Abstracts: May 16th, 2006

This report from Kable, a provider of public sector research and publishing services, claims that the short term impact of shared service initiatives in the public sector is being greatly exaggerated. There have been estimates of savings of up to £40bn over ten years for the UK public sector from shared services, but the report suggests it is more realistic to assume a long term saving of some 20% – or £2bn – of the estimated annual cost of otherwise providing certain corporate services. The report points out that this lower estimate is broadly in line with the expectations of current public sector projects, and comparable with actual results achieved in commercial organisations.The report estimates that finance and HR represent some 70% of the potential scope for shared services, with a further 10% represented by revenues and benefits, and 20% from miscellaneous, smaller scale and sector-specific initiatives. Over the medium term the report predicts that most of the measurable benefits will be achieved in the back office. The report argues that only about half of corporate services across the public sector are susceptible to a shared services approach. It concludes that given realistic lead times for adoption and achievement of benefits it is likely that shared services can deliver savings in the region of 2.3% of the total £20bn cost of corporate services per annum over the next four years.

Looking to the future, the report predicts that as the market matures attention will move from efficiency benefits to improved service delivery, from shared back office to shared front office services, and on exploiting shared infrastructure to develop linkages across public sector bodies and deliver more citizen-centric services.

The report can be obtained from Rachel Colby on 020 7608 8411 or rachel.colby@kablenet.com.