Lack of expertise and collaboration threatens NHS procurement shake-up

As government plans revamp of purchasing systems, experts warn trusts need to change

The NHS will fail to secure the cash savings and service improvements that could be achieved through enhanced procurement processes unless trusts join forces and increase purchasing expertise, experts are warning.

Next month the Department of Health (DH) will publish a new procurement strategy for the NHS that will be formally adopted before the end of the year. This aims to address the key issues highlighted in two recent critical reports from the National Audit Office (NAO) and the Public Accounts Committee (PAC). Both claimed that opportunities for efficiencies were being missed because of the current procurement processes used by NHS trusts.

It is agreed that procurement as a function is a key driver in delivering not just savings, but improved patient care and outcomes

But experts are warning that any approach will fail unless organisations accept that they do not have the necessary expertise and will need to break down boundaries and work together. This will be even harder as the Government’s reforms create more competition and division within the marketplace.

Speaking at a recent Public Service Events conference on health service purchasing, Beth Loudon, NHS procurement programme lead for the Department of Health’s procurement, investment and commercial division, said: “It is agreed that procurement as a function is a key driver in delivering not just savings, but improved patient care and outcomes and that NHS trusts will need to take action now to start making improvements at a local level on understanding and improving their procurement performance and becoming more transparent in how they do business and how they spend money.

“The solutions lie in a combination of evolutionary and revolutionary approaches; local, regional and national actions; and process and cultural changes.”

The NAO predicts that collaborations between trusts could amount to savings of more than £500m. Spokesman, Amyas Morse, said: “At least 10% of hospitals’ spending on consumables could be saved if trusts got together to buy products in a more collaborative way.

NHS trusts will need to take action now to start making improvements at a local level on understanding and improving their procurement performance and becoming more transparent in how they do business and how they spend money

“In the new NHS of constrained budgets, trust chief executives should consider procurement as a strategic priority. Given the scale of savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold trusts directly to account to Parliament for their procurement practices.”

But the report warned that increased accountability could be difficult to achieve when there is little or no central control over foundation trusts. And a lack of expertise within the trusts themselves means few have the drive or knowledge to take action.

The solutions lie in a combination of evolutionary and revolutionary approaches; local, regional and national actions; and process and cultural changes

As part of a project exploring the impact of collaborative procurement, a QIPP workstream was set up involving 10 health bodies: Aintree University Hospital NHS Foundation Trust, Central Manchester University Hospitals NHS Foundation Trust, East Lancashire Hospitals NHS Trust, Royal Bolton Hospital NHS Foundation Trust, Salford Royal NHS Foundation Trust, St Helens & Knowsley Teaching Hospitals NHS Foundation Trust, Tameside Hospital NHS Foundation Trust, Trafford Healthcare NHS Trust, University Hospitals of South Manchester NHS Foundation Trust, and Wrightington, Wigan and Leigh NHS Foundation Trust.

While this has helped to build the evidence base for the impact of joint procurement processes, it has also highlighted the problems that threaten to stand in the way of the Government’s anticipated improvements.

Given the scale of savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold trusts directly to account to Parliament for their procurement practices

Focusing on key procurement areas including orthopaedic surgery, audiology, and sutures, the project found that, on the positive side, clinicians appear to understand the challenge and have a major contribution to make. But it added that the overall commitment to collaboration between trusts is fragile and that the building blocks for change are not in place in many organisations. It also found that some trusts do not understand the procurement challenges or opportunities and a number of teams do not have the procurement expertise required to drive improvements. It added that, in some trusts, despite the growing evidence, procurement remains near the bottom of the list of priorities.

The DH’s plan is expected to provide some guidance for trusts, but the Government is also targeting the supply sector as part of its efforts to drive improvements.

The Cabinet Office’s head of domestic procurement, Ed Green, has revealed a five-point plan to improve transparency regarding NHS spending. It pledges to:

  • Provide industry with greater certainty by publishing medium-term rolling pipelines by sector. These will be updated every six months and will give industry greater confidence to invest strategically in skills, jobs and technology
  • Operate an open-door policy for businesses by discussing forward procurement pipelines and supply chain opportunities and engaging in dialogue with the market before a major procurement takes place
  • Provide industry with greater simplicity by making it 40% faster to do business with the NHS for all but the largest and most complex procurements and by completing purchasing processes within 120 working days using LEAN sourcing techniques. It also pledges to adopt a general presumption against the use of competitive dialogue in all procurement activities and to consider breaking up larger contracts into smaller lots to improve access for SMEs
  • Identify capability gaps in supply chains that need to be addressed to meet future demand by improving dialogue with industry so firms can better plan and invest in research and development activities
  • Continue to back businesses when bidding for contracts overseas by investigating routes to market through industry bodies and UK embassies

For more on the conference, click here

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