Crown Commercial Service – comments on annual report and accounts (part 1)

The Annual Report and Accounts of the Crown Commercial Service was recently and quietly published here. We’ve taken a look, and in the interests of balance and fairness, we have decided to present our thoughts as a series of “positives and concerns”. And it is quite valid for any tax payer to look hard at these documents. After all, this organisation is not just costing directly some   - likely to increase further as headcount increases to full complement – but it is spending or strongly influencing over £10 BILLION of taxpayer’s cash.

So as well as looking at these reports, we’ve had a series of informal discussions over the last few days with a small (but well-informed) number of people who know a fair bit about what is going on in CCS. So our comments are coloured by that input as well as the formal documents.

The major issue that is hard to classify as positive or negative currently is the fundamental transformation that CCS is undertaking. It is morphing from a central buying organisation that in the main (but not exclusively, e.g. Energy) let framework contracts for clients to call off against, to what is really a “managed service” operation, almost a procurement full service outsourcing provider. That means running categories on behalf of clients on an end to end basis, from requirements to contract management, and also providing a “consulting” service to support clients on major one-off projects or other similar needs. (It also now incorporates the “procurement policy” aspects that used to sit separately in OGC then Cabinet Office, such as issues around EU Directives).

That end to end category management approach should bring opportunities to go to market with committed spend, not just vague promises. That should drive further value improvements.

We’re on the fence here. The transformation is taking some time – we’ve pointed out before that CCS is well behind the initial plan for transferring the first four pilot departments onto this new arrangement. On the other hand, we have picked up comments that things re really starting to happen now, and there appears to be more willingness from departments to move into this arrangement. That suggests the CCS proposition is looking more robust. However, until we see this embedded and working well, with satisfied customers, it is too early to declare success.

Moving on from that major ‘neutral’ point, let’s have a look at the positives.

Positives

  • Savings – the headline numbers look good. “GPS has maintained excellent financial performance and savings which total £3.1 billion. Spend through frameworks was up 9.7% ...”  And there have been some good efficiency gains too, such as continuing to reduce the average time taken for procurement exercises, now down to around 75 days.
  • There has been some good work in category areas. For instance, “the communications category team has rationalised the number of buying agreements within the category from 27 to five to simplify access to maximise savings and, in doing so, created a diverse and vibrant supply base with 70% of suppliers being SMEs”.
  • There has been a dramatic ramping up of the advisory arm of the CCS, with over 30 generally pretty senior (G6 or SCS1) level people coming in – even some joining from the big consulting firms, a reversal of the usual talent flow! Whilst that does not guarantee success, the lack of good people certainly guarantee failure, so that’s one hurdle crossed. And this is good news - “this year will also see the launch of a Commercial Graduate Fast Stream Programme and Fast Track Modern Apprenticeship Programme”.
  • As we said above, we do believe the appetite from departments for the managed service approach has increased. The retirement of some of the most experienced CPOs in departments has probably helped CCS too!
  • Sally Collier’s previous work in this area means that she has a good understanding of the issues around smaller firms (SMEs) and we believe there is a genuine commitment to improving their lot in the government marketplace. We’re still doubtful whether the 25% of spend target by 2015 will be hit, but there seems to be some thinking at least about innovative ways in which SMEs might do better. But really, this is another one that we need to see tangible work before we get too excited: G-Cloud is fine, but what’s next?)
  • Sustainability – the annual report includes a considerable amount of information about this area. We won’t repeat it here, but it’s all good stuff.
  • After a somewhat shaky period, CCS has survived the exit of David Shields – that wasn’t a given, as he was a very effective leader and had stamped his personal mark on the organisation strongly and positively. We don’t know the new leadership team ( aside from MS Collier) but we have heard positive things about new operational and technology leader s in CCS.

OK, this is all somewhat longer than we’d expected – so let’s save the “concerns” for tomorrow!

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