The NAO report on this topic published as HCP 481, session 2007-08 (ISBN 9780102954159)

The Driver and Vehicle Operator (DVO) Group is part of the Department for Transport and is made up of four agencies: the Driving Standards Agency, the Driver and Vehicle Licensing Agency (DVLA), the Vehicle Certification Agency (VCA) and the Vehicle and Operator Services Agency (VOSA). It was established in 2003 to promote closer collaboration between the agencies and to develop modernised co-ordinated services in order to deliver improved customer services and value for money. The Highways Agency is an executive agency of the Department for Transport and is responsible for operating, maintaining and improving the strategic road network in England. Issues considered in the Committee's report include how the agencies contribute to departmental objectives and policy, issues of accountability and transparency, agency funding and accounts, shared systems and co-ordination.

In this report the Transport Committee calls on the Government to implement the vision for transport - including improved traffic flows on motorways, rail electrification and high speed rail, reducing greenhouse gas emissions from transport - that has been established under the current Secretary of State, Lord Adonis. The Department has made progress in a number of important areas, both recently and over the past decade, and has also established a new sense of direction, despite a too-frequent change of ministers. The Committee reviews progress against the Government's integrated transport plan, 'Transport 2010', which was adopted in 2000. Whilst much has been achieved, the ambition to build up to 25 light rail lines has not. It calls on the Government to publish a comprehensive progress report against the targets that it set itself. It also calls for strong action on local bus services which, outside London, are still not integrated with other local transport services. Bus use outside London continues to decline, apart from a slight increase after the introduction of free bus travel for older and disabled people. The Committee calls for full implementation of the Local Transport Act which gives local authorities powers to introduce bus quality partnerships and quality contracts; and for the Traffic Commissioners to be given adequate resources to carry out punctuality monitoring.

As part of the 2010 Spending Review the government announced a significant reduction in the budget of the Department for Transport, with spending due to be 15% lower by 2014-15, in real terms, than the Department's £12.8 billion budget in 2010-11. The Department prepared early, identifying areas for budget reductions based on good analysis. But for road users, railway passengers and taxpayers, there are many questions which remain unanswered. The Department doesn't fully understand the impact of its cuts to road maintenance. There is concern that short-term budget cutting could prove counter-productive, costing more in the long-term as a result of increased vehicle damage and the higher cost of repairing the more severe road damage. Another area of concern is rail spending. The Department spends two-thirds of its budget through third party organisations such as Network Rail and Transport for London. While information and assurance have improved over some third party spending, there is still a lack of proper accountability and transparency for Network Rail. Rail budgets aren't being reduced as much as other areas, yet passengers still face high fares. The Department hands Network Rail over £3 billion each year, underwrites debt of over £25 billion and continues to treat it as a private sector company. The National Audit Office must be allowed full audit access as quickly as possible.. Better contingency plans for dealing with threats to its planned budget reductions also need to be developed - for example if some of its planned efficiency savings do not deliver or if inflation is higher than forecast

Since 2004, central government has sought to reduce the cost of administering finance, human resources and procurement services through sharing back-office functions. In previous examinations the Committee found that the Government had not yet realised the potential to save taxpayers' money. The renewed focus on improving shared services is welcomed. The Committee expects the Cabinet Office to engage constructively with their recommendations. This report considers five of the eight shared service centres. Whilst performing adequately, they had cost £1.4 billion to build and operate compared to an expected cost of £0.9 billion. These five centres were also expected to have saved £159 million by the end of 2010-11. In the event, the Ministry of Justice centre broke-even, the Department of Work and Pensions and the Department for Environment, Food and Rural Affairs centres did not track their total savings, and the Department for Transport and Research Councils UK, have reported a net cost to date of £255 million. The current strategy will only be effective if the Cabinet Office demonstrates strong leadership. So far it has been left up to individual departments and their arm's length bodies to decide whether they use shared service centres leading to low take-up. Those bodies which have become customers of shared service centres have retained their own processes resulting in over-complicated systems which also undermine the scope for efficiency. The Cabinet Office should also develop comparable data on the cost and quality of services provided by the shared services centres and should consider whether it can extend its shared services strategy to include other common functions needed by central government departments

