Government estimates that substantial savings can be made through shared corporate services in the public sector have been given short shrift by MPs.

A damning report by the House of Commons Public Accounts Committee says that it is unclear how the Cabinet Office figure of £1.4 billion in savings will be achieved.

The shared services agenda has been central to public sector efforts to generate savings since the publication of the Gershon Review in 2004.

But the MPs' report, Improving Corporate Functions Using Shared Services, published last week, concludes: “The Cabinet Office does not have sufficient grip on the cost of its activities to promote shared services,” adding that the team set up to encourage the use of shared services across government didn't even know how much money it had spent or how it was allocated.

Uniform policy won't suit all

HR gurus are dubious that aligning pay and conditions of those doing the same jobs for different public sector employers is a good idea

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It says that the number of NHS organisations using NHS Shared Business Services will need to increase significantly to meet the forecast annual saving of £250 million by 2014-15.

On the back of the report, Edward Leigh, chairman of the committee, says: “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,” ePolitix.com (May 8) reports.

Even where public bodies attempt to implement shared services, they face a number of barriers, a survey of 178 senior public sector managers by the law firm Browne Jacobson suggests. The biggest hurdle is a lack of financial and human resources. Only one manager in four linked shared services to “cost savings and end benefits” - raising questions about whether they have bought in to government ambitions to drive efficiencies through shared projects.

Most managers believe that the shared services agenda is being driven by senior management and central government - only one in ten said that it was driven by frontline workers. Getting workers on board could be tough given that managers say that less than a quarter of the workforce are active supporters of shared service projects and more than a third actively oppose them.

Lack of trust is a key challenge, with concerns over partner organisations giving priority to their own issues and lack of authority over partner workforces.

Public sector a poor client

“I have little sympathy for the Government over this [Office of Fair Trading] investigation into contractors rigging bids. What do they expect if they persist in procuring based on lowest price? I am very sad [that] the public sector is still using this short-cut approach.

“We always said it would be difficult for the construction

industry if the Government didn't play ball. In 1998 [in Sir John's Rethinking Construction report] we said the Government was a relatively poor client. This is still the case.

“The public sector is still producing huge problems for the industry. It is still procuring on lowest price and as long as this is the case, proper tendering can't happen. Connec-ted to this is the fact that the Government is also still some way off partnership agreements. The Government has not really understood how to move forward. The situation is disappointing...

“... I am disappointed that the levels of improvements we asked for have not been achieved but pleased that we are at least making progress. I said most government reports end up in the waste bin so the fact that Rethinking Construction had any impact at all is an achievement.”

Sir John Egan, chairman of Severn Trent Water, in Building (May 9)

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