NAO warns shared services strategy may fall short of promised benefits

The UK government’s plan to modernise Whitehall’s back-office systems through shared digital platforms is unlikely to deliver its full benefits unless longstanding governance and technical challenges are addressed, according to a report from the National Audit Office (NAO).

The watchdog said the government’s Shared Services Strategy – overseen by the Cabinet Office – still faces uncertainty around departmental commitment, funding pressures and problems integrating with other government IT systems.

The strategy aims to consolidate functions such as finance, HR and payroll onto shared cloud-based platforms used across departments. Ministers expect the programme to deliver around £1 billion in net lifetime savings and provide better data to support decision-making across government.

However, the NAO concluded that while progress has been made in establishing delivery structures and procurement plans, fundamental issues remain that risk undermining the programme’s long-term impact.

Governance and commitment gaps

Under the current model, departments are grouped into five shared-services “clusters”, each using a cloud-based enterprise resource planning (ERP) platform. The clusters – Matrix, Synergy, Unity, Defence and Overseas – are intended to bring departments onto common processes and systems by 2028.

But the NAO said some departments have yet to fully commit to delivery plans, even though the Cabinet Office considers participation compulsory. This lack of firm buy-in makes planning and financial forecasting more difficult for the programme.

The watchdog also warned that there is no single owner in central government with a clear mandate to enforce participation or resolve cross-government issues affecting the programme.

Interoperability problems persist

Compatibility between the shared services platforms and other government systems remains a key risk, the report found. At least 25 other digital programmes across government will eventually need to integrate with the shared services clusters.

The NAO highlighted the failure of a new civil service recruitment platform, known as the Applicant Tracking System, which had to be abandoned because it could not integrate with the cluster systems.

In addition, the quality and completeness of data used to monitor progress varies across departments, limiting the effectiveness of central dashboards designed to track delivery.

Funding and delivery pressures

Although the programme has received more than £1 billion in funding since 2021, some clusters still face financial uncertainty and may need to compete for departmental budgets to complete delivery.

The NAO noted that progress has been uneven across government functions. Finance processes are the most advanced in terms of standardisation, while HR reforms have fallen behind schedule and some functions have opted out of the shared services model.

NAO calls for stronger central leadership

The NAO said the shared services strategy still has the potential to drive efficiencies and improve how government manages corporate data. But it warned that stronger governance and clearer accountability will be required to realise those benefits.

NAO head Gareth Davies said governance problems, interoperability challenges and inconsistent departmental commitment are currently “hampering efforts to keep the programme on track”.

The watchdog has recommended that the Cabinet Office clarify responsibilities for securing departmental buy-in and strengthen oversight of how shared services platforms integrate with other government digital programmes.