- Procurement staff in Lancashire to buy products on behalf of three trusts
- New model to be implemented from October
- Initiative praised by Lord Carter
Procurements chiefs are hoping collaboration between three acute trusts will lead to millions of pounds of savings, after winning permission to set up a “cluster”.
Blackpool Teaching Hospitals Foundation Trust, Lancashire Teaching Hospitals Trust and East Lancashire Hospitals Trust are merging their procurement departments to buy products more effectively.
The trusts, which had combined non-pay spending of £400m in 2016-17, hope the move will result in additional savings worth up to 40 per cent of their existing annual procurement efficiencies, which total £11m across the three in 2017-18.
Lancashire Teaching Hospitals is the most financially challenged of the three and this year forecasts a deficit of £10m.
Procurement staff at the trusts are being consulted over the plans but the scheme has already been approved by all three boards.
The consultation gives staff the chance to explore or take up new roles within the emerging structure.
Sharon Robson, director of the procurement cluster, said the new model would go live in October but implementation would continue until it is “fully operational” in 2019.
The plans have been praised by Lord Carter, who wrote the foreword in the business case and met with procurement leaders in Lancashire last month.
His landmark efficiency report in 2016 highlighted the potential for trusts to save millions of pounds by improving their procurement.
Ms Robson and Mike Doyle, the programme’s deputy director, started work on the business case for the merger last November.
“There were differences but fundamentally the three trusts’ service provision was very similar,” Ms Robson said.
“We have got the future operating model coming on stream, so whatever model we developed needed to align with that and we had to ask serious questions of what the future of local procurement looks like.”
Her team spent three months gathering information, before spending the next four months writing the business case – which was approved by trusts in spring.
Ms Robson said the biggest change would be the “culture” of working, as the 110 staff will be procuring for all three trusts rather than one.
She said there would not be any reduction of the staff at present, with staff from Blackpool and Lancashire transferring to East Lancashire Trust as the host organisation.
However, the procurement team may reduce in size as the model develops but it is hoped the new way of working will improve staffs’ commercial skills and offer opportunities elsewhere in the trusts.
Staffs’ locations will not change but certain roles will require working at sites run by all three trusts.
Asked how the model would work against the backdrop of centrally led procurement programmes such as the future operating model and nationally contracted products, Mr Doyle said there would be a greater focus on product and service standardisation, and volume commitment to the market.
“The role of the cluster will be increasingly focused on stakeholder engagement, specification agreement, and performance management of contracts across the member trusts,” he said.
He added that there would also be a need to manage categories of expenditure for products not covered by the future operating model.
The business case also included the recruitment of two clinical procurement specialists for Blackpool and East Lancashire, to bridge the gap between clinicians and procurement staff. Lancashire Teaching Hospitals already has someone carrying out this role.
The cluster’s board, which Ms Robson and Mr Doyle will report to, will comprise the trusts’ three finance directors.
Lancashire Teaching Hospitals Trust has achieved several million pounds of cost savings in 18 months after improving its inventory management.
The trust sought to increase its overview of its products by using software called Atticus, which provides data management of stock.
By rolling out the software in its operating theatres – one of the highest areas of non-pay spending – the trust identified £3m of balance sheet adjustments recovered through having greater control and overview of its stock.
This also freed up time for theatre staff because the system enabled the procurement and supply chain management team to take control of inventory management.
The trust is rolling out the software to other departments.
Information provided to HSJ