The UK NHS needs to make “substantial improvements” to its S2P process, as the NAO finds it spends over £3bn per year outside its supply chain

The UK’s National Health Service (NHS) is reportedly not making the most of its spending power in the procurement process. The service faced criticism this week following a new report by the National Audit Office (NAO). The report found that the NHS, which has approximately 1.6 million interactions with patients every day, is not fully utilising its spending power to save money when purchasing medical equipment and consumables. 

In the past year, the NAO claims, the NHS procured more than £3 billion worth of medical goods and consumables from outside the NHS Supply Chain — a “purpose built procurement route” designed to use the scale of the organisation to reduce costs and improve the quality of its supplies. Annually, the NHS spends around £8 billion on products.

NHS trusts don’t trust the NHS supply chain 

Much of the procurement done by the NHS happens via its trusts, which are encouraged, but not required, to purchase medical supplies through the NHS Supply Chain. The report stresses that, in order to meet the organisation’s procurement savings targets, the trusts need to use the NHS Supply Chain. 

“The NHS has enormous buying power, but it is not yet making the most of it,” said Gareth Davies, head of the NAO, stressing that the NHS Supply Chain was able to secure significant cost savings on medical equipment. For example, NAO findings revealed that some NHS trusts paid up to £490 for each hip replacement stem part — a product available through NHS Supply Chain for £258.

However, users of the NHS Supply Chain have complained that the products available via the procurement stream were inferior to those available elsewhere.

A customer satisfaction survey conducted by the NHS Supply Chain found that more than seven in 10 (71.8%) customers said they used alternative supply routes because the products they wanted were not available through the NHS.

“Supply Chain needs to do more to deliver, and to show that it is delivering, for the NHS. In response, trusts need to make use of the NHS’s buying power to secure the lower costs Supply Chain can bring, with support and clear direction from NHSE,” Davies added. 

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