Government as one customer

Government has recognised that it needs to act as one customer to exploit its buying power in the market, and to reduce duplication and inefficiencies in the process. This has led to the creation of the Crown Commercial Service (CCS). CCS is a new organisation with ambitious plans to change how government buys some £15 billion of common goods and services.

A focus on achieving savings in government's commercial relationships has driven further activity at the centre, including the renegotiation of contracts with strategic suppliers, the introduction of Crown Commercial Representatives to lead negotiations, and the use of strategic supplier information to inform contracting decisions.

The NAO has been supportive of this agenda, believing that it provides the opportunity to drive down costs and improve services. However, our previous reports Managing Government Suppliers (2013) and Update on the next generation shared services strategy (2014) highlighted a range of challenges, including:

•  Unclear accountability between the centre and departments. Central oversight and control, such as interventions through the spending controls process and management of supplier relationships, challenges existing accountability structures. It may be necessary to do this in order to change the system, but longer-term goals may be at risk if departments are not on board.

•  Clarifying the operating model for the centre and departments to allow departments to determine how their own commercial functions should operate.

•  The rapid expansion and ambition of the Crown Commercial Service brings risks in terms of being able to meet departmental demand for services, and to recruit to keep up with the required capability.

•  The centre maintaining clear leadership of a cross-government programme, and working closely with departments to achieve the anticipated savings.

•  Helping departments to become 'intelligent customers' of the shared services. This includes changing departments' ways of working to get the most out of the centres and to realise the value of the initiative.