09 June 2006
Cabinet Office officials backed away from inflating savings targets for Whitehall's shared services programme because it was difficult to reflect improvements in services delivered, Public Finance has been told.
The admission by senior officials delivering Whitehall's shared services programme raises questions about the accuracy of the 'back-office' savings targets identified by the ongoing Gershon efficiency programme. This relies heavily on departments reflecting service improvements financially.
Cabinet Office officials last week estimated that public sector organisations could slash £1.4bn from their annual £7bn bill for functions such as finance and human resources by merging them under the shared services agenda.
Under Gershon, departments make 'cashable' savings – those that can be easily quantified and recycled back into the public sector, such as reduced staff costs. Other, 'non-cashable', savings, such as improvements in health or benefit services brought about by more efficient computer systems, make up around 50% of the target.
When Gershon's report was launched, Whitehall officials claimed that hundreds of millions of pounds would be 'saved' through improved IT services.
But a senior government source last week told PF that the Cabinet Office threw out plans to include estimates for service quality improvements in the shared services target because 'it was very difficult to quantify exactly what those benefits and “savings” would be'.
A senior Whitehall finance expert this week told PF that the Cabinet Office's decision 'exposed the already contentious figures for “non-cashable” savings in Gershon's report as questionable'.
Meanwhile, Cabinet Office officials remain confident that more organisations will share services. The initiative has been dogged by slow take-up.
David Myers, head of shared services at the Cabinet Office, told PF last week: 'There are some very good examples of shared services savings already available to us. Transport for London, for example, has saved 25% of its human resources costs... while 108 primary care trusts are now part of the shared NHS finance service.'
However, a study by professional services firm Deloitte, published on June 7, states that 'shared services have yet to take off in the public sector' and criticised public bodies for retaining their own support services.
John Binns, Deloitte's public sector consulting partner, warned: 'The next Spending Review is just around the corner, with the budget belt undoubtedly set to tighten.
'Unless a shared services programme is initiated now, the ability to meet the next round of efficiencies will be severely jeopardised.'
Attacks by ministers 'cowardly'
A leading civil servant has branded recent ministerial criticism of officials' failings as a 'cowardly' attempt to shift responsibility for struggling policies away from the government.
Jonathan Baume, general secretary of the FDA senior civil servants' trade union, hit back last week after months of political attacks on the way that Whitehall officials have managed problematic policies. These include those at the troubled Home Office and the Department for Work and Pensions.
Baume said the recent 'bandwagon' of criticism was 'unfair, divisive and damaging to the work of every government department'.
While some criticism of Whitehall staff was justified, he argued, 'the timing of many of the recent attacks is driven by politics, not performance'.
'The Labour government is in some difficulty as poll ratings fall and the Conservative Party is revitalised,' he said.
'Some recent criticism of the civil service looks like an ill-disguised attempt by some politicians and commentators to make excuses and shift responsibility for struggling policies to the staff who serve them.'
Baume's stern defence of Whitehall heaped pressure back on to ministers, one senior civil service source told Public Finance.
'Plenty of senior officials will be very
pleased that Baume has been so candid on their behalf. While there should always be scope to criticise officials when they have failed in their duties, it is clear that, in the case of the Home Office, for example, political and policy failings have been equally as damaging as poor performance by staff.'
Makeover for 'verbose' civil service code
Cabinet secretary Sir Gus O'Donnell this week published the new civil service code, which scraps its complex predecessor in favour of concise guidelines on impartiality and a new complaints framework.
O'Donnell launched the code at the National School of Government's Twenty-first Century public services conference on June 6. It has been drafted following extensive Cabinet Office consultation with the civil service commissioners and thousands of Whitehall staff, and replaces a document that was seen as out of date and verbose. The new code will form part of the employment contract for all new civil servants.
Key revisions include provision for the independent commissioners to consider a complaint direct from a civil servant, rather than a departmental manager.
Jonathan Baume, general secretary of the FDA, which represents senior Whitehall staff, said the code was 'more useful to civil servants of all grades'.
But Baume said the code should be a stepping stone to a full civil service Act that would enshrine in law the sector's impartiality and independence. O'Donnell favours an Act, but it is not seen as a priority at Number 10.
PFjun2006
