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Saturday, 31.01.2026
Transforming Government since 2001
Whitehall departments' back-office functions are to transfer to two independent centres under a strategic plan for shared services published by the Cabinet Office just before Christmas. Next Generation Shared Services estimates that departments can save £400m-£600m a year through a "coherent shared services strategy", with departments' transaction costs falling by between 25% and 40%.

The plan admits that "there have been many public pronouncements of failure and some, less public, successes in this arena". It says the initiative "needs to go further in terms of service and deliver greater savings faster" as shared back offices play their part in the government's efforts to cut the deficit.

With a nod to previous calls to action it poses the question "What's different this time?" by announcing the strategy as the most comprehensive plan for shared services ever produced by [UK] government "brought together by the Cabinet Office with the participation of all its customers - the departments".

In the foreword, Stephen Kelly, the government's chief operating officer, says he will "fully support the drive to full implementation".

The plan sets out the aim to create two independent centres to which targeted departments will transition current services. Offerings will include a lower cost enterprise resource planning (ERP) system "to reduce the cost of the current ERP solutions and to remove the barriers to entry for smaller departments and ALBs by reducing software and maintenance costs through consolidation."

The operating partner for the first centre, ISSC1, will be in place by March; the second a year later. The plan emphasises the need for a lower cost ERP system, without which the government "will struggle" to meet efficiency targets. The one-off ERP upgrade will in itself save £32m, the plan says.

The strategy hints at user involvement "through customer forums and even shareholdings". Meanwhile, a "Crown Oversight Function" will aim to improve the quality of services while cutting the operating costs.

The plan acknowledges several worries with previous shared services schemes. To tsmall organisations concerned about being regarded as second class users by big departments, the plan says "The independent centres will be facilitated by the Cabinet Office who will look to ensure that departments have an equal voice in respect of customer service - irrespective of size."

On the question of small departments reclaiming VAT, it says: "The Cabinet Office is working closely with HM Treasury to ensure that payment of VAT does not act as a disincentive to departments joining the programme."

The NAO reported as far back as 2007 that VAT was one of the most significant barriers to shared services.

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Autor(en)/Author(s): Michael Cross

Quelle/Source: UKauthorITy, 03.01.2013

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