Business-critical Government change programme at risk due to lack of funding, says PAC

• Over £500 million a year spent on back-office functions after multiple failed attempts to rationalise
• PAC says Government must free up taxpayers’ money for essential front-line services

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All government departments need a range of corporate functions to support their operations and people, including human resources, finance, procurement, and payroll. These services are used by more than 450,000 civil servants.  

For the last two decades, central government has been trying to share more of these ‘back-office’ services across Whitehall departments to cut costs and improve efficiency. But previous strategies have failed to deliver shared services, and back-office functions are costing the taxpayer over £500 million each year.  

In a report today, the Public Accounts Committee repeats previous warnings that the longer it takes for government to get on top of the situation, the greater the impact will be on the effective functioning of government and on the ongoing cost to the taxpayer.  

Some progress has been made in the last two years, but the Committee remains concerned that this effort may falter like previous strategies. Lack of an overarching business case for the latest Shared Services Strategy, lack of the funding to deliver it, lack of quantified benefits of doing so, and lack of a contingency plan, all mean delivery of this Business-critical change programme is at risk. 

Chair's comments

Dame Meg Hillier MP, Chair of the Committee, said:

“If the Government is looking for efficiency savings in this economic and cost-of-living crisis it should start right at its own door. Delivering back-office functions such as civil service HR, IT and payroll piecemeal are costing the taxpayer over £500 million a year while departments argue with the Treasury over how much more money they need to improve them.  

This money is in fact desperately needed for essential public services, and for public services delivered well and efficiently, with value for the taxpayer the uppermost concern. If this latest strategy to rationalise is to be a success it needs to reduce costs while also freeing up resources from the back-office for our struggling front-line services.”