Crown Commercial Service taking a slow and steady approach to meet its savings targets, MPs told
The chief executive of the Crown Commercial Service has told the Public Accounts Committee that he would rather “take time to build a model that endures” than rush to increase the volume of services bought through and by his centralised procurement team
The Crown Commercial Service expects all departments to be buying “something” through its team by 2018, according to chief executive Malcolm Harrison – but it will not be rushing to move large volumes of spend to the central unit.
The CCS was launched in April 2014, bringing in staff from the Government Procurement Service, with a mandate to buy common goods and services directly from suppliers rather than simply creating frameworks for departments to use.
But a report by the NAO last year said the Cabinet Office was too reliant on this mandate, and “severely underestimated the difficulty of implementing joint-buying across government”.
By April 2016, CCS was managing some £2.5bn of spend directly – over £8bn less than it had originally forecast. At the same point, it was also only managing the spend of seven departments directly – 10 fewer than planned.
At a Public Accounts Committee hearing on Tuesday, Harrison – who was brought in initially to conduct a review of the service and who became its chief executive in 2016 – told MPs it would take over 18 months to get the service on track to meet its original targets.
“I believe we will be looking at a very different picture [in the future],” he said. But he added: “It will be in more than a year and half’s time – it will take longer than that to get this properly established.”
He continued: “As the committee have said, this has been tried a number of times and not quite got right. I would hope this time we will take the time and build a sustainable model and build something that will endure.”
He explained that he wanted to increase the volume of spending which CCS manages by “focusing on activities where we can add value, [and] not get distracted by a lot of other transactional activity.”
It was “realistic” to expect all departments to have transitioned some procurement to CCS by the end of 2018, Harrison said, adding that the team now aimed to be managing £18bn of public sector spend by 2020. This would include goods bought directly by CCS and by departments themselves through CCS frameworks.
He said that CCS generates savings of 10% on the spend it takes over, so it would expect to be saving the public sector around £1.8bn a year by the end of this parliament.
Civil service chief executive John Manzoni told the committee he believed the trading fund was now “set up for success,” despite disappointment with the original challenges.
“I believe we’re set in a structure which is, in the short term, less ambitious because it has more focus on what it can do, but in the long term has more potential even than the original business case,” he said.
Harrison told MPs that a focus on bringing in large volumes of procurement quickly meant there was a “muddled” approach, and the CCS began to carry out jobs and oversee categories that did not suit a central procurement team.
Asked about the original pace of transitioning departments to the central service, he said: “I do think there was a general era where a lot of very good ideas were promulgated, but frankly I don’t think the civil service had the experience to do it at the pace that was expected.”
Harrison and Manzoni also outlined plans to streamline the management information systems which gather information about procurement across government. Currently there are 62 separate systems, most of which do not talk to each other.
These will be reduced to around 5-10 systems which can talk to each other, Manzoni said, as part of a £10m investment programme due to be completed by February 2019.
Asked about his long term vision for the CCS, Harrison said it was: “For us to clearly demonstrate that we can put in place the most competitive deals for common goods and services for the UK public sector. I don’t expect the scope to get much broader, but I expect it to get a lot deeper.”
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