30 November 2006 | Helen Gilbert and Rebecca Ellinor
The two purchasing arms of the Department of Health look set to merge as the head of one announces his departure.
Ken Anderson, who was appointed as the department's first commercial director in 2003, was instrumental in negotiating the £3.7 billion-a-year outsourcing of NHS Logistics and much of the NHS Purchasing and Supply Agency (Pasa). He is leaving at the end of the year to join Swiss investment bank UBS.
Meanwhile, SM has learnt that Anderson's Commercial Directorate (CD) is set to merge with Pasa to form a 'super-agency'. It is expected they will be amalgamated by the end of the financial year and manage commercial activity on a national level.
A health spokeswoman said the CD would not comment on the plans but did not deny them.
According to Whitehall insiders, 'The Commercial Agency for Health' as it will be known, will be more "transparent" - governed by the secretary of state with its own audit committee.
Duncan Eaton, former chief executive of Pasa, told SM
: "It's time to move forward. It's right now to look to one organisation. I hope it is established quickly and its role agreed so suppliers and staff know they are agreed."
One Whitehall insider commented: "It's so obvious Pasa could have performed better, whereas the CD was far too temporary. The best of both organisations will be brought together."
The search for Anderson's replacement has already begun with a number of senior figures in health tipped to take the top post. With the health department among the public sector's biggest buyers it is hoped the post will go to a strategic procurement professional.
"It is important the new organisation will be staffed by procurement professionals who understand the NHS," added Eaton.
The merger is likely to result in personnel changes at the CD. As SM exclusively revealed (News, November 2) of the 230 people who populate it, only a handful are permanent civil servants. The rest are interims and consultants on daily rates of £950 to £2,000. Earlier this month Sir Peter Gershon said: "There is still, in some parts of the sector, an enormous and dangerous dependence on the use of external consultants."