News / Watchdog backs NHS shared services

The report, which covered the use of shared services across government, estimated that SBS, a joint venture between the Department of Health and Xansa covering finance and accounting services, could deliver net present value savings of £250m over 11 years. Most of this (£160m) was likely to be saved in the first nine years. The enterprise would break even after five years.

Improving corporate functions using shared services warned that savings estimates were based on the SBS customer base growing to 65% by 2014/15 and there was a high level of uncertainty about this assumption. Its current share is 21%, and this was forecast to deliver savings of £16m in 2007/08, but an increase to 30% would deliver an additional £7m.

The NAO warned boards of NHS bodies that had not joined SBS to ensure their in-house service was better value for money than opting for shared services.

While customers expressed dissatisfaction early on, satisfaction improved over time. Satisfaction was higher among established customers (more than two years) than among those that had recently transferred to SBS.

An NAO survey of finance directors found that 55% of those who had been customers for more than two years said the supplier payments service, for example, was better and 27% said it was worse.

Around a quarter of finance directors who had been customers for less than a year said it was better than their previous arrangements, but 68% said it was worse.

The NAO said SBS needed to make further progress in customer satisfaction. It added that though it was on course to make significant savings, SBS was not yet performing at efficiency levels found in the private sector.

For example, it should ensure invoices were always accompanied by purchase orders and be allowed automatic approval of low value invoices.