Shared Services for the UK Public Sector

The incoming government has already announced that a number of high-profile shared service initiatives will be scrapped, including BECTA and ContactPoint. While some of these initiatives have been overshadowed by privacy concerns, their abolition is seen as a cost-saving measure, thus indicating a lack of belief in the cost-saving arguments previously put forward for these initiatives.

The termination of ContactPoint will introduce migration problems for local authorities that have already migrated their systems and procedures onto the ContactPoint database, and will now need to procure some viable alternative. (What should follow ContactPoint? CYP May 2010)

At the same time, however, new shared services are being proposed. For example, I note a report commissioned for the Welsh government, suggesting that collaborative working and shared services could make savings on its education budget [Kable, 19 May 2010]. And Westminster wants to share social care software [Kable, 25 May 2010].

The whole area of shared services remains controversial. John Seddon of Vanguard, a notable critic of shared services, has been voluble in his criticism of the assumption that shared service designs will automatically lead to economies of scale and therefore lower transaction costs. Here are a couple of his pieces.

• Open Letter to David Miliband (May 2006, registration required)
• Speech against the motion 'Shared services will deliver the greatest efficiency' (Institute of Revenues, Ratings and Valuation annual conference, October 11th 2006)
• Why I'm suspicious of shared services (Local Government Chronicle, January 2010)

I agree with Seddon that the business case for shared services often looks simplistic if not naive, and there appear to be some serious architectural flaws in the way that some of these initiatives have been conceived.

However, I remain convinced that shared services can have a place in the public sector IT strategy, provided that the architectural complexities can be sorted out, and with radical changes to the procurement regime. But there are some critical asymmetries here that have to be managed, and I don't see much sign that the key players fully understand this complexity yet.

And simply abandoning shared services doesn't solve the problem either.

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In December 2004, @PhilBoxer and I wrote an analysis of the Child Support Agency from the perspective of asymmetric design. Public Sector IT - The CSA Case

In January 2006, @davidsprott and I, on behalf of the CBDI Forum, submitted a brief response to the UK government's published strategy on transformational government. Shared Services for the UK Public Sector (pdf). Our response identified the need for architecture, but we didn't spell out what this entailed.