The head of the Crown Commercial Service (CCS) has outlined an ambition to take control of around £15bn of central government spend by putting the customer first.
Simon Tse, chief executive of CCS, told SM currently the organisation controlled about £10bn of central government spend on common goods and services but it had been calculated there was around £19bn spent in these areas.
“Will we get all of it? I’d like us to get £15bn of it coming through our commercial deals,” he said.
Tse, who has been with CCS for four years, the last two as chief executive, said the organisation had been on a transformation journey that revolved around putting the customer “at the heart” of decision-making, in order to draw in more spend to its frameworks.
He said in the past, “we’ve designed our strategy and built our framework from it, and we’ve gone to the market and said, ‘You will buy from it won’t you’, with an air of arrogance.
“What I’ve been saying is, ‘No that’s not the way I want us to work as an organisation’. I want us to put the customer at the heart of the organisation, which is our transformation journey.”
In 2017 MPs on the Public Accounts Committee criticised CCS for failing to deliver quality services to departments and slow progress on centralising spend since its creation in 2014. This followed a 2016 report from the National Audit Office that said the organisation, set up to aggregate spend on common goods and services, had “not yet achieved value for money”.
There has always been a question around how much carrot and stick will be required to centralise public sector spend, a debate that continues in the health sector, but Tse comes down on the side of the carrot.
Tse told SM CCS was now “taking the voice of our customer and making it as equal as our category strategy team’s”. “I want us to be custodians of the category strategy but we need to tap others’ knowledge,” he said.
He has set up a customer experience directorate, which includes teams around the country that work closely with clients and potential customers in NHS trusts, local government, schools and universities to explain what CCS does.
There are more regular customer engagement sessions and community-of-interest groups that bring buyers together across the public sector and central government to contribute to category strategies.
Currently there are around 76 such strategies, ranging across CCS’s four pillars of buildings, technology, corporate services, and people. In order to win buy-in, CCS asks departmental commercial directors to sign off its category strategies.
“A level of trust has now come in that we didn’t necessarily have before,” Tse said. “In a lot of cases over the past 18 months those departments that put their own frameworks in place are now transitioning those to CCS to manage in a consolidated way.”
Last year £15.7bn went through CCS frameworks, up on £13bn the year before, and Tse says this year the figure will be around £18bn. Around £6bn of last year’s spend was from the wider public sector. “We want to do a lot more with the wider public sector as we move forward,” said Tse.
CCS’s commercial model is built on suppliers on its frameworks paying a levy of up to 1%, which goes into a pot that is used to invest in skills and knowledge. Talks are taking place with customers about what to do with surpluses generated by the levy.
Despite the levy, Tse says a comparison of CCS prices and the open market showed “we are five percentage points better”.
In response to the coronavirus pandemic CCS has been supporting public sector bodies and asking suppliers to “assure their supply chains”.
“It’s about making certain that whatever is needed across the UK, recognising that we’re about common goods and services not about medical and pharmaceuticals, but making certain the things people need, that we are helping, providing advice and guidance,” said Tse.
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