Over two-thirds of NHS trusts shop elsewhere due to limited availability through NHS Supply Chain
The NHS is missing out on procurement savings amounting to tens of millions of pounds, according to a new report published today by the Public Accounts Committee (PAC).
PAC warns that NHS Supply Chain, which was created to save the NHS money through pooling hospitals’ purchasing power, including for procuring assistive technologies like wheelchairs, prosthesis, and hearing aids, has failed to persuade NHS trusts to use it to make billions in purchases.
NHS Supply Chain was created to solve the known problem that the NHS was not making the most of its collective buying power to get the lowest prices for its purchases, the committee states.
Entitled ‘NHS Supply Chain and efficiencies in procurement: Twenty-Fourth Report of Session 2023–24’, PAC’s report finds that the organisation has so far failed to demonstrate that it is the answer to the NHS’ needs.
Of the £7.9 billion spent by NHS trusts on medical equipment and consumables, £3.4 billion is outside of NHS Supply Chain. This means that it is only achieving around 57 percent of market share to a target of 62 percent.
Trusts’ satisfaction with NHS Supply Chain is low and in steady decline, the report underlines. Over two-thirds of trusts say they shop elsewhere because of limited availability through NHS Supply Chain.
The report further raises concerns that a focus on costs may impact on the quality of outcomes for patients. The report, which finds that clinicians are not convinced that NHS England (NHSE) and NHS Supply Chain value quality over price, calls for clinicians to be involved in purchasing choices to ensure that better patient care is considered alongside value and cost.
Additionally, the report questions the level of savings NHS Supply Chain reports it has made for the NHS.
NHSE shared the organisation’s reported savings with it but using two different methods which generated two very different figures – £3.3 billion from 2016-17 to 2022-23, and £1.7 billion for the same period, risking confusion over how much NHS Supply Chain has actually saved, PAC states. Trusts do not always recognise the savings that NHS Supply Chain reports, causing frustration and mistrust.
PAC’s confidence in savings claimed by NHS Supply Chain is further undermined by the fact that the cumulative £3.3 billion claimed has not been validated by either the UK Government or NHSE.
Dame Meg Hillier MP, Chair of the Committee, said: “The problem NHS Supply Chain was created to address is well-established. Given the scale of the NHS’ collective billions of pounds worth of collective spend on procurement, ensuring the best value for money for the taxpayer is essential.
“But our report finds that trusts do not have the requisite confidence in NHS Supply Chain to utilise its services, leaving it at risk of being an answer to a question no-one is asking.
“Cost is of course only one factor when making high-stakes decisions around which equipment to use for patients, and it is essential that clinicians are given a seat at the table so that better patient care is considered alongside best value.
“All agree that high-quality equipment must be readily available to NHS trusts at the best possible price. The hard yards must now be put in to build trust in the systems that are there to deliver these outcomes.”
Following the report’s findings around NHS Supply Chain, PAC makes a series of recommendations for improvement:
- NHS Supply Chain should set out how, and by when, it will get the NHS to use NHS Supply Chain for the original goal of 80 percent of its spending on consumables and medical equipment.
- NHSE should set out how it will provide adequate challenge of and support for NHS Supply Chain, particularly regarding NHS Supply Chain’s plans to modernise and transform its business.
- NHSE needs to use procurement data more systematically to challenge trusts to buy more consumables and medical equipment through NHS Supply Chain.
- A year after implementing the new savings method, NHSE should assess whether trusts accept the savings that NHS Supply Chain reports. The new method for calculating savings should be used in all cases to ensure consistency.
- Alongside its Treasury Minute response, NHS Supply Chain should provide a clear and realistic road map setting out the timetable for transformation and modernisation and when benefits will materialise. In carrying out this exercise NHS Supply Chain should also examine whether the eight-year timetable should be reduced.
- NHSE and NHS Supply Chain should set out how they will involve clinicians in purchasing choices to ensure that better patient care is considered alongside value and cost.
Read the full report here.
Responding to the report, David Stockdale, Chief Executive at BHTA, commented: “The BHTA and our members continue to be ready to work with NHS Supply Chain and the broader UK medtech supply chain to ensure procurement works for the whole of the supply chain, to ultimately deliver the patient outcomes we all want.
“We recognise the healthcare landscape is challenging for all parties currently and continue to believe that genuine engagement from all stakeholders will lead to the best outcomes.”
In response to PAC’s report, an NHS Supply Chain spokesperson stated: “We are committed to realising the full potential of NHS Supply Chain to deliver greater savings and efficiencies alongside a broader value proposition focussing on supply chain resilience, product safety, enabling access to innovation, social value, sustainability, and ethical considerations.
“We have redesigned NHS Supply Chain’s operating model and embarked on a major modernisation programme to upgrade key infrastructure and IT systems. We need to further improve and integrate our platforms to provide a more consistent experience for colleagues across the NHS and suppliers. As the NAO report highlighted our funding is managed on a year-by-year business cycle in line with NHS England’s business planning process.
“We are continuing to work together with the Department of Health and Social Care (DHSC), NHS England, NHS trusts, suppliers, and other system partners across the country to improve procurement in the NHS. This will be achieved through ongoing collaboration, partnership working and innovation.
“Over the last year we have been strengthening our engagement with our NHS partners to improve our understanding of their needs through our quarterly national and regional advisory forums, various panels and working groups. We are continuing to develop these engagement forums to ensure that they bring the voice of NHS colleagues and patients into the heart of our organisation. These engagement forums support our goals to make substantial improvements in satisfaction with our services by ensuring our business plans focus on those matters that will make the greatest difference to the NHS.
“NHS Supply Chain is clear that we can deliver over £1 billion of value by 2030. This can only be achieved by working in collaboration with all groups within the NHS, national bodies, industry associations, suppliers and NHS England. We have worked with NHS England and national representatives of the NHS trusts to develop a new standard saving methodology for the entire NHS and it’s expected that this method will be ready for all parties to use to calculate savings from April 2024. Our programme is aligned to this approach and reporting method.”
PAC’s report echoes findings from a National Audit Office report earlier this year, which revealed that the NHS is not making the most of its spending power to save money in purchasing medical equipment.