Northern Ireland PAC slams costs of shared financial services scheme

14 May 14
Members of the Northern Ireland Assembly have criticised the ‘extraordinarily high’ costs incurred by Account NI when it pays public sector suppliers

The assembly’s Public Accounts Committee has probed the performance of Account NI, a shared finance transaction processing service, which makes payments on behalf of 12 government departments and 18 other public bodies in Northern Ireland. It processes more than one million transactions each year worth over £10bn

But the committee found that it costs £9.73 to make a payment to a supplier, which chair Michaela Boyle said made it a ‘very high cost operation’.

The committee also criticised the lack of clear evidence that Account NI had delivered value for money, given the £213m that had been invested in it since it was established in 2000. Nor was it clear that Account NI had made the £43m in savings, which were promised in it business case.

‘It is not acceptable that the public purse is committed to spending millions more on this project without clear evidence that it has delivered, or will in future deliver, value for money,’ said Boyle.

However, the committee did acknowledge that Account NI’s performance against the prompt payment target was ‘world class’. The body pays government suppliers within seven days, against a target of ten days set by the Northern Ireland Executive.

Northern Ireland’s finance minister Simon Hamilton disputed the PAC’s findings.

‘The figure of £9.73 quoted by the PAC is not an appropriate basis on which to make a valid comparison with other bodies and the report’s analysis therefore is insufficiently robust for the PAC to reasonably draw such a definitive conclusion on cost. The direct staff cost per transaction in Account NI is around £2.05,’ he said.

‘Thus, the PAC has overestimated the potential savings of £3.4m per year, if Account NI reduced its costs. The annual cost of staff in the accounts payable function is in the region of £1.5m therefore it is impossible to make a saving of this magnitude.’  

He added that Northern Ireland’s shared services were an ‘exemplar’ not just in Europe but in the world.

‘I’ve personally spoken with the representatives of other governments who are keen to learn from what we’ve already achieved in Northern Ireland.  

‘Whilst acknowledging that there is always room for improvement, we should celebrate the success of our shared services,’ said Hamilton.

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