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NAO urges CCS to step up as it fails to achieve value for money target

The Crown Commercial Service is failing to deliver quality services to customers and achieving value for money, according to the National Audit Office

The National Audit Office (NAO) has called on the Crown Commercial Service (CCS) to improve its quality of service to customers.

The NAO report said CCS has failed to provide integrated or standardised services and “couldn’t demonstrate to its customers that its deals are always the best available”.

CCS was set up as a way of centralising all purchasing, eliminate duplication and act as a single entity for all central government procurement.

Earlier in 2016, it went live with the second iteration of its technology products and services framework – a “one-stop shop” for public sector organisations going out to tender for technology products. CCS is also responsible for the Digital Marketplace and G-Cloud

Although using CCS frameworks saved organisations £521m in 2015 and 2016, the NAO said the procurement agency is not yet achieving the value for money originally envisioned.

The report said only seven out of 17 departments have so far transferred its responsibility for buying common goods and services to CCS, totaling £2.5bn spend, which is “well below the £13.4bn envisioned”.

“Although CCS customers can save money by using CCS deals, we would have expected more savings would have been delivered if CCS had been set on a sounder footing,” the report said.

“As a result, central government has not yet achieved value for money from its central buying.”

Cabinet Office criticised

The report also criticised the Cabinet Office for underestimating the difficulty of mandating and implementing joint buying across government departments and organisations. It was also slammed for not being detailed enough in its implementation strategy and for failing to track net costs and benefits.

NAO head Amyas Morse said it wasn’t surprising that CCS ran into difficulties and had to reset its plans “without a sound overarching business case or a detailed implementation plan”.

“It is particularly disappointing that the Cabinet Office has not tracked net costs and benefits. Because of this, it is not possible to show that CCS has achieved more than departments would otherwise have achieved by buying common goods and services themselves,” he said.

The report said although central buying is the right way forward and should achieve “very large savings”, it’s not clear what spending should be centralised.

“The strategic argument for joint buying, however, remains strong,” it added.

Quality improvement needed

In December 2015, CCS set out its strategy for “smart tech buying”, aiming to grow the supply chain, increase and improve buying power and “support open data expansion and open source creation”.

Part of this includes better engagement with suppliers and customers. However, one of the main criticisms in the report is that “CCS’s management of services has not supported consisteny value for money and quality”.

“For example, CCS’s services were not integrated or standardised, and CCS could not demonstrate to its customers that its deals are always the best available,” the report said.

“Some customers complain that CCS’s services can be poor quality. Although CCS has helped its customers to save money, customers have consistently reported that they are not satisfied with CCS’s performance. Customers have reported issues including poor communication, unreliable services and the way CCS has managed procurement frameworks.”

The purchasing organsiation was also criticisised for increasingly extending its frameworks, but the NAO added that CCS has “shown clear signs of improvement in governance, risk and internal control”.

One of the frameworks that have been extended is the Contingent Labour One (CL1) framework, which was due to expire in June 2016, but has been extended until June 2017. 

The contract for sourcing temporary staff across government has faced controversy, particularly Lot 1, where Capita was contracted to manage sourcing the higher value, more skilled requirements.   

A consortium of small to medium-sized enterprises (SMEs) said they had lost millions of pounds in revenue as a result of the framework and accused the supplier of breaching the terms of the contract.

Some suppliers also accused CCS of attempting to undermine their relationship with government and to pursue a policy to cut them out of the supply chain in direct contravention of official Whitehall policy to increase the amount of public spending put through small businesses.

However, frameworks such as the technology products and services framework aim to make it easier for SMEs to sell to government, with more than 90% of the suppliers on the framework being SMEs.

In an interview with Computer Weekly in 2016, Kelvin Lee, CCS category director for technology products and services, said the new framework is more focused on quality than its previous iteration, with a 90-10 split on quality and price.

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