NHS Procurement Review – A Rather Odd Consulting Approach?

I’ve agreed to Chair the “Future of Procurement in the NHS” conference (more details via that link) in Manchester in December. I’ll try and help ensure it is an interesting and useful event – and it is free to practitioners, which is a real positive. The focus will be on two main areas; the changing landscape in NHS procurement, and the impact of technology.

And it looks like there will be plenty to talk about!  While we reported here on good news in NHS procurement, there was other more puzzling news the other day.

NHSI put out a tender opportunity using a Crown Commercial Service framework, looking for proposals from consultants to carry out what looks like a review of the overall NHS provider (hospitals and so on) procurement landscape. This is the first stage of what might be a two stage process, and we understand that the suppliers who turned up for the briefing meeting were told that if they put a lot of work in at the first stage, which has a fixed budget of £2 million, they might get to win the stage 2 implementation, which would be more lucrative – yes, that old negotiation strategy!

The goal here is to look at the 60% of NHS provider spend that is not going through the new FOM model with its 11 category towers and the SSCL “intelligent client” organisation, which some see as overly expensive and over-engineered. That 60% includes many services, from temporary labour to facilities. The consulting project though gets into some controversial territory, suggesting that it will look at how to manage that spend, including who does what, which leads into a review of the numbers of staff in hospital procurement teams, and even whether current people have the right skills to deliver the new model.

As HSJ reported, 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.”

This is tricky stuff even if you are doing it in a single organisation with the backing of top management. But here, NHSI seems to be suggesting that it can make those major decisions for hundreds of organisations that are still independent with their own governance, budgets, objectives and so on.

So, has NHSI engaged with the Trusts to get their buy-in to this programme? That is not clear, but from the comments of HCSA and others, it does not appear to be the case. HCSA asked in the HSJ article “how the centre is going to effect change when they don’t control local teams?”  (HCSA also holds its big annual conference in Cardiff in November too – another very good event).

Back to the study - the danger therefore is that a lot of money could be spent on this work, but the network might reject the findings. I don’t see how NHSI can force a Trust procurement head to go through an assessment centre, for instance, or downsize a valued supply chain team?

Word on the street is that EY are favourites to win this work – but surely that would be a conflict of interest, as the firm has made a fortune from advising on issues around the SSCL, which could benefit from the outputs of this work. The timescale for submitting bids is pretty tight though, which always makes the cynics suspect a fix.

And there are mutterings too that maybe this whole exercise is being launched because of the escalating costs of the SSCL. This is causing some push-back on the centre from Trusts, so if the study suggests that “savings” of a few hundred million could be made by taking out staff plus centralising services contracting, then maybe the £280M a year for the FOM looks more reasonable?

We’re not close enough to understand quite what is going on here – or the role of various senior players in this complex landscape. There’s Jin Sahota, architect of the FOM, Melinda Johnson and Steve Oldfield in the Department of Health commercial team, new NHSI Procurement Head Preeya Bailie and others. Let’s see what emerges anyway.

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Voices (9)

  1. Mr Grumpy's Sidekick:

    The NHS is a big political animal and over the years has been seen as a financial black hole for Government. More money keeps being invested and year on year the financial deficit gets worse. The interest from the centre is never going to go away

    Does this mean that management consultants are required to come in and tell us what we know – of course not. But at the same time the HCSA views have been incredibly short sighted.

    We do have the expertise sitting at Trust level to make improvements. Has anyone stopped anyone locally from doing this? Has anyone stopped HCSA from driving change locally? The answer is no. If Trusts or the HCSA think that improvements can be made locally then get on with it. Financial performance of the NHS suggests this isnt happening or isn’t working, so the centre will always look for external help to spark action.

    We now have STPs who are meant to work together. I have heard so many times that trusts in STP and procurement teams in those trusts do not want to work together as they can get a better deal or contract than their neighbour. Consider those in power at HCSA and they have played the same games in their trusts – this is not leading by example or by the communictaions we have seen recently.

    Where trusts do work together the great results are there to see – unfortunately though this is a minority not a majority.

    Rather than take time to complain that something else is coming out from the centre and suggest that there is local expertise, why not just prove it and get on with it. No one in the centre is stopping you working with a trust next door to improve procurement.

