09 May 2008
The government does not know how much it spends on back-office services and it is 'not clear' how a flagship programme to save £1.4bn in costs will be achieved, MPs have warned.
Plans to increase the use of shared services are a key part of the Transformational Government programme launched in 2005, but have been dogged by delays.
Documents released alongside the programme's annual report in January 2007 revealed that the government's timescale for introducing shared services across the public sector had slipped by five years, to 2016. This year's report is still unpublished.
Now the Public Accounts Committee has thrown the planned savings into doubt. Its May 8 report says: 'The Cabinet Office cannot provide an accurate figure for total corporate services spend across government because departments operate outdated systems and have poor management information.'
The Cabinet Office had estimated Whitehall's spend on finance and human resources at £7bn a year, but the MPs noted that it had 'lost the calculations and underlying data involved in its estimate'.
The report, Improving corporate functions using shared services, says: 'It is not clear how the £1.4bn potential annual savings from shared services will be achieved,' Systematic analysis of the risks of adopting shared services is also lacking, it adds.
PAC chair Edward Leigh said the £1.4bn savings figure was 'a flimsy estimate', adding: 'There are no centrally agreed benchmarks against which to measure performance. The Cabinet Office doesn't even have a timetable for achieving this level of saving.'
A spokesman for the Cabinet Office said: 'Over half of all central government employees now benefit from shared corporate services, releasing people and resources to focus on delivering top-quality public services. We welcome the PAC's report, which raises some important points that will help us continue to improve our work in this area.'