Department of Health issues new guidance on NHS procurement

All NHS trusts will be expected to publish the details of all contracts over £10,000 on the Government’s Contract Finder database, stop using PQQs for low value contracts and regularly audit procurement, new guidance issued by the Department of Health has said.

The document, NHS Procurement: Raising our game, also called on trusts to appoint a board executive to be accountable for procurement performance.

Other recommended steps include:

  • Trusts should share their procurement data with other trusts for the purpose of benchmarking;
  • Trusts should include the requirement for suppliers to provide GS1 GTIN's (Global Trade Item Numbers) and associated data as an integral part of any procurement process. “In addition, trusts should make it clear to their suppliers that provision of GS1 data will be evaluated positively in any competitive situation and over time provision of the data will become a mandatory requirement”;
  • Trusts should analyse their non-pay spend and assure themselves they are complying with available contracts;
  • Trusts should analyse their non-pay spend and set themselves goals to ensure improved coverage by their e-procurement systems;
  • Trusts should nominate a non-Executive director to sponsor the procurement;
  • Trusts should review their performance against the NHS Standards of Procurement and re-visit their procurement strategies to ensure they align with the trust’s business priorities;
  • Trust Chief Executives should consider using the ICARE approach to lead change in procurement;
  • Trusts should acknowledge the Government procurement pledge.

The Department claimed that ‘buying smarter’ could save the NHS as much as £1.2bn.

Together with the NHS Supply Chain, a £300m cash fund has also been set up to enable the NHS to buy bulk large equipment such as CT and MRI scanners.

“Traditionally, the NHS has struggled to make the most of its buying power as there was very little knowledge between local hospitals about their equipment needs,” the DH said. “This fund allows the NHS to benefit from the savings of bulk buying expensive medical equipment via NHS Supply Chain.”

Health Minister Simon Burns said: “Waste is unacceptable when we know there are simple solutions. That is why the NHS needs to buy smarter and get the best value for the taxpayer for every penny spent.

“We know that at least £1.2bn could be saved over the next four years if the NHS innovatively changes the way it buys goods and services.”

Burns said the £11m+ already saved through bulk-buy discounts on the cash fund was the first step to better procurement in the NHS.

The Raising our game guidance, which can be downloaded here, identifies the actions that the NHS must take immediately. 

“It should be focused on outcomes, not just cost, and must be responsive to creative ideas from suppliers, procurement specialists, clinicians and managers,” the Department said.

Sir Ian Carruthers is meanwhile to conduct a Procurement Strategy Review that will inform the strategic approach to procurement in the NHS. 

An open call for evidence was published alongside the Raising our game document.