Shared services: efficiency or softening up for outsourcing?

The Commonwealth says shared services will promote innovation, improve efficiencies and reduce risk. It’s been tried in the public sector, but have they found the right balance?

It’s too early to tell if the Commonwealth’s new Shared Services Centre will be the panacea of costly machinery of government changes, or a flash in the pan destined to be wiped out in the next ministerial reshuffle. The first report of its progress was released this month, and its clients list is growing.

Born of the decoupling of the super-department of Education, Employment and Workplace Relations in December last year, the SSC remains legally and practically part of both Education and Employment — an exercise in Clayton’s outsourcing and a test of the Commonwealth’s contestability chops. The SSC was tasked with maintaining the existing economies of scale gained from DEEWR’s previous merger of corporate and IT services, and kept more than 600 employees shared across the two founding departments.

For now, the SSC is only providing services that were previously in place for DEEWR, but has already pitched itself to other agencies as an innovative, efficient and low-risk alternative. Education’s first SSC report explains:

“By setting up the SSC the departments aim to avoid extra costs by maintaining existing economies of scale and enabling a focus on synergies and process efficiencies that will, over time, deliver better services at reduced cost.

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