Shared services in government: Today’s challenges, tomorrow’s potential
Dr Thomas Elston of Oxford University's Blavatnik School of Government with with the Cabinet Office and HM Treasury brought together policymakers, consultants, industry experts and researchers to examine the opportunities and challenges of shared services reform.
Especially since the global financial crisis of 2007-2008, the sharing of administrative services (like HR, finance and procurement) between multiple agencies has emerged as a key reform strategy for governments looking to deliver better public services at lower cost to the taxpayer. The UK Government is currently seeking annual savings of up to £600m from its Next Generation Shared Services programme, and further opportunities are being sought to share professional functions between government departments, including legal advice, internal audit and analytic services.
Historically and internationally, such ‘shared services’ have proven challenging to deliver in the public sector, as they require significant business and cultural changes. Moreover, research at the University of Oxford suggests that technical problems can emerge because some back-office functions are deeply intertwined with primary policy activities and thus are not easily standardised. Therefore, in the UK and elsewhere, today’s key policy challenges concern how to achieve maximum benefit from existing reform programmes, and where to look to next for further savings.
In September 2014, in partnership with the Cabinet Office and HM Treasury, Dr Thomas Elston of the Blavatnik School of Government brought together policymakers, consultants, industry experts and researchers for a two-day conference on the opportunities and challenges of shared services reform. Included among the 24 delegates were senior officials from the UK Government, the Northern Ireland Executive, and the US Federal Government, executives from leading private sector organizations, six experts from Deloitte and the OECD, and six academics from the University of Oxford, Kings College London, and the University of Antwerp. The delegates took part in presentations, Q&A sessions and roundtable discussions focusing on international reform developments, trends in private industry, strategic priorities of service providers and service users, and the challenges of service benchmarking.
Subsequently, Dr Elston prepared a policy memo titled To Share or Not to Share? Delivering Corporate Services in 21st-Century Government. The provides succinct, research-based analysis and recommendations for government officials in the UK and beyond, and was published in March 2015. The project partners provided feedback and advice on early drafts of the memo.
The memo attracted attention in the UK and internationally, in countries as far apart as Canada, Australia and South Africa. In the UK, there is growing appreciation of the challenges of delivering substantial savings through shared service reforms. Dr Elston submitted further written advice to HM Treasury as part of its external outreach in preparation for the Spending Review 2015, warning of the key risks to achieving major cost reductions in back-office services. The key messages from that advice were also summarised for a blog post on the BSG Faculty Blog, and formed the basis of a presentation to the Portuguese government in December 2015.
Dr Elston is now pursuing a larger study of shared services as part of a Leverhulme Trust Early Career Fellowship, in collaboration with several delegates from the 2014 conference.
This project was funded by Oxford's ESRC Impact Acceleration Account.