Dissecting the Carter Report – We Need A Programme Plan

So let’s continue with our detailed look at the Carter Report into NHS efficiency – or “Operational productivity and performance in English NHS acute hospitals: Unwarranted variations” as it is known to its friends. We dissected the first three procurement recommendations yesterday, now let’s move onto the other three.

"d)  trusts focusing on the measurement of key procurement metrics and being responsible for driving compliance to the following targets by September 2017: 80% addressable spend transaction volume on catalogue, 90% addressable spend transaction volume with a purchase order, 90% addressable spend by value under contract."

Our comment: Quite tough targets we suspect for many Trusts but all good metrics and sensible differentiation between volume and value. The tests again will come in terms of who is going to monitor this; who will advise Trusts that are struggling, and what will be done with those who fail? It’s a big agenda again for presumably the brand new NHS Improvement (NHSI) organisation with its own lack of procurement capability.

"e)  trusts accelerating collaboration with other trusts to develop aggregated sourcing work plans to reduce variety (including with NHS Supply Chain for their categories) for 2016-17 and 2017-18, including contributing to clinically driven product testing and evaluation, and adopting the outcome of these processes, switching products where appropriate, unless a clinically agreed exception exists.)" 

Our comment: “trusts collaborating with other trusts” is far too vague really to be meaningful. Does simply buying from NHS Supply Chain count as collaboration? Which other trusts do I need to collaborate with? Within the text, there is talk of that trusts should collaborate with “at least five other Trusts”. Why five? Any evidence that is the right number? Who is going to lead on the “aggregated sourcing work?” And what about the various (often competing) collaborative bodies, some like Health Trust Europe essentially private sector operations now. Sorting out the landscape of procurement bodies in health has been an issue for years, so this is another decent aspiration but there is nothing here to give us confidence that it will happen, although the better Trusts are already collaborating to some extent through various mechanisms.

"f)  trusts embracing the adoption and promotion of the NHS Standards of Procurement with the support of the new Skills Development Networks, with those that have already achieved Level 1 achieving Level 2 of the standards by October 2018; and those trusts that are yet to attain Level 1 achieving that level by October 2017. All trusts to produce a self-improvement plan to meet their target standard by March 2017."

Our comment: OK, we really don’t know much about this. Apparently the “Department of Health recently approved a bid from the Finance Skills Development Network to establish a national Commercial Procurement Skills Development Network (PSD) which will provide an infrastructure and professional oversight to ensure a consistent approach to skills and organisational development, raising the commercial capability amongst the procurement community through a national framework.”

We don’t really understand what a finance network is doing developing commercial / procurement skills. Remember, there was some good stuff around skills in the August 2013 “Procurement Development Programme for the NHS” report. Most of it never really happened. So we will retain an air of hope tinged with cynicism on this recommendation.

..........

So all in all, there is much that is directionally and conceptually good in the Carter Report. But it is weak in terms of putting in place the mechanisms that are necessary to drive real change – governance, structures, resources, planning, capability, measurement. A lot seems to be placed at the door of an organisation (NHSI) that does not even exist properly yet – and has no real procurement expertise. The role of the Commercial Directorate in the Department of Health is unclear, as is the future for the various collaborative bodies in the sector.

The report also does not seem to fully recognise the need for very different category approaches, we would argue. There is a world of difference between stationery, stents, rubber gloves, prosthetics, capital equipment … there is too much here that assumes benchmarking and a bit of voluntary collaboration will solve all the problems.

Our biggest hope is that the report will at least encourage those better performers in the system to be more active and promote good practice; and that the weaker Trusts will be more willing to listen. Technology is another positive that will eventually revolutionise how the NHS works, not just in our area. But those weaker hospitals must invest in people too, as well as tech; a major hospital where the most senior procurement person earns £40K a year and is the same grade as an assistant accountant or (very) junior pharmacist has a real problem.

Finally, many of the recommendations are sensible but we have heard them before – from the 2013 report, from various NAO reports, even from the OGC Procurement Capability Review of the Department of Health in 2008 (authors Maggie Jones, Sally Collier, Duncan Eaton and me).

We don’t want to be overly negative, and Lord Carter has done a very decent job given the scale of the problem, but our expectations frankly are fairly low. But we hope to be proved wrong – if we are, that will be down to “bottom-up” work by the professional procurement and supply-chain leaders in the NHS, not through NHSI or the Department, we suspect.

Voices (2)

  1. LM:

    There are too many dependencies placed on the DoH Procurement Transformation Programme (PTP) and, as everyone knows, it is being managed by a highly inexperienced, unqualified, disengaged, disconnected team led by yet another self-serving contractor/interim. And too much dependency placed on a new ‘heavy-weight’, we hear, brought in from manufacturing. Let us give him a few years to obtain an understanding of the public sector, the civil service, HMT, Cabinet Office, CCS, the DoH, the BSA, NHSB&T, NHSI, the other 12 ALBs, the wider health sector, the HSCA (Health and Social Care Act 2012), the NHS, FYFV, Vanguards, Test Beds, success regimes, hospital chains, model hospital, the Carter Report, Lord Carter, Lord Prior, Lord Hunt, MPs/Ministers, the new bloke sat to the left of John Warrington, primary and second care markets, private healthcare, CCGs, CSUs, AHSNs, NHSSBS, NHS Supply Chain, the hubs, HTE, and the EU Public Procurement Regulations, and, before you know it, he will really make a difference.

  2. Mark Lainchbury:

    Genuine Question

    What is addressable spend in an NHS Hospital ?

    Total Non-Pay ?
    Total Non-Pay less Intra NHS payments ?
    Total Non-Pay less Intra NHS ££s & existing PFI Deals ( often lasting 25 years or more )
    Total Non-Pay less Intra NHS ££s, PFI & Interim managers
    Total Non-Pay less Intra NHS ££s, PFI, Interim managers & Agency staff
    Total Non-Pay less Intra NHS ££s, PFI, interim managers, Agency staff & Outsourced providers
    Total Non-Pay less Intra NHS ££s, PFI, interim managers, Agency staff, Outsourced providers & Rates

    Getting to be, Trust HoPs have quite a small pond to fish in, which is why I suspect Carter broadened the scope of his report so quickly.

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