James Reilly (Dublin North, Fine Gael)
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Question 50: To ask the Minister for Finance the steps he will take to implement a framework for the development of shared services and outsourcing across the public service; and if he will make a statement on the matter. [44847/09]

Richard Bruton (Dublin North Central, Fine Gael)
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Question 101: To ask the Minister for Finance the details of the pilot programme in shared services and in outsourcing that are under way; and the estimated saving anticipated in total as a proportion of the original cost. [45147/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 50 and 101 together.

The report of the Task Force on the Public Service, Transforming Public Services, defined shared services as the bringing together of activities that have been previously performed in many Departments or agencies into a single or small number of centres in order to perform routine processes more efficiently and effectively. It identified the most common areas of shared services as payroll, financial management, human resources management, means assessment, procurement and common ICT services.

The Task Force noted that experience in both the public and private sectors demonstrates that benefits can be realised by the adoption of shared services models under certain conditions. It recalled the view of the OECD that an incremental approach should be taken to the development of shared services which should be a strategy that is only pursued where a clear ex-ante case can be made for achieving either financial benefits or service improvement.

Experience elsewhere shows that shared procurement activities and shared technical infrastructures have high success rates and deliver very high rates of return if managed well. On the other hand complex issues have to be tackled for many of the remaining shared service opportunities and there is plenty of evidence both of failures and successes, with positive rates of return being delivered only in the medium term.

The Cabinet Committee established a series of working groups with membership drawn from across the Public Service to develop proposals for shared services in four areas - Human Resources and Pensions; Finance and Payroll; Single Point of Telephone Contact; and Simplification of Means Assessments. The Cabinet Committee has now considered initial reports in this area and a series of priority projects have been identified to be progressed, with the lessons learned from these projects being applied to subsequent developments in other areas.

Initial findings indicate that there are benefits to be realised from the adoption of shared services models through administrative and operational improvements, reducing costs associated with duplication, enabling business change and building organisational capability. However, it is not possible at this early stage to quantify such savings.

A number of major initiatives to provide shared ICT approaches have been implemented over the past few years. These include voice, data and mobile telephony, digital radio services, framework procurements for IT commodity items such as PCs, laptops and printers, and digital radio services. The Department of Finance is now working with a number of other public bodies to progress other potential opportunities for additional shared ICT approaches.

In the area of procurement, the National Public Procurement Operations Unit has been established in the Office of Public Works. A Project Board has been set up under the chairmanship of the Minister of State at the Office of Public Works, Martin Mansergh, to oversee the development of the Unit. The Board comprises representatives of the Department of Finance, the Department of Education & Science, the Department of the Environment, Heritage & Local Government, the HSE and Department of Finance & Personnel, Northern Ireland. The Government has decided that the NPPOU is to be responsible for managing the purchase of goods and services common to all areas of the Public Service, e.g. office equipment, furniture and fittings, fuel, electricity, printing, stationery and office supplies, uniforms and transport fleets. The existing Government Supplies Agency (GSA) in the OPW has been disbanded and its duties in relevant areas have been assumed by the NPPOU. Sector-specific items such as drugs, medicines and military equipment will continue to be managed within the relevant sectors (e.g. the HSE and the Department of Defence).

No consideration of shared services would be complete without an assessment of the potential for services to be delivered by external providers. An external provider may be able to provide a service or an element of a service more effectively or efficiently at an acceptable service quality level and consistent with public service standards of equity and probity. The overriding consideration must be the service to the citizen.