NHS procurement strategy published – worth the wait!

The long-awaited UK National Health Service (NHS) Procurement “strategy” has finally been published this morning. It’s titled “Better Procurement, Better Value, Better Care: A Procurement Development Programme for the NHS”.

That title gives you the first clue about it – it’s not really a strategy, but more of an improvement programme, which has both positives and negatives. It is a little light on some of the really big strategic issues – for instance, around the tricky aspects of competition versus collaboration that are central now in the NHS. But on the positive side, it has more tangible and interesting material suggesting ways of improving matters quickly than we might have expected from a “strategy”.  And generally, it is an impressive and promising document in terms of the future of NHS procurement.

Much of the focus, perhaps not surprisingly, is on how procurement can contribute to the immediate short-term cost challenges in the NHS. That sits alongside the longer term ideas to improve capability and performance. I suspect the non-specialist media will focus on some of the comparisons between Trusts, such as in the area of use of external staff, which are fascinating and will put some named Trusts on the spot immediately.

But before we get into the content, a few words of praise. This appears to be a report endorsed by everyone who matters – the Department of Health, NHS England, Monitor, etc. It’s not easy getting stakeholder buy-in in this environment, so well done to the team behind it.

And another positive - the first thing you notice is how well written it is. I don't mean lots of flowery, complex sentences; rather, it is clear, direct and succinct, without being dumbed down or condescending in the slightest. I'm not sure I've read a report of this nature that makes its points quite as bluntly when it comes to current issues. It is done without coming across as accusatory, yet it doesn't pull its punches or include all the excuses and caveats you often get in this type of report  ("of course, Trusts face a very difficult environment and clearly have attempted to address these issues blah blah blah ").

Instead, look at these bullet points, just as a taster from the section titled “Making procurement more efficient and productive”, which demonstrate the prevalent style. This is part of a diagnosis of current issues, which is spot on.

      Investing in an efficient, strategic procurement capability has not been a priority for many NHS boards, often due to the absence of functional leadership at a senior level and effective board representation.

      The production, publication and sharing of procurement best practice and related case studies across the NHS is negligible. It is almost impossible to identify publications of relevant best practice.

Anyway, here are the four key priority areas that the report identifies. We’ll come back to them through this week.

1. Delivering immediate efficiency and productivity gains

2. Improve data, information and transparency

3. Improving outcomes at reduced cost through clinical procurement review partnerships

4. Improve leadership and capability

A number of opportunities are identified under the immediate efficiency banner. For instance, comparison of the Trusts who have the highest and lowest usage of temporary staff is very interesting, with Trusts ranging from apparently zero use of temporary staff up to those where temps are around 10% of the total workforce.  This is also indicative of one of the wider themes here - the use of data and information to drive comparisons across Trusts and therefore better performance.

One of the fundamental issues in the sector is that the organisations have become more independent (under the last and present governments), hence it is hard to see that a highly dictatorial or centralised approach could work. Yet it is clear that there are big differences in performance between Trusts. So the strategy that appears to be laid out here is based on “the centre” leading a drive to improve capability, but also promulgating sharing and publicising spend data - both a positive encouragement for people to improve, along with an element of "name and shame".

And perhaps the most striking action comes under that last point around leadership and capability.

“Therefore, DH will create a new Centre of Procurement Development (CPD) to support the procurement development programme and ensure best practice is embedded  throughout the NHS. The CPD will incorporate an Academy of Procurement Excellence* (APEX), which will enable professional development and leadership. The CPD will act as a one-stop shop for all NHS procurement professionals, housing a range of effective and much needed capability accelerators”.

Fascinating, and we’ll look at this later this week in more detail.

 * But wasn’t there a consulting firm called Procurement Excellence?  It’s OK, we'll let you use the name…!

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Voices (5)

  1. Simon Walsh:

    The Health Care Supply Association has prepared the following statement commenting on the release of the Department of Health & NHS England report “Better Procurement Better Value Better Care”.

    In welcoming the report Lord Hunt, President of the Health Care Supply Association and Chairman of the Heart of England NHS Foundation Trust said “Procurement can make a vital contribution to the delivery of better patient care through the negotiation of the best commercial supply arrangements, in conjunction with clinical colleagues and innovative suppliers. As President I want to see the procurement profession develop and am delighted that central to the report are plans to promote leadership and the development of capability and capacity within the NHS procurement function.”

    In endorsing Lord Hunt’s view, Simon Walsh, Chairman of the Health Care Supply Association and Head of Procurement and eCommerce, Central Manchester University Hospitals NHS Foundation Trust said “The expectations of the NHS procurement function have never been higher and from my experience there needs to be appropriate investment in the function and also in the systems which support it, in order for procurement to optimise its contribution. The leadership of the function at national level in England has been of significant concern since the abolition of the NHS Purchasing and Supply Agency in 2010. I welcome the setting up of the Procurement Development Programme Oversight and Delivery Boards and look forward to the Health Care Supply Association (HCSA) making a major contribution in implementing the Procurement Development Programme going forward”

    In addition to the aspects of leadership, capacity and capability development, the report also focuses on NHS non-pay expenditure, which according to the DH is exceeding budgets year on year. The HCSA recognises that whilst NHS procurement professionals have a key role to play in managing non-pay expenditure, it would be an oversimplification to conclude that current budget excesses are as a direct result of poor procurement performance.

