Lord Carter’s efficiency review of 2014 identified that the NHS would be able to make a total of £5bn savings per annum in the years leading up to 2020/2021 if a number of steps were taken to improve efficiencies across England and Wales.
With increased pressures on NHS trusts to deliver, procurement functions are under more scrutiny than ever to translate buying and sourcing activity into real and sustainable benefits.
Some of the challenges faced within 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. This means that most of the benefits identified at the procurement stage may not be fully realised further down the line simply because the resources needed to make this happen are not available. In addition, procurement staff are under pressure to move on to the next exercise making it difficult to focus on the work required to realise the benefits identified during the procurement stage. To further compound this problem, the sole focus of some finance and procurement departments on delivering against Cost Improvement Plan Savings (CIPs) targets has somewhat blurred the vision of some procurement departments and executives within the NHS. This has sometimes perversely led to sub-optimal outcomes, ultimately un-sustained results and unrealised or diminished benefits. There seems to be a gap in the crucial period post contract award and prior to business as usual which needs to be filled if organisations are fully to realise benefits.
The very resources that the NHS needs to achieve and maintain their CIP targets and other objectives against the Carter review are the resources that it desperately lacks. This calls for a more creative and innovative approach if departments are to achieve lasting success against their objectives.
Notably, in our experience, the trusts that deliver the sustainable outcomes are those that are able to focus their resources on this gap between the contract award and business as usual stages.
We have identified the following three simple investments that can lead to improvements in bridging this gap
1. Joined up working - avoiding 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 key resources close - filling 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 voices of other users and they usually have the power and influence, as well as 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 - bridging 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 and accountability between procurement functions and their stakeholders to ensure benefits are realised. Governance should be informed by high level plans for sourcing and procurement. This would further strengthen accountability and improve communication which can contribute to achieving sustainable improvements in procurement.
How can we help?
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's effectiveness to determine what may be required to 'bridge the gap' and help release the savings not previously reached. Please contact Tim Merritt for more information.