The government has dropped proposals to part-privatise NHS Blood and Transplant.

The Department of Health this morning published a commercial review of NHSBT which approved the organisation’s strategy for the next three years and makes no recommendation to move some of its work into the commercial sector.

NHSBT survived a cull of arm’s length bodies in the comprehensive spending review last July.  But a further review considered whether blood processing, testing and some logistics could be more efficiently delivered by a commercial organisation.

HSJ reported in May that eight companies were invited to discuss running services with the Department of Health’s commercial directorate, with Capita and DHL expressing an interest.

Responding to the document published this morning, NHSBT chair Bill Fullaghar said: “Publication of the commercial review brings to an end the uncertainty for our donors and stakeholders brought on by speculation about the possible outcomes of the review.

“The NHSBT board will continue to oversee the drive for efficiency whilst never compromising our life saving work.”

NHSBT is the sole supplier of blood to hospitals in England. This funds some of its income, with the rest coming from central government for its organ donation services.

It competes with other NHS bodies and the commercial sector to provide tissues, including bone.

The review said NHSBT should change the way it reports its finances to make clearer that its government-funded activities do not subsidise the parts that compete with other organisations.

It also recommended the NHSBT should continue to develop pilot studies for new transfusion services with trusts and publish the results.

The NHSBT’s 2011-14 strategic plan said it aims to make £10m savings a year to keep blood prices as low as possible for trusts.

The organisation is predicting a turnover of £432m this financial year.

Chief executive Lynda Hamlyn said: “This review provided an opportunity to rigorously test our strategy and plans. We are delighted that the findings of the review endorse our unique and valuable role in saving lives through voluntary donation and that despite speculation in the media there are no recommendations to privatise NHSBT. We will continue our work to improve our services at least cost to the taxpayer.

“We greatly value the support shown during this review by our donors, our customers and others who have an interest in our work. These expressions of how much our role is appreciated inspire us to continue to do the best we can to help save and improve the lives of patients through the products and services we provide.”

Public health minister Anne Milton said: “The review gives us a real opportunity to make a difference to a service that is relied upon across the country. I would also urge hospitals to look at the recommendations and see how they could improve their use of blood to both improve the care of patients and save unnecessary expenditure.”