It’s good to share. Isn’t it?

Eleanor Roosevelt once exhorted us to “learn from the mistakes of others; you can’t live long enough to make them all yourself.” It was with this in mind that I found myself reading a recent report on the government’s attempts to share the administrative services of central government  bodies in areas such as finance, human resources and payroll (http://www.publications.parliament.uk/). What might universities and colleges learn from this endeavour?
The background: four years ago, eight shared service centres were created, five of which are the subject of the report. These shared service centres were expected to cost £0.9 billion to build and were expected to make a saving of £159 million by the end of 2011/12. They ended up costing £1.4 billion. What about the savings? One managed to break even, three failed to track savings, and the fifth has reported a net cost of £255 million. Not quite the money-saving scheme that was envisioned, then, rather more like a rewrite of the plot of Ocean’s Eleven: to save money, George Clooney decides to pool administration responsibilities with several other con-artists. When they finally get the loot, it just about covers the stationery costs.
This report highlights the issues that the plan has encountered, which universities and colleges may find useful when planning their own shared service activities, while recognising that sharing services across autonomous institutions may prove even more challenging than across central government departments. The key lessons are:
It will take a lot longer, cost more and be more difficult than anyone expects.
Lesson number one engenders (almost literally) a sense of déjà-vu; the government failed to learn from the past. Their plans for completion were over-optimistic and unrealistic, and there were no plans for how to measure performance. These centres now have a history of providing poor value for money, and there is no plan on how to remedy this.
Nobody will use it.
The second problem was that when they did get these centres up and running, few people bought into them. Use of the centres was not compulsory, but if only a few departments used them they could not provide the economies of scale required to make them effective. The report recommends the appointment of a senior responsible owner who will be able to persuade potential users to use the shared service centre rather than ploughing their own furrow. One only has to look (in my case rather ruefully) at the number of legal services framework agreements established across the sector and the difficulty in persuading institutions to use those, to foresee that this could be a significant issue in HE and FE shared services.
Even those who do use it will only do so if they don’t have to change how they do things.
The report concluded that the failure to deliver the expected savings was at least in part the result of a lack of willingness to modernise. Streamlining administrative functions is key to increasing savings, but it is not feasible while users are unwilling to change the way they work. This had led to the shared service centres developing over-complicated systems which negated savings.
So all in all, a depressing but instructive tale, and one which does at least offer the opportunity for the HE/FE shared services sequel to avoid the same pitfalls.

Smita Jamdar
Partner and Head of Education
For and on behalf of SGH Martineau LLP
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