Hundreds of senior commercial specialists in the civil service are to be directly employed by a crack new team in the Cabinet Office and loaned back to departments, CSW can confirm, as the government seeks to improve the recruitment and development of staff with the skills needed to help Whitehall hold its own with private sector suppliers.
According to the latest figures, central government spent more than £40bn with third party suppliers in 2014-15, and some £15bn-worth of large government contracts are set to expire over the next five financial years, presenting a major procurement challenge for the civil service's 4,000 commercial staff.
Meanwhile, both the National Audit Office spending watchdog and MPs on the Public Accounts Committee have repeatedly highlighted concerns over the government's commercial capability, and civil service chief executive John Manzoni has admitted that the organisation has allowed its skills to "atrophy" in recent years.
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Documents seen by CSW confirm that a major shake-up of the government's commercial operations is now under way, centred around the establishment of a new unit called the "Government Commercial Organisation" – first hinted at in Treasury minutes published last month – which will employ senior commercial staff on enhanced pay and terms and send them out into departments as and when they are needed.
According to the documents, GCO will act as "the single employer of several hundred commercial specialists for departments in central government", directly employing all senior commercial staff at Grade 6 and above, drawing up their contracts, managing their performance and treating them as an "entire cohort with targeted learning and development opportunities".
Commercial staff will not, however, be automatically transferred to this new team, instead having to gain accreditation through a recently-established Assessment and Development Centre (ADC).
A dedicated "Accredit" team in the GCO – led by the Cabinet Office's Beth Pavey – will, the document says, "provide rigorous, objective and consistent assessment of the capability of each participant", with senior commercial specialists invited to attend a one-day assessment day with the ADC to put their skills to the test.
Commercial staff at Grade 6 or higher who gain ADC accreditation will then be offered "the option of taking new terms and conditions in the GCO", the document says, promising that those terms have "been benchmarked to ensure they will be attractive".
A separate document says details of the new reward offer are "still under development", but says there is agreement "in principle" to offer "higher base pay, a higher level of performance related pay and new defined contribution pension arrangements".
Accredited senior specialists will then be deployed into departments "for extended periods" of between one and five years, with GCO promising to work with departments to ensure specialists are "matched with the areas of greatest need and opportunity", and pledging to maintain a central database of specialists across Whitehall to try and improve the civil service's patchy record on succession planning.
Training and support
The document describes GCO as being modelled on the lines of a professional services firm, which can then called on by departments when needed – and it says the new organisation will also have a dedicated "Attract" team focused on recruitment and retention.
That team – led by Cabinet Office deputy director Marcus Luke – will focus on ensuring "the career prospects of staff who join or stay in government are optimised", the document promises, as well as working to ensure proper induction in areas including public procurement and government accounting for staff drafted in from outside Whitehall.
A "Talent" team, led by Flora Huskisson, will meanwhile aim to "significantly strengthen" the career prospects for commercial staff, with "periodic moves across government and secondments" helping to ensure that there are sufficient opportunities for promotion within the civil service.
"Staff will have a regular opportunity to discuss their learning needs" – Government Commercial Function
And a "Teach" team will oversee training, including a dedicated "Commercial Curriculum" aimed not just at centrally-employed commercial specialists but also "generalists who need to be commercially aware", senior civil servants "who need further commercial training" and offering commercial training to Fast Streamers and apprentices.
Professional bodies including the Chartered Institute of Procurement and Supply (CIPS) and the International Association for Contract and Commercial Management (IACCM) are working with GCO to draw up this curriculum, and the organisation says it "will undertake regular reviews of skills gaps and develop new solutions to meet learning needs".
"New products will be consulted on and developed by a new Academic Board consisting of professional institutes, industry, academia and commercial professionals from departments," it adds. "Staff will have a regular opportunity to discuss their learning needs with one of our learning consultants."
Accountability and funding
The new model represents a major reorganisation of the government's commercial profession, and the documents seen by CSW seek to address a number of potential concerns among departmental staff about the changes, including on how accountability will work and how the new model will be funded.
On accountability, the Cabinet Office says staff in the GCO will "still work to the department's permanent secretary", with accountability for their roles "unchanged" during the period of their deployment in a department.
"The GCO provides departments with greater insight and access to the capability it requires and opportunities to share best practice and knowledge across the function. This will ultimately lead to better commercial outcomes across government" – Government Commercial Function
And it seeks to rebut the charge that the new structure will reduce the autonomy of departments in favour of greater interference from the centre of government.
"Departments remain responsible for their commercial decisions and outcomes," the document says. "Commercial Specialists from the GCO will be deployed to departments, operating in the department, for the department in line with the departmental objectives.
"The GCO provides departments with greater insight and access to the capability it requires and opportunities to share best practice and knowledge across the function. This will ultimately lead to better commercial outcomes across government."
A prospectus for the GCO says work "is still continuing to determine the best funding model" for the new organisation, which has received initial 2016/17 funding from the centre of government to cover set-up costs.
But while the details are still to be ironed out, the document says "the intention is that, in steady state, recharging departments will wholly finance the GCO".
The GCO says it will measure its success through improved staff engagement scores among commercial staff; a higher ratio of "permanent accredited staff" to posts requiring specialists; and cutting "reliance on consultants/interims".
CSW understands that the process of moving civil servants into the GCO will take place over the next 12-18 months.