The Cabinet Office has signed a £32-million IT and communications deal with Fujitsu that is structured to allow other public sector bodies to sign up to a shared services package.

The public sector Flex contract will act as a seven-year framework agreement, under which other public agencies can procure services. It is designed to help public sector bodies secure economies of scale by sharing the service.

Shared services are a key theme of the Transformational Government strategy launched by the Cabinet Office in November 2005. Reports released early this year showed the timetable for introducing shared services in central government had slipped significantly, but the new contract shows the Cabinet Office is attempting to build the theory into its own practice.

The Flex deal is expected to save the Cabinet Office £2.5m a year, while other agencies will make cost savings from sharing a common infrastructure, more effective collaboration and improved reuse of systems.

The Cabinet Office said discussions were already under way with public sector organisations interested in buying IT services through the agreement, including the Office of National Statistics.

Peter Court, chief information officer at the Cabinet Office said: “As well as enabling us to take a lead in the shared services arena and deliver significant cost reductions and improved services to our staff, there will be environmental benefits through the use of energy efficient technology that will reduce the Cabinet Office’s carbon emissions by over 300 tonnes per annum and also support much more flexible working practices.”

Organisations that sign up to public sector Flex will receive a “core shared service”, covering data centre facilities, desktop hardware and software, thin client and laptop options, service desk support, network management, security, disaster recovery provision and flexible working facilities.

Agencies can also choose to buy in applications support, hosting, telephony and “confidential” security on a call-off basis. Business change services, IT strategy, testing and integration, applications development and printing services can be bought as additional services.

The innovative contract is the first major IT outsourcing deal to use the new “competitive dialogue” procurement process introduced under European Union legislation in 2006. Environmental measures included in the contract include the use of thin-client devices that consume far less energy than a traditional PC and provision for increased remote and flexible working.