    The HCSA believes that there needs to be a much broader focus on the management of non-pay expenditure at Trust Board level. Improving capacity and capability in the procurement function alone will not deliver the required improvements. What is needed is a root and branch review of how Trusts manage their non-pay and within that determine the roles of the procurement function and the required skills and capacity. This needs to be a Trust-wide initiative and should embrace every individual member of staff involved in the commitment of expenditure and the specification and use of goods and services.

    The HCSA is passionate about the development of a strong procurement profession within healthcare and will provide its members with a broad and influential professional network; continue to promote development opportunities for emerging talent and will build stronger partnerships with suppliers and industry bodies. The HCSA is already supporting the initiatives launched by the Department of Health earlier in the year, including the NHS Standards of Procurement and the Procurement Performance Metrics Dashboard.

    The Health Care Supply Association is a key stakeholder and will be a strong supporter of the report’s recommendations aimed at improving procurement’s performance; investing in capability and capacity and ultimately delivering the best commercial outcomes for NHS organisations.

  2. Frank Tudor:

    Inadvertently the strategy document is a major advert for the lack of commercial expertise within the NHS. You don’t need to be a fellow of the institute to see that that the stock photo on page 24 has been collected from Google images and no royalty has been paid. As a customer of iStockphoto I can tell you that that particular image would have cost the NHS £106 as opposed to the untold thousands they will no doubt have to pay now……

    More importantly, a mandating of a dedicated Procurement lead on the executive team of every NHS trust would have been a more impressive commitment to get things done at a local level. Providing a package of support for non‑executive directors and finance directors is, in my opinion, not a particularly bold step.

    1. Bill Atthetill:

      Ah! Having looked on LinkedIn, you must be Frank Tudor at the DWP, presumably.

      I’ve just finished reading “Better Procurement, Better Value, Better Care” and I’m in agreement with many of Peter’s very positive insights. It clearly states, within the document that, while there are many pockets of excellence (in procurement), the landscape is in disrepair, and hence is inefficient and costly to maintain from every conceivable perspective – trusts, suppliers, clinicians etc. (Just like the PAC stated when they hammered the Home Office over procurement in policing.) It also mentions that trust boards haven’t invested in procurement (and in the function within their own organisations) – largely because they don’t know what good looks like (sounds familiar?). Since the closure of NHS PASA (looking at Mr Walsh’s comments below) there seems to have been a huge in increase in variation – there have been no standards and hence there is massive inconsistency in process, approach etc. I can only imagine that, unlike some central government departments, where they go into denial, and then wonder why procurement receives so little attention, the authors of this strategy have opted to openly promote the case for change, with the prime objective of resolving it permanently (I’ve noted, for example, that the Centre of Procurement Development won’t be a ‘temporary’). In my view, this is an excellent strategy, and is bold in many ways.

      Now, on that last point, let me pick up on what could have been, in your humble opinion, bold and “impressive” – a mandate to each trust to put a procurement lead on their executive teams to “get things done at a local level”. There are, I understand, nearly 170 ‘independent’ acute hospital providers out there, in a addition to a range of mental health trusts, ambulance trusts, community trusts etc etc – hundreds in a devolved market – each with its own CEO and Board (Exec Board and Exec team etc). Really, a ‘mandate, in an increasingly devolved market?

      Do you know what would be really impressive? For central government to mandate a similar concept across its own departments – just 16-17 of them? – it could rollout the ‘mandate’ today, if it really wanted to…. What success has a ‘mandate’ had in the decades that this opportunity has been available to Heads of Civil Service, Cabinet Ministers and Perm Secs? Absolutely none. Hence, Commercial/Procurement is still firmly buried under Finance. (Interestingly, the first department ever to own a ‘Director General of Commercial’ at Board level was…..the Department of Health. Ironic., really.) Do you know what would also be really impressive – to ‘mandate’ new ways of working across central government to make it buy much of the same stuff once. Success thus far? None. Again, not after decades of knowing it could simply mandate the concept.

      Now, what about similar ‘mandates’ in the commercial sector (the new name given to the ‘private sector’)? Let me see….why don’t we choose a well-known, very aggressive ‘commercial’ firm, like a bank, like Barclays (your old firm). It seems that their Board couldn’t mandate a single corporate procurement team across its own organisation – hence, why Barclays Capital (a subsidiary) owned an independent global procurement team for many years. Why have one procurement team when you can have two! And to think, the number of people who say that we should refer to the commercial sector more often, because “they can mandate things”. Dear oh dear. If only they knew, Frank, if only they knew….

  3. queenie:

    A good document, good practical interventions and much needed ‘go to’ place for nhs procurement to be developed. However, I worry that the unhelpful ‘Bargain Hunter’ comment made by Dan Poulter may reduce the procurement profession yet further to a bunch of shoppers and also lead to a distracting media frenzy of ‘NHS encouraged to buy cheap products that could risk lives’.

    1. Peter Smith:

      Great minds.. I just said to my wife an hour ago – “oh no, the Minister has gone and brought David Dickinson into it!” Oh well, let’s hope it doesn’t distract from a good piece of work. Just have to make it all happen now…

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