NHS efficiency chiefs are hiring management consultants to draw up a new model for how trusts should spend billions of pounds on goods and services, HSJ can reveal.
NHS Improvement is intensifying efforts for trusts to make savings from their non-pay spend by hiring external consultants to develop a strategy that will “transform the way procurement is delivered” at local level.
The strategy could spell big changes for local procurement teams, which will be encouraged to pursue consolidation amid a push from the centre for “significant technology automation” in the sector. It will also aim to “bring consistency to the delivery of NHS procurement”.
The Health Care Supply Association, which represents NHS procurement professionals, said it was “surprised” by the “depth and breadth” of the programme’s scope.
A spokesman for the association questioned the need for consultants being hired to draw up the model, and added that there was “enough expertise in the system”.
NHSI said the consultants will advise on the “change management element” and “private sector expertise and best practice”.
It comes amid the rollout of the new NHS Supply Chain, which will purchase commonly used equipment and devices for trusts, with the aim of saving hundreds of millions of pounds annually. The NHS spends just under £6bn annually on such goods. This represents 40 per cent of trusts’ non-pay expenditure on overall goods and services.
The new strategy will address the remaining 60 per cent of spending on goods and services. NHSI has not specified which areas will be included in the programme’s scope, but ruled out medicines and agency staff. Other non-pay costs which are often procured externally typically include estates and facilities services, and other non-clinical supplies and services.
Earlier this month, the regulator issued a tender for the work, seen by HSJ, through a consultancy framework run by Crown Commercial Framework.
The document says the successful consultancy will help “create the target operating model, that will increase NHS procurement capability”. It says: “The new model will develop national strategy and models that will cover the majority of the [non-Supply Chain goods and services spend].”
The winning bidder will provide support to NHSI in two phases, which in total would last for two years.
In phase one, the consultancy will develop at least three options for the model. The proposals must then be “validated” by a group of NHS and arms lengths bodies professionals.
This group would involve NHS Improvement’s chief procurement officer Preeya Bailie, the regulator’s four regional heads of procurement, and a selection of heads of procurement at trusts.
If an option is selected and given funding, the consultancy would then – in phase two – help implement the model during the next 18 months.
The tender states: “It is anticipated that a smaller number of national or regional roles will support local procurement teams and the focus of local procurement teams will be linked more to the national agenda.”
The HCSA spokesman said: “The NHS has enough capacity and knowledge to be part of the solution, rather than have the solution done to us.”
He added: “We do wonder why they are going to consultants.
“The question in our minds is how is the centre going to effect change when they don’t control local teams?”
Total non-pay expenditure by the NHS is estimated at around £30bn annually. In his 2016 report, Lord Carter estimated hospitals could save £5bn by making savings in these areas.
There are around 4,000 procurement staff across more than 230 NHS organisations. The procurement function costs the NHS around £179m, according to NHSI.
A spokesman said NHSI is in the “development stages” of what the model could look like, and added the regulator would play an “active role” in the model’s “design and build”.
The regulator did not answer if it expected the NHS’s procurement workforce to be reduced as a result of the model.
Sourced from HSJ written by Nick Carding