The Department of Health’s commercial directorate is to be scaled down and regionalised and procurement of NHS private sector capacity handed to local commissioners.

Speaking at the annual HSJ Forum on Monday the DoH’s director general of commissioning and system management Mark Britnell said that the ‘commercial directorate will be reduced in size and regionalised and procurement will be localised’.

Sources close to the discussions confirmed that the commercial directorate will be ‘neutered’.

The plans will be contained in the DoH’s operating framework to be published next month.

The changes follow last week’s announcement that the independent sector treatment centre programme is to be drastically cut and in some cases scrapped (for more background, click here).

The move means that the £700m a year of business originally planned for the private sector could now be cut to as little as £200m, while the DoH may have to pay up to £20m in bid costs to contractors on top of the£5m it has paid for schemes that have already been axed.

Earlier this week Conservative MP Stephen O’Brien hit out at the DoH over what he called ‘crass mismanagement and incompetence on a grand scale’.

Mr O’Brien said he has asked the National Audit Office to examine the procurement process and the commercial directorate’s work.

Aside from the private sector’s costs, the government had, according to its published figures, already spent £72m by March 2007 on the procurement.

Last month the department admitted that just eight of the 190 staff in the commercial directorate are civil servants; the rest are external consultants who cost a total of £88,000-120,000 a day.

Earlier this month the DoH also revealed that, on top of his £190,000 salary, the government also pays for the accommodation costs and travel to the US of DoH commercial director Channing Wheeler.

A spokeswoman confirmed that the government was looking at the ‘role and activities of the commercial directorate’. However, she said it would be ‘premature to speculate on what the outcomes of those considerations will be’.

  • The operating framework may also contain plans to link trust payment to patient satisfaction. Mr Britnell said the DoH was looking at whether it was feasible ‘to make some contractual payments based on patient experience’ in order to ‘stimulate’ the NHS to move toward using patient satisfaction and experience data to commission more intelligently. He said the government was considering bringing in a system which would see NHS providers denied around 1 per cent of their payments unless they could demonstrate improvements in satisfaction.