The Cabinet Office has revealed plans to establish a Crown Commercial Service (CCS), which will centralise procurement and allow the government to purchase goods and services as a single customer.
CCS will bring together the Government Procurement Service and other Cabinet Office teams and is due to be established in Autumn 2013.
The announcement builds on recent successful renegotiations of software licenses that the government carried out, headed up by Chief Operating Officer Stephen Kelly, where it was able to save millions of pounds by acting as a single entity.
It is also in line with the Civil Service Reform Plan, which set commitments to transform how Whitehall operates.
"This Government's commercial reforms have already saved the taxpayer £3.8 billion. But hard-working families expect us to go further. The new Crown Commercial Service will ensure a step change in our commercial capability, giving Government a much tighter grip on all aspects of its commercial performance, from market engagement through to contract management," said Francis Maude, Minister for the Cabinet Office.
"Commercial reforms are a key element of our Civil Service Reform programme. To win the global race, Britain needs an exceptional civil service with strong commercial acumen. We need the best, most cost-effective public services in the world".
The Cabinet Office said that CCS will "work with Departments and wider public sector organisations to ensure maximum value for the taxpayer is extracted from every commercial relationship".
Specifically, the CCS will:
Centrally manage the purchase of common goods and services
Introduce a new Complex Transactions Team to work with departments on complex procurements, reducing the need for external advice
Enable departments to focus their commercial efforts on their own strategic requirements
Improve commercial ability across the Civil Service
Work with the wider public sector to ensure that the benefits of aggregation and centralisation are being realised
"Government should be an excellent customer. We spend around £45 billion on buying goods and services, and need to make the most of this extraordinary buying power," said Bill Crothers, the Government Chief Procurement Officer.
"The Crown Commercial Service will ensure we act as a true single customer: buying the essentials for the whole of Government in the most efficient way possible, whilst freeing up departments to focus their procurement expertise on what is unique to them. The result will be more savings, an increase in the quality of the commercial service to Government, and a sustainable approach to our commercial and procurement activity which will benefit the whole of the public sector."
The government has been carrying out a number of reforms in recent months to get the best value for money from traditional IT suppliers to the public sector. However, CGI's UK President, whom was put in charge of operations after the acquisition of Logica, recently slammed the government for its commitment to SMEs.