3.5 Since the review the government is changing the way that it undertakes and funds key aspects of its joint buying activities. This has led to changes to the activities undertaken by CCS and departments. For example:
• CCS has committed to reducing the number of unique services it offers and will transfer 53 activities and some of the people carrying out these activities back to departments. For example, CCS will transfer 23 people carrying out contract management activities solely dedicated to the Department for Work & Pensions back to this department. However, CCS may continue to provide unique services to the Cabinet Office and HM Treasury;
• CCS will stop charging fees to departments for the procurement services it conducts on their behalf. This will take place when CCS and departments agree on the specific services that CCS will continue to provide for departments. CCS expects this to happen by the end of 2017-18. This reduction in CCS's income will be offset by an increase to an existing levy that suppliers pay when they provide services under CCS frameworks.17 The levy is currently around 0.5% and will become around 0.9% of the costs of services provided under CCS frameworks;
• CCS will consolidate and restructure a number of activities. These changes aim to improve CCS's efficiency. They will separate development activities (such as the creation of procurement frameworks) from service delivery activities (such as buying goods or services using existing procurement frameworks);
• CCS is recruiting four senior specialists to lead on creating and managing strategies for buying categories of goods and services such as information technology; and
• CCS is investing around £10 million to improve the way it manages its operations. This programme is called the Digital Transformation Programme (Figure 17 overleaf). CCS expects the programme to improve its control environment and reduce both the time taken and errors incurred on activities for customers. It is also drawing up plans for a Crown Marketplace, which will provide a digital platform for customers to directly buy simple goods and services.
Figure 17 |
CCS Digital Transformation Programme
The Digital Transformation Programme aims to improve seven major areas
Area | Objective |
Internet portal | To improve CCS's internet portal to make it easier and cheaper for customers to transact via CCS frameworks |
Catalogues | To make frameworks direct available to public sector buyers in an 'Amazon'-style experience |
Sourcing | To replace the existing e-Sourcing tool with a more scalable and integrated tool |
Resource | To improve CCS's capability to manage and allocate resources |
Business processes | To improve business process efficiency by automating business processes |
Reporting and analysis | To improve CCS's reporting and analysis |
Contracts finder | To integrate the existing contracts finder tool into the new capabilities |
The Digital Transformation Programme expects to achieve a net benefit of £7.5 million by 2020. Planned benefits will mainly be due to a smaller workforce.
Source: Crown Commercial Service |
3.6 The review and the actions following the review have been received positively by CCS's departmental customers. We spoke to commercial directors across government in summer 2016. Overall, we found an increased confidence in CCS and its ability to meet their needs. Many added that CCS was yet to demonstrate improved levels of service. Some had concerns about the impact of transferring services back, especially to the smaller departments.
3.7 Nonetheless, CCS continues to face challenges in some areas that have caused it problems since its launch and which have caused problems for other attempts to implement joined-up procurement and shared services (Figure 18 on page 52). In part, this is because CCS had yet to translate its focus on improving the integration of CCS's operations and the quality of services into a clear business case or benefits realisation plan. This has four implications, which we explore over the next few pages:
• CCS still requires a means to win over departments and other customers if it is to expand further.
• CCS's governance is not sufficiently clear.
• It is not clear how CCS now fits with wider changes in the government commercial function.
• CCS lacks a means to demonstrate its progress.
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17 This change will be implemented progressively and will not impact the levies charged under existing framework agreements.