£250 million cash releasing savings achieved for the NHS
£158 million cost-avoidance savings achieved on capital medical equipment purchases
26 October 2017
NHS Business Services Authority and NHS Supply Chain are pleased to announce that as of the end of September 2017 they have achieved over £250 million cash-releasing savings which should assist Trusts in maximizing their procurement budgets. These cash-releasing savings have been delivered against the £300 million target set for September 2018 by the Department of Health.
Gerry McGeary, Head of Supplier Management, NHS Business Services Authority said: “I would like to thank everyone who has contributed to the huge task of delivering these savings. Our Trusted Customer programme, which serves as the voice of the customer, ensures that NHS Supply Chain’s procurement strategy has contributed to the delivery of these significant savings. We seek to encourage more joint working between all stakeholders in order to deliver the full £300 million cash-releasing savings target by the end of September 2018.”
David Pierpoint, Chief Operating Officer, NHS Supply Chain, commented: “This is a great achievement and it’s only by working in collaboration with our customers and suppliers on our savings programmes such as the Nationally Contracted Products (NCP) programme, High-Cost Tariff-Excluded Devices (HCTED) and Compare and Save that it’s been possible to make these savings.”
In addition, the NHS Supply Chain Capital Solutions Team has achieved the overall target set by the Department of Health of £158 million cost avoidance savings ahead of its due date of September 2018. This achievement has benefitted many NHS trusts who have purchased Capital medical equipment through NHS Supply Chain.
Jason Lavery, Director NHS Supply Chain Capital Solutions explained: “The key driver for these savings is the better utilisation of the Department of Health Capital Equipment Fund. Through working collaboratively with local and regional customer groups, we have been able to aggregate and leverage national demand within NHS capital medical equipment. The Fund has also provided the opportunity to commit bulk orders to suppliers of radiotherapy equipment as part of the national £130m replacement plan to support the treatment of cancer”.
Lord Carter of Coles’ report for the Department of Health, ‘Operational Productivity and Performance in English NHS Acute Hospitals: Unwarranted Variations’ published in February 2016 estimated that £700 million could be saved through better procurement activities and these savings targets in line with Lord Carter’s vision.
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Notes to editors
About NHS Supply Chain
All information in this press release is correct at the time of going to press.
NHS Supply Chain is operated by DHL and managed by the NHS Business Services Authority. It supports the National Health Service (NHS) and other healthcare organisations in England and Wales by providing end to end supply chain solutions.
The organisation was formed in 2006 from the NHS Logistics Authority and parts of the NHS Purchasing and Supply Agency (NHS PASA). The initial contract which was due to expire in October 2016 has been extended for a further two years until October 2018.
NHS Supply Chain is working closely with the NHSBSA, to build on the savings already achieved to deliver £300m of the opportunities for procurement efficiency savings as highlighted in Lord Carter’s interim report: Review of operational efficiency in NHS providers.
NHS Supply Chain manages the sourcing, delivery and supply of healthcare products and food for over 1,000 NHS Trusts and healthcare organisations. It provides a single point of access to over 316,000 nationally available, transactable lines ranging from bandages to sutures, from gloves to implants, and surgical equipment. In addition, it can help you plan your investment in medical capital equipment such as MRI scanners, linear accelerators and patient monitors.
Its management of the procurement process negates an NHS organisation’s need to tender through the Official Journal of the European Union (OJEU). Costs can also be reduced through its one-route solution that consolidates all products onto one invoice and delivery.
To ensure that its products are fit for today’s healthcare market, NHS Supply Chain works with suppliers of all sizes to ensure its range embraces high quality and innovative products; and engages with clinicians, the Department of Health and academic institutions to make sure that it is aware of the current requirements and latest developments in clinical practice.
NHS Supply Chain’s product areas include:
- Catering, including food
- Infection control
- Capital equipment, including finance and maintenance
Based in Alfreton, Derbyshire, UK, the business employs over 2,400 staff across seven sites.