Government commercial reforms: where next?

The Cabinet Secretary, Sir Jeremy Heywood, wrote about the Government’s efforts to improve commercial capability last week. In our review of commercial capability in the civil service, we note that there has been considerable progress in these reforms – but there is still more to do.

Leadership from the top and ensuring that policy staff change the way they work to better take advantage of commercial talent are two of the areas we said need continued focus. So, Sir Jeremy’s intervention is a valuable signal of his leadership, and it is powerful that he is making it clear he expects policymakers to involve commercial professionals in the early stages of any project with a commercial component. 

The next steps he highlighted are:

1. Accrediting and providing improved learning and development support to contract managers, not just procurement professionals.
2. Involving arm’s length bodies (ALBs) in reforms. ALBs will be able to use new processes that have been set up to support recruitment and accreditation of senior commercial staff (partiularly ALB commercial directors) – if they want to.
3. Allowing slightly more junior civil service staff (at Grade 7) to join the Government Commercial Function.

All of these steps amount to an expansion of the reform programme. Relatively few contract managers are expected to become centrally employed with the Government Commercial Organisation (GCO) employees. It is also unlikely ALB commercial directors will opt into the GCO (as they are public servants with quite different employment terms).

However, there will clearly be considerable work to do in terms of accrediting and developing these broader groups. Identifying contract managers across government when many will be operational managers as well as contract managers will be particularly tricky. Adapting accreditation processes to suit contract managers and building the more diverse career development and training support required by newly involved groups are another challenge. It is also vital that the quality of existing work is maintained, if departments are to continue to have faith in the centrally-run assessment centre and the emerging GCO learning and development offer.

Broadening the focus of the reform amounts to a vote of confidence from Sir Jeremy that new structures and processes put in place by the Government’s Chief Commercial Officer, Gareth Rhys Williams, and his colleagues are fit for purpose. But expansion will inevitably increase the pressure to ensure results. The success of the overall programme should be judged by how well departments are designing and running services that rely on private and voluntary sector providers. And Sir Jeremy will be eager to demonstrate that the reforms he is championing are delivering results for departments and government as a whole.

Fortunately, a process has been established that will allow government to measure – and celebrate – successes and address areas where progress falters. Departments are currently self-assessing capability against the Government’s new (and recently much improved) commercial operating standards. Towards the end of 2017, these self-assessments will be followed by reviews that measure progress against this baseline. These reviews will be done by peers (teams from other departments, including other commercial directors).

It is vital that these reviews are seen as serious, objective and difficult to manipulate. The current plan for private reviews by peers has pros and cons. Peer review is often a valuable learning mechanism for all involved, but can create challenges for consistency and perceived impartiality. Privacy no doubt helped to ‘sell’ the idea of reviews to permanent secretaries – but fear of public criticism and hope of praise can increase senior focus on ensuring commercial capability actually improves.

I’m not sure of the exact methodology that will be used in peer reviews. However, it would make sense to protect against these risks. The IfG's research on the impact of the 2005-12 departmental capability reviews judged that their approach to ensuring consistency and impartiality was rather successful. They included peer reviewers from other departments in the review team (who benefited greatly) but they also drew on a central support team and some strong independent figures. In that case, figures were drawn from private, voluntary or wider public sector. Departmental non-executive directors might easily do a similar role today.

Though caution is understandable, it may also be overly cautious not to publish reviews. The Government publishes ratings for the likely success of major projects and these don’t undermine government. Rather, they show that government takes project management and public accountability seriously. A similar approach to assessing commercial capability could do likewise and would demonstrate and increase confidence that reforms are making a real difference.