More than half of government employees are now using shared services, according to the Cabinet Office's annual report on The Transformational Government Strategy.

Sharing IT systems between government departments to save money has been a key plank of the strategy.

The Cabinet Office has designed a thin client Flex framework – managed by Fujitsu – which aims to cut overall IT costs by 20 per cent and desktop computing costs by 40 per cent by sharing computing power between departments.

"The Public Sector Flex shared service framework has already been adopted by four organisations, including two Whitehall departments, potentially saving millions of pounds a year," said government chief information officer John Suffolk.

The Cabinet Office, the Department for Innovation, Universities and Skills, the Office of National Statistics, the Children and Family Court Advisory and Support Service (Cafcass) have all signed up to the system, and Fujitsu is making the business case to other government departments to do so.

But shared services are not always cost effective.

Plans to share IT systems across the Department for Transport (DfT) could end up costing £81m by March 2015 rather than saving the department money, according to a National Audit Office (NAO) report last month.

Other parts of the strategy aim to improve public service delivery by encouraging uptake of online services.

The report says the number of people renewing their car tax online has now passed the 10 million mark, while uptake of those filing tax returns online increased 30 per cent last year.

A project to streamline government information on web sites is also on schedule, with 712 extraneous web sites marked for closure as the information is moved to central services such as Directgov.

The initial Transformational Government Strategy was published in 2005 and this is the second progress report published by the Cabinet Office.