Government predicts £1.8bn savings over next 15 years from shared services drive

Cabinet Office issues projections of impact on implementing software ‘clusters’

The government has predicted that its ongoing shared-services programme will save £1.8bn over the next 15 years.

The Shared Services Strategy for Government was published by the Cabinet Office two years and set out plans to establish five ‘clusters’ of departments, and implement in each of the five a shared tech infrastructure of corporate software, such as HR and finance systems.

A report from the National Audit Office late last year flagged a number of challenges facing the programme, including the age of incumbent systems and a reported lack of funding. Auditors also concluded that the Cabinet Office lacked a clear idea of how much the programme has cost so far and the extent of the benefits it will deliver in the long term.

Three months on, and the department has declared that it believes “around £1.8bn could be saved over the next 15 years” as a result of the shared-services programme – which it said will this year be “moving full force into delivery mode”, including plans for supplier engagement and business-case approval.

This comprises direct savings of £500m and £1.3bn in efficiencies gained, the Cabinet Office said.

Minister for the Cabinet Office Jeremy Quin said: “The strategy was created to offer better cross-government, streamlined services that relieve the burden of bureaucracy. We want to free up civil servants’ time to focus on what they do best: engaging with, and delivering for the British public. This transformational programme is underway and demonstrates the important steps we’re taking to be more collaborative.”

The Cabinet Office sits within the Matrix cluster which, broadly, encompasses government’s most policy-centric departments. Also included in this group are: HM Treasury; the Attorney General’s Office; and the Departments for Education; Business and Trade; Energy Security and Net Zero; Science, Innovation and Technology; and Culture, Media and Sport.

Delivery across this cluster was led by the now-defunct Department for Business, Energy and Industrial Strategy which, earlier this year, signed a £6.5m deal with specialist HR consultancy Veran Performance, which will serve as “business design partner” for the shared-services initiative. It is not clear which department will serve as the Matrix delivery lead now that its responsibilities have been split across several newly created departments.

Alongside Matrix are the Defence grouping, containing the Ministry of Defence and the Armed Forces; Overseas, which includes, the Foreign Office and parts some parts of the trade department; the Synergy cluster for delivery-centric entities, including Defra, DWP, Home Office and the Ministry of Justice; and the HMRC-led Unity segment, which also features the Departments for Transport and Levelling-Up.

The NAO report last year revealed that the Matrix, Synergy and Unity clusters had submitted bids for the 2021 three-year spending review seeking cumulative funding of £759m. All three submissions were rejected, but the Treasury has now “approved a funding envelope of up to £300m to support these clusters to deliver the Shared Services Strategy and to address the risk that departments could be left with unstable and unsupported systems in the interim”, according to the audit agency.

Sam Trendall

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