Second wave of Whitehall-wide commercial standards out by end of this month

Commercial Standards are getting an overhaul, the Cabinet Office confirms, but wider "Blueprints" are still not finished

Civil service chief executive John Manzoni wants new standards to shape good practice across government. Image: UK Parliament

By Matt Foster

21 Jul 2016

The second batch of the Cabinet Office's new "commercial standards" is set to be published by the end of this month, it has emerged, but broader reform plans set to be finished by March are still in the works.

A government-wide review of Whitehall's ability to hold its own with private sector providers was launched in 2014, after a report by the Public Accounts Committee urged departments to pay "much more attention to contract management" following revelations that suppliers G4S and Serco had overcharged the Ministry of Justice for the electronic tagging of offenders.

Earlier this year, civil service chief executive John Manzoni unveiled 14 new commercial standards for all government departments, asking them to ensure they had "a fully resourced and appropriately skilled, trained and experienced commercial function".

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The standards included bringing in open book accounting, planning "well in advance of a contract ending" to avoid the use of extension options, and early publication and review of the business cases underpinning planned deals in a bid to sharpen scrutiny.

Standard number 13 superficially commits government to making sure there are "robust governance processes" on private sector contracts, with a vow to "oversee supply and recording of performance evidence" and build in scope for early exit from contracts "where necessary".

Just before parliament broke for its summer recess on Thursday, the Treasury published a 122-page document updating MPs on government's progress in implementing six years'-worth of PAC recommendations.

"The Cabinet Office will be working closely with departments to ensure plans for blueprints are credible and robust. This process should conclude in Summer 2016" – Cabinet Office

Responding to the committee's observation that central government's "management of private sector contracts has too often been very weak", the Cabinet Office said it was working with departments to ensure the Commercial Standards were adhered to – and revealed that it had already begun work on drawing up a new version.

"Cabinet Office is currently engaging with Departments to embed the Commercial Standards into commercial delivery," the response said. "The Commercial Standards are undergoing a planned review, to create an iteration 2 by the end of July 2016. Future reviews will ensure the Commercial Standards remain current, and that adherence to standards and commercial delivery in government continuously improves."

As part of the commercial review process, departments are currently being asked to work with the Cabinet Office draw up so-called "blueprints" for improving their commercial operations.

When Manzoni launched the commercial standards, he told PAC that these blueprints would be ready by March. However, the update from the Cabinet Office now says these will be published in the "summer".

"Departments have been tasked to complete a blueprint, which will outline their future target operating model, defining the skills and people they need to deliver against their pipeline," the Cabinet Office says.

"They will also outline governance structures, processes and ways of working. The Cabinet Office will be working closely with departments to ensure plans for blueprints are credible and robust. This process should conclude in Summer 2016."

The Cabinet Office is currently on the hunt for a new senior official to keep an eye on departments' adherence to the new commercial reform plans.

According to a job ad posted on GOV.UK last month, a £160,000-a-year "Continuous Improvement Director" will lead a ten-person "Standards and Continuous Improvement" team in the Cabinet Office, reporting directly to government chief commercial officer Gareth Rhys Williams and responsible for "assessing and monitoring how well the standards are being met" across Whitehall.

Atos review

Separately, the Cabinet Office also briefed MPs on Thursday on the progress of its review into all major government contracts with supplier Atos, after PAC accused the supplier of engaging in "sharp practice" on a health IT project.

The Whitehall-wide review into all Atos contracts worth over £10m was launched after the committee said Atos had failed to show "an appropriate duty of care to the taxpayer" while working on the Department of Health's General Practice Extraction Service.

According to an investigation by the National Audit Office, Atos was brought in by the NHS Information Centre in March 2013 to develop a tool to manage the extraction of GP data, after a previous lengthy delay in getting the project off the ground.

But the spending watchdog said that when the system was transferred to the Health and Social Care Information Centre "it had fundamental design flaws and did not work".

PAC said Atos – which reached a final settlement with government to complete the project in 2014 – appeared to have "acted solely with its own short-term best interests in mind".

Updating the committee on the review's progress, the Cabinet Office said: "The Terms of Reference for the review have been finalised and the Cabinet Office has issued an information and data request to Departments for contracts in scope.

"Data collection was completed at the end of April. Interviews with Departments were completed in May and interviews with Atos will be completed by mid-June 2016. The Cabinet Office will report back to the Committee in the summer 2016."

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