Authority gives trusts a £5m Christmas present

4 January 2001
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04 January 2001 | David Arminas

Wholesale and distribution body the NHS Logistics Authority has given £5 million back to NHS trusts three months before the end of the financial year, because of improved service and efficiencies.

"We have taken a bold step in doing this," Ian Bradshaw, chief executive of the authority, told SM. "We looked at our position after the first nine months of the financial year and saw no indications why we won't do as well in the next three months. Normally, an authority has to wait until the end of the year."

The authority attaches a premium to orders to cover its operating costs, but is required by remit not to generate a profit, explained Bradshaw.

"Increased order volumes and operating efficiencies have generated a trading surplus for us of £5 million, and we've returned that to each trust on a proportional basis of how much business they have had with us," he added.

The organisation, which was the wholesale division of NHS Supplies before it was split last April to create the NHS Purchasing and Supply Agency, handles an estimated £520 million-worth of goods.

Bradshaw believes the efficiencies have mainly come from the introduction last May of the authority's web-based Road Map. Trusts can now log on to find check the status of their orders, including the location of the delivery trucks.

"We handle 26 million order lines a year and 40 per cent of them are worth £10 or less," Bradshaw said. The site shows order status, delivery times and criteria to measure the authority's performance, as well as the trusts' ordering departments. "This was especially valuable to trusts during the recent petrol crisis."

By the end of this month, three trusts - Southampton University Hospital Trust (SUHT), Oxford Radcliffe and Birmingham Heartlands - will have completed a study of their internal ordering systems in order to better understand how to make savings in ordering.

"We are now building up information from the Road Map system," said Tim Cronin, supplies and facilities manager at SUHT, which received £42,000 from the authority based on its annual £4 million spend. "It's difficult to say how much we will save [internally] at this stage."


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