NHS will leak cash, warns procurement boss

8 November 2010

8 November 2010 | Rebecca Ellinor

Without the correct purchasing professionals and processes, the NHS will lose money, warned the chief executive of a multi-award-winning procurement hub that is to be wound up.

Speaking to SM today, Ian Shepherd, chief executive of NHS re:source collaborative procurement hub in the East Midlands, said he fears there is currently no over-arching strategy to manage the changes being implemented.

“If you don’t have the right people, processes and tools in place you will leak cash until you put something in place to plugs all those leaks,” he commented. “I don’t see a cunning plan emerging as to how the NHS is going to do that.”

Since Shepherd’s organisation was set up in April 2006, it has saved more than £85 million. Operating costs over that time run at less than a third of that figure, and some of the expenses were covered by income made by the hub.

Re:source has been involved in procuring everything from stationery to syringes, even controlling the cost of locums and agency staff. It set up a GP surgery in Corby to help disadvantaged individuals not registered with a doctor, while its deal for esophageal dopplers was recognised by the Department of Health as the number one innovation that would potentially save the service 10s of millions of pounds. The organisation has also won much external recognition, including two CIPS Supply Management gongs in the past two years, a GO and an Independent Healthcare award.

Talks about its fate have been ongoing for 22 months, seriously damaging staff morale. Initial announcements suggested it was just the provider side of the organisation that may go, but now the future of the commissioning support element is also in doubt. The move puts all 46 employees at risk of redundancy. A decision will be made on the future of re:source on 6 December.

The decision rests with the chief executives, chief financial officers and procurement heads at the organisation’s 22 stakeholders in the region, one of whom has already advertised for a new head of procurement and eight category managers.

“We’re here to make a contribution to people’s lives and wellbeing,” continued Shepherd. “I hope that what’s happening doesn’t compromise that purpose for anyone within procurement and commissioning, and it’s upheld by everyone else in the NHS. If it’s not, the immediate and strategic consequences for the NHS could be significant.”

The future of purchasing in the wider NHS is currently uncertain. It is expected much of the work will be transferred to a mixture of other NHS bodies and private sector providers. Across the health service there are around 30,000 people managing contracts, with some significant skills gaps.

Of the other nine collaborative procurement hubs around the country, the North East organisation is to be disbanded and the North West hub is expected to be merged with the NHS’s Shared Business Services Organisation. It is not yet known what will happen to the others.

* Supply Management will publish a feature examining the future of NHS procurement in the 25 November issue.

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