Action needed to improve performance of Crown Commercial Service

24 March 2017

The Public Accounts Committee report says that the Cabinet Office must ensure departments buy-in to system intended to save taxpayers' money.

Disappointing results delivered

A Government body set up to save public money by buying common goods and services centrally has delivered disappointing results, says the Public Accounts Committee.

In their report the Committee examines the Crown Commercial Service (CCS), established in 2014 with the aim of centralising £13.4 billion of central government spending and to carry out direct buying services on behalf of all departments.

It was intended to improve government's management of commercial contracts, and also provide framework agreements to enable both central government departments and the wider public sector to purchase common goods and services.

Only £2.5 billion of spending managed instead of £13 billion

The Committee concludes the creation of CCS was poorly executed and progress in centralising procurement has been slow, with CCS only managing £2.5 billion of spend on behalf of seven departments instead of the £13 billion, on behalf of all 17 departments, predicted in 2014.

The overall performance of CCS has been poor, says the Committee, which highlights the fact it "did not have detailed plans from the start setting out how it would collaborate with departments, and failed to gain their confidence".

The Committee also finds CCS's management of procurement frameworks remains unsatisfactory and its current governance structure is "confusing, blurs accountability and reduces clarity of the purpose" of CCS.

Recommend that spending be transferred "as soon as practicable"

Among its recommendations to Government, the Committee calls for action to ensure all departments understand the importance of achieving savings from centralised purchasing "and transfer appropriate spending to CCS as soon as practicable".

The Cabinet Office and CCS should report back to the Committee by October setting out the plans it has agreed with each department to centralise their spending on common goods and services "fully by 2020".

Chair's comments

Meg Hillier MP, Chair of the PAC, said:

"Government really needs to sharpen up if this latest attempt to centralise buying is to function properly.
The Crown Commercial Service was set up with the intention of saving public money. But so far it is only managing around a fifth of the spending it expected to and is a long way from achieving its potential.
This is a dismal showing that calls into question exactly how willing Government departments are to accept the authority of the Cabinet Office in this area.
Is the case being made for CCS underwhelming, or is the message just not getting through? Is discipline across Government too weak?
There were clearly fundamental problems at the launch of CCS but even now it is unclear exactly how progress will be made during this Parliament and beyond.
Meanwhile the taxpayer is losing out."

Report summary

Government can make substantial savings from buying common goods and services centrally, but the results of the government's latest attempt to do so have been disappointing.

Since its set-up in April 2014, the Crown Commercial Service (CCS) has failed to consistently deliver quality services to departments, and progress with centralising procurement has been slow.

It experienced severe difficulties with the programme to transfer procurement from departments to the CCS which was halted twice.

Only seven departments managed rather than all 17

As a result, CCS is only managing £2.5 billion of spend on common goods and services on behalf of seven departments instead of the £13 billion on behalf of all 17 departments predicted in 2014.

CCS still has to develop a full business case and demonstrate how it will add value to departments.

This is the latest failure we have looked at of the Cabinet Office attempting to centralise services. It needs to learn the lessons and ensure departments buy-in to what it is trying to do.

Further information

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