The government has given the go-ahead to the controversial outsourcing of supply chain services to German parcel company DHL and US logistics firm Novation.

The government has given the go-ahead to the controversial outsourcing of supply chain services to German parcel company DHL and US logistics firm Novation.

DHL will be responsible for procuring a range of products and delivering them to hospitals and GP surgeries. Its new organisation will be known as NHS Supply Chain, and will take over the work of NHS Logistics and parts of the NHS Purchasing and Supply Agency.

Some of its work will be sub-contracted to Novation, which has been under investigation by the US Senate since 2002 for alleged anti-competitive practices among group purchasing organisations.

Public sector union Unison is balloting its members at NHS Logistics' five depots on strike action.

The Department of Health said the deal would bring down the cost of supplies and create more than 1,000 new jobs.