The Cabinet Office must ensure that its drive to improve government’s commercial capability is fully understood by all those affected, according to a report published by the Institute for Government.
The programme of reforms – led by government chief commercial officer Gareth Rhys Williams – includes the creation of a Government Commercial Organisation which will directly employ and train senior commercial staff, and offer higher pay in a bid to tackle recruitment and retention concerns.
The central team is also helping departments to share information on suppliers and markets more effectively, and centralising some activities such as procurement of common goods and developing standard frameworks.
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The think tank has studied the latest round of reforms aimed at improving government’s commercial capability, and finds that while they have the “potential to succeed”, the changes are now entering a crucial phase when leaders must ensure momentum and support does not dwindle.
“These commercial capability reforms cannot be allowed to fade,” the report says. “Plans can and should be refined as leaders learn what is working, but commercial capability is simply too important to the performance of government to fail.”
The report is broadly supportive of the programme, saying it has many of the indicators of success that the IfG has identified when examining previous reform programmes.
“Some talented commercial staff eligible to join the GCO believe they will be better served by staying out of it" – Institute for Government
For example, the reforms have clear objectives and measures of success, and focus on supporting departments to deliver their own objectives rather than on centralising work
The report notes there “have already been some highly visible changes as a result of the reforms to date”, including the arrival of new talent from the commercial Fast Stream and the recruitment of “a significant number of senior staff who might not otherwise have considered a career in the public sector”.
However the researchers found that some staff are uncertain about what the reforms will mean for them, and are reluctant to join the new GCO.
“A complaint heard occasionally – though our sample of input was small – was that choices had not been sufficiently widely debated and evidenced to build this broader buy-in,” the report says, though it adds that detailed staff briefings were still being carried out and will be completed by Spring 2017.
Nevertheless, researchers found that “some talented commercial staff eligible to join the GCO believe they will be better served by staying out of it”.
Staff were concerned that joinging the GCO might limit their ability to manage their own career progression, or that they might be redeployed to departments against their preferences.
The report concludes that: “Uncertainty among commercial staff risks reducing the speed and enthusiasm with which existing commercial staff move into the GCO. Addressing questions and concerns, including from staff who will not move into the GCO, will help build the group, which has a stake in ensuring the broader reforms succeed.”
The GCO arrangements have also come under fire from unions, opposed to the proposal that staff moving to the new system would receive a pay rise only by reducing their pension provision.
The IfG's report says commercial leaders must “ensure that those in commissioning roles become much clearer on whether they will be expected to become GCO employees, and in what ways they are expected to be involved in the wider reforms".
According to the think tank, some leaders are concerned that if reforms do not succeed they will still be held responsible for failures without meaningful control over recruitment and training of staff.
The report says that only evidence of successful reforms will really build confidence among commissioners, but says “an open and collaborative approach from those Cabinet Office staff implementing new processes will help to ensure that commissioners do not turn against the reforms (or duplicate efforts) prematurely if there are a few teething problems".
Although the IfG praises the way Rhys Williams and other departmental leaders have steered the reforms, it says such leadership must extend below the most senior grades.
“Given that those below director grade cannot always articulate a shared narrative about the purpose and value of reforms, there is clearly not yet this broader ownership,” the report says.
2010-15 reforms analysed
The study also charts the history of commercial reforms carried out in the 2010—15 parliament, which it says “were seen as a useful and necessary shock to the system”.
“There is also considerable admiration for the drive and energy that Francis Maude’s political leadership brought to the area," the IfG says.
"For the first time in a long time, there was political interest in building commercial capability across government and securing better deals on existing contracts."
“There is also considerable admiration for the drive and energy that Francis Maude’s political leadership brought to the area" – IfG
However, as these reforms continued they were hampered by “significant conflict between those driving cross-cutting reforms and those driving departmental reforms,” the report says.
The IfG says clashes over Maude’s desire for central control processes, frustration over requests from the centre for data, and concerns over the flawed roll-out of the Crown Commercial Service contributed to such conflicts.
Launching the IfG's new study, report author Tom Gash said the management of outsourced government contracts "affects us all".
He added: "Most of our public services are now in some way supported by private companies and voluntary sector organisations. Private companies run the trains and buses we travel on, and charitable academy trusts run the majority of secondary schools.
“Yet more than half of people we polled think no one takes responsibility when something goes wrong with these outsourced public services. It’s time for the government to prove them wrong – and it can only hope to do this by keeping up the momentum on these crucial reforms.”