Twelve Open Questions for UK Government on its Strategic Vision for Shared Services

English: Oliver Letwin MP, Minister of State, ...

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English: Francis Maude MP, Minister for the Ca...
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A. INTRODUCTION – BACKGROUND AND CONTEXT 

This week, I belatedly spotted that the Government had published the August Structural Reform Plan progress report (published September 9). This initiative has really been an important step forward by the Coalition Government in open reporting to the public. My first deep dive was into Department of Works & Pensions (DwP), looking for an update on the Universal Credits programme. Readers of this blog will remember that two weeks ago, I published a blog entitled “Cabinet Office & Treasury Score Own Goal with “Catch 22”: More Myths, Realities & Escalating Risks?” which focussed extensively on the Public Accounts Committee serious concerns about the risks on the  Government’s flag-ship welfare reform programme, with subsequent alarm bell headlines across the UK media.

When I turned to the DwP update for the month of August in the Government’s August Structural Reform Plan progress report (published September 9), it simply reported “work ongoing”. This immediately put me on alert and I questioned:

Is it possible that the August Structural Reform Plan progress report, published by the Prime Minister’s Office and the Cabinet Office might not be entirely accurate in its representation of risks to the Structural Reform Plans?

This prompted my second deep dive into the August Structural Reform Plan progress report into the update from the Cabinet Office, which had been struggling against delivery milestones all year, for example, the Open Services White Paper was published six months later than originally planned (the Open Services White Paper was examined in detail in an earlier blog). Like the DwP, the Cabinet Office reported all actions as “work ongoing”. Anyway, this prompted me to research further on the Cabinet Office’s web site. Much to my surprise, I noticed that the Cabinet Office had published the Government Shared Services – Strategic Vision, July 29. I found the date of publication interesting as it was immediately before the Parliament’s Summer recess – also I remembered that Francis Maude had published an update on the Government’s “Catch 22 strategy” update on August 1. To remind the reader that two weeks ago I wrote on my blog:

Regular readers of this blog will know that I have repeatedly highlighted the increasing likelihood of failure from Local Authorities relying on Shared Services programmes to achieve draconian cuts in budgets (mandated by the Coalition Government). Last week, I cautioned against spending another £5 Billion on capital investment, citing the Government’s capacity to avoid the next omnishambles. Most of this year, I have also been leading a campaign to get the Cabinet Office to reverse its Catch 22 policy which, in my view and that of many colleagues, is not in the national best interest. The Rt. Hon. Francis Maude MP, Minister for the Cabinet Office and Paymaster General has claimed that the Government’s Catch 22 controls over independent executives, consultants and contractors has saved circa £1 billion. Unfortunately, the reality, highlighted this week, is that the Catch 22 policy is a fatal own goal, with circa £3 billion plus of cost savings at increasing risk of delay, overspend and failing to meeting their policy objectives. The Government’s flagship welfare reform programme is just the latest casualty.

B. GOVERNMENT SHARED SERVICES – STRATEGIC VISION

As a Shared Services specialist, with a keen interest in Public Sector Shared Services, I was seriously intrigued why I had not spotted the  publication of the Government Shared Services – Strategic Vision earlier. Readers of this blog will know that I have been regularly blogging on this theme all year. In September, I published an update entitled “UK Local Authorities and Shared Services: Cost-Cutting – Myths, Realities and Escalating Risks?” which generated quite a lot of debate. I started to ask myself :

Why had the Cabinet Office published its Government Shared Services – Strategic Vision on July 29, six months late but immediately ahead the Summer recess and just before Francis Maude’s update on cost cuts (August 1) which captured quite wide media attention? (the Government Shared Services – Strategic Vision received very little media attention)

My original intention for this blog was to publish a critical review of the Government’s Strategic Vision for Shared Services but I was so disappointed by its content that I decided that for this blog I would just try to focus on generating some critical questions.  I was also a bit worried that I would perhaps demonstrate too much bias and wanted to test my perceptions on the wider public’s views too.

C. OPEN QUESTIONS?

  1. Has the Cabinet Office followed proper process and engaged in adequate consultation with stakeholders?
  2. Has the Cabinet Office adequately addressed its own bias and that of its limited group of external advisors, given that it had been charged with implementing Shared Service strategy since the Gershon Report in 2004 (the Cabinet Office subsumed the Office for Government Commerce -OGC)?
  3. Has the Cabinet Office compromised its Strategic Vision for Shared Services by creating a special and biased case for the Department of Transport (DfT), given that the DfT’s record on Shared Services has repeatedly been severely criticized since Gershon?  
  4. To whom did the Cabinet Office turn for expert advice in publication of this strategy paper and to what extent were they genuinely independent advisors?
  5. The Cabinet Office has declared circa £60 million of savings since Gershon (citing only DwP, MoJ and the Home Office) on an annual spend of £2.5 billion, equivalent to equivalent to 1%, when Best Practice in the Private Sector is circa 40% savings, so why has the Cabinet Office not targeted savings of say 40% (Best Practice), as part of its strategy, which would be equivalent to annual sustainable savings of £1 billion?
  6. Why didn’t the Cabinet Office strategy include Local Authorities, which presumably could generate savings of another £1 billion?
  7. Why has the Cabinet Office not mentioned Shared Services savings for all the departments and Local authorities since Gershon, and is one to assume that all the huge transformation work on Shared Services since Gershon in 2004 has not generated any auditable efficiency savings? 
  8. Why didn’t the Cabinet Office strategy cite the costs of consultants in engaged in advising on Shared Services since the Gershon Report? (Given declared savings of just £60 million, I would also question whether the vast sums spent on Shared Services consultants (since Gershon) have been in the overall public interest, i.e. has the tax payer lost out because consultants have not delivered demonstrable value for money?)  
  9. Is Shared Services the right solution for the Public Sector, compared to say outsourcing, given just 1% savings in nearly eight years, and unknown millions/billions of pounds spent on consultants?
  10. Should the Prime Minister perhaps intervene, like with Healthcare, and invite wider stakeholder consultation on Shared Services?
  11. Should there be a public enquiry as to why Shared Services has only generated £60 million of savings in eight years (equivalent to 1% on £2.5 billion), given the inherent bias of the Cabinet Office (including subsumed  OGC) and its narrow group of professional advisors?
  12. Should the Cabinet Office reverse it’s Catch 22 and policy and positively encourage independent executives and consultants, with suitable Shared Services expertise, to operate client-side in both Central and Local Government (bearing in mind that top-tier independents are a proven smarter choice than branded consultants?)

