Daily Insight: Top of the towers

And the winners are…

Four multimillion pound contracts have been awarded to winning bidders who will become major purchasing organisations for the NHS.

The contracts, awarded by the Department of Health, complete the procurement for 11 new “category tower” providers, who will buy common goods, medical equipment, consumables and other services on behalf of the NHS when the NHS Supply Chain contract expires in October.

These organisations will be tasked with delivering annual procurement savings of up to £600m by 2021-22, as part of the efficiency reforms that followed the Carter review in 2016.

The NHS spends £5.7bn a year on these categories of goods and services.

Two names that stood out among the four winners were DHL Supply Chain and North of England Commercial Procurement Collaborative.

DHL, which currently operates NHS Supply Chain, has now won three of the 11 contracts (the maximum number allowed) and is also involved in a fourth through a joint venture with US analytics firm Vizient.

North of England CPC is also involved in three category towers as it is one of four regional procurement hubs that make up the NHS Collaborative Procurement Partnership, which was awarded contracts by the DH last November.

It means at least seven of the 11 category towers will be provided by existing procurers of goods for the NHS, with DHL and the CPP hubs accounting for well over half of the market share within this area of NHS procurement.

The category tower providers are now working on their procurement strategies ahead of going live later this year, which will be anxiously awaited by tens of thousands of suppliers across the country.

Takeover tussle

Two trusts are going head to head in the battle for ownership over Shropshire Community Healthcare Trust.

With an income too small to be sustainable on its own, the trust is seeking a partner to help shore up its services and two providers have been shortlisted.

In one corner is Shrewsbury and Telford Hospital Trust, in the other South Staffordshire and Shropshire Partnership Trust.

Each with a different skill set, one an acute and one a mental health and community provider, both trusts believe that they are in the best position to take over their neighbour.

Taking into account current reconfiguration plans at Shrewsbury, it would make sense for the community trust to be brought under its wing. However, looking at the acute trust’s performance and workforce woes, South Staffordshire’s experience in running community services may seem more desirable.

But South Staffordshire is already going through one merger process with the Stoke on Trent Partnership Trust, so has plenty on its plate.

The winning provider is due to be chosen by NHS Improvement in March.

• Senior leaders of three trusts to recommend merger