• Concerns raised that planned shake up by the Department of Health could result in “fragmentation” of NHS procurement system
  • DH intends to split procurement into 11 “category towers” when NHS Supply Chain contract ends in October 2018
  • Health Care Supply Association warns “the whole supply chain is being put at risk”

Plans from the Department of Health to change the way the NHS buys goods could result in the “fragmentation” of the procurement system, supply chain experts have warned.

The Health Care Supply Association, which represents NHS procurement staff, has said the “whole supply chain is being put at risk” by the proposals.

Richmond House

Richmond House

The DH said it was ‘vital’ to update the procurement operating model

Under the DH’s “future operating model”, when the current NHS Supply Chain contract with DHL ends in October 2018 the procurement system will be split into 11 “category towers” – each covering a different category of goods.

Private companies and NHS procurement hubs will be invited to bid to run these towers. If they win a contract, they will be responsible for carrying out tenders on behalf of the NHS for the category of goods covered by the tower.

However, the chair of the HCSA, Helen Lisle, warned that the DH’s approach would see “significant elements of the existing NHS procurement and supply chain operating model subject to potential fragmentation”.

There are concerns that the creation of towers operated by multiple providers will cause confusion among trust procurement staff about who is responsible for what, and prevent the NHS from getting better deals by putting different types of good into a single tender.

In a statement, Ms Lisle said the HSCA had received feedback that the plans were “generating a high degree of anxiety within the NHS procurement profession and there are fears that the whole supply chain is being put at risk”.

“At a time when the objective of ‘collaboration not competition’ is being promoted across the NHS… the DH is encouraging and maintaining competition within the procurement landscape,” she said.

Ms Lisle said there was a “perceived lack of engagement, consultation and active involvement” of NHS procurement staff in the design of the new model.

She said trusts had been working well with NHS Supply Chain since revisions were made to its contract last year, and called on the DH to “urgently evaluate the benefits of a further extension to the… contract in order to maintain the momentum of these savings initiatives”.

A DH spokeswoman said: “We recognise the value the HCSA add in representing the purchasing, supply and procurement professionals in the healthcare system and we have invited the HCSA chair to meet with our commercial director to discuss any concerns they have.

“It is vital for the wider procurement project that we update our current operating model, following the recommendations from Lord Carter on procurement, which suggest there are around £1bn in savings to be made overall for acute hospitals.

“We have consulted widely on these proposals and we will continue to engage with the HCSA and other key partners as this work continues.”

HSJ understands that the DH and the HCSA are in dialogue about the plans.