HSJ’s expert briefing on NHS finances, savings and efforts to get the health service back in the black. This week by correspondent Nick Carding.

Waiting for savings

When finance chiefs look through their cost improvement plans for the year ahead, the procurement section often contains some of the larger figures.

But, when planning for the 2019-20 financial year, many trusts are not clear about the level of savings anticipated from their purchasing arm.

This is because a new procurement model covering £5.7bn worth of annual NHS expenditure is being rolled out, through a major reorganisation of the NHS Supply Chain.

From April, NHS Supply Chain’s operating costs will be covered by tariff income withheld from trusts.

The idea is that trusts are more likely to use NHS Supply Chain if they are already paying for its service.

Therefore, the question on the lips of delegates attending the Health Care Supplies Association conference in Cardiff last week was pretty straightforward: “What savings should my trust expect from NHS Supply Chain and when will I find out?”

Alas, answer came there none.

Trusts were given their first forecasts a few months ago, but many rebelled – with some organisations even facing a net loss under the new system.

At last week’s conference, NHS Supply Chain chiefs admitted they had “second-guessed” some of the savings assumptions.

Delegates were told to expect new forecasts in the not-to-distant-future, but with only four months to go before the next financial year, time is of the essence.

Another concern for procurement heads is what level of the savings generated through NHS Supply Chain will be capital.

HSJ understands a significant chunk of NHS Supply Chain’s savings forecast for 2018-19 (£187m) relates to capital equipment, which cannot be included on trusts’ income and expenditure sheets or cost improvement plans.

Brexit homework headache

Meanwhile, some details of the contingency plans for Brexit (or EU exit as government officials have been told to refer to it) were also provided at the HCSA event.

All trusts were told to submit self-assessments of the impact of Brexit on their contracts with suppliers by last Friday (30 November).

Two days before the deadline, only 11 of around 220 trusts had responded. HSJ has asked NHS Improvement how many trusts submitted their response on time.

In addition, trusts will be given “demand capture” forms to fill out, which will help NHS Supply Chain with its own preparations.

The above work follows an earlier diktat from the Department of Health and Social Care, which ordered trusts to assess the impact of a no-deal Brexit on their supply chains.

Given the fact that the EU referendum was held more than two years ago, there is some bemusement from NHS procurement and supply chain staff at the somewhat late hour these Brexit-related tasks have been delegated.

The capital conundrum

In September, this column analysed half of England’s sustainability and transformation partnerships’ bids for capital funding from the DHSC to support local projects and their estates strategies.

Three months on, HSJ has collected this data (available from HSJ Intelligence) from another 15 STPs.

Incidentally, the variation in the STPs’ transparency over releasing the data was surprisingly large and illustrates the inconsistent approach that dogs local NHS decision-making.

The previous column concluded that the needs of the acute trusts trumped transformation projects that are more focused on providing care in the community, and the new details confirm this.

Across the 26 STPs which provided details of every bid (a further 11 STPs categorised their bids in different themes), there were 60 bids for projects at acute trusts, and 33 for primary care and community trusts.

Eleven bids were designed for a clear transformation project across the whole STP, nine bids were submitted purely for mental health trusts, and five bids for ambulance trusts.

The STPs are expecting to find out which bids have been successful before the end of 2018.