Public Accounts Committee challenges NHS Supply Chain on procurement savings

The Public Accounts Committee has made six recommendations to address its concerns that NHS Supply Chain is failing to achieve opportunities for savings in NHS procurement.

The Committee’s latest report, published on 27 March 2024, focuses on how NHS Supply Chain can work with the DHSC, NHS England, trusts and suppliers to make NHS procurement more efficient. 

The report, NHS Supply Chain and efficiencies in procurement, claims that too many trusts lack confidence in NHS Supply Chain and so do not use it, that DHSC and NHS England have been weak in their oversight of this and that NHS Supply Chain lacks a clear vision to gain the confidence of both procurement teams and clinicians within trusts. 

NHS Supply Chain responded to the report saying they are committed to deliver greater savings and efficiencies, are embarking on a major modernisation programme and are continuing to work with stakeholders to improve NHS procurement. The full statement can be read here. 

The NHS spends approximately £8 billion annually on medical equipment and consumables, with roughly £4.5 billion (57%) of this being spent through NHS Supply Chain. A key objective of NHS Supply Chain when it became fully operational in 2019 was to be the chosen route for 80% of such spending by 2023/24. 

Public Account Committee’s Recommendations 

1. 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% of its spending on consumables and medical equipment.
2. 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.
3. NHSE needs to use procurement data more systematically to challenge trusts to buy more consumables and medical equipment through NHS Supply Chain.
4. 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.
5. 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.
6. 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.

The report comes at a time of significant procurement reform, with the introduction of the NHS Provider Selection Regime at the start of 2024 and the Procurement Act expected to come into effect in October. We await further detail in the government response to the latest Public Accounts Committee report, which is generally expected within two months. 

If you have any questions about procurement of Healthcare goods or services, please contact our Healthcare team. 

This article was written by Rory Trust and Chloe Francis.