Following the Money: The future of NHS procurement revealed

These are fast-moving times for NHS procurement professionals.

Just as the NHS’ 4,000-strong workforce is adapting to the reorganisation of NHS Supply Chain, the profession is now set for further – and potentially far more dramatic – changes to its structure.

The new game in town is called the “procurement target operating model”, and is being run by NHS Improvement with the help of Deloitte and a small selection of NHS procurement staff.

This model aims to improve the way trusts buy categories of products and services which are not covered by the NHS Supply Chain.

The NHS spends up to £10.4bn on these categories annually, which is a significantly higher chunk of expenditure than on NHS Supply Chain products (roughly £5.7bn).

Categories covered by the new model range from ICT, estates, temporary staffing, purchased healthcare, patient transport, facilities management, clinical waste, energy, corporate services and other essential functions that enable an NHS trust to operate.

This column has been given a sneak peek into some of the proposals for the new model (the final version has not yet been completed), and will attempt to spell out the key highlights below.

Purchasing power pendulum swings towards centre

By far the most important take-away from the blueprint is the vision that national teams will lead on creating strategies for each of the categories covered by the model.

This appears to be a similar tack to the recent changes to NHS Supply Chain, where specialist procurement organisations are tasked with buying products on behalf of the NHS across 11 categories.

The document states “integrated category and market management teams” will be the “driving force for procurement activity across the NHS. They will own and develop a single approach to each spend category to leverage economies of scale and drive market innovation”.

It appears the actual procurement will be done by “consolidated operational procurement delivery teams”, which will “implement the central category strategy at the local level, manage operational buying and undertake low-value sourcing initiatives/reactive buying”.

In plain English, this indicates trust procurement staff will no longer be able to buy services the way they want, and will instead have to adhere to nationally-set strategies.

Individual trust procurement teams look likely to gradually be replaced by regional collaboratives.

Trust procurement staff’s job roles to be overhauled

The model is dependant on “significant change” taking place at “local level”.

Local roles will become “more focussed on change management, demand management and business/clinical partnering”, according to the blueprint.

This seems rather vague, but procurement professionals HSJ has spoken to believe this means staff being told to focus more on contract management and other commercial tasks.

However, the blueprint itself admits “how this shift will be supported from the centre, and then deployed across the national landscape, needs more definition”.

A new role for technology

The blueprint is clear that a nationally led “automation workstream” is required, and that “utilisation of technology and procurement systems varies significantly from trust to trust”.

This is not particularly new, as readers of Lord Carter’s 2016 report into hospital efficiency may recall, but the emphasis on automation in the plan is striking.

Automation will, in the first instance, be rolled out for things like such as requisition approvals, invoices, and purchase orders.

In the longer-term it is envisaged that automation can help with contract management through activities such as raising queries, notifications of late or no response, and receiving clarifications.

Left out

It is notable that, in a document spanning more than 100 pages, the words “consultant”, “doctor” and “nurse” do not appear once.

This is significant because, as all procurement staff know, half the battle to improve your purchasing often lies with the clinicians who use the products.

There is no mention of engaging with clinical staff, though the plan’s authors may argue the categories in scope of the model are not all patient-facing.

There are also no details of how the national teams referred to above will be recruited to and staffed.