The Department of Health and Monitor have written to foundation trusts encouraging them to take a tough stance towards suppliers who attempt to impose “blanket inflationary price increases”.
In the letter signed by health minister Daniel Poulter and Monitor chief executive David Bennett the two organisations also advise trusts to avoid signing confidentiality agreements with suppliers, in line with transparency guidance which they say will be due to be introduced in April. The guidance will include instructions to providers to make their procurement information publicly available, including the prices they pay for goods and services.
The letter reads: “We would encourage foundation trusts to take a robust approach to resisting blanket inflationary price increases from their suppliers. We are currently developing guidance and tools to support you do this.
“We are aware that some suppliers are asking foundation trusts to sign confidentiality agreements to discourage price benchmarking, so we would urge you to refrain from signing such agreements.”
The two leaders note: “Whilst there are pockets of excellence in procurement across the NHS, to deliver such efficiencies we need to tackle inflationary pressures and pursue innovative solutions collectively.
“With the financial pressures continuing to increase it is more important than ever that foundation trusts get a grip of their non-pay expenditure to protect front-line services.”
The letter concludes: “There will be further announcements; not least how we think the £1.5bn to £2bn savings [set out in last year’s procurement review] can be delivered in practice…Transforming the approach to NHS procurement is a major priority for us and should be for every NHS trust board if we are to truly protect front-line services. We will do what we can to support you in this process.”
A spokeswoman for Monitor said that the letter was sent to serve as a reminder of the recommendations of the procurement review, Better Procurement, Better Value, Better Care, that were published in August last year.
At the time of the review’s publication, the DH announced that it would immediately begin the process of recruiting a “procurement champion with private sector expertise” to help cut NHS spending on its supplies. This was in response to the procurement review’s claims that there was a lack of consistency and senior oversight in procurement and that the NHS relied too heavily on framework deals with suppliers. However, a spokeswoman for the DH said that the position has still not been filled.