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Health minister shakes-up way the NHS buys supplies

Strategy launched to save millions in NHS procurement

Jo Carlowe

Monday, 05 August 2013

A new blueprint has been launched today to change the way the NHS buys its goods and services.

In setting out the strategy Health Minister Dr Dan Poulter details plans to save £1.5 billion.

The health minister explains: “Hospitals must wake up to the potential to make big savings and radically change the way they buy supplies, goods, services and how they manage their estates.

“We must end the scandalous situation where one hospital spends hundreds of thousands more than another hospital just down the road on something as simple as rubber gloves or syringes, simply because they haven’t got the right systems in place to ensure value for money for local patients.”

The new strategy: Better Procurement, Better Value, Better Care: A Procurement Development Programme for the NHS, also looks at the procurement inefficiencies that currently exist in the NHS. It also finds an over reliance on ‘framework agreements’ at the expense of the NHS striking radical money-saving deals, like hospitals getting together to bulk-buy equipment for a discount.

Dr Poulter sets out a number of specific actions to tackle these problems. They include:

  • The recruitment of a new NHS procurement champion with private sector expertise
  • Dr Dan Poulter to lead a top-level team, drawn from Government, the NHS and business to work with the new procurement champion
  • Mandating hospitals to publish for the first time what they pay for goods and services and setting up a brand new ‘price index’ especially for hospitals, through which they will be able to see how much they are spending on different products compared to other hospitals
  • Cutting the temporary staff bill by 25% by the end of 2016 (temporary staffing currently costs the NHS £2.4 billion every year)
  • A plan for the Department of Health to work with top NHS suppliers directly to strike new, bulk deals for medical equipment
  •  ‘Growing the UK economy by making the NHS more agile and better at working with small and medium-sized businesses’
  • Exposing poor value for money and bad contracts by making more data about the deals the local NHS is signing publicly available; and
  • Improving support to help senior NHS staff better understand procurement.

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