In 2004, the Gershon Review recommended that the Government pursue the sharing of services, including human resources, finance, procurement and payroll, to achieve cost savings. It has been up to individual departments to establish their own arrangements and, between 2004 and 2011, eight major shared service centres emerged. The five centres examined by the NAO were expected to cost £0.9 billion to build and operate but, to date, they have cost £1.4 billion. They were also expected to have saved £159 million by the end of 2010-11. While, in one instance Government has achieved break-even in a time consistent with the private sector, its overall performance has been varied and the two centres that are still tracking benefits report a measured net cost of £255 million. Most departmental customers have not acted as 'intelligent customers' and they will need to build in-house capability with enough business and technical understanding to manage the services and work with the centres to achieve efficiencies. Among other findings are that the software systems used in the centres have added complexity and cost; and that, as the use of the centres has been voluntary, departments have struggled to roll-out shared services fully across all their business units and arm's length bodies. The Cabinet Office has recently gained approval for a new strategy and business case. The NAO considers the approach is ambitious and has challenging timescales. The Cabinet Office is actively working with departments on its implementation.

Ministers have challenged all Departments to reduce their 2004 sickness rates by 30% by 2010. This report looks at the sickness levels in the Department of Transport and its seven executive agencies, which average 10.4 days sickness for each full-time employee (compared to a Civil Service average of 9.8 days). However the performance is varied. The central Department and four agencies have sickness levels at or below comparable organisations but three agencies have higher levels and the Driving Standards Agency and the Driver and Vehicle Licensing Agency have absence rates of 13.1 and 14 day respectively. If there is going to be a significant change there needs to be action at the corporate and individual business level. Corporately there needs to be: targets for each part of the Department, tailored to circumstances; quality standards for recording sickness with the provision of management information; a consistent framework for evaluating initiatives and sharing good practice. At a business level more could be done to ensure that line managers were aware of their responsibilities and improve intervention in long-term cases.

The Department for Children, Schools and Families has made progress in improving its financial management, with strong commitment at senior management and board level. The Department's ability to reach a high standard of financial management depends partly on successful working with local authorities, other partner organisations, and the schools themselves. It does, however, face specific challenges, including the need for better strategic management of its large capital programme, and to encourage better financial management in schools. The Department has built up a large capital underspend, which increased from £1.9 billion at 31 March 2008 to around £2.4 billion at the end of March 2009. Its capital expenditure programme will need to be carefully managed given the history of underspending and the challenge of bringing forward £924 million of expenditure from 2010-11 to 2009-10 as part of the Government's fiscal stimulus. At March 2008, schools in England had a net cumulative surplus of £1.9 billion. Only 1 in 5 local authorities reduced their total net school surplus in 2007-08. Local authorities are accountable for school spending and the Department should encourage them to redistribute excessive uncommitted surpluses in line with local needs. The Department was, in 2007, one of three departments which had not implemented in-year accruals accounting systems, which would help to improve the accuracy of financial forecasting and reporting. The planned introduction of a shared services arrangement for finance with procurement and personnel support should also help improve financial management and lead to efficiencies.

Corporate services provide often vital support to the delivery of effective and efficient public services, and cover such areas as finance and accounting, human resources, procurement, information technology, facilities and estates management. Sir Peter Gershon's review of public sector efficiency (available on the HM Treasury website, http://www.hm-treasury.gov.uk/media/C/A/efficiency_review120704) identified benefits from shared services, but found that departments' efficiency targets did not include savings specifically from shared corporate services. This NAO report has been conducted to take account of developments between the 2004 Spending Review (Cm.6237, ISBN 9780101622728) and the 2007 Comprehensive Spending Review (Cm. 7227, ISBN 0101722729) on shared services and focuses mainly on finance and human resources, which are generally the more developed areas of shared service in the public sector. The publication is divided into four parts, and looks at general and specific areas, including: the potential of shared services in the public sector; the problems of customer satisfaction experienced by the NHS and HM Prison Service with shared services; the variable progress across government; the lack of a clear overview from the Cabinet Office on shared services. The NAO has also set out 9 recommendations, including: public bodies should streamline their corporate service processes in line with best practice; they should also improve how they analyse the performance of their corporate services and whether there are more cost-effective ways to obtain such services; Departments should increase public transparency of corporate service performance.

John Seddon explains how successive governments have failed to deliver what our public services need and exposes the devastation that three decades of political fads, fashions and bad theory have caused. With specific examples and new evidence, he chronicles how the Whitehall ideas machine has failed on a monumental scale - and the impact that this has had on public sector workers and those of us who use public sector services.