Plans to move departmental finance, human resources and procurement services to two shared back-office services centres were unveiled in 2012. The move was estimated to eventually save £400m - £600m a year.
But a PAC inquiry in 2016 found the scheme had in fact increased costs by £4m because of “poor supplier performance”.
A PAC report said the Cabinet Office had shown a failure of leadership and called for renegotiations with suppliers.
A Government Shared Services unit has now been set up in the Cabinet Office to oversee the project.
The strategy outlines plans for departments to adopt one of three cloud computing platforms, with the Home Office the first to make the switch.
It said: “The spend on shared services across government is significant. Future savings are predicted to be in line with the 2013 business case.”
It added that 10%-15% further savings could be achieved through “commercial tension” between the three IT suppliers – Oracle, SAP and a yet-to-be named third supplier to provide a cheaper alternative for smaller departments.
The majority of departments are to use Oracle, while HMRC, Department for Transport and the Ministry of Housing, Communities and Local Government will use SAP.
The Department for Education is to take on the ‘flexible alternative’.
Matthew Coats, interim head of government shared services, said: “This will be step change in shared services across the government, directly supporting civil servants in their roles, while also contributing significant savings to the public purse.
“By allowing civil servants to spend less time doing administration, they can spend more time delivering vital services to the public.”
