Belfast Telegraph

Unit set up to save cash is needlessly spending millions

By Michael McHugh

A government payments unit set up to save money is needlessly spending millions of pounds a year, a public finances watchdog warned.

More than £3 million a year could be saved if Account NI reduced costs to the international average, the Assembly's Public Accounts Committee (PAC) said.

The primary purpose of the shared financial service centre is to generate efficiency savings by reducing duplication, standardising processes and generating economies of scale in paying government bills.

However, the PAC report said: "It is clear to the committee that the Department (of Finance and Personnel) is in denial about the extent to which Account NI is a very high cost operation."

Account NI is a financial shared service centre serving Executive departments and 18 public bodies. It costs Account NI £9.73 to process and pay an invoice. The Department of Finance and Personnel argued that only £2.05 of this amount was directly related to staff costs.

But the PAC said: "This ignores the fact that elements of the remaining overhead figure are extraordinarily high."

The Audit Office has estimated that if Account NI could reduce costs to the level of the average international performer it could save £3.4m a year.

The group of MLAs made six recommendations including that the department undertakes a detailed review of Account NI costs for staff and overheads to significantly reduce them.

It recommended a review of staffing levels within Account NI and the elimination of unnecessary duplication of work.

The report said: "The committee finds it unacceptable that Account NI has operated for five years without putting in place a basic performance measure which would allow it to monitor the cost of the service it provides."

There has been an enormous increase in the estimated cost of developing and operating Account NI since the first estimate of £114m in 2003, the committee said.

The Audit Office calculates that the total project cost, from inception in 2001 to the end of the contract with the IT provider in 2018, will be at least £213m. MLAs said, given this huge investment of public funds, they expected to see clear evidence that the project has delivered value for money.

"It is not acceptable that the public purse is committed to spending millions more on this project without clear evidence that it has delivered, or will in future deliver, value for money," they said.

Finance Minister Simon Hamilton defends payments service

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