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Unhealthy practices in NHS procurement



In the governments quest to improve the efficiency of the National Health Service and improve cost-savings in a time of recent recession and cuts, the privatisation and outsourcing of services has become a popular fix-all. However recent reports and major case examples are demonstrating that the NHS is failing in carrying out effective procurement. 

In the latest report published by global professional services organisations Ernst and Young, a trend showing a divergence in supplier prices being paid by different hospitals was discovered, with millions of pounds being wasted by the failure of NHS trusts to effectively communicate and negotiate strong and effective contracts.

The failure of contract negation and project governance has been seen before in the failure of the Lorenzo digital record contract with CSC. While CSC carried out numerous account errors, the failure of the project was compounded by the NHS’ failure to employ effective governance and the inclusion of damaging targets weakened service levels.

Nigel Clifford, CEO at Procserve, commented on the report saying: “Ernst and Young’s recent report has highlighted the fragmentation and lack of sharing in NHS procurement, leading to some hospitals in England paying more than they need to for medical supplies. This is bad news when funding pressures are being felt in the health sector.”

While the report identified weaknesses in how the NHS carried out procurement, the development of the National Police Procurement Hub (NPPH) was identified as a good example of driving value for money and ensuring that individual forces receive value for money from one main procurement system driving highly negotiated contracts.

As the NHS moves to outsource greater numbers of services with one in five NHS patients now treated by private firms, the risk of ineffective handling of contracts becomes more prevalent. It is clear that the public sector is well placed to drive strong procurement contracts and outsource key services as demonstrated by the work of other departments but it is clear that best practice has not yet been employed within all areas.

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