MPs question promise of shared services

Government estimates of savings that can be made through shared services are "flimsy at best", according to the chair of the Commons' public finance watchdog.

Edward Leigh was speaking as the public accounts committee published its report into shared corporate services in the public sector.

The report says it is unclear how the Cabinet Office figure of £1.4bn in potential savings can be realised, pointing to shortcomings in the recording of shared services and poor information on the costs of corporate services.

The Cabinet Office are also criticised for not having a timeline to deliver the expected savings, with the department's shared services team failing to inform the committee of how their budget for the last two years was spent, according to the report.

Leigh said the findings were not only damning in relation to shared services but called into question the ability of departments to get value for money from corporate services in general.

"Government lacks accurate information on what corporate services cost and how they perform. There are no centrally agreed benchmarks against which to measure performance. The Cabinet Office doesn't even have a timetable for achieving this level of saving."

He added: "This is not just a point about poor management information and a lack of grip on detail undermining the move towards greater sharing of services. Whether or not public bodies move to shared services, they must know whether they are receiving value for money from their corporate functions.

"Without that knowledge, there can be no driving out waste and freeing up money to improve services to citizens."

The Public and Commercial Services Union (PCS) said the committee's report reflected concerns that shared services were being set up to meet "arbitrary estimates to cut costs".

PCS general secretary Mark Serwotka said that shared services were often instituted without regard to the quality of the service provided.

"Our experience of shared services is that the emphasis is on cutting costs and not improving quality, which in turn impacts on the smooth running of organisations such as the Prison Service.

"The report rightly recognises the impact that setting up shared services has on staff morale in terms of job cuts and where changes to work lead to reduced customer contact," he added.

"In approaching shared services, the government need to put the emphasis on the quality of service delivery rather than crude cost cutting based on arbitrary figures."