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New shared services contract for Department for Transport

The Government is establishing the first independent shared service centre to cut the cost of back office functions and save up to £600m a year.

The seven-year contract with arvato covers the management of the Independent Shared Services Centre 1 (ISSC1), created from the existing DfT shared service centre in Swansea.

The contract includes an optional three year extension and could eventually include provision of HR, procurement, payroll and financial transactional services to multiple government departments and arms length bodies.

Arvato will share expertise across systems to adopt common processes and cut costs.

Cabinet Office minister Francis Maude said: “The creation of an Independent Shared Service Centre takes us one step closer to delivering the faster, smaller and more unified Civil Service we envisaged in our Reform Plan.

“Although it’s perfectly obvious that sharing services makes sense, successive governments have been unable to make progress on this for the past decade.

The taxpayer should no longer have to foot the bill for duplicative services. Instead departments will be able to focus on providing services rather than managing back office functions.”

Philip Rutnam, permanent secretary at the DfT, said: “This is a significant step forward for the department, and the government, as we seek to improve, standardise and simplify back office processes while delivering better value for money and greater efficiency.”

Stephen Kelly, head of the Cabinet Office Efficiency and Reform Group, said: “Appointing a private sector partner to run the first new Independent Shared Service Centre will allow us to maximise the economies of scale that arise when departments pull together.

“Whilst we seek to build on experience gained through running shared service centres within the public sector, the time has come to move away from the fragmented and constrained model that has existed to date, instead harnessing the advantages of commercial experience and industry best practice.”

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Image c. Philip Toscano/PA Wire


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