A report from the NAO has slammed Department for Transport (DfT) shared services initiatives, branding initial department plans to be ‘unrealistic’ and ‘over optimistic’.

The report looked into DfT plans made in 2005 to implement a comprehensive shared services arrangement between the Driver and Vehicle Licensing Agency, Driving Standards Agency. Initial plans projected savings of £112.4m with a set-up cost of £55.4 million.

However, the report stated that: “Inadequate contract management and poor initial implementation of the Programme have meant that the Programme as originally envisaged will not achieve value for money”. The failings mentioned in the report elevated costs profoundly which the NAO expect to reach £121.2m in 2008 achieving savings of just £40.1m by March 2015.

IBM was named as the principal supplier in the deal but appears to have played little part in any of the failings that took place. The report blamed the DfT for ‘insufficient management’ and ‘poor specification of requirements’ in its dealings with the ITO giant.