Raising commercial skills is a key part of Civil Service Reform. This is because we spend £240 billion of taxpayers’ money with suppliers to deliver public services, including £40 billion in central government alone. In an era of increased demand and less resource it is more crucial than ever to spend every penny of it well.
This isn’t just a task for commercial professionals; obtaining better value requires us all to demonstrate sound financial and commercial understanding. Yet we know from the Annual Skills Review that “delivering commercial outcomes” is one of areas where civil servants rate their capability weakest. So what do we need to do to change this?
All civil servants must better understand the three phases of commercial engagement:
• early market engagement - how to plan and engage with the market to obtain most choice and innovation
• procurement - how to procure and contract intelligently
• good contract management - how to manage the delivery of goods or services so that our expectations are met
Value is obtained during all of these 3 phases, but today we tend to overly focus on the procurement phase. We have established 5 guiding principles (STACK), to build our commercial capability and restack the commercial balance in our dealings with suppliers:
Specialist capabilities are required across the wider Civil Service as well as by a group of commercial experts. Commercial expertise is broader than what we refer to today as ‘procurement’.
Time should be spent where we can maximise value. In a regulated procurement environment this applies as much, if not more, before a formal procurement starts as well as after a contract has been signed.
Attitude, or judgement, is as important as process and so we need all our dealings to be about knowing what represents great value and achieving it.
Crown is what we must always act as, and be treated as a single customer.
Knowledge is key and we must seek, share and use it to our commercial advantage.
So, we need to work hard to develop a Civil Service which has a strong commercial mindset, and a Commercial Function which has the skills, experience, confidence and judgement to provide an excellent service to Government. There is a great range of commercial learning programmes available for all of us on Civil Service Learning – so please log on now and have a look!
The 1 day Civil Service Learning Commercial Skills for Leaders course is a must for all senior civil servants to gain insight into applying commercial skills to complex issues and lead more effectively in commercial situations. The next course is on 30th October in London.
For everyone from HEO to SCS, the Effective Commercial Planning and Contracting Masterclass offers a 1 day introduction on how the commercial cycle works, how to make best use of different markets and how to create effective contracts. And for anyone whose job involves managing contracts or suppliers, we have a 1 day Masterclass in Managing Contractors. There are also 5 free e-learning modules on Commercial Awareness, available to all staff.
And finally, the Civil Service Reform Plan: Progress Report was published yesterday and gives an update on our efforts to reform the Civil Service. Commercial reforms are a key part of this programme and our work features prominently in the report. I encourage you to read it.