Auditor Urges Increased Shared Service Savings

Audit Scotland a statutory body set up in April 2000 ensure that the Scottish Government and public sector bodies held to account for the proper, efficient and effective use of public funds.says the country's public sector is making slow progress in achieving savings from shared services

The report, Improving public sector efficiency, says that shared services remain a "key challenge" for Scottish public bodies who are facing the greatest financial pressure since devolution.

In the first year of Scotland's Efficient Government Programme, the report says £12m was saved through shared services projects. Local authorities reported efficiency savings of £3.8m and the central government reported £3m.

The public sector must continually strive to improve efficiency
The Scottish Executive has said that shared support services, including IT, have the potential to generate "substantial" efficiency savings. It has called for public bodies to join up support service arrangements within and across sectors.

Welsh First Minister also calls for efficiencies
The Scottish report comes on the same day the Welsh First Minister Carwyn Jones, is due to call on public service bodies in Wales such as the NHS, police and councils to become more efficient at Wales' first Public Services Summit.

Audit Scotland Report Highlights
• The public sector has reported £839 million of efficiency savings in the first year of the Efficient Government Programme. 57 per cent higher than the £534 million target. Of the reported savings, £254 million (30 per cent) have been delivered through better purchasing, better asset management and shared services, but there is still scope to increase savings from these areas.
• The scale of the financial challenges facing the Scottish public sector means that a new approach is needed that fundamentally reviews priorities and the delivery of services.
• While there is a significant amount of joint working, there's a continuing need for more and better coordination between public sector organisations to improve productivity and safeguard quality of service delivery.
• The public sector needs a better understanding of the relationship between costs, volume and quality of services to maximise improvements in productivity and reductions in cost.
• There must be less reliance on seeking efficiencies, through non-recurring savings such as asset sales
• Planning for two per cent efficiency savings each year will not be sufficient to bridge the gap between projected future spending and future funding.
• Better coordination could provide more consistency in reporting efficiency savings and allow better sharing of good practice.

Report Recommendations: The Scottish Government and public bodies should:
• ensure they have a priority-based approach to budgeting and spending
• continue to improve collaboration and joint working, overcoming traditional service boundaries
• improve information on costs, activity, productivity and outcomes, including setting baselines to measure performance against
• give greater urgency to developing benchmarking programmes
• maintain the momentum of activities and initiatives to improve purchasing and asset management and extend shared services
• ensure there is a joined-up approach to efficiency savings across the public sector, avoiding duplication
• ensure that plans are in place to deliver savings, clearly setting out what action will be taken, the level of savings to be delivered and how these will be measured
• strengthen the involvement of front-line staff, service providers and users in redesigning public services

Full Report