NHS must remove Russian firms from its supply chain ASAP

In a letter to NHS providers, the health and social care secretary told them “to undertake an urgent review of your supply chains and identify contractual relationships you have with Russian and Belarussian suppliers”.

Trusts are to send an overview of their contracts to the Department of Health and Social Care “and make plans to exit those contracts as soon as possible, within the terms of those contracts,” according to the letter, seen by HSJ.

Multiple Russian and Belarussian entities have been added to sanctions lists around the world since the Russian government invaded Ukraine. Businesses and state bodies in the UK have been distancing themselves from high-profile Russian firms, including Russian state-controlled energy company Gazprom.

The NHS has come under pressure over the past week to end contracts with the UK subsidiary of Gazprom, following an HSJ analysis published last week that showed multiple trusts are spending millions buying gas from the firm.

Last week the former chief executive of NHS England Lord Stevens said the gas supply contracts were, in effect, putting money in the hands of “dictatorial regimes that are engaged in acts of aggression”. The health secretary has since said the NHS must stop buying gas from Gazprom.

However, there is anxiety in NHS procurement circles over whether exiting the contracts early is possible without incurring a considerable financial penalty. The health secretary appeared to acknowledge this in his letter, although he made no mention any financial support from the centre to meet these costs.

Instead he said: “Where there is a risk of significant financial or critical loss of service impacts to terminating contracts immediately, commercial teams will want to consider these carefully, but I would ask that you develop a roadmap to exit these relationships as soon as practically possible.”

HSJ has also seen an accompanying note from NHS England. This says: “As outlined in the [Secretary of State’s] letter, where there is a risk of significant financial impact or critical loss of service impacts to terminating contracts immediately, commercial teams will want to consider these carefully and need to develop a roadmap to exit these relationships as soon as practically possible.”

It continues: ”In order to meet this request, we ask NHS organisations to review direct tier 1 contracts with Russian and Belarussian suppliers and inform us how and at what point those contracts could be exited in a legally compliant manner. This should include any potential additional costs, financial implications, end of contract dates, notice periods, break clauses, as well as any other issues such as the potential impact on patient services and alternative available suppliers.”

The NHSE note adds: ”In addition, we ask that you proactively review current procurement processes to ensure that Russian and Belarussian suppliers are not considered for new or renewed contracts.”

It is unclear exactly how much business the NHS does with Russian and Belarusian suppliers, besides Gazprom. NHS trusts in the past, for example, have bought services from Russian cybersecurity firm Kaspersky although it is not yet clear how many contracts remain in place.

The Health Care Supply Association, the representative body for NHS procurement professionals, said this was “an understandable development” but represented a “challenging and distracting task for all procurement teams”.

It will “once again demand that NHS procurement and HCSA members use their exceptional skills and knowledge to respond at national, regional, and local level in England”.

HSJ has contacted the DHSC for comment.