The lack of an understood and agreed strategy has caused confusion, duplication and 'dysfunctional behaviour' in the NHS's procurement efforts, says the Office of Government Commerce.

In a review of the DH's procurement capability published to coincide with the pre-Budget report, the OGC found that although there was evidence of "good work" in system management, "some aspects of the current organisation appear to have dysfunctional consequences".

In a traffic-light scoring of main work areas, the department was given a red for governance and organisation. It received amber/red ratings in a further three criteria, three amber ratings and two amber/green scores, failing to pick up a single green.

Procurement skills will become even more crucial for PCTs in the next year as they are now expected to make savings through more efficient commissioning.

The OGC praises regional procurement hubs for "valuable work" but warns the way they are funded is unsustainable.

Support offered by the NHS Purchasing and Supply Agency, the commercial and commissioning directorates, hubs and private sector providers "varies in quality".