The Cabinet Office unit’s annual accounts showed that the loss contrasted with a small surplus of £33,000 during the previous financial year.

Most of this year’s deficit (£5m) was incurred by the CCS’s Commercial Accelerator Programme, aimed at identifying future savings opportunities in central government departments over the next four years.

Malcolm Harrison, interim chief executive of CCS, said: “Whilst the first year of CCS was one of formation and building, this year has been one of consolidation, transformation and review as we move forward on our journey towards a mature organisation.

“2015/16 has been hugely challenging, but nonetheless, a successful one in certain key aspects for the Crown Commercial Service.”

The accounts said that two digital projects - the Digital Transformation Programme and the Crown Marketplace Programme – are integral to achieving service delivery improvements.

During the year, phase one of the former commenced and initial scoping of the latter progressed, the accounts said.

The CCS said: “We must rapidly move the Crown Marketplace from concept to delivery, making it easy for our customers to access our products services via digital channels, some of which will be as part of a self-service 'click and buy' experience.

“We have the opportunity, to innovate and disrupt supply markets through the use of technology, commencing with pilots for catalogue-able spend categories such as office supplies, tyres and furniture.

“Together, this capability improvement and transformational investment provides CCS with the opportunity to deliver consistently high quality services to more public sector customers for less cost per pound of spend channelled through our deals.”