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NHS: Procurement

Health written question – answered on 12th May 2011.

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Photo of Derek Twigg Derek Twigg Shadow Minister (Health)

To ask the Secretary of State for Health

(1) how much the NHS plans to spend on procurement in each year from 2012 to 2015;

(2) how much the NHS spent on medical supplies and equipment in 2010-11; and if he will make a statement;

(3) what plans he has to review best practice for procurement in the NHS;

(4) what steps his Department takes to evaluate NHS contracts for supply and delivery of medical supplies and equipment for best value; and if he will make a statement.

Photo of Simon Burns Simon Burns The Minister of State, Department of Health

In 2009-10, the latest year for which figures are available, the national health service spent approximately £37 billion with external suppliers on the procurement of goods and services, of which £16.5 billion is spent by NHS providers (NHS trusts and NHS foundation trusts). This £16.5 billion comprises a number of different expenditure categories such as drugs, non-clinical supplies and services, transport and establishment, all of which may include elements of medical supplies and equipment, but the category “clinical supplies and services” will cover most of the purely medical supplies and associated equipment purchased by NHS providers. Expenditure in this particular category for 2009-10 was £4.5 billion.

In future years NHS providers will continue to be free to make their own procurement decisions from within their own budgets. However, efficiencies across the NHS in the region of £15-20 billion by the end of 2013-14 are required under the Quality, Innovation, Productivity and Prevention initiative which includes projected efficiency savings of £1.2 billion from procurement by the end of 2013-14. To achieve this the Department has a comprehensive procurement strategy in place based around three key work strands of greater transparency on pricing; promoting and improving the national collaborative bodies such as NHS Supply Chain; and product standardisation and rationalisation.

The National Audit Office published a report on its review of procurement by NHS providers in February 2011. The Department agreed with most of their recommendations, and which are already being addressed by these work strands.

The Department does not make assessments of individual NHS contracts. The role of the Department is on making the tools and information available for the NHS to make the best procurement decisions. All NHS bodies must follow their Standing Financial Instructions to ensure that any contracts entered into are value for money and comply with any legal requirements.

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