Speech on National Shared Services Office Bill 2016, Second Stage

25th January, 2017

A Cheann Comhairle, Members of the House, I move the National Shared Services Office Bill 2016.


This Bill is somewhat detailed and technical, but it is extremely important and lays out the legislative basis for the establishment of the National Shared Services Office as a separate Civil Service office under the aegis of the Department of Public Expenditure and Reform.




The Office was established on an administrative basis in 2014. It is charged with leading the Shared Services strategy and implementation of Shared Services projects and operations within the overall Public Service reform and renewal context across the Civil Service.


In the Civil Service the Government investment in Shared Services has been significant, with €28.5m capital funding provided to date, reflecting the  importance of this key cross-cutting transformation initiative under the 2011 Public Service Reform Programme.


Of utmost importance to me and to this Government is ensuring that our work continues to have a positive impact on the general public.

I believe that Shared Services in the Civil Service is doing just that – by creating one dedicated team who are taking daily operational functions common to all departments, such as Finance and Human Resources, and transforming them through process standardisation, system consolidation and higher levels of automation and self-service.


This allows departments focus on their core business of effective front-line service delivery, reducing their staff requirements in these areas.


Shared Services are modernising how we deliver common support services in the Civil Service.


This shift from more costly department-specific custom solutions and duplicated effort across departments to standard automated processes is, and will continue to, lower the technology costs and the numbers of staff required to carry out this type of work.




The NSSO is a customer-focused organisation that provides services to Public Servants across a number of organisations.


The Centres themselves arestaffed by Civil Servants who are fast becoming specialists in best-practice standards of non-core support services such as HR and Payroll.


Because these Centres operate a single standard way of working, they are able to contribute to, and respond quickly to, the introduction of new policies, such as the recently introduced paternity leave scheme.


Furthermore, because data is consolidated centrally and standardised, it creates better insights for policy makers and provides improved management information for decision making.


When compared with international standards, Ireland has made significant progress in a relatively short timeframe in delivering its ambitious plan in this area.


Research confirms this progress is a result of strong Government and senior management support.




The rationale for setting up the National Shared Services Office is to consolidate our shared services specialisation with an enhanced customer focus and service culture, separate to the broad-ranging policy making functions of my Department.


Establishing the NSSO as a separate entity will enable my Department to move away from operational matters and prioritise expenditure and budgetary policy over Shared Services.


However, the Bill is clear that I, in my capacity as Minister for Public Expenditure and Reform, will retain a supervisory role, empowering me to appoint and remove the Chief Executive, and it allows me give direction to the Office, as necessary.


Further to this, the Chief Executive will be fully accountable to the Oireachtas, answering on NSSO service, quality, benefits and value for money.




Significant progress has already been made in advancing Shared Services within the Civil Service.


The Human Resources and Pensions Administration Shared Services Centre for the Civil Service is in operation since March 2013.


When the annual running costs are extracted, the saving in the cost of the delivery of transactional HR was estimated at €3.7m across the first three groups of Departments and Offices that migrated to this new service.


It now provides HR and pensions administration services for 34,500 Public Servants across 39 departments and offices and employs over 330 Civil Servants.


The single Payroll Shared Service Centre for the Civil Service, or PSSC, which began operating in December 2013, now services 43 organisations and has 102,000 payees, including 57,000 retirees.


In 2016, the PSSC made over 2.7 million payments to the value of €3.24 billion. This figure is set to rise in the current year.


The PSSC is replacing 18 Payroll Centres that had different versions of payroll systems, which previously cost €21.4m to provide payroll, pension, travel and subsistence payments.


The business case estimates an annual cost when fully operational of €15.8m.




The development of a new finance technology solution for Government has also begun.


The introduction of a single finance technology platform will replace 31 existing finance systems across Government departments and offices and facilitate transaction processing in the Financial Management Shared Service Centre.


The Centre, which is scheduled to start providing financial management services in 2018, will use common technology and standardised procedures to deliver core financial management services to 48 identified Government organisations, all of which will be on board by 2020.


It is expected to yield a sustainable reduction in the annual cost of finance of approximately €15.4m through a reduction in the cost of support for finance technology and a reduction in the headcount equal to 145 full time equivalents required to provide financial management processing services.

Financial Management Shared Services will make a significant contribution in fulfilling the dual mandate of managing expenditure and reforming the way in which we deliver services.


The Centre will deliver tangible improvements in the efficiency and effectiveness of the Government’s central finance function that includes the processing of finance transactions such as payment of invoices, processing of receipts, fixed asset accounting, as well as the general ledger and appropriation accounts audited by the Comptroller and Auditor General.




Research shows that service delivery and high-quality customer services are most effective where implementation is separate from policy-making.


For greater effectiveness, the NSSO requires the flexibility to respond quickly to operational matters, which is not always possible within an environment of measured pace and focus on policy making, as within the Department of Public Expenditure and Reform.


Added to that, the demand on my Department from the NSSO is significant. In 2017, with an estimated 780 staff, the NSSO will be twice the size of my Department.


Creating the NSSO as a separate office also provides for the independence of Shared Service governance.


This independence ensures clear accountability structures, delivered through individual service agreements with Public Service Bodies, which specify the terms and conditions upon which services are to be provided.


Further to this, and in anticipation of the enactment of the NSSO Bill, the NSSO is formalising and modifying its current Governance arrangements with the establishment of the NSSO Board, as provided for in this Bill.


A separate Customer Services Group will also be established to oversee Shared Services performance across the Service Management Framework.




Turning to the Bill itself, this legislation provides for the Office to carry out corporate administrative functions on behalf of a public service body.


This legislation will specify the Chief Executive Officer of the NSSO as Accounting Officer. The NSSO Board, which will have an advisory remit, is also be provided for in the legislation.


This Bill is set out in five parts.


Part 2 allows for the practical structures in the establishment of the National Shared Services Office. It confers on the Office all such powers which are necessary in the performance of its functions.


Part 3 of the Bill is concerned with the establishment, membership and functions of the Board.


Parts 4 and 5 contain technical provisions dealing with transitional arrangements, and consequential and miscellaneous provisions.


I look forward to listening to contributions from members.




To conclude, it has always been envisaged that the NSSO would become independent in the delivery of its functions.


Shared Services is the biggest cross-cutting transformational change the Civil Service has experienced. I acknowledge that the implementation of large scale Shared Service projects of this kind are not without risk.


The statutory establishment of the NSSO will help us to meet the requirements of international best practice in this area.


These requirements include clear accountability arrangements, clear funding arrangements, an appropriate degree of operational autonomy, and a strong customer focus.


I am sure the House will find, that with five shared service centres operational across the sectors, and others planned in the next few years, Ireland has an ambitious plan for investment in shared services.


Finally, I would like to acknowledge the guidance, support and direction from the members of the Shared Services Steering Board and Programme Boards to the NSSO.


Their sponsorship has been instrumental in assisting the delivery of this ambitious programme of work and bringing it to this point today.


I commend this Bill to the House.