NHS purchasing 'fragmented and inefficient', says NAO

1 Feb 11
NHS hospitals often pay over the odds for basic supplies such as paper and surgical gloves, auditors have found.
By Vivienne Russell


2 February 2011

NHS hospitals often pay over the odds for basic supplies such as paper and surgical gloves, auditors have found.

A National Audit Office report published today said purchasing in the NHS was fragmented, with trusts paying widely different amounts for the same items. The NAO estimates that at least £500m a year could be saved through more efficient procurement practices.

NAO head Amyas Morse said: ‘At least 10% of hospitals’ spending on consumables, amounting to some £500m a year, could be saved if trusts got together to buy products in a more collaborative way.

‘In the new NHS of constrained budgets, trust chief executives should consider procurement as a strategic priority. Given the scale of the potential savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold trusts directly to account to Parliament for their procurement practices.’

The report notes that, with no central control over foundation trusts, the Department of Health cannot demand improved procurement. Responsibility for this falls to the management of individual trusts.

It also found that some trusts were not getting value for money because they were buying many different types of the same product. For example, one trust bought 21 different types of A4 paper, 652 types of medical gloves and 1,751 different canulas. Making lots of small purchases rather than buying in bulk can also drive up costs, the auditors said.

Public Accounts Committee chair Margaret Hodge said it was ‘simply unacceptable’ that so many trusts were paying more than they needed to.

She said: ‘This report makes clear that individual trusts acting alone will only be able to make limited improvements in the future. But the proposed NHS reforms will take decentralisation still further.

‘We look forward to exploring these vital issues with senior officials when they come before us in a few weeks’ time. In particular, we will want to understand whether a reconfigured NHS will be better able to secure the substantial economies of scale that it should be getting with the taxpayers’ money it spends.’

Nigel Edwards, chief executive of the NHS Confederation, said the report was ‘challenging’.

He added: ‘NHS leaders will want to study this national picture with great care because we are all very aware that there has never been a more important time to get maximum bang for buck on behalf of patients.

 ‘The NHS has a £100bn- a-year budget, which means it can leverage enormous spending power. It is clear that many NHS organisations are doing this very well but also that there is scope to do better. With the NHS facing the greatest efficiency challenge in its history, we have to bear down on every opportunity to make savings for the public.’

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