise processes across government have also been inconsistent.
Under the programme, each of the clusters – Defence, Matrix, Overseas, Synergy and Unity – will move to a common IT system, known as an enterprise resource planning (ERP) system. Last month, the Synergy cluster, which is led by the Department for Work and Pensions, selected Capita as the preferred provider to operate its services.
Today’s NAO report says the interoperability of clusters’ systems with other new government IT systems continues to be a problem. It cites the abandonment of the planned replacement for Civil Service Jobs – known as the Applicant Tracking System – as an example.
The Cabinet Office signed a £22m contract for the ATS in 2024, but a reset in October last year saw the original aim of a central civil-service-wide platform abandoned, reducing the scope to central provision of particular services. Each cluster will instead develop its own ATS. The NAO says interoperability problems with the cluster systems were at the heart of the issue.
The NAO said the Cabinet Office estimates that the total costs of the ATS programme reset will be between £26m and £38m. The current centralised jobs platform is expected to continue in use until 2030 to give clusters time to develop their own systems.
The NAO said the programme reset is “likely to cause further delays to the implementation of shared services” and warned that lessons would need to be learned from ATS as clusters will have to interface with at least 25 other digital-change programmes as part of their work.
“There are numerous interdependencies that affect the delivery of shared services and management of these interdependencies has been inadequate,” it said.
The NAO said seven of the digital-change programmes are assesed as having “high or medium impact” on shared servces. It added: “Inadequate governance of interdependencies is still hindering clusters’ planning for the value for money and delivery of shared services.”
The report notes that “not all” civil service functions have engaged with implementing shared services, meaning there is a disparity between functions’ data and process convergence,
which directly impacts their readiness to onboard.
According to the report, finance and grants are “widely seen as ready and willing to onboard across all the clusters“ however it notes less engagement from commercial and HR.
Uncertainty about departmental buy-in
Elsewhere, the NAO update says there is uncertainty about buy-in from some departments and arm’s-length bodies.
The NAO said some departments are unable to commit to a specific timetable for onboarding to their cluster, while others are unconvinced of the business case for moving to their cluster’s ERP.
HM Treasury, the Department for Education and the Home Office are all given as examples of departments that have invested significantly in new “highly configured” ERPs to deliver on requirements. “For the individually configured ERPs, onboarding to the cluster ERP will mean loss of some functionality as they seek to converge on data and processes,” the NAO said. It added that such departments would face “unnecessary cost” to develop their new processes.
DfE and HM Treasury are both part of the Matrix cluster and its business case hinges on their participation. The NAO said that if either department chose to withdraw, it would significantly affect Matrix’s business-as-usual planning, and costs and benefits projections.
Lack of programme-wide governance
While clusters have a clear governance structure and delivery plans, the NAO said “governance issues” at programme level remain and the Cabinet Office lacks authority to respond to problems affecting the whole strategy.
“There is no single owner in the centre of government with a clear mandate to secure departmental onboarding, which leaves buy-in uncertain and timelines at risk,” it said. “The absence of a strong technical lead has resulted in inconsistent ERP configurations and data convergence, undermining interoperability and data standards.
"When combined with fragmented governance of interdependencies, this creates a real risk that the strategy will not be delivered to time or budget.”
Funding questions
The report says that although HM Treasury provided significant funding for shared services at the 2025 Spending Review “there remains some uncertainty and disagreement over funding”.
The report says that while Matrix, Synergy and Unity were allocated approximately £846m in ringfenced funding, some departments reported there were still funding gaps that may need to be covered from departmental budgets.
The Foreign, Commonwealth and Development Office’s Overseas cluster and the Ministry of Defence’s Defence cluster did not receive ringfenced funding.
Additionally, the NAO noted that many ALBs are not included in current business case plans, meaning that departments and clusters need to plan for the additional costs and resources required to enable ALB onboarding.
NAO head Gareth Davies said: “The Shared Services programme has the potential to deliver efficiency gains across government, but governance issues, interoperability problems and inconsistent commitments are hampering efforts to keep the programme on track.
“Our recommendations are designed to address these findings and maximise the chances of success.”
Sir Geoffrey Clifton-Brown, chair of parliament’s Public Accounts Committee, said the NAO’s update showed that delivery of the Shared Services Strategy remains “disappointingly flawed”.
“We continue to see inadequate governance of interdependencies, as well as issues with funding and IT integration, all of which are jeopardising delivery,” he said.
“Cabinet Office must work with departments to secure their buy-in and put in place a clear owner for shared services with the right levers to deliver the strategy and realise the much-needed savings.”
Among its recommendations, the NAO called on the Cabinet Office clarify governance responsibilities for government shared services at director general level and above “as a matter of urgency”.
It also said the department should do more to secure a commitment from government departments to onboard to shared services by 2030.
In a clear reference to the ATS issues, the watchdog also proposed the creation of a civil service-wide and function-wide transformation board to ensure interdependencies between government programmes and shared services are adequately managed.
Civil Service World sought a Cabinet Office response. It had not provided one at the time of publication.