Press Release - The procurement of consumables by NHS
acute and Foundation trusts
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.
Amyas Morse, head of the National Audit Office, said
today:
"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."
Notes for Editors
-
This report examines the procurement of
medical supplies and other types of consumable product by NHS
hospitals in England. The report focuses on classes of goods that
have to be bought regularly because they are routinely consumed or
have a limited life, e.g. dressings, beverages or staff
clothing.
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The 165 hospital trusts spend approximately
£4.6 billion on consumables each year. Spending on consumables
typically accounts for 25 per cent of an average trust’s non-pay
expenditure and 10 per cent of total expenditure.
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Press notices and reports are available from
the date of publication on the NAO website, which is at http://www.nao.org.uk/. Hard copies
can be obtained from The Stationery Office on 0845 702 3474.
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The Comptroller and Auditor General, Amyas
Morse, is the head of the National Audit Office which employs some
900 staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government
departments and a wide range of other public sector bodies; and he
has statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Press Notice 01/11
All enquiries to Sarah Farndale, NAO Press Office: Tel:
020 7798 5350
Mobile: 07985 274421