22 January 2004 | Simon Binns
The future of the NHS Purchasing and Supply Agency (Pasa) and the NHS Logistics Authority hangs in the balance as the Department of Health's commercial directorate, set up to review the NHS's £11 billion budget, releases its findings this month.
Last year, the DoH set up an advisory board from the private sector, led by AT Kearney consultant Ken Anderson, to investigate spending by health authorities and trusts and the way savings are calculated.
Consultancies PricewaterhouseCoopers and AT Kearney were hired to initiate a review of Pasa and the NHS Logistics Authority. The main issues were the supply chain, the relationship between the two agencies, and the role of regional confederations that operate groups of NHS trusts and hospitals.
Sir Nigel Crisp, NHS chief executive, said there was a need for "greater professionalism in how we procure from and negotiate with the private sector".
The review is certain to affect the work of Pasa, which saved £270 million last year, and the logistics arm. It could even lead to a reduced day-to-day role, or even a non-executive role, for both organisations, according to a source close to the debate.
He told SM that the review was likely to recommend a strategic role for Pasa, with its present power to negotiate contracts being vested in the NHS confederations. Pasa would then reallocate staff throughout the confederations as it concentrated on monitoring performance.
A spokesperson for the DoH would not discuss the report, but said the commercial directorate would have "responsibility for negotiating contracts with the private sector".
Duncan Eaton, Pasa's chief executive, said: "We need to organise ourselves in the most efficient way to ensure maximum benefit from our outlay."
A spokesperson for the NHS Logistics Authority told SM that although it "had not previously engaged" with the directorate, its chief executive, Barry Mellor, would meet its representatives at the end of this month.
The commercial directorate will not scrutinise the £5 billion NHS IT procurement programme under Richard Grainger.