The role of the NHS Purchasing and Supply Agency Neil Argyle Associate Director of Purchasing - Policy and Performance 5 December 2001

Agenda background to the Agency the NHS Plan Agency’s Corporate Plan what does it mean for suppliers?

Background: NHS Supplies NHS Supplies formed 1992 born out of NAO criticisms – wasted purchasing muscle part of NHS – special health authority 3 national operating divisions: –Purchasing –Wholesaling –Customer services all income derived from ‘customers’

NHS Supplies scale of operation – March ,500 national / ‘sub-national’ contracts with 1,400 suppliers £2.5 billion influenced spend (total NHS non pay expenditure 2001/2 = £11 billion) 12 warehouses 18,000 stock lines £42 million average total stockholding £530 million per annum stores sales NHS Supplies expired 31 March 2000

Historical view of purchasing and supply in NHS focus on non-pay spend in secondary health care historical ‘functional’ role  contracting and distribution  process driven and low profile  expertise in operational activities  price focused unclear priorities and strategies across NHS fragmented, variable practice NOT STRATEGIC

Cabinet Office - Procurement Review 1998 Overall principles: working in partnership instituting best practice organisational change ‘Procurement savings of at least 3 per cent per annum achievable’

Trusts appoint board member with specific responsibility for procurement take responsibility for local procurement staff produce a written procurement strategy implement electronic information management system

wholesaler to logistics provider manage the supply chain increase influence £500 million £1,500 million review potential for private finance manufacturers and importers NHS Hospitals Clinics Community GP surgeries etc Wholesalers and Distributors NHS Logistics Authority

NHS Purchasing and Supply Agency works on behalf of the NHS executive agency of the Department of Health Chief Executive reports via NHS Operations Director to Health Minister Ministerial Advisory Board centrally funded framework agreement with Department of Health

The Agency’s objectives – Framework Agreement with DoH deliver a cost-effective supply chain ensure strategies reflected in ministers’ policies and priorities for the NHS establish overall framework for performance management of procurement in the NHS determine/control the appropriate level at which procurement decisions are made improve efficiency and effectiveness of NHS procurement and supply chain improve skills, expertise and professionalism of NHS procurement staff increase NHS boards’ awareness of procurement issues

The NHS Plan A plan for investment with sustained increases in funding –NHS to grow 50% in cash terms, 33% in real terms in 5 years –7000 extra beds in hospitals and intermediate care –over 100 new hospitals by 2010 and 500 one-stop primary care centres –over 3000 GP premises modernised and 250 scanners –clean wards and better hospital food overseen by ‘modern matrons’ –modern IT systems in every hospital and GP surgery –7500 more consultants; 2,000 more GPs; 20,000 extra nurses; 6,500 extra therapists

NHS Plan – the reform agenda services to be redesigned around the needs of patients a new system of ‘earned autonomy’ with £500 million performance fund Modernisation Agency national standards matched by regular inspection (CHI) increased capacity for NICE NHS and social services to come together – new Care Trusts role changes e.g. nurses able to supply some medicines patient input at all levels concordat with private sector

NHS Plan – direct improvement to patients patients to have GP appointment within 48 hours end of long waits in accident & emergency maximum waiting time for an outpatients appointment will be three months, and six months for inpatients big expansion in cancer screening programme end to ‘postcode lottery’ rapid access chest pain clinics improving the patient environment

NHS Plan – investment in equipment 50 new MRI scanners 200 new CT scanners 80 new liquid cytology units 45 new linear accelerators 3000 new automated defibrillators in public places 450 new and replacement haemodialysis stations extension of ‘patientline’ (bedside TVs and phones) £250 million in new IT to underpin NHS Information Strategy

NHS Plan – task forces the ‘priorities’ improving access cancer CHD capital and capacity children inequalities and public health mental health older people quality workforce performance

Shifting the balance of power more responsibility to front line staff national standards/local delivery structural changes – Health Authorities, Regional Offices

Agency’s Corporate Plan (1) Agency will have made significant contribution to NHS Plan Agency will have led on NHS procurement objectives flowing from wider government agenda Agency established and recognised as centre of expertise all non-pay NHS expenditure will be subject to best procurement practice Agency will be influencing 80% on non-pay NHS expenditure at least 30% (£3.7bn) will be purchased from Agency contracts there will be full NHS commitment to Agency’s contracts continued…..

Agency’s Corporate Plan (2) the NHS will be trading electronically the NHS will be using an integrated supply chain for at least £1.5bn of its expenditure organisational structures will be in place across the NHS that will eliminate fragmentation and deliver efficiency all staff involved in procurement issues will have the required professionalism, skills and competencies all procurement activity will be subjected to performance management to include demonstration of best VFM and will be regularly part of Trust Board agendas

What do the changes mean for suppliers? procurement firmly on the agenda, at both national and local level more inclusive NHS procurement - joined up purchasing and supply opportunity for nurturing innovation emphasis on value, not just price a ‘once only’ approach where appropriate modern systems A STRATEGIC APPROACH