£2 billion savings target for NHS offers 'huge opportunity' for buyers

Will Green is news editor of Supply Management
20 March 2014

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20 March 2014 | Will Green

The NHS is facing the challenge of finding savings of £2 billion with only 600 qualified buyers across the entire organisation.

John Warrington, deputy director for procurement policy and research at the Department of Health (DH), told a conference there was a “huge opportunity” for buyers because of the “lack of capacity”.

“There is a lack of leadership on procurement in trusts,” he said. “Chief executives still don’t give this the attention it deserves.”

Warrington told the Government Opportunities NHS Procurement Conference in Birmingham that 66 out of 245 provider trusts were predicting a deficit and the NHS was in “serious difficulty with its finances”.

The savings target from government has increased from £1.5 billion to £2 billion by the end of 2015/16, but there is a 7–8 per cent annual increase in spending that cannot be accounted for, said Warrington.

“Data and systems are not as good as they could be,” he said. “It’s still pretty embarrassing; we don’t know what the NHS spends its money on and who with. There’s still no central database for that.”

However, he said trusts would be “mandated” to collect and publish spending data. “Trusts will make procurement information publicly available and they will be encouraged to share that between themselves,” said Warrington.

“I know that’s an issue for some suppliers. I know there are some suppliers that are not keen on that. Some are asking trusts to sign non-disclosure agreements after signing a deal.”

Warrington, who drew up a radical overhaul of NHS procurement, said the crown representatives scheme would be extended into the NHS as part of a “key supplier management programme” aiming to save £250 million.

Further savings were planned through using national category strategies for spending in areas such as orthopaedics and by channelling spend on common goods and services through the Crown Commercial Service.

He said: “If you are in procurement it’s a huge opportunity.”

Speaking afterwards Warrington said just 30 per cent of trust spend was covered by purchase orders. He estimated there were around 2,500 people “doing procurement” in the NHS and said he hopes to get them all CIPS qualified with the help of the renamed "Centre of Procurement Efficiency”, an academy that will be set up “in the next month or two”.

 

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