A £20m network of around 20 commercial support units will be set up to boost primary care trusts’ efforts to stimulate the market.
The Department of Health’s commercial strategy, expected today, confirms that it will axe the commercial directorate and the NHS Purchasing and Supply Agency.
DH director general for commissioning and system management Mark Britnell said the plans were the DH’s first formal response to the Budget and would help the NHS “meet some of the challenges laid out”.
The Budget said PCTs will be expected to save £500m a year through more efficient commissioning. Market stimulation was the area commissioners performed worst at in the first year of world class commissioning.
Mr Britnell told HSJ that if commissioners did not understand how to stimulate the market, the NHS “would not be in the strongest position to meet the downturn”.
The units, which will employ lawyers and accountants, are tasked with boosting performance on market stimulation and contracting, supporting commissioners and providers, and providing a point of contact for the third, voluntary and private sectors.
But PCTs will still be legally responsible for all contracts in their areas.
PCTs will be encouraged to participate by being held back at level one in world class commissioning’s market stimulation and contract management competencies unless they can show they are performing at the same level as the units.
The DH hopes joint working through the units will allow commissioners to pool the available talent and improve more quickly.
Mr Britnell said: “It is neither feasible nor desirable for 152 PCTs to develop world class commercial and procurement skills.
“And as we move into a colder economic climate for public services, we don’t wish to encourage PCTs to have stand-alone commercial and procurement functions.”
The Purchasing and Supply Agency’s sourcing activities will be merged into the Office of Government Commerce’s Buying Solutions agency - including setting up an NHS-facing buying arm.
Other activities will move into the new regional units and local procurement hubs will be expected to realign with the regional units to boost the NHS supply chain’s efficiency.
The DH will have a new procurement, investment and commercial division to strengthen its commercial and procurement support, and a strategic market development unit, to provide leadership and support for commissioners in market analysis and market-making.