Finance secretary Rosemary Huxtable tells public servants shared services a ‘long-term game’

A white elephant was the elephant in the room when Finance Department secretary Rosemary Huxtable told public servants on Tuesday how the government has changed tack centralising back-end work in shared services hubs.

The chief of the department leading the project to roll “backroom functions” into six “corporate services hubs” addressed the failures that hurt attempts by others to establish and move staff to shared services.

Referring to troubled efforts from other governments to make similar reforms as an “elephant in the room”, she said the Coalition’s push to roll corporate services into separate hubs involved risks.

However it would be necessary for agencies to make savings, be more effective and focus resources on other work.

“While they may not make the headlines, there are success stories,” she said, referring to the NSW and ACT governments’ use of shared services.

Also looming over her address to public servants and consultants, but not directly referred to, was the Coalition government’s abandonment this year of the Abbott-era “Shared Services Centre” white elephant after sinking more than $210 million into the failed project.

Hundreds of public servants working at the centre were quietly sent back to their departments or moved to the Finance Department, and the centre’s functions taken over the Employment and Education departments.

But the federal government still insists shared services can deliver big savings and is now pinning its hopes on the six “corporate service hubs” with an ambitious agenda to cover more than 140,000 public servants within four years.

Of 90 agencies marked to give back-end work to hubs, 17 employing 62,000 public servants have made the move and 13 covering another 3,000 staff have not chosen a hub or deferred the change.

Sixty agencies employing 59,000 staff are waiting to begin the transition.

Ms Huxtable said the government would play a “long-term game” in the program, learning from the mistakes of others who tried to move payroll and other services into hubs but rushed the transition after heeding overly optimistic businesses cases.

“We’ve learned through the experience of others to take a staged and gradual approach,” Ms Huxtable said.

She said insufficient upfront investment had harmed previous attempts by organisations to use shared services.