5 August 2010 | Angeline Albert
A construction procurement framework will save the UK health service more than £200 million over its six-year lifetime, according to health minister Simon Burns.
The minister said the Procure 21+ framework, which comes into effect on 1 October, will save money by simplifying how NHS trusts contract construction firms for hospital refurbishments and new builds. It will also reduce the cost of bidding for potential contractors, and therefore the prices they charge.
The framework is expected to save £207 million during its six-year lifetime (six years is the EU limit for the length of all procurement framework agreements). Six companies have been approved to deliver NHS projects via Procure 21+, which means NHS trusts can use them without going through a separate EU procurement process.
The framework builds on the existing voluntary Procure 21, which has become a popular procurement route for NHS capital spending schemes.
A spokesman for the Department of Health said: “The Procure 21+ framework has secured lower overheads, profits and design rates from companies when compared with the previous framework. If the current level of activity is maintained, this will save the NHS around £135 million.”
The remaining savings of £72 million will come from an annual service fee paid by the framework firms, together with a cost reduction from the centrally managed VAT recovery service.
NHS trusts can choose from six companies: Balfour Beatty; Healthcare Partnership Solutions; Integrated Health Projects; Interserve Project Services; Kier Regional; and Willmott Dixon.
Burns added: “The new system will cut bureaucratic waste and allow the NHS to reinvest savings directly into services for patients.”