MPs back 'comply or explain' procurement rule

The Commons public accounts committee looked at NHS procurement of high value equipment like magnetic resonance imaging, CT scanners and linear accelerator machines for diagnosis and treatment.

The report criticised the DH, saying resources were being “wasted” and standards of service had become “variable” because “the systems for buying and managing high value equipment are fragmented”.

It said the department was responsible for getting value for money from health spending but it noted the DH could not force foundation trusts to use “more efficient” procurement frameworks run by the NHS Supply Chain.

The committee recommended commissioners put “comply or explain” clauses in contracts with hospital trusts “to encourage purchasing through framework agreements unless they can articulate a clear reason to take a different approach”.

In an evidence session, chief executive of University College London Hospitals Foundation Trust Sir Robert Naylor told the committee this approach could be “quite a strong lever over an organisation like mine”.

Earlier this month HSJ reported that such a regime is being looked at by the Department of Health as part of NHS chief executive Sir David Nicholson’s review of innovation, due to be published later this year.

The committee also urged the DH to renegotiate its contract with NHS Supply Chain to include financial incentives to deliver its “primary objective” of saving the NHS money. It said at present, since the NHS Supply Chain is paid a percentage of purchases, it “would benefit from higher prices and has little incentive to negotiate lower prices with suppliers on behalf of the NHS”.

The report also said the NHS “lacks adequate information” about the use of high value scanners which could “drive improvements in efficiency”.

Committee chair Margaret Hodge said poor procurement had led to “unacceptable” waiting times for scans and variations in the number of scans per machine.

She said: “We are also concerned about whether the NHS will be able meet the growing demand for scans and radiotherapy at the same time as delivering such big financial cuts. Half of all machines need to be replaced over the next three years, at a cost of around £460m.”

The report said the NHS was “not taking advantage of bulk buying to achieve discounts” and encouraged commissioners to “require trusts to share their plans” when replacing high value equipment.

Chief executive of the Foundation Trust Network Sue Slipman said “enforced collective bargaining” is “not the answer and goes against the whole way that the health service is developing”.

She said: “Many attempts in the NHS to buy collectively have not delivered value, including the recently dropped national programme for IT procurement.  Foundation trusts are keenly aware of the need to save money by wise purchasing and are already actively looking at ways to make their NHS funds go further and provide better patient care.”