New unit to oversee "enhanced pay and grading structure" for Whitehall's commercial staff
Civil Service Board backs move to let key commercial staff work directly for the centre of government, potentially sitting outside of departmental pay and grading
The Cabinet Office has set up a new body to try and improve the recruitment and retention of commercial specialists by the civil service, after MPs said government commercial roles were still "not attractive enough" to outsiders.
The government spends nearly £200bn a year with private and voluntary sector providers, but a recent report by the Public Accounts Committee highlighted the challenge government still faces in getting the right people to oversee those deals.
PAC said the government still struggled to recruit and hold on to key commercial staff, in spite of "encouraging progress" since a 2013 scandal which saw the Ministry of Justice overcharged by two major private sector suppliers. And the committee warned that some departments were reporting vacancy and interim rates of 15%, with key senior-level posts "still unfilled".
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The government has now published its formal response to that report, shedding light on the steps the Cabinet Office is taking to address the committee's concerns.
The latest Treasury minutes reveal that the Civil Service Board – the organisation's highest decision-making body – has recently backed the creation of a new "Government Commercial Organisation", which will be housed in the Cabinet Office.
According to the minutes, the new unit will act as a "single employer" and "will be used to enact an enhanced pay and grading structure to improve the ability to attract and retain the most experienced and talented people".
The move raises the prospect of key commercial staff being employed by the centre of government, rather than departments themselves.
It follows similar confirmation from the head of the Government Digital Service, Stephen Foreshew-Cain, that the central digital team is currently drawing up plans to create a new pay and grading structure for digital, technology and data specialists to address recruitment concerns.
Elsewhere in its response, the government says that while pay for commercial staff is "more market competitive" than in the past, it is still "not on a par with industry".
As a result, it says the Cabinet Office, Treasury and departments have been "working to improve other aspects of the overall offer", including a more clearly-defined career structure.
"This will include clearer career paths, access to more opportunities across Government via a new talent management strategy, and the development of the commercial training curriculum for both specialist and non-specialist staff," it says.
The minutes say the Cabinet Office is also encouraging permanent secretaries to make sure that the civil service's senior commercial managers are more closely involved in board-level decisions.
A Commercial Capability review was launched by the Cabinet Office and the Treasury in 2014 in response to PAC's report on the MoJ tagging scandal.
Civil service chief executive John Manzoni has repeatedly stressed the need for Whitehall to do more to build its commercial firepower in recent months, telling CSW earlier this year that he believed the government had "essentially allowed our own capability inside the civil service to atrophy".
The problem of hanging on to senior commercial staff under the tight pay restraints imposed by the Treasury was meanwhile highlighted in the latest report by the Senior Salaries Review Body, which found that the Cabinet Office's recent drive to bring in 25 commercial experts from outside the civil service had resulted in just 10 appointments.
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