The UK government's shared services strategy, aimed at improving efficiency across departments, is struggling to meet its objectives, according to a report from the National Audit Office (NAO). Launched eight years ago, the program has been hampered by inconsistent information, funding challenges, and a lack of ownership among participating departments.
The shared services initiative, introduced in 2018, was designed to enhance the civil service's value for money through a standardized platform for human resources, procurement, finance, and payroll applications. However, following a reset of the strategy in 2021, the government shifted from requiring each department to procure its own enterprise resource planning (ERP) system to establishing five shared service clusters that cover 17 departments. These clusters—Matrix, Synergy, Unity, Defence, and Overseas—are intended to streamline procurement through central frameworks, with a new completion target set for 2028.
Despite these plans, the NAO report identifies several ongoing issues, particularly surrounding interoperability among the clusters. The report notes that while the clusters have a governance structure and delivery plans in place, governance issues at the program level persist. The Cabinet Office lacks a definitive mandate to address overarching issues that affect the entire shared services strategy.
Data Quality Concerns
The Cabinet Office has attempted to create a portfolio dashboard to monitor the program's progress, but it struggles to enforce timely and accurate data submissions from the clusters. As a result, the quality and completeness of the data vary significantly, limiting the dashboard's effectiveness. Additionally, while there is general support for the strategy among departments, the commitment from those currently utilizing cloud services is unclear, contributing to uncertainty regarding the overall strategy's viability.
Notably, HM Treasury and the Department for Education (DfE), both part of the Matrix cluster, have expressed the need for clearer cost projections before determining if the new system represents a beneficial investment. The Cabinet Office has asserted that departments cannot opt out of shared services participation without thoroughly assessing the value for money and the impact on the business case.
While the Cabinet Office oversees the shared services strategy, it lacks the authority to compel compliance from departments, and no single entity within the government is charged with ensuring the program's successful implementation. The NAO report highlights that clusters and their member departments are at various stages of planning for onboarding their arm's-length bodies (ALBs), with existing plans not encompassing all ALBs. This onboarding process is expected to be complex and requires meticulous planning.
Funding, Integration, and Governance Issues
The program also includes an Applicant Tracking System (ATS) transformation initiative to replace the existing civil service recruitment platform. However, this initiative has faced adoption issues among the clusters, with several clusters voicing concerns about the ATS between 2023 and 2025. By November 2025, some clusters struggled to make critical design decisions due to the interdependencies between systems, leading to a reset of the ATS program in October 2025.
Governance remains a significant challenge, as the absence of a strong technical lead has resulted in inconsistent ERP configurations and data convergence, further complicating interoperability and data standardization. The report warns that fragmented governance over interdependencies poses a substantial risk to delivering the strategy on schedule and within budget. Without urgent action to address these gaps, the government may not realize the anticipated benefits and could incur additional costs.
The shared services program received approximately £846 million in funding during the 2025 Spending Review for three clusters: Matrix, Synergy, and Unity. While the Cabinet Office contends that this funding is sufficient to alleviate the clusters' concerns, the clusters themselves have reported remaining funding gaps that may need to be filled by departmental budgets. Additionally, some clusters, like Defence, do not have a dedicated budget.
The NAO underscored that a program lacking formal commitment complicates planning efforts. The business case for the strategy relies on the participation of both the DfE and HM Treasury in its financial assumptions. If either department decides to switch clusters, it could significantly disrupt the usual planning processes and cost-benefit projections.
Moreover, the merger of NHS England with the Department for Health and Social Care (DHSC) adds another layer of complexity. The prime minister's announcement in March 2025 regarding the abolition of NHS England has led to DHSC's exclusion from the Matrix cluster's scope, a decision made to facilitate successful integration while minimizing risks to the Matrix program's delivery.
Gareth Davies, head of the NAO, remarked that the shared services program has the potential to generate efficiency gains across government. However, governance issues, interoperability challenges, and inconsistent commitments are undermining efforts to keep the initiative on track. The NAO has recommended ensuring that there is solid buy-in and commitment from departments to roll out the shared services strategy and onboard services by 2030.
Source: ComputerWeekly.com News