- NHS Supply Chain and trusts have been using different savings methodologies
- Organisation says it is working to upgrade its systems so it can deliver savings information to all trusts
- Proportion of every trust’s income is withheld to fund project
Trust procurement leads have expressed serious concern over savings reports provided by a flagship efficiency model, with one saying the scheme was “costing [them] an arm and a leg”.
Several trust heads of procurement told HSJ the reports they have received from NHS Supply Chain do not reflect their actual savings because of the way they have been calculated.
NHS Supply Chain, which has been working out trust’s savings manually because of a “critical” IT issue, acknowledged its savings methodologies “do not match the way [trusts] calculate their savings”.
A spokeswoman said the project recently issued new statements to seven trusts which had queried savings reports delivered earlier this year, adding: “The feedback has been incorporated where possible given the limitations of our systems.”
She added NHS Supply Chain was working with contractor DXC to update its IT systems.
At the start of the financial year, trusts had a portion of their tariff income withheld to fund the running of NHS Supply Chain, which buys consumables and medical devices. For larger trusts, this exceeded £1m.
What NHS Supply Chain does
NHS Supply Chain, which was previously run by DHL, was recently reorganised by the Department of Health and Social Care. It consists of several category towers operated by a number of specialist companies. It is managed by DHSC subsidiary Supply Chain Coordination Limited.
The efficiency body is tasked with achieving billions of pounds of savings and gaining an 80 per cent market share by 2022-23.
But some procurement leads are reluctant to increase their use of the service without robust evidence of trust-level savings.
One head of procurement told HSJ his trust would only consider buying more goods through NHS Supply Chain if it could show its basket of goods would cost the same or less than other suppliers.
“But at this point, nine months in, they haven’t been able to prove to us that they are making any savings,” he explained. “Just because we’re paying for it once, doesn’t mean we want to pay for it twice.
“We are willing to work with NHS Supply Chain, but they have got to up their game considerably. They are costing us an arm and a leg and they’re not delivering right now.”
The NHS Supply Chain spokeswoman said that direct trust comparisons between savings and tariff “may not equate,” but added: “The objective of the model is to drive greater efficiencies across the NHS, and to centralise some operational activities that would otherwise need to be undertaken locally.”
She added: “NHS Supply Chain acknowledges the difficulties customers have faced by not having access to savings reporting information that aligns with their calculation methods. We understand their frustrations. We are working hard to provide savings information to all trusts and this is our number one business priority.”
Frustration has been compounded at a trust level by NHS Supply Chain’s national savings figures. The project says it has already exceeded its business plan savings target of £150m this financial year. The spokeswoman recently told HSJ its national figures were not significantly affected by the trust-level issues.
But trust procurement leads remain unconvinced. One branded the overall figures “fictitious”. Another said: “If they’re sticking to this idea that they’re exceeding savings targets — well, show me the money.”
Several trust procurement leads shared their frustrations with HSJ at a meeting of the Healthcare Supply Chain Association two weeks ago.
An HSCA spokesman told HSJ: “We are acutely aware of the widespread concern that exists at trust level with regard to the delivery by NHS Supply Chain of promised savings.
“This is reflected in a lack of confidence in the contribution NHS Supply Chain savings can make to trust 2019-20 savings plans.
“Our members will continue to work closely with NHS Supply Chain colleagues to improve both performance and confidence.
“The continued inability to satisfactorily evidence savings is of great concern and the disconnect between the original NHS Supply Chain business case and trust savings recognition is a significant challenge.”
Information obtained by HSJ
November and December 2019