The government’s strategy to transform back office operations could help deliver between £400 million and £600 million a year in savings.
Steria Limited has been appointed as the private sector partner in a deal that will save taxpayers money by consolidating the government’s back office functions, the Minister for the Cabinet Office, Francis Maude, announced today.
The government’s strategy to transform back office operations and consolidate transactional functions across government could help deliver between £400 million and £600 million a year in savings for the taxpayer. Reduced duplication, shared expertise and larger economies of scale will help bring down back office costs. It will also create the potential for the 2 new independent shared services centres to grow their businesses by offering a highly competitive service to new customers across central government, the wider public sector, and, potentially, to private sector clients. This could drive down costs even further to deliver increased savings generated through growth.
As partner in a new Joint Venture company, Shared Services Connected Limited (SSCL), Steria will run the second of 2 new Independent Shared Services Centres (ISSC2).The Joint Venture will harness commercial expertise to deliver government back office functions more efficiently and is a key example of driving innovation in government commercial models – both key parts of the Civil Service Reform Plan.
ISSC2 will be initially comprised of a number of existing shared service centres, the largest of which is operated by the Department for Work and Pensions (DWP). The Department of Environment, Food and Rural Affairs (Defra), and the Environment Agency (EA) will also join SSCL, as will parts of the UK Shared Business Services Ltd operation. SSCL will deliver payroll, HR, finance and procurement services to the existing customers of these centres, with further government departments, agencies and public bodies expected to join in due course.
Minister for the Cabinet Office Francis Maude said:
Steria Limited has set out a compelling vision for how they will work with us to help government deliver back office functions more efficiently and, ultimately, more competitively. A key part of the Civil Service Reform plan is making government more unified, enabling civil servants to focus on delivering exceptional public services.
It makes sense for government departments, agencies and public bodies to share services and pool expertise, so that hard-working taxpayers don’t have to foot the bill for duplicate services. Instead they will be able to focus on providing services rather than managing back office functions. This is a great partnership which will promote the kind of growth that sees profits delivered back to the taxpayer and will help Britain compete in the global race.
Stephen Kelly, Government Chief Operating Officer and Head of the Efficiency and Reform Group said:
Appointing Steria Limited as a private sector partner to run this second Independent Shared Service Centre will allow us to maximise the economies of scale that arise when departments pull together. We can build on the existing expertise across government shared services by harnessing Steria’s experience and commercial best practice to deliver efficiencies for the government and significant savings to the taxpayer.
Earlier this year the government signed the contract for the running of the first Independent Shared Service Centre (ISSC1) with the private sector provider, arvato, and demonstrates progress in delivering the Strategic Plan for Next Generation Shared Services.
Notes to editors
The Independent Shared Services Centre 2 (ISSC2) project is part of the Civil Service Reform Plan and contributes to a more cost effective and unified Civil Service. It will create a new UK-based shared services business (owned 75% by the private sector and 25% by government), initially delivering services to DWP, Defra and Environment Agency and generating at least 35% savings to government. The Cabinet Office has led this project, working effectively with all public sector customers of the service.
The new company, Shared Services Connected Limited (SSCL.), will be initially formed from a consolidation of some existing shared service centres: DWP, Defra, and the Environment Agency. In-scope services from UK Shared Business Services Ltd (UK SBS) are expected to join by 2015. It will comprise 1,200 staff serving approximately 150,000 customers.
The Strategic Plan for Next Generation Shared Services (NGSS) has learnt from previous attempts to share back office functions. Unlike existing shared service centres, both ISSCs will be run independently of government departments. NGSS seeks to eliminate duplication and maximise standardisation by reducing the present number of departmental service centres from 8 to 5. This will contribute to the overall savings target of between £400 million and £600 million as part of the wider programme to transform government back office functions.