    Would be nice if HCSA focused on what they could do to support their arguments rather than just complain they are being hard done by. It will be interesting to see their approach at their conference, I do worry it wont be proactive though – “woe is me”.

    1. Simon Walsh:

      HCSA is simply expressing a view and how we feel.
      I’ve been involved in HCSA matters for many years and have always tried to put into practice the principles of cooperation ; transparency and professionalism.
      I head a very professional and successful Trust Team whilst contributing to change at regional and national level.
      Send me a message and we’ll chat further.

      1. Mr Grumpy's Sidekick:

        Hi Simon

        To be fair Manchester is a lot further ahead as part of devolution and is doing good work. Unfortunately this is not being seen elsewhere and HCSA should be spending its time sharing this best practice and encouraging others to take part in a way which does not lead to trusts fighting against one another. HCSA should give HoPs/ DoPs the tools they need to drive collaboration locally.

        HCSA can express its feelings but at some point will have to grab the bull by the horn to make change rather feel sorry for itself. The back pedalling on the category towers was very odd indeed especially where views were given by HCSA which did not reflect the views of their members!

        1. Final Furlong:

          To be fair, there are numerous instances of good practice being demonstrated across the NHS, Manchester being one (along with GSTT, amongst others). We must, of course, be careful not to mention UCL Procurement Partners which hasn’t moved on much in the last few years, and has, in fact, lost its most prestigious client, GOSH, to GSTT.

  2. Rasputin:

    NHSi procurement people have zero track record and zero credibility with any of us who run large complex procurement teams in unstable and hostile environments – they simply wouldnt cut the mustard with Exec Teams.

    The notion that they marked our homework was an eye brow raiser, this ill conceived intellectually flawed consultancy project on top of the towers that simply wont deliver £600m cashable savings next ( or any) year must have the Perm Sec scrabbling through “yes Minister”book of excuses.

    Promotions all round for the architects by the looks of things.

  3. Simon Dennis:

    Being a generous soul, I’ll give them £2m worth of consultancy for nothing. If you want to improve NHS procurement efficiency, remove the centre. Totally. No NHSi procurement team, no consultants, no towers, no top slicing.
    Just freedom to be agile, and budget line accountability to the employing trust’s FD.
    If Trusts want to come together collaboratively, great. Let them do that – but from a centre viewpoint, just publish accurate comparators and leave the local teams to serve their organisations best.

  4. Sam Unkim:

    The timing of this absolutely stinks. A pragmatist would wait until the FOM was proven and producing savings before doubling down

  5. Final Furlong:

    You couldn’t make it up, but, someone, somewhere thinks they should.

  6. Michael Angel:

    How to summarise my feelings on this without the use of expletives has been a challenge!

    Any Public Sector Procurement Professional at local level will show scars they have acquired from consultancy firms promising to deliver “efficiencies and savings” only to actually consume all the value that has been delivered and run to the hill with their ill gotten gains. I have had experiences whereby consultancies come in. We work alongside supporting them only for them to propose the very ideas and approaches us the procurement team have already proposed! An expensive second opinion.

    There seems to be a culture whereby the perceived view is that there is a problem with NHS Procurement and that whole view is stimulated by the fact one Trust pays more for bog roll than another. Is it then the belief that if uniformed pricing across all commodities and services was implemented on a national scale that this will be a demonstration of procurement excellence and the savings will pour in? Pie in the sky thinking. The NHS is a multi-layered beast whereby attempting to mandate and streamline process across the entire organisation will end in tears as those layers are not synergised by policy or objectives. Look at NHS Commissioning Services and the mess they end up in without designated procurement expertise on the ground. Most of those contracts are let by central procurement functions funded by the NHS who operate in silos with minimum accountability. Stands the reason and logic that if we are seeing such difficulties in that area, what would it look like for goods at that level!!??

    I do get the logic they are trying to follow. Which is one that the NHS is one organisation and should operate as one. Sadly that is not the reality. As the HCSA said there is enough procurement expertise within to address the challenges and propose ways forward to combat those challenges. We’ve seen the top down approach applied again and again and the same outcome is the Status Quo remains. My suggestion, try from the bottom up!

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