Monday, 9 July 2012

Francis Maude and the economies of scale

"A seven-year government efficiency programme has backfired and increased costs for the taxpayer by hundreds of millions of pounds, a public spending watchdog said ... Whitehall departments have spent £1.4 billion in an attempt to save £159  million by sharing "back-office" functions such as personnel and procurement ..." – Telegraph readers and followers of DMossEsq have known all about this since March.

Any 12 year-old management consultant can make the case that sharing services saves money. It stands to reason.

Except that it's not true.

And now the Public Accounts Committee have a few words of advice for Francis Maude and the Cabinet Office:
Committee chair Margaret Hodge said: "Shared service centres have failed to deliver the savings they should have. They cost £1.4bn to set up, £500m more than expected, and in some cases have actually cost the taxpayer more than they have saved. I welcome the Cabinet Office's ambitious new strategy for improving shared services. But unless it learns from the past it will end up making the same mistakes again."
Will Mr Maude listen to Parliament? Or to the agile 12 year-olds touting shared services in the G-Cloud?

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