MPs slam central government procurement

An influential committee of MPs has criticised the performance of the government’s buying arm as “poor” and “disappointing”.

An investigation by the Public Accounts Committee into the Crown Commercial Service (CCS) has revealed that the organisation is currently only managing £2.5bn of spending on behalf of seven government departments - instead of the expected £13bn on behalf of 17 departments.

CCS’s management of procurement frameworks, such as its heavily delayed £2.9bn construction consultancy framework called Project Management and Full Design Team Services, has also been criticised as “unsatisfactory”.

This framework was taken over by CCS in November 2014, seven months after its creation, following the cancellation of the previous process run by its procurement partner UK SBS amid a storm of criticism, which saw then-failed bidder Turner & Townsend challenge the framework in the High Court.

The large consultancy framework is now expected to be awarded before the end of April, nearly four years late.

The committee added that the CCS has been unable to demonstrate that its frameworks are the best in the market, as well as failing to renew or replace frameworks before final expiry dates.

The use of expired frameworks contravenes public procurement law and exposes the government and organisations using the frameworks to legal challenges. The CCS said it had taken legal advice before extending frameworks beyond the final expiry date.

The 2014 creation of the procurement body by the Cabinet Office was “poorly executed” and progress in centralising the government’s purchasing has been slow, the committee reported, adding that the CCS “did not have detailed plans from the start setting out how it would collaborate with departments and failed to gain their confidence”.

The CCS, itself, told the committee that it believed the organisation was “wrongly designed”.

In addition the committee said the CCS’s governance structure is “confusing, blurs accountability and reduces clarity of the purpose”.

According to the report from the committee the government only realised the CCS was “severely off-track” in 2015 when a second review of the service was commissioned.

The cabinet office and CCS are expected to report back to the committee in October with plans agreed with each department to centralise spending on common goods and services by 2020.

Meg Hillier MP and chair of the Public Accounts Committee, said: “The Crown Commercial Service was set up with the intention of saving public money. But so far it is only managing around a fifth of the spending it expected to and is a long way from achieving its potential.

“This is a dismal showing that calls into question exactly how willing government departments are to accept the authority of the Cabinet Office in this area.

“There were clearly fundamental problems at the launch of CCS, but even now it is unclear exactly how progress will be made during this Parliament and beyond.”

A CCS spokesperson said: “The CCS has reported savings of £2.4bn for the taxpayer since its inception in 2014. With an experienced senior leadership team now in place, we are confident in our ability to deliver even greater value for the taxpayer moving forwards through the centralised procurement of common goods and services.”