Government departments have been warned they must be able to demonstrate what savings have been achieved through the Next Generation shared services strategy, in a report published by auditors.

The Cabinet Office estimates its shared services strategy will achieve savings of between £400m and £600m per year, with an implementation cost of between £44m and £95m.

In Update on the Next Generation Shared Services strategy, The National Audit Office said that the Cabinet Office must work with other departments to realise the full benefits of its shared services strategy.

It says department must also be clear in their reporting of savings achieved, as previous studies have shown the Government has not always been able to demonstrate value for money from these initiatives.

Amyas Morse, head of the National Audit Office, said: ‘The Cabinet Office has made progress with its shared services strategy. However, as the initiative enters its most challenging phase, it is crucial that the Cabinet Office fully address previous recommendations by the Public Accounts Committee.

‘In particular, lessons from intelligent customers should be shared, and the department should prepare and communicate performance benchmarks. There will be a tension between getting departments to join the centres and sticking to the programme's timetable, and maintaining a standard operating model that is acceptable to all users.’

A spokesperson for the Cabinet Office said: 'We are reforming Whitehall as part of our long term economic plan to save taxpayers money and ensure the country lives within its means. The Audit Office considers that our shared services programme is broadly on track. We will consider their recommendations in detail but we already know that there’s more to do to slash duplication and ensure value for the taxpayer.'