National Audit Office Report on Crown Commercial Service – Looking Forward

In our last article covering the National Audit Office’s fascinating report on the UK government’s central buying organisation, Crown Commercial Service, we looked at some of the NAO’s analysis of the issues, in particular around the early development of CCS in 2014/15. Today we’ll take a look at the more forward looking elements of the report.

NAO says that “CCS is now focusing on improving the quality of its services”. It will reduce the number of unique services it offers and transfer some functions and people back to departments. Funding will all come from suppliers (as we reported some time ago) so there is no charge to departments. The relationship with departments is improving, NAO reports, although at the time of the review, “CCS has not yet agreed the detailed implications of its new standard service offering with departments”. There is still work to be done on the overall business case and getting a clearer view on milestones and benefits (although we suspect things have moved on since the report was written).

We then have one of the most interesting sections in the whole report – as NAO says, “We have wider questions about CCS’s role, purpose and longer-term sustainability”. Of course most of the mainstream reporting of the report didn’t get into this, yet it is arguably the most important section. Nobody really would argue that there should not be some central buying organisation (not even us, despite our doubts over aggregation and economies of scale), but there are key strategic questions here. NAO identify four:

Whether the original CCS mandate remains  - and should departments still be mandated to use CCS, or should they have more flexibility, and use CCS where the organisation can demonstrate clear benefits to those users?

How CCS best contributes to the government’s wider plans for improving commercial capability – this is really about the link to the wider Cabinet Office commercial skills agenda under Gareth Rhys Williams, the Chief Commercial Officer for government,  with up-skilling of procurement in departments as one of the themes there. How will and should CCS fit with those wider plans and strategies?

How CCS intends to achieve its ambitious plans for increasing the use of the wider public sector of its frameworks, without compromising service delivery for central government – the CCS business plan looks for a doubling of its public sector business by 2020. Is that likely, without damaging the core business? We might also add a question around whether it is appropriate, as well as achievable. We’ll come back to that question shortly in another article.

Why CCS contains functions and people that do not belong in a central buying agency – such as the “complex procurement” advisory team and the procurement policy team, who sit in CCS but report to Rhys Williams. This may “blur the lines of accountability” as NAO says. They are correct – we suspect this is some sort of funding issue rather than a logical decision!

The final section in the report is the recommendations. This is shorter than might be expected, but we suspect that is because CCS could legitimately say that under the new leadership team they are already implementing the majority of the actions NAO has identified. But here are those NAO recommendations in full – we generally agree with them, although there might be room for more debate about the “mandate” point:

- CCS should work with departments to build support for central buying.

In support of this, the Cabinet Office should reiterate the mandate for CCS in central government and be clear about its expectations for departments that have not yet transferred their buying of common goods and services to CCS.

- the Cabinet Office should work with CCS to clearly set out the relative priority of CCS’s central government and wider public sector markets.

- the Cabinet Office should review the accountability and governance arrangements of CCS and which functions properly belong in the CCS trading fund.

We believe that CCS should focus on the buying of common goods and services and the review should seriously consider the best organisation to host the commercial capability, management of strategic relations and policy teams.

- the Cabinet Office and CCS should create and communicate a clear benefit realisation plan for improvements to CCS operations and service quality, with a clear baseline and milestones. CCS should regularly report on progress to departments.

 

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