Big savings to be made from NHS estates

9 June 2011

9 June 2011 | Angeline Albert

The NHS could save more than £1 billion a year on estate running costs partly through better procurement, according to a report by consultancy EC Harris

The annual study, NHS Service and Estate Efficiency Report: Seizing the Opportunity, was published yesterday and sent to all NHS trusts in England.

It said benchmarking both Private Finance Initiative (PFI) and non-PFI services highlighted opportunities to standardise and rationalise supply chains.

The report said soft facilities management (FM) services, in particular cleaning, has seen significant increases in cost per square metre. It said in the case of cleaning to prevent the spread of bugs, rising costs were the result of a risk-adverse climate that is leading trusts to “over specify as an insurance policy” rather than based on actual need. “Hybrid versions of standards and specifications are developing resulting in unit rates for services which ultimately become difficult to compare on a like-for-like basis,” the report added.

It went on to say that “all too often trust boards are ignoring the major efficiency opportunities that exist, placing such issues in the ‘too difficult box’”.  

The National Audit Office concluded in an NHS report in February that at least 10 per cent of hospitals’ spending on consumables, amounting to some £500 million a year, could be saved if trusts purchased products in a more collaborative way. Commenting on that report, the EC Harris document said: “This will mean reducing flexibility in order to achieve better prices through standardisation.”

EC Harris said NHS trusts should benchmark themselves against the best performing health trusts to improve performance. It also said a 50 per cent reduction of empty or underutilised space would yield a saving of £248.73 million a year from the FM budget and energy savings.

“The key to success remains as ever: access to comparison data; a willingness to look at alternative estate delivery and FM models; and the ability to drive implementation. We are currently working with a number of trusts and PCTs, where there are clear opportunities for seven figure savings,” the report said.

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