‘Critical issue’ delays trusts’ savings data until 2020

Briefing papers, seen by HSJ, reveal NHS Supply Chain, which buys common consumables and medical equipment for the health service, has told trusts it may not develop its new “savings system” until the fourth quarter of 2019-20. 

The new software will replace NHS Supply Chain’s current savings system, which is not able to report accurate savings at trust level after a “system issue” emerged earlier this summer. In July, NHS Supply Chain told HSJ it hoped to have the new system in place by December.

NHS Supply Chain has been reorganised by the Department of Health and Social Care, which wants to increase trusts’ use of the organisation in a bid to deliver hundreds of millions of pounds in savings.

‘A critical issue’

Although NHS Supply Chain told HSJ it is ahead of its overall savings target, there is currently no way for trusts to understand what their individual savings amount to. An NHS Supply Chain spokeswoman acknowledged: “This is a critical issue.” 

NHS Supply Chain is attempting to mitigate the situation by manually working out each trust’s saving, but this has so far only been achieved for April and May this year. A spokeswoman said June’s figures would be issued to trusts “shortly”.

The Health Care Supply Association, which represents NHS procurement professionals, told HSJ the sector needed a “firm date for when the savings information system will be available to trusts”, to enable them to “better identify the benefits” from the new model.

HSJ has spoken to several heads of procurement at trusts who are frustrated at the lack of information available, particularly because trusts themselves are funding NHS Supply Chain’s running costs. These running costs were last year forecast to increase to £260m in 2020-21.

The HCSA spokesman said he was “aware of the priority” NHS Supply Chain has given to “the delivery of a savings information system that trusts can access”.

NHS Supply Chain’s IT provider is DXC Technology, which won the £250m contract last year.

The spokeswoman told HSJ NHS Supply Chain is still attempting to ensure “all identified issues” will be resolved by the end of 2019.

“Both DXC and our internal savings team are working hard to ensure that monthly reporting to trusts can continue as we acknowledge that this is a critical issue that needs to be fixed as soon as possible,” she said.

She added: “We are confident that we will achieve our savings numbers at a national level, but we are disappointed that at this time we are unable to provide accuracy for individual trusts that we had expected to be able to do.”

Ahead of target

According to the NHS Supply Chain briefing papers, seen by HSJ, the organisation delivered net savings for trusts worth £224m in 2018-19, which was ahead of its target. The amount of savings will differ from trust to trust depending on how much they use NHS Supply Chain.

Trusts with the biggest turnovers are effectively paying more than £1m towards the organisation’s operating costs, after every trust had a portion of tariff-income withheld by NHS England.

NHS Supply Chain has a target to deliver £2.4bn of savings by 2022-23. The organisation is run by Supply Chain Coordination Limited, which is a subsidiary company of the Department of Health and Social Care.