Administrative Service Centers

The Danish public sector faces a number of well-known challenges, including

• High employment rate and a growing demand of labour 
• A high rate of retirement among public employees in the years to come
• Citizens have growing expectations to the public services
• International competitiveness requires an efficient and well-functioning public sector
• Resources should be allocated to services close to the citizens rather than back-office functions

The study showed that the potential for improvement in the field of administration in Danish governmental institutions (ministries and agencies) is due to the following characteristics of the administrative functions

• Economies of scale are typically not realised as most ministries lack sufficient size
• There is not much standardisation of processes across ministries
• It-systems are often developed within ministries or agencies and thus not shared across agencies

In order to address these challenges, and to re-allocate resources from administration to citizen oriented services, the Danish Government decided in February 2008 to establish two administrative shared service centres.

One centre, currently being established at the Ministry of Finance / the Agency for Governmental Management, is to work in the area of finance, pay-roll and travel services. Another centre, located at the Ministry of Taxation, will carry out administrative it-services.

After full implementation, the two centres will serve up to 90.000 state employees from all ministries, though some ministries will continue to have their own administrative services. Implementation started in the spring of 2008 and is expected to last up to three years. When the process is carried through, annual savings of more than DKK 600 mio. (Euro 80 mio.) are expected.