08 September 2000
A feasibility study by the NHS Executive earlier this year explored the opportunities for making economies of scale by setting up shared service centres to run payroll and other key support services for large numbers of health bodies. It is believed to have recommended fewer than 20 shared service centres across the whole country.
But the NHS has now decided not to go for a big bang approach. In a letter to finance directors last week, the Executive's director of finance, Colin Reeves, said: 'Whilst the initial findings [of the feasibility study] support the concept, the scale of the project suggests that this development should take place on an incremental basis.'
In theory, a small number of shared service centres, running a range of financial services, offer the maximum savings. But this would involve a major investment upfront at a time when the government is keen to maximise investment on frontline services. And the public sector's record on implementing IT projects is far from good.
The shared service project will now initially concentrate on payroll. The Executive has decided to move the whole service on to a single payroll and human resources system. But, importantly, Public Finance understands that local health bodies will be allowed to take their own decisions, in conjunction with regional offices, on how and when to set up shared services.
Some regions could opt for a single support service centre, others for multiple, smaller centres.
Following a tendering exercise, the Executive has drawn up a short-list of potential suppliers for the common payroll system. Once a deal is finalised, the system will be rolled out over three to five years.
In the meantime, two shared service pilot projects will be set up, one at a regional level (almost certainly in the South West region) and one on a smaller scale. The experiences of the pilots are expected to help inform local choices on joint working.
'It sounds a sensible approach,' said Barry Elliott, chairman of the Healthcare Financial Management Association. 'The idea of pilots and reviews is sensible, rather than a big bang approach, particularly given the public sector's experience of implementing major computer projects.
'And it tends to mirror the approach taken to strengthen internal audit arrangements, which was largely left to local discretion with the general direction dictated from the centre.'
PFsep2000
