Tackling the public sector savings challenge Simon Wilson The Crown Commercial Service Conference on University Purchasing (COUP) September 10 th, 2015

COUP Event Circa £230bn spend p.a. on goods and services across the public sector Commercial expertise for the whole of the public sector Imperatives Saving money to protect front line public services Supporting economic growth Enabling innovation and new delivery models Better commercial practices saved £5.9bn in 2014/15 Saving money to support deficit reduction 2 COUP Event

Our Purpose: Savings & Service Direct Buying Service on behalf of the public sector - £15bn of spend in 2015/16 Policy Delivery Ministerial priorities and driving value for money What we do COUP Event Our challenge: up to £1bn savings (2014/15 baseline) and increasing over this new parliament Advisory Service Supporting more than 50 projects 3 COUP Event

How we do it Agreements, contracts, memoranda of understanding for central government and wider public sector access - including Higher Education. EU compliant, value for money, commercial solutions Energy, travel, fleet, office solutions, communications services, print, professional services, ICT, eCommerce, construction, research and facilities management & property. Common goods and services Working with other buying organisations in health, local government and devolved administrations to combine volumes and deliver savings to benefit the whole of the public sector. Strategic alliances Ensuring policy development is linked to implementation. Negotiating with the EU to make the procurement process faster, less costly and more effective. Bringing together policy, advice and buying 4 4 COUP Event

Some key facts 5 COUP Events c£5.9bn savings in 2014/15 against a 2009/10 baseline through better commercial practices; price and demand savings and renegotiating large contracts. Savings c£15bn of public sector spend through CCS deals in 2014/15. £2bn under direct management via a managed service. >1800 procurements carried out in 2014/15. Spend 61% of the 2,600 suppliers we work with are small businesses supplier contracts managed on behalf of our customers. New contracting models have led to a 40% reduction in active framework agreements. Suppliers 14,500 customers across 1,400 organisations Business Partners in place - a primary point of contact focused on delivering excellent service to customers (central government and sector leads). Customers

Savings - commercial levers Current approach 1.Market place efficiency (5-10%) 2.Demand management (5-10%) 3.Design specification (5-10%) 4.Re-procurement / aggregation (5-10%) 5.Channelling more spend to through improved deals (3-5%) 6.Contract management (3-8%) 7.Contract re-negotiation (2-5%) 8.Supplier innovation and management (10-25%) 6 COUP Event Historical approach Re-procurement & limited aggregation (5-10% savings) Historical approach Re-procurement & limited aggregation (5-10% savings)

What we should all expect from suppliers 7COUP Event To embrace competition To be innovative through proposals for how we can improve services To be transparent through open book accounting To demonstrate high levels of corporate responsibility To deliver what we are asking for as an intelligent client To deal effectively with CCS as one customer – the Crown To make a reasonable but not excessive profit To provide opportunities to small businesses in the supply chain To deliver savings for taxpayers

Top 10 reforms in the new Directive Much simpler process of assessing bidders’ credentials More freedom for buyers to negotiate with suppliers Poor performance under previous contracts is grounds for exclusion Greatly simplified rules on Dynamic Purchasing Systems Expressly permits the use of electronic catalogues Reduced red-tape on suppliers’ response times Clarity that buyers can take into account relevant skills and experience Clarity that social aspects can now be taken into account A turnover cap and provisions on breaking up large contracts to help SMEs Temporary exemption for public service mutuals 7 COUP Event

8 COUP Event Corporate Solutions Property FM Energy Travel Fleet Communications Financial Services Office Solutions People Technology Professional Services Consultancy & Contingent Labour Network Services Cloud Services Technology Products Software Licensing Buildings Establishing specialist capability Our focus - accelerating savings through taking a more strategic approach Listening to customers and suppliers

Improving capability 10 COUP Event Highly skilled specialists with high capability driven by innovation Recruitment of more experienced commercial experts – fewer but more senior people Better management of the talent we have Improving performance through assessment and development programmes