The Scottish Government

Answers to Questions

Question 1 What is Shared Services about?

Answer 1

Efficient Government is about delivering excellent public services with greater user choice. We want to attack waste, bureaucracy and duplication in Scotland's public sector. We need to get more out of the money we spend by ensuring we have the right people, with the right skills, in the right numbers, working in the right way. We set out our plans for Efficient Government in the document "Building a Better Scotland" and Shared Services is one of the key workstreams identified in that document.

Shared Services will be a key driver for the delivery of the 2010 efficiency target of £1.2b/annum set out in the Efficient Government plan and will support our wider Public Service Reform plans [link] by seeking to put in place an adaptive, flexible, and efficient infrastructure to support the delivery of frontline services. This can free up significant resources to be reinvested in frontline services and improve customer service to public sector organisations and the general public.

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Question 2 What areas are you looking at?

Answer 2

The Shared Services framework will apply to all public sector organisations in Scotland. Examples where sharing has good potential include aspects of:

• support functions such as Accounting, Payroll, Procurement, Human Resources, Facilities, and Information and Communications Technology, which all organisations need to support their core business and which are delivered to customers within the organisation, rather than to the public,
• the common operational processes and systems that underpin front line services and
• Infrastructure to support those common operational processes.

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Answer 3

There are numerous examples in the public and private sectors at home and abroad where shared services has delivered substantial savings whilst at the same time improving customer service levels. Our research has indicated that on average a conservative estimate of 20% savings can be achieved on an annually recurring basis. In Scotland we have world leaders, such as the Royal Bank of Scotland, and we are drawing on thier expertise and experience.

Equally a number of Scottish public organisations [ link to resources page] have implemented various types of shared service arrangements which provides a good platform upon which to build. The cabinet office shared services tool kit also provides further case study and backgroun information in the benefits of shared services.

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As yet there are no specific targets for savings to be achieved by sharing services, although it is expected to play a significant role in achieving the £1.2b/annum 2010 efficiency target set out in the Efficient Government Plan. For indicative purposes, it is possible to gauge the potential prize that could be gained through shared services by using some of the available statistics. Scottish Executive Department Expenditure Limits for 2006-07 are £26.5bn. Our research gives a figure that between 5% and 15% of expenditure is spend on support costs, which is between £1.3bn and £4bn. Research also indicates that a conservative estimate of savings that could be achieved by sharing is 20%. This equates to potential savings of between £260m and £800m.

These savings will be monitored by the Scottish Executive, and all projects will have robust business cases and baseline measures against which to benchmark and measure future benefits.

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Question 5 What will be done with the money saved?

Answer 5

It will be up to individual organisations to decide how to reallocate savings, but all efficiency gains will be directly reinvested in frontline services and will help deliver our goal of world class public services.

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Question 6 Is this about cuts?

Answer 6

No - this is about releasing resources for frontline delivery. All resources freed up will be ploughed back into frontline services. We all recognise that the rate of expansion in resources seen in the public sector over the last few years cannot continue; however, people's expectations of the services they receive will continue to increase. This combined with demographic pressures will make getting the most out of our resources a high priority over the coming years. Greater efficiency in the services we deliver will help us meet these challenges.

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Question 7 How many jobs will be lost?

Answer 7

The focus is not on job losses and the will be no specific targets for redundancies. However it is clear that shared services will have implications for the jobs of some staff as we seek to move resources from support functions towards working on frontline services. We recognise that our people are our best assets and that their motivation is key to delivering our aspirations for world class public services. There will be a strong focus on retraining and redeploying and a presumption against compulsory redundancies. We want to continue to engage with the unions to ensure best practice is followed.

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Question 8 Are we adopting a private sector fad?

Answer 8

Whilst shared services did indeed originate in the private sector, it is now a mainstream concept and has been in use for over 20 years. And it is not just in the private sector - it has also been successfully implemented in the public at home and abroad. As with any change programme, it can be done well or badly, and we are committed to learning lessons so we do it as effectively as possible. There are numerous examples of the shared services approaches adopted by a range of organisations in the public and private sector.

