The committee found the “poorly executed” Crown Commercial Service was only making £2.5bn of spend on common goods and services on behalf of seven government departments instead of the £13bn on behalf of all 17 departments predicted in 2014, when the CCS was set up.
The CCS was shown to have badly managed procurement frameworks, which did not benchmark the prices it achieves on its contracts, so it cannot tell whether the end users achieve the best prices.
Meg Hillie, chair of the PAC, said today: “Government really needs to sharpen up if this latest attempt to centralise buying is to function properly.
“The Crown Commercial Service was set up with the intention of saving public money. But so far it is only managing around a fifth of the spending it expected to and is a long way from achieving its potential.
“This is a dismal showing that calls into question exactly how willing government departments are to accept the authority of the Cabinet Office in this area.”
The CCS has said it could generate savings of 10% on average on all spend on common goods and services once all departments had fully centralised their spending on these items by 2020.
The report has urged the Cabinet Office to develop a full business case to demonstrate the benefits the CCS could bring to the departments.
Its failure to develop detailed plans from the start setting out how it would collaborate with departments meant the CCS failed to gain departments' confidence, the group of MPs concluded.
This hampered the progress with centralising procurement to the CCS - a move which was halted twice.
The committee called on the government and the CCS to report back to them in October with details of the plans agreed with each department.
A Crown Commercial Service spokespersons said: "The Crown Commercial Service has reported savings of £2.4 billion for the taxpayer since its inception in 2014.
"With an experienced senior leadership team now in place, we are confident in our ability to deliver even greater value for the taxpayer moving forwards through the centralised procurement of common goods and services."
