What next for Cabinet Office top suppliers procurement programme?

We described yesterday what has been achieved by the top suppliers' programme led by the Cabinet Office. It appears – subject to final audit of course – to be a genuine success and an unusual example of Ministers getting involved in a positive and value-creating manner with external suppliers (unlike some historical examples we can think of!)

So… what happens next? Given the evidence that taking a joined up approach to suppliers has paid off in the work to date, there is an obvious desire to build on that success. So the appointment of Crown Commercial Representatives (CCRs) who will take 'ownership' of major suppliers and build on the pan-Whitehall approach to managing these firms is key. (The roles were advertised apparently, but not particularly widely). The first sign of progress here was the appointment of Stephen Allott as the CCR for smaller suppliers (SMEs). And if he lives up to his cv, he could prove to be an inspired selection.

But how will the CCR role work? It is positioned at SCS2, similar to big Department procurement directors, and we suspect most of the other CCRs will be existing civil servants, including some of the negotiation leads from the last stage of the programme.  But we’re told they will work part time; so they will spend half their time as CCRs and half retained as commercial director of their home Department. This has apparently been agreed with Permanent Secretaries in concept, and the individuals in question will have a mix of personal performance objectives to reflect their dual role.

What exactly they will do has not been closely defined; it will 'depend on the supplier'. Now this is where I start to struggle a little. For some suppliers, I can see a clear CCR role; negotiations on a new pan-Government contract with Oracle would be hugely helped if it were led by the CCR who has already had some serious negotiation exposure to the firm. But if it were Serco, HP or Balfour Beatty? If one of those firms has won a contract, fair and square, with a Department, what role does the CCR play? They can't go in and repeat the recent cost savings programme every year; and they can't interfere with a proper procurement process and award.

I don't want to be negative given the success to date, and I understand perfectly the desire to continue the collaboration. So with that in mind, I'll just lay out some of the issues / questions that I suggest should be addressed early in the life of the CCR concept.

  • Being in a 50%50 reporting line to two bosses is not easy as I know from personal and painful experience. It needs understanding bosses, a clear statements of priorities, objectives, ways of working and reporting.
  • There needs to be clear understanding of the respective roles of CCRs and Departmental procurement staff. Those roles may differ by supplier, but if we don't get clarity here I confidently predict – again, from personal experience – trouble.
  • Robust and relevant information and data about suppliers will be key. A common sourcing / contract and supplier management platform around central Government (at least) looks like a key enabler here – pretty much a ‘must have’ I would say.
  • Linked to the data issue, there must be credible ongoing performance tracking. Even at half time, 6 SCS 2 people will have an all-in cost to the taxpayer of around half a million a year. Someone will ask questions about this if the results aren't measured and credible.
  • I'm always interested in the law of unintended consequences here. So might there be a temptation for Departments to look to focus business on suppliers who aren't part of this initiative?  “I'll get the Cabinet Office off my back if I don’t give any work to these top 30 suppliers”. That may sound plain daft but we've seen stranger things happen. So flexibility in terms of which suppliers are in and out of the programme will be needed.

Thanks for staying with us all the way to the end of this series of posts; we’ve covered this initiative in some detail, but it is important both as an innovative initiative for public procurement; and in terms of the contribution it can make.  The structural UK budget deficit is around £80 billion per year; this may ‘only’ be £1 billion or so, but every ‘little’ helps!

Voices (4)

  1. Christine Morton:

    Stop the presses! Is this an “unofficial” announcement that they’ve saved £1B? Over what time period? How many suppliers does that £1B cover?

    I agree with the concerns expressed above about the efficacy of the CCR programme in the “next steps.”

  2. Barry Henniker:

    I think Wendy Mason is exactly right. The Philip Green approach to procurement of viewing government departments as retail branches of Next is badly flawed. The bulk of the money that flows out of these departments is not commoditised expenditure but are policy or legislatively driven and varyingly complex and highly specific contracts for services. The Cabinet Office may well be wedded to the CCR role but it WILL end in tears and fly in the face of delivering demonstrable value for money

  3. Wendy Mason:

    Sorry, I may be being terribly old fashioned and a traditionalist here but how does this line up with governance requirements for financial accountability to Parliament through the Permanent Secretary? If that accountability is not to be eroded surely the role of the CCR can only be as advisor to departments and maybe to offer challenge behind closed walls! The CCR may champion and challenge the supplier but the CCR cannot provide a Court of Appeal for either party without eroding existing lines of accountability! It is going to be quite a fine line to follow and one that those without Whitehall experience may find utterly frustrating!

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