Letter to the Chairman from the Permanent
Under Secretary of State, Foreign and Commonwealth Office
FCO SHARED SERVICES
PROGRAMME
I had previously informed the Committee that
the FCO Board had asked Andrew Lloyd to reappraise the Shared
Services Programme following the red rating from the Office of
Government Commerce (OGC) earlier this year. I am writing today
to inform you of the outcome of that process and of decisions
reached at the FCO Board on 26 September.
A lot of good work has been done by the Shared
Services Programme over the last 18 months. It has:
— Established an innovative Facilities
Management contract for the UK and 14 of our posts in North West
Europe. This is expected to realise direct savings of approximately
£9 million over the life of the seven year contract. There
will also be ongoing benefits from reducing the Full Economic
Costs for the FCO and other Whitehall Departments as over 100
of our staff will be transferring to the service provider, Interserve
Ltd. The OGC said in their final review of this contract that
they "... consider the overall project management and communications
to be examples of good practice".
— Remained on course to deliver significant
savings on procurement during the CSR period.
— Stayed on track to deliver a UK Shared
Service Centre during the first half of 2009.
Work undertaken to date by the Programme has
confirmed that there are considerable potential benefits for the
FCO in moving to shared services working arrangements, both in
the UK and across our overseas network. But our experience has
also shown that in order to realise these benefits we must first
spend more time modernising our individual corporate services,
before moving to larger scale sharing of our services overseas.
We have concluded, therefore, that the Shared Services Programme
should now close, with this modernisation agenda being taken forward
as part of a new Corporate Services Programme which will:
— Simplify, standardise and streamline
our corporate services particularly in the areas of finance and
human resources.
— Develop the UK Processing Centre
into a UK Shared Services Centre. Initially this will mean further
consolidation of financial transaction processing, with a focus
on driving service levels up. Over time the Centre will be expanded
to provide further support across corporate services functions.
— Set the corporate framework and provide
support to deliver more joint working on corporate services among
groups of Embassies in particular regions, where it makes good
business sense to do so. This will build on the good practice
developed, for example among our Posts in North America.
To deliver this revised approach to improving
our corporate services, we have appointed Andrew Lloyd as Director
Corporate Services. Andrew will work closely with Directors dealing
with Finance, HR, IT, Security and Estates and be responsible
for coordinating change across the whole range of corporate services.
The new Programme will be headed up by Colin Reynolds, who brings
in experience of managing the transformation of the US network.
I would be happy to explain our thinking in
more detail when I appear before the Committee at the end of October.
Sir Peter Ricketts
3 October 2008
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