D. NEXT STEPS

I would encourage the interested reader to critically review the UK Government’s Strategic Vision for Shared Services and reflect on my Twelve Open Questions. Everybody is most welcome to share their views below.

6 responses

  1. Pingback: Dealing with Austerity – Commodity or Individual: Personal Branding: the Next Frontier? – Part 1 | Dr Alf's Weekly Blog

  2. I think there are broader political questions which underly the lack of progress the Coalition is making and to me it is obvious that the Government has continued to listen to the wrong people and is not prepared to do otherwise.

    1) The Coalition is basing it’s entire strategy on the premise that cutting the deficit is the only game in town and that private sector growth will mop up the ensuing unemployment.

    From the very start, it was clear that the private sector lacked the confidence to do this and with bank lending curtailed could not start up new businesses in anything like the required numbers.

    The banks were told to rebuild their balance sheets but have not been forced to lend or do anything else and global investment flows have been into China,India and the Far East whilst this country is bled dry.

    2) The Government therefore does not believe that the private sector will pull the UK economy out of trouble and is resigned to doing nothing to accelerate the pace of public sector reform to the required levels because to move at that pace would require more exporting and real impetous to the private sector.
    It reasons that it is not prepared to upset its natural supporters in the business community and is following the bigger agenda which is deindustrialisation in most Western economies and a flow of work and capital eastwards.

    The evidence of our own eyes is proof enough of this so I do not need to produce evidence.

    Taking your first point about stakeholders, it, of course, has not consulted them or told the public it’s true motives, if it were to do so there would be uproar and still may be later.

    3) The answer to your second point must also be no because the people who advise the Cabinet Office are the same people, drawn from the Big 4 and strategy houses (like McKinseys) who have wasted billions over the years with flawed advice and have failed to get to grips with value per taxpayer pound which by a margin of 3 to 1 is worse than Singapore and just 17th in the world.

    In the case of the MOD which in my lifetime has never delivered a single project or piece of procurement on time and to budget, one could be forgiven for thinking that civil servants and defence contractors have deliberately conspired to bilk the British taxpayer on a grand scale.

    4) The Department for Transport has a record going back for more than 100 years of underestimating traffic demand, building roads too late at extra cost, failing to get accurate weather forecasts and getting it’s figures wrong at every turn.

    The latest example of this is it’s refusal to widen the A14 despite the fact that this decision which affects 50% of our imports and exports, worsens our balance of payments because goods take longer to emerge from the Port of Felixstowe and to our export markets.

    The Strategic Vision for shared Services, if it contains any figures from the DOT must therefore be suspect by default.

    5) Advisors who are part of the furniture and on long term contracts inevitably go “native” but from a strictly legal point of view a Big 4 consultancy or systems integration house is “independent”.

    6) The Cabinet Office did not need to include local authorities because David Cameron said that they were responsible for their own affairs within tight cash envelopes and that he did not believe in “police force mergers”, “fire service mergers” but that he thought that back office savings were possible.
    He knew or should have known, as I did as early as October 2010, that Price Waterhouse Coopers had prepared transformational blueprints for every local authority in the country.

    By not including them, he could then argue that their financial troubles were down to them and to the public sector unions.

    Of course local authority CEO’s and the trades unions have argued the opposite case and have convinced the public at large and some people on LinkedIn that it is all down to the Government and their meagre cash settlements when in reality the waste, fraud, nepotism, cronyism and mismanagement continues virtually unabated with casualties occurring at the lower ranks.

    7) This answers your points 5, 6, 7 and 8, except that the Government still doesn’t know the true costs of consultancy due to the fact that about £8 billion gbp is buried in outsourcing contracts.

    The inability of the NAO and the Government’s number crunchers to get to these figures, either shows that the Government doesn’t care, or that the people it uses to produce the figures are not up to the job.

    8) Outsourcing without TUPE would be a better solution than shared services because shared service models in this country embody TUPE and simply roll up all the waste into another unauditable area.

    9) There is no point in the Prime Minister intervening because he is too prone to U turns and is not sufficiently on top of the detail to get to the truth even though he means well.

    An enquiry using UK citizens would be compromised by the Civil Service “Sir Humphreying “it’s findings, appointing an expert in whitewash to lead it and filleting the findings, so as to make them innocuous and misleading to the public.

    To get to the truth, you would need someone respected from overseas with no stake in the outcome and even then the civil servants and politicians would find some way of traducing the findings or the person who wrote the report.

    10) Should the Government reverse “Catch 22”, yes of course it should, but the ISP’s failed to lobby (interim service providers), failed to make their case with sufficient vigour, the Press is supine and the UK taxpayer is largely asleep.

    Will they awaken and will the Press force change?

    Perhaps, but our industry such as it is needs to raise it’s game, otherwise like the dinosaurs destroyed by the pole shift and a comet creating tsunamis millions of years ago, many of our number will become extinct entities that no-one even remembers any more.

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