Another bungled operation in the NHS

17 July 2002
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18 July 2002

The collapse of its recruitment campaign for a new purchasing head has left the NHS in turmoil - and some searching questions for the Department of Health to answer. David Arminas reports

Alack of suitable applicants has stalled the search for the new head of the Department of Health's (DoH) proposed 50-strong purchasing department.

Or so we are told.

No fewer than 70 people applied and it is within the realms of possibility that the right person wasn't found.

But government ministers, procurement professionals and the tax-paying public who want a better health service will want an explanation for what has turned out to be nothing less than a fiasco.

At the very least, the episode raises questions over the selection process followed by the Whitehall bureaucrats responsible for drawing up the job specification, advertising it and deciding on a shortlist.

At worst, it leaves a cloud over procurement strategy development in the department responsible for the nation's health and upon whose success New Labour has pinned its hopes for the next general election.

First, the pay of this new appointment is just over £95,000 for taking on the responsibility of a £6 billion budget. He or she would directly handle major DoH programmes such as controversial private finance initiative projects and large-scale IT contracts.

The new appointee was also supposed to oversee the two health service purchasing organisations, the NHS Purchasing and Supply Agency (Pasa) and NHS Logistics.

But the pay for the job was to have been £10,000 less than that of Duncan Eaton, the head of Pasa who was to have reported to the new appointee. In addition, the new procurement supremo would have had to work with a new IT director whose salary, it is reported, will be around £240,000.

The pay hardly reflects the responsibility of a person designated to shake up procurement, and seemed almost destined not to attract suitably qualified people.

How could the DoH get the connection between remuneration and responsibility so horribly wrong, especially at a time when UK public and private-sector organisations are recognising the contribution of purchasing to a business's bottom line?

A job description had to have been developed, a budget approved and a recruitment agency with head-hunting capabilities appointed. There surely should have been warning signs that the pay-and-responsibility equation was not right.

Inept handling

Publicly, it makes the DoH look inept. Department officials can expect a lot of discussion at senior government levels in light of Lord Hunt's announcement in May that a £40 billion cash injection will be given over the next five years.

In his announcement, Hunt put procurement firmly in charge of ensuring the taxpayer - voters - get value for money out of this extraordinary budget increase.

It was a bold statement setting the scene for a fundamental shake-up of the entire NHS procurement operation.

But the officials responsible for putting the plan into operation have fallen flat on their faces at the very first hurdle.

The present debacle is only the latest in a line of recent NHS procurement bungles.

Admittedly Pasa surpassed its target of achieving £130 million of savings by reaching £200 million of savings on contracts worth £2.6 billion in 2001.

But a major setback came in February. A £4 million national servicing deal to maintain vital diagnostic imaging equipment fell into disarray, eventually leaving individual trusts to renegotiate their own five-year deals with GE Medical Systems. Trust purchasers seethed over what they believed was Pasa's responsibility.

Pasa ended 2001 with a "could do better" report from the Audit Commission after the spending watchdog found that up to half the £11 billion budget for NHS supplies was not delivering value for money.

Internal DoH politics cannot be eliminated from the department's lack of direction on the new purchasing set-up.

The creation of a new purchasing bureaucracy could be seen as showing a lack of faith in Pasa and NHS Logistics, created only two years ago amid much ballyhoo about better purchasing strategies.

Eaton and Barry Mellor, NHS Logistics's chief executive, took on their jobs when their organisations were marketed as the top agencies for making NHS savings.

Whatever the reason for the latest mess, the search for a purchasing supremo at the DoH has been a massive flop so far.

When the Whitehall mandarins do get round to sorting it out and have another go, they had better get it right.


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