Wellington is likely to become home to a national agency that will provide back-office services and information technology systems for New Zealand's 21 district health boards.

Further details of the agency – such as what services it will provide and how it will be structured are yet to be decided.

Michael Cashin, chairman of the Shared Services Establishment Board, says it is still coming to grips with the various infrastructure in the DHBs and expects to recommend cost-saving initiatives to the Government at the end of March.

The board will not take a heavy-handed approach and respects that some DHBs may need to keep some functions in-house, he says.

The agency will most likely be based in Wellington, whatever form it takes. "We have not considered locating it elsewhere."

Auckland DHB service provider HealthAlliance has made a bid to lead the agency. HealthAlliance chief operating office Nigel Wilkinson says it is too early to comment on the location of the agency.

"You could have bases in multiple places and people contributing to the shared services organisation from different locations."

HealthAlliance is offering assistance to the board. "It's a pretty open process. We and a whole lot of other people are trying to contribute our expertise."

The Government announced the agency in November as one of several initiatives expected to cost between $5 million and $10m but save $700m over five years, and said it would consolidate functions such as payroll and processing.

Health Minister Tony Ryall has said the agency could use a shared services model – whereby DHBs provide systems and services to each other, outsource services or set up centres of expertise to provide them.