Government CCS agency not good value for taxpayers, National Audit Office says

A troubled agency responsible for buying around £2.5 billion of goods and services for Whitehall and public sector bodies has so far failed to achieve good value for money for taxpayers, a spending watchdog said.

The creation of Crown Commercial Service (CCS), which was launched in 2014, was "rushed" and the reforms to centralised buying "have not been well managed", the National Audit Office (NAO) concluded.

The shift to CCS was supposed to have saved £3.3 billion over its first four years, but the NAO said that it was impossible to tell whether the £521 million of savings claimed in 2015/16 would have been achieved even without moving purchasing to the agency.

The NAO report noted that "from the start there was a rapid erosion in departments' confidence in CCS" and by 2015 the programme was "widely acknowledged to be in difficulty" leading to an independent expert being appointed to review the agency and "reset" the way it works.

By 2016, only seven departments had transferred the responsibility for buying common goods and services to CCS, amounting to £2.5 billion, well below the £13.4 billion envisioned.

A further £12.8 billion of spending by central government and public sector organisations uses CCS frameworks for the deals.

NAO chief Sir Amyas Morse said: "Without a sound overarching business case or a detailed implementation plan, it is not surprising that the Crown Commercial Service rapidly ran into difficulties and soon had to reset its plans.

"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."

The NAO report said: "The Government's reforms to central buying have not been well managed. 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.

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

The report acknowledged the "strategic argument for joint buying remains strong" and CCS is "making changes to its operations which it expects to improve services in the future".

CCS chief executive Malcolm Harrison said: "CCS continues to enable central government and the wider public sector to achieve substantial benefits for the taxpayer from the procurement of common goods and services.

"I welcome this report, which rightly highlights the challenges CCS faced at its establishment, while acknowledging the positive progress we are now making."

John Manzoni, chief executive of the Civil Service, said: "The Cabinet Office will always set ambitious targets for the work we do right in the heart of government. CCS has made huge strides in recent months, and we expect to see more and more savings as the changes we make take hold across departments.

"From the centre we will increase skills and bring in the talent needed to make sure every penny of taxpayers' money is used to its absolute maximum."