How bridging procurement gaps in NHS trusts can deliver significant savings

With increased pressure on NHS trusts to deliver savings, procurement functions are under more scrutiny than ever to translate buying and sourcing activity into real and sustainable benefits.

Lord Carter’s efficiency review in 2014 identified that the NHS would be able to make a total of £5bn savings per year leading up to 2020/2021 so long as a number of steps were taken to improve efficiencies across England and Wales.

Some of the challenges facing public procurement in the NHS are clear and long-standing. Things are not getting simpler or easier; good procurement people are scarce, time and money is tight and procurement officers have to compete for the attention of equally stretched stakeholders.

As a result of these challenges, most of the benefits identified at the procurement stage may not fully materialise, simply because the resources needed to make them happen are not available. In addition, procurement staff are under pressure to move onto the next exercise making it difficult to focus on the work required to deliver the benefits identified during the procurement stage.

Filling in your process gaps in order to maximise the benefits

To further compound the problem, the sole focus of some finance and procurement departments on delivering against the Cost Improvement Plan Savings (CIPS) targets has blurred the vision of some procurement departments and executives within the NHS. This has sometimes led to poor project outcomes and unsustainable results with unrealised or diminished benefits.

The resources that the NHS needs to achieve and maintain their CIPS targets and other objectives against the Carter review are also the very resources that it desperately lacks. This calls for a more creative and innovative approach if departments are to achieve lasting success against their objectives.

There seems to be a gap in the crucial period between the contract being awarded and ‘business as usual’ stage which need to be filled if organisations are to meet all of their objectives. The trusts that deliver the sustainable outcomes are those that are able to focus their resources on the gap between the contract award and business as usual stages.

We have identified the following three simple strategies that can lead to improvements in bridging these gaps:

1. Ensure that all working is joined up to avoid the collaboration gap
Good procurement functions are able to interrogate the market for value for money solutions. However, these are not always readily adopted by business managers, contract managers and clinicians because of gaps in collaboration. The achievement of lasting success requires time and a joint effort from all the relevant stakeholders from the outset. The Carter report reinforces this sentiment by stating that: ‘we have learnt from our conversations with trusts that close engagement and collaboration are essential and that this supportive approach needs to be maintained'.

2. Keep your key resources close in order to fill the resource gap
It is important to keep the same team that were involved in the delivery of the initial procurement exercise and use them to embed the change as these are the people that know the requirements inside out. They are very often the super users and the voices of other users and they usually have the power and influence, as well as the understanding, to manage and mitigate issues and risks that may arise at the early stages of implementation. They are also likely to be in a position to undertake the granular work required at the user end to ensure that users adopt the new or changed product or service. 

3. Introduce good governance to bridge the accountability gap
Trusts should consider appointing a Senior Responsible Officer (SRO) for key categories of spend so that there is good governance around procurement. The SRO can also ensure accountability between procurement functions and their stakeholders. Governance should be informed by high level plans for sourcing and procurement. This approach would further strengthen accountability and improve communication, thereby contributing to sustainable improvements in procurement.

As organisations seek to meet the challenges around procurement promoted by Carter both by looking at current capabilities and outsourcing opportunities, this is the right time to undertake a review of the procurement function effectiveness to determine what may be required to bridge the gap and help release the savings not previously reached.

Act today; shape tomorrow

For further information on how RSM can help your trust to better manage its procurement processes, please contact Walter Akers.