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Tuesday, 6.01.2026
Transforming Government since 2001
Systems introduced under the previous Labour government that saw Whitehall departments pooling resources and sharing services failed to make the intended savings and actually cost the taxpayer more than they saved, according to the Public Accounts Committee.

The committee had looked at evidence from the Cabinet Office, the Department for Education and the Department for Work and Pensions at previous attempts to save money and welcomed the coalition government's renewed focus on improving shared services – driven by the Cabinet Office's "ambitious new strategy". However, there were risks involved and there was "a particularly challenging timetable for implementation".

The committee said: "We look forward to seeing real progress this time round. The recommendations we make are designed to help the Cabinet Office succeed with its new strategy and learn from the mistakes of the past. We expect the Cabinet Office to engage constructively with our recommendations and not, as happened following our 2008 report, to ignore recommendations which, if implemented, would have left them much better placed today."

The committee's report claimed that, while performing adequately, shared service centres had cost £1.4bn to build and operate compared to an expected cost at the start of the project in 2004 of £0.9bn. These five centres were also expected to have saved £159m by the end of 2010/11. In the event, the Ministry of Justice centre broke-even, the Department of Work and Pensions and the Department for Environment, Food and Rural Affairs centres did not track their total savings, and the two centres that were tracking savings – the Department for Transport and Research Councils UK – reported a net cost to date of £255m.

The current strategy will only be effective, the MPs said, if the Cabinet Office demonstrates strong leadership to deliver greater value for money and gets buy-in from departments. So far, it has been left up to individual departments and their arm's length bodies to decide whether they use shared service centres. This has led to low take-up and so the centres are unable to achieve the economies of scale necessary to deliver savings and value for money. Those bodies that have become customers of shared service centres have retained their own processes rather than adopt those of the centre, resulting in over-complicated systems which also undermine the scope for efficiency.

Committee chair Margaret Hodge said: "Shared service centres have failed to deliver the savings they should have. They cost £1.4bn to set up, £500m more than expected, and in some cases have actually cost the taxpayer more than they have saved. I welcome the Cabinet Office's ambitious new strategy for improving shared services. But unless it learns from the past it will end up making the same mistakes again."

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Quelle/Source: Public Service, 09.07.2012

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