“At least 10 per cent of hospitals’ spending on
consumables, amounting to some £500 million a year, could be saved
if trusts got together to buy products in a more collaborative
way.
“In the new NHS of constrained
budgets, trust chief executives should consider procurement as a
strategic priority. Given the scale of the potential savings which
the NHS is currently failing to capture, we believe it is important
to find effective ways to hold trusts directly to account to
Parliament for their procurement practices.”
Amyas Morse, head of the National Audit Office, 2
February 2011
NHS hospitals often pay more than they need to
when buying basic supplies, the National Audit Office has reported.
A combination of inadequate information and fragmented purchasing
means that NHS hospitals’ procurement of consumables is poor value
for money. The NAO estimates that at least £500 million a year
could be saved by the NHS on its spending on consumables, and
potentially much more for some products.
Today’s report points out that with no central
control over Foundation Trusts, the Department cannot mandate more
efficient procurement practices. Responsibility to demonstrate
value for money in procurement falls upon the management of
individual trusts. The price that trusts pay for the same items
varies widely. The average variation between the highest and lowest
unit price paid was 10 per cent.
Some trusts are not getting value for money
because they are buying many different types of the same product.
For example, trusts bought 21 different types of A4 paper, 652
types of medical gloves and 1,751 different cannulas. There is also
a large variation between trusts: one bought 13 different types of
glove, whilst another bought 177 different types.
There are unnecessary administrative costs
because many trusts make multiple small purchase orders. Taking
just four items bought in high volumes, around £7 million in
administration costs could be saved each year if the number of
orders were reduced to the level achieved by the best performing 25
per cent of trusts.
Hospital trusts have complete freedom to
decide what they buy and how they buy it. They can use regional
procurement hubs or NHS Supply Chain or they can buy direct from
suppliers. The limited evidence available suggests that new
contracts are frequently being established which overlap and
duplicate each other, incurring unnecessary administrative costs.
There is no national performance framework for Hubs which would
enable comparisons to be drawn between them or an assessment of
their potential optimal performance to be made..
Publication details:
HC: 705, 2010-2011
ISBN: 9780102969467