The challenges faced by the Crown Commercial Service

1.19  The Crown Commercial Service (CCS) is a new organisation with ambitious plans to change how central government buys some £14 billion of common goods and services (35% of the estimated £40 billion spent on procurement). In November 2013 we reported the Cabinet Office's ambitions for central government may not be matched by the right resources, capability and information.24 The creation of the CCS was designed to strengthen its governance over commercial issues. It is in the process of developing its own capability, and has made some progress. It:

•  gained HM Treasury approval for its business case in March 2014 and refreshed it again in July;

•  appointed a new management team below the Accounting Officer and is seeking a new non-executive chair;

•  appointed a new head of contract management, who is introducing new operating procedures for its own contract management;

•  recruited new staff with 118 external recruitments; and

•  started to review the way that it communicates with the commercial profession and departments.

1.20  Once common goods and services are transferred to the CCS, departments will retain responsibility for the day-to-day management of the service (Figure 6). There is a risk, as with all central buying functions, that the commercial function in CCS will become too remote from the end-user and day-to-day manager. Departments will thus need to 'contract manage' the CCS as a key supplier. CCS managers are keen to promote a service culture and the CCS is putting in place memorandums of understanding with each department as it transfers in. These set out mutual responsibilities, and will enable departments to influence the CCS's performance by withholding fees if the service is not delivered to the required standard. CCS has also established business partners for each department whose responsibility it is to ensure that the CCS meets departments' needs.

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24  Comptroller and Auditor General, The role of major contractors in the delivery of public services, Session 2013-14, HC 810, National Audit Office, November 2013.