NHS Supply Chain and efficiencies in procurement – Report Summary

Summary

NHS Supply Chain was created to solve a known problem and to save the NHS money. The NHS was not making the most of its collective buying power to get the lowest prices for consumables and medical equipment. To solve this, in 2018 the Department of Health and Social Care (the Department) established the NHS Supply Chain organisation to make savings through aggregating the NHS’s purchasing power. But too many trusts still lack confidence in NHS Supply Chain and choose not to use it for billions of pounds of spending. Of the £7.9 billion that trusts spend on consumables and medical equipment, only £4.5 billion is spent through NHS Supply Chain. Trusts are clearly not engaging with the service that NHS Supply Chain provides at the scale required to harness the NHS’s collective buying power. Net customer satisfaction with NHS Supply Chain is in decline; from a peak of 67% in 2021–22 to 54% in 2023–24 and over two-thirds of trusts say they shop elsewhere because of limited availability through NHS Supply Chain. NHS Supply Chain has so far failed to demonstrate that it is the answer the NHS needs. The Department told us that it was intended that using NHS Supply Chain would become so compelling that trusts would choose not to go elsewhere. So far, this approach appears to have failed.¹

NHS England, and before it the Department, have been far too lenient in their oversight of NHS Supply Chain. They have failed to validate savings, do not challenge why trusts do not make more use of NHS Supply Chain and have allowed NHS Supply Chain to get to the point where its systems are not fit for purpose and where it is, by its own admission, years away from being what the NHS needs.

The NHS’s need for an effective and high-performing procurement function remains compelling and this function requires strong national leadership and oversight. Currently, neither NHSE nor NHS Supply Chain has a clear vision of how NHS Supply Chain can secure the confidence of not only local procurement teams and managers but, crucially, clinicians as local champions for what is best for the NHS and patients. The need is also urgent. Delay and non-delivery risk further undermining the value of NHS Supply Chain. We are encouraged by the recognition by NHS Supply Chain that there is much to do but also much to be gained. We look for swift and sustainable progress from NHSE and NHS Supply Chain and would encourage our successor Committee to continue monitoring this.