NHS Supply Chain has pledged that it will use the ‘opportunities’ for greater savings highlighted in the Carter review as part of a deal that will see its contract extended until 2018.

It will look to make £150m worth of cash releasing savings by 2018, on top of the £150m already promised by March next year.

NHS Supply Chain, set up in 2006, is a joint venture between NHS Business Services Authority and logistics firm DHL.

The financial value of the contract extension has not been revealed.

Lord Carter’s interim report into NHS provider productivity, published in June, included recommendations the Labour peer said could save the service up to £5bn a year by 2019-20.

In a statement, the authority said: “As part of the extension, the NHS Business Service Authority and NHS Supply Chain will work closely together to deliver on the opportunities for savings and efficiencies highlighted in Lord Carter’s report.”

An authority spokesman said that the £300m cash releasing savings target will form part of savings that Lord Carter wants to achieve from the procurement of consumable medical products including syringes, hip joints and cardiology devices.

He said NHS Supply Chain would work with its customers and suppliers to develop strategies to ensure the “speed and scale” of the adoption of money saving initiatives.

He added that achieving the savings will be managed through a savings “roadmap”, which will identify all the savings initiatives and the levers to be used to deliver the £300m.

In addition, the authority will continue to work with its suppliers and customers on its savings programmes such as Core List, which has been reducing the range of like for like products the NHS buys.

Another initiative, Compare and Save, is designed to standardise trusts’ procurement processes by providing data comparing the cost of products trust currently buy with lower cost alternatives.