“It is absurd that the government has no reliable information on the cost of its own corporate services. How long would a private sector business last if it didn’t know how much it was spending on human resources?  Or its financial functions? Or managing its buildings?  Companies without knowledge or control of these costs do not stay in business for long”. 

“Worse still, the Cabinet Office can’t even explain its sums.  They tell us the government is spending £7 billion on corporate services and that they spent £4 million in coming up with this estimate.  Yet on closer inspection by the National Audit Office, this £4 million figure turns out to be wrong by £1 million”.

“Even so they spent enough money to hire 60 accountants for a year.  Yet despite this expenditure the Cabinet Office still can’t give us accurate information about how it did its sums because it has lost the calculations and underlying data involved in its estimate.  There is a lack of basic cost control at the heart of the government”.

Mr Bacon was speaking as the Commons public accounts committee published its report on improving corporate functions using shared services.  The report finds that the government lacks reliable information on the cost of corporate services, including finance, procurement, human resources and facilities management.  Corporate services across government are estimated to cost £7 billion a year, but the report also finds that the Cabinet Office had lost the calculations and underlying data involved in its estimate. 

The Cabinet Office initially claimed it had spent £4 million in 2005–06 and 2006–07 on its Shared Services Team, which had calculated the £7 billion figure.  However, the Cabinet Office was unable to explain to the public accounts committee how this money was spent.  A further review of this spending by the National Audit Office then showed that the Cabinet Office had incorrectly included £1.0 million in its previous estimate.

8 May 2008
 

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