Shared Services for Efficiency - A Progress Report

A £3 billion reform programme in the Northern Ireland Civil Service is the subject of to-day’s report by John Dowdall CB, Comptroller and Auditor General for Northern Ireland.

The seven projects which make up the programme are pivotal to the reform of the Civil Service and, according to the Audit Office report, are, in some cases, already beginning to change the way the civil service operates. Although it is still too early to reach a firm conclusion as to whether these new services are delivering the efficiencies and benefits envisaged, Mr Dowdall found that the establishment of a Civil Service Reform Oversight Board by the Department of Finance and Personnel (DFP) has led to the development of more effective programme management arrangements that align with good practice. However, he also found that some projects have encountered difficulties which have produced challenges for DFP.

Main Findings

• Each project is supported by a Business Case which sets out the strategic and policy context and defines the operational need for the services being procured.
• The five projects which were subject to external procurement attracted at least three private sector bids. This was during a Shared Services for Efficiency – A Progress Report period when only 67 per cent of PFI projects in England received three or more bids.
• Some projects have gone through significant changes during the procurement process. For example, in HR Connect a shift in the procurement approach and extension to the contract period resulted in the cost increasing from an original estimate of £328 million to £465 million. In contrast, the cost of Network NI reduced significantly from an original estimate of £48 million to £29 million; this was mainly from a change in scope and the successful bid being significantly lower than expected.
• Generally projects have taken longer to procure and implement compared with original estimates. Contract signature has been reached 9 to 18 months later than initially planned, with Workplace 2010 experiencing a longer delay. The reasons include initial timetables based on optimistic assumptions, changes at preferred bidder stage, unforeseen complexity and, in the case of Workplace 2010, a legal challenge by one of the unsuccessful bidders.
• Managing the procurement and implementation of these projects has been a major challenge for DFP and gaps in capacity and capability have been filled with assistance from the private sector. Up to December 2007, project procurement and implementation costs have exceeded £44 million.
• Several projects reached contract signature although benefits realisation strategies were either still under development, required more work or were not yet approved. However significant progress was made during the latter part of 2007 on the baseline information that is needed to develop these strategies.
• Both the HR Connect and Records NI contracts reflect good practice. For example, the Records NI terms and conditions include open book accounting and ‘gain sharing’ arrangements and provide for benchmarking during the lifetime of the contract. In HR Connect, the contract allows for departments in Great Britain to reuse, in certain circumstances, the process and software solution developed.
• Most projects have used the Gateway Review process and formal post procurement ‘lessons learned’ reports have also been completed for three of the projects.

Notes for editors

• The Comptroller and Auditor General is Head of the Northern Ireland Audit Office (the Audit Office). He and the NIAO are totally independent of Government. He certifies the accounts of Government Departments and has a range of other public sector bodies. He has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and public bodies use their resources. His reports are published as Assembly papers.
• The Comptroller and Auditor General’s report “Shared Services for Efficiency – A Progress Report” is published as NIA 206/07-08 of Session 2007-08. It is available fromthe Stationery Office throughout the United Kingdom. It is also available on the Audit Office website at www.niauditoffice.gov.uk. The report is embargoed until 00.01 hours on 24 July 2008.
• The NICS is undertaking a major programme of reform which was launched in October 2004 with the publication of “Fit for Purpose: The reform agenda in the Northern Ireland Civil Service”. The Comptroller and Auditor General’s report covers progress to the end of December 2007 on seven key projects which have been taken forward in the context of the reform agenda. Six of the seven projects are being implemented after separate procurement and/or appraisal processes. The seventh project, Workplace 2010, is currently working to select a preferred bidder with a view to having a contract signed in 2009. The projects, which provide for a service-wide consolidation and redesign of business processes into standalone centres or ‘shared services’ projects, are;
  • HR Connect – provides personnel services from a shared service centre;
  • Workplace 2010 – aims to introduce a modern working environment in the NICS;
  • Records NI – an IT based common storage facility for all of the NICS records;
  • Account NI – provides centralised transaction processing services from a shared service centre;
  • Centre for Applied Learning – provides quality generic training services to NICS departments and agencies, including senior civil servants;
  • IT Assist – a new information and communications technology (ICT) shared service centre; and
  • Network NI – the delivery of voice, video and data communication in a high-speed network service connecting all NICS locations;
• The review has not set out to make an assessment of the value for money of each project. But given their strategic significance, the Audit Office will continue to monitor their implementation with a view to providing further assurance reports to the Assembly.