All NHS payroll and accounts services could be dealt with by as few as 10 shared service centres under plans being discussed by the NHS Executive.

NHS deputy director of finance and performance Christine Daws told a Chartered Institute of Public Finance and Accountancy health conference last week that it was looking for two pilot centres by Christmas.

Initially, the centres are likely to deal with payroll and accounts payable. But they could deal with other business 'where it does not matter where it is done'.

The Executive has been working with management consultants KPMG on models for shared services centres since last year.

Ms Daws said a single centre for the whole of England had been briefly considered - 'but it was at the stage of [looking at] implementability we threw that out'.

Five models, including 25 centres - roughly three per region - and 50 centres, covering one or two large 'health economies', were explored in detail. But Ms Daws said a steering group overseeing the project had concluded that 10 to 25 centres could deliver 'real benefits for the NHS'.

KPMG, she said, had suggested the NHS should be aiming for eight centres.

'So one thing we are wrestling with is how to implement this - how to take our 500-plus organisations and get to only 10 to 25 centres.

That is why we are looking for two national pilots.'

Ms Daws said developments in the NHS meant the emphasis of finance work was changing from processing transactions to providing analysis and advice.

In addition, she said the NHS needed to think about how to 'future proof 'more of its finance work so there was less upheaval when policy changed, new organisations were created or mergers took place.

It needed to consider how to afford 'state of the art' financial systems beyond the reach of individual organisations. It also needed to cut duplication and costs.

At the moment, Ms Daws said, there were 37 suppliers of general ledger systems across the NHS.In Aylesbury, where she worked as a finance director, there were three NHS finance departments serving three NHS organisations. 'That is not sustainable.'

Although Ms Daws insisted that cutting costs was not the main driver for exploring the development of shared services centres, the Executive believes at least£70m could be saved over 10 years. Private sector benchmarking has suggested the savings could be five times as high.

Further work on the centres will take place alongside work to procure a single HR and payroll system to replace the 27-year-old standard payroll system used by 80 per cent of the NHS.

Ms Daws said two suppliers had now been identified and one would be chosen by the end of the year, with a contract signed by April.