Twenty-seven NHS Trusts are participating in a year-long pilot ‘to prove that going to market as a single entity will deliver huge savings to the NHS’. Led by the NHS Trust Development Authority (TDA) and the Department of Health, the pilot has project support provided by procurement collaborative, NHS London Procurement Partnership, and is directed by a steering board comprising representatives of the DH, NHS England, TDA, LPP, and Trusts.
Its primary objective is to design and develop a practical operating model for more effective collaborative procurement across multiple Trusts. It will ‘be underpinned by collective commitment to buy’, and will ‘deliver cost reductions and drive efficiencies via the use of aggregated expenditure, product standardisation, and rationalisation of vendors’.
Last June the DH released an updated set of national standards for procurement, reinforcing the need for high levels of joined-up, professional procurement across the NHS, including greater sharing of supplier data. LPP chair, and chief financial officer of Chelsea & Westminster NHS Foundation Trust, Lorraine Bewes, said: “NHS provider organisations should be securing the same terms and conditions from suppliers, and using the same products for the same application, as though they were a single national entity. Yet time and time again, we find the same products being bought at different prices, and different products being used for the same application.”
The DH and NHS England publication ‘Better Procurement, Better Value, Better Care’ (HEJ – September and October 2013 ) requires NHS procurement to release a further £1.5bn in savings by the end of 2015-16, and a 10 per cent real terms cut in administration budgets. Project manager, Steve Ellesmere, explains that ‘the aim of the pilot is simple: to prove that going to market as a single entity, with commitment to spend, leads to significantly improved procurement results’. He says: “We are targeting a significant saving on prices paid. We will use demand aggregation based on common data to influence the commitment of Trusts for the creation of shared contracts, with a single price per item. This cannot, however, be a case of simply leveraging buying power, but must also seek to reduce duplication and variation. We want to work with suppliers to help to reduce supply chain costs.”
To enable the pilot to proceed, Trusts have agreed to:
• provide the necessary procurement, finance, and IT resource, to proactively participate in the project;
• share price information with other participating trusts, ensuring complete price transparency; and
• commit as one of a collective group to the purchase of agreed volumes of items at agreed prices from defined suppliers, based on joint contracts.
