NHS organisations will be given incentives but not forced to use NHS Shared Business Services for back-office administration, according to Department of Health finance deputy director Peter Coates.

Giving evidence to the Commons public accounts committee last week Mr Coates said the joint venture between the NHS and outsourcing firm Xansa needed at least 22 more NHS organisations to sign up to NHS shared business services before it could break even.

Eighty-nine organisations have signed up so far.

Mr Coates admitted there had been 'resistance' from NHS organisations to contracting to use the service, especially from foundation trusts, because of the value they placed on financial independence.

'Foundation trusts and acute trusts generally are more resistant than primary care trusts,' he said.

Mr Coates said it could become more difficult to get more trusts to use shared services as more foundation trusts were authorised.

However, if NHS organisations signed up to use the service and 'made the changes that were recommended' by Xansa they would make a 20 per cent saving on their current invoicing and payment systems, he said.

By getting trusts to use the services the DoH hopes to save£250m over five years in NHS administration and payment functions.

Mr Coates told the committee this saving was expected to come from a mix of trust savings and dividends from Xansa's profits. As yet the DoH has not made any savings on the scheme and Mr Coates admitted that if Xansa did not make a profit no savings would be made.

In February the DoH revealed that 60 per cent of the work carried out by the joint venture would be outsourced to India, a 20 per cent increase on the original contract in order to cut costs (for more background, click here).