Michael White: Burns resumes battle with NHS procurement

This time it is with the gallant ambition of saving £1.2bn over four years from a £5bn annual budget for medical supplies and other “consumable” goods.

Everyone knows it’s a tough nut to crack, one with unforeseen consequences as efforts to curb the NHS’s pharmaceutical bill routinely demonstrate. Hospitals can buy supplies in a bewildering number of ways, from direct purchase to assorted local collaborative hubs and the national NHS Supply Chain, which the parcel firm DHL runs under a 10-year contract.

Ah, the very mention of 10-year outsourced contracts adds to the complexity of the exercise in these suspicious times when the frontier between public and private sectors is so porous and contentious. In the past few days the government’s plans to create a 111 non-emergency phone number (I actually saw it advertised on Monday) to ease 999 pressure has been attacked as dangerously half-baked by the British Medical Association – just as wannabe private sector bidders like Capita and Serco have withdrawn for “unworkable” reasons.

You could argue (I would) that public/private frontier issues have always been there and are now merely more visible. So this week’s allegations by the Office of Fair Trading that 500,000 patients a year pay unnecessarily for dental work they could get on the NHS (the British Dental Association’s man sounded very defensive) is hardly new: I was turned into a private dental patient myself 10 years ago without realising.

In this instance closer examination reveals that all Smoker has done is trumpet a “call for evidence” from all interested parties – trusts, Whitehall, industry – on how reform of the procurement pyramid could be improved and speeded up. The call was made in a “Dear colleague” letter from Sir Ian Carruthers, NHS capo for the South of England, entrusted with the wearisome task by Sir David (“Uncle Joe Stalin”) Nicholson. Who says he can’t delegate, eh?

So the new drive for “world class procurement” (never trust anyone who invokes “ world class” bus services, maths teaching or England football managers) is welcome but hardly revolutionary. It stems in part from the sharp prod delivered last year by the formidable Commons public accounts committee, which complained the system generates avoidable waste and varying prices or products, including 652 different types of surgical glove.

A more rationalised and standardised choice of product, plus economies inherent in large-volume purchases, could yield savings of £500m a year, the committee’s auditors suggested – a more ambitious figure, I notice, than Smoker’s £300m. There is a woeful lack of data vital to meet the Nicholson challenge’s efficiency targets, it added.

Well yes, but isn’t the Lansley challenge of a more diverse NHS where public, private and third sector compete to drive the NHS into more efficient ways – forcing laggards to adapt – likely to fragment procurement still further? It may not, but it may. Committee reports among others have pointed to very mixed results in outsourcing at the notoriously inefficient and extravagant Ministry of Defence: the private sector is no magic wand.

With that in mind I noted The Guardian’s troubling investigation into Serco’s cost-cutting management (it also has MoD contracts) of the controversial GP out-of-hours service in Cornwall. The firm denies whistleblowing allegations of unsafe practices. But staff and voters being asked to embrace unavoidable change are entitled to be wary. Andrew Lansley should remember the NHS is crucial to the Cameron challenge, otherwise called the 2015 election.