A report from the National Audit Office warns of a lack of clarity on programme oversight, as well as ‘funding gaps that might need to be covered from departmental budgets’
A multibillion-pound programme to deliver shared services across government remains afflicted by “governance shortcomings, funding uncertainty and delays”, a major new report from the National Audit Office has warned.
First published five years ago, the Shared Services Strategy for Government set out a vision to create five clusters of departments, each of which would standardise on a single back-office software system. Major project data – covering just three of these clusters – indicates collective whole-life delivery costs of about £3.7bn.
The new NAO report reveals that HM Treasury has committed £1.15bn funding so far, with £459m in delivery costs incurred to date. Some 470,000 civil servants – equating to 85% of the total – have been impacted by the rollout so far, auditors found, with 25 other “government digital change programmes” also affected by the shared services implementation.
The report says that, while the “Treasury [has] provided significant funding for shared services… those we spoke to in clusters told us that there were still some funding gaps that might need to be covered from departmental budgets”.
The two clusters not included in the Government Major Projects Portfolio – Defence and Overseas – do not have ring-fenced funding. Consequently, “progress has been challenging due to funding constraints and wider departmental budget pressures”, the NAO found.
£3.7bn
Whole-life delivery costs of shared services across the Matrix, Synergy and Unity Clusters
£1.15bn
Funding committed by HM Treasury since 2021
470,000
Number of civil servants impacted by the rollout so far
25
Other digital transformation programmes affected by the shared services initiative
Elsewhere, with a total of at least 100 departments and arm’s-length bodies in scope of the technology rollout, auditors concluded that “many of the ALBs are not included in current business case plans, [and] departments and clusters need to consider and plan for the additional costs and resources required to enable ALB on-boarding”.
The report also said that the “Cabinet Office needs to clarify expectations, including which ALBs it expects to join shared services, and what it expects from each cluster”.
“While Cabinet Office believes it has been clear in its messaging about ALBs needing to be onboarded, clusters and departments told us otherwise,” the document added. “Clusters, and their member departments, are at different stages of planning for the onboarding of their ALBs, and existing plans do not include all ALBs. Onboarding of ALBs will be a big additional step, and one that will require careful planning.”
While recognising some “improvements” in governance arrangements overseen by the Cabinet Office, the NAO said that “significant gaps remain”.
“There is no clear owner for shared services with the levers to deliver the strategy,” the report said. “There is still reliance on other boards, for example the Civil Service Transformation Board and Applicant Tracking System Board, which have no clear remit in relation to the Shared Services Strategy.”
Unrealised potential
Issues with the planned replacement of the Applicant Tracking System (ATS) – a platform used to support recruitment across the civil service – have created significant problems for the shared services agenda.
“The replacement… had to be abandoned because of interoperability problems with the cluster systems,” the report said.
A reset of the programme to deliver an alternative to ATS will result in additional costs of up to £38m, the Cabinet Office has indicated. The NAO also found that “the reset ATS programme will likely cause further delays to the implementation of shared services… [as] each cluster [will now] be deploying its own ATS as part of its ERP” unified back-office infrastructure.
“We continue to see inadequate governance of interdependencies, as well as issues with funding and IT integration, all of which are jeopardising delivery.”
PAC chair Geoffrey Clifton-Brown
Overall, the NAO concludes that “despite numerous improvements, the programme is unlikely to realise its full potential due to a range of issues including governance, funding and IT integration”.
Gareth Davies, head of the NAO, said: “The Shared Services programme has the potential to deliver efficiency gains across government, but governance issues, interoperability problems and inconsistent commitments are hampering efforts to keep the programme on track. Our recommendations are designed to address these findings and maximise the chances of success.”
The chair of parliament’s Public Accounts Committee, Sir Geoffrey Clifton-Brown, added: “We continue to see inadequate governance of interdependencies, as well as issues with funding and IT integration, all of which are jeopardising delivery. To see the necessary improvements, Cabinet Office must work with departments to secure their buy-in and put in place a clear owner for shared services with the right levers to deliver the strategy and realise the much-needed savings.”