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Question 9 Is this about privatisation or outsourcing?

Answer 9

We have no favoured models for sharing. The right model will be different for different situations and services. It is unrealistic to assume the public sector can deliver everything, so we want to consider the best way to leverage private sector expertise and funding. There is no ideology behind this - what counts is what works. We are open minded and everything is on the table. We want to get the best outcome for the people of Scotland.

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Question 10 Does this mean jobs leaving my local area?

Answer 10

Firstly, there are many options about how sharing can be moved forward, all of which can deliver savings. Internal improvement, shared business systems, public sector owned shared services, and joint ventures are all valid approaches. Not all of these will involve relocation, and the driver must be the business case and what makes sense for the particular organisations and services under consideration. Secondly, where required, relocation decisions will be determined openly and transparently with a presumption against unnecessary concentration in any one area.

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Question 11 How does this fit with other areas such as Best Value and Public Service Reform?

Answer 11

There are a number of linked initiatives, all aimed at supporting the drive for more efficient and effective public services. Best Value provides a performance framework, Public Service Reform is a high level debate about the long term structure of the public sector, and the Efficient Government Initiative brings a practical focus on freeing up resources for frontline delivery. Shared Services is part of the Efficient Government Initiative and is about putting in place an adaptable, flexible, efficient infrastructure to support whatever model of frontline delivery is in place.

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Question 12 How much consultation has taken place?

Answer 12

Shared Services is an area which has been consulted on from first principles. It is key that the public sector takes ownership of this agenda. Expert advice from a range of key stakeholders was gathered and contributed to the development of the Shared Services public consultation document, which set out a direction for the next 10 years. The Scottish Executive will inevitably play a leadership role in facilitating cross cutting debate, but we are keen that communities within the public sector take ownership of delivery.

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Question 13 Is this about centralisation?

Answer 13

We have no favoured model for delivery. In some cases a centralised approach will be the best approach, for example with national procurement in NHS Scotland. In others a distributed virtual shared service may be more appropriate. What counts is what works, and we recognise the diversity in public sector organisations in Scotland. The customer will be at the heart of any decisions about the provision of their support services.

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Question 14 What does it mean for the public?

Answer 14

Most of the services being looked at are internally focused so do not have any direct contact with the public. The main benefits will be in freeing up resources for frontline delivery. Some systems, such as customer relations management, are customer facing, and these can help hide some of the wiring behind accessing public services. Transactions with public sector organisations will be faster, smoother, and hopefully fewer in number as information is more easily shared. There are already excellent examples of use of new technology and best practice, and we want to bring everyone up to the same standard.

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Question 15 Are your expectations unrealistic?

Answer 15

We are not asking the public sector to do the impossible. There are already excellent examples in the public sector, and we want to bring everyone up to these standards. Every member of the public deserves the same experience as with the best.

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Question 16 What support for retraining will there be?

Answer 16

We recognise that this change programme will understandably cause some staff to be anxious and we need to take steps to reassure them. However, equally, no public sector employee wants to feel like their time is not being used for efficient and effective services. We want to remove the barriers presented to job satisfaction by bureaucratic systems and processes. We want to ensure everyone is working in a job they feel is serving the public in the best way - this is the essence of the public sector ethos. There will certainly be a presumption against compulsory redundancies and a commitment to retraining and redeploying where possible. Public sector leaders have a duty to help spread these messages and to help reassure their staff.

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Question 17 What incentives are there for staff to buy into this?

Answer 17

In the best shared service arrangements there is a real focus on delivering excellent support services. The link between staff development, welfare, and overall performance is understood and recognised. This is often in contrast to internal provision where support services can be seen is a second tier priority. A shared service centre also presents the opportunity to develop a professional career structure for support services employees.

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