3.13 The current CCS governance arrangements mean that a number of functions paid for by the trading fund report to the Government's Chief Commercial Officer in the Cabinet Office and not the chief executive of CCS (see Part One, paragraph 1.13). These staff work on complex procurements, the development of government's commercial capability and the management of strategic supplier relationships. CCS and Cabinet Office senior officials told us that although this arrangement was "not perfect" it did not create any practical difficulties. However, in our view it:
• reduces clear line of sight. These additional functions are funded by but do not directly relate to the services for which CCS charges its customers as a trading fund.18 In 2015-16 these functions cost around £7 million and are forecast to cost around £9.5 million in 2016-17;
• reduces clarity of the purpose of CCS. When we interviewed departments, around half of department commercial directors (or their representatives) were unclear about aspects of CCS's governance such as which functions reported to the government chief commercial officer role. CCS also includes staff that develop and manage procurement policy on behalf of government. Although this helps policy and practice to be informed by each other, we believe that it is inappropriate to include policy within a trading fund; and
• blurs accountabilities. For instance, it is not clear which services the CCS board and audit committees are responsible for and which the Cabinet Office's are responsible for.
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18 Trading funds are normally set up specifically to undertake government business activities. They are established under the Government Trading Funds Act 1973 and are financed principally by the receipt of revenue for the provision of goods and services undertaken in their normal course of business.