Poor procurement skills blamed for PFI delays

20 April 2006
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21 April 2006 | Anusha Bradley

"Inadequate" skills and "sloppy" practices in the procurement of hospital private finance initiative (PFI) projects is causing delays and wasting millions of pounds, according to the Confederation of British Industry.

In a report published today, Buying the best for the NHS, the CBI warns that the public sector's failure to pick up the bill for procurement delays, in addition to poor procurement planning, are holding back PFI's full potential to deliver best value for money.

It calculated a "conservative estimate" that procurement delays add an extra £2.4 million to each major hospital project.

Speaking today at an CBI industry forum aimed at encouraging debate on the issue, Kevin Beeston, deputy chair of CBI's public services strategy board and chairman of Serco Group, said the private sector was much more effective at delivering health services.

"For example, private-sector contractors deliver 30 cataract operations a day compared with public-sector clinics which do, on average, five operations a day," he said.

Sir Digby Jones, CBI director-general, said in the report: "At the point when the NHS makes purchases - before the private sector takes control of projects - delays are all too common and costly."

This is because public-sector procurement skills are "inadequate to the task", said Adrian Bull, chair of CBI's healthcare panel and managing director of Carillion Health.

The CBI is calling for the government to establish a national procurement academy to ensure there is a pool of experts with the abilities and experience to deliver successful projects.

It said one problem was that highly skilled procurement professionals were often lured into the private sector by better pay, resulting in knowledge being lost.

However, Malcolm McKillop, PFI project director at Mid-Essex Hospital Services NHS Trust, dismissed the need for a national training academy.

"Problems should not always be blamed on procurement. Sometimes the private sector causes delays too."

He said the CBI's call for procurement to be incentivised to adhere to procurement timetables, by making them pay the cost of delays, would "engender a culture of blame" and hinder true partnerships.

Instead, all partners needed to take responsibility for risk, he said.



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