What’s happened to Shared Services

The Transformational Government white paper’s reliance on Shared Services made absolute sense in recommending the of use shared services to achieve consistency, improved performance from service oriented specialists and economies of scale. This would free up management time and money to enable government to become citizen centric, a major change.

I don’t have any statistics to prove it but I’m getting a strong impression that ICT suppliers are closing their Public Sector Shared Services operations, i.e not trying to sell shared services as services. The reason isn’t hard to find, the public sector are doing shared services themselves and not buying them from the private sector. It’s not all bad news for the ICT sector as the public sector are buying the infrastructure and skills etc. but not as services the supplier can also sell to others.

Whether this is bad news for the UK rather depends on the cost and quality of the services provided by public sector shared services providers. Guidance from the Cabinet Office Shared Services team is that central government organisations not big enough to build viable operations should buy from HMRC or the DWP. John Suffolk, the government CIO, commented not long after the announcement that DWP and HMRC will need to match commercial performance and rates. Unfortunately it will take a few years until we know if they are truly competitive and in the meantime the market for shared services is dead.

The ICT industry trade body, Intellect Shared Services working group http://www.intellectuk.org/content/view/455/56/ started it’s position paper by saying “Industry’s vision for shared corporate services is that by 2016 a majority of the transactional elements of corporate services in the public sector will be delivered through relatively few professional shared service organisations. Some of these organisations will remain inside the public sector, but others will be outsourced. The ICT industry envisages the creation of new organisations in the public and private sectors whose sole purpose will be to provide shared corporate services to a number of public sector organisations.” The paper has the arguments to support this move but unless the drivers on Departments change I can’t see this vision being realised.