Friday 4th September, 2015

The department for Business Innovation and Skills has decided against a major outsourcing deal with Steria and the Cabinet Office, citing the costs and risks of the project as "no longer viable".

BIS had a contract in place to outsource its finance, HR and payroll services to the Steria-run Shared Services Connected Ltd (SSCL) this year.

The shared services strategy was launched by the Cabinet Office in 2012, with the two privately-run centres touted as contributing toward £400m-£600m in savings.

A spokeswoman from BIS said: "A number of factors changed since the placing of the contract, and based on costs, service and level of risk, it was no longer a viable option and an agreement, endorsed by Cabinet Office, was reached to terminate the contract."

"We are currently considering options for a future shared services model for BIS and partner organisations," the department said.

The Major Projects Authority has flagged the project as being at high risk of failing to deliver, and sources have also indicated the programme is not going well, with both centres being hit by “replans”. It remains unclear how much has been saved since the centres were opened in 2013.

Last month it was confirmed that the Metropolitan Police Service (MPS) had awarded the joint venture group a ten year back office support contract as part of a strategy to realise some £100m in cost savings.

Under the agreement, SSCL will deliver services to MPS from its current locations in London for the initial twelve months at the contract. After this period, services are expected to be transferred by SSCL to its centres of excellence.