Friday 22 nd October 2010 Sustainable Procurement Forum

Stephen Heard MBA MCIPS Regional QIPP Director NHS Cambridgeshire (on secondment to the EoE SHA) Post Graduate Certificate in Sustainable Business from University of Cambridge Programme for Industry (2007) Member of the University of Cambridge Programme for Sustainability Leadership

“To enable all people throughout the world to satisfy their basic needs & to enjoy a better quality of life… …without compromising the quality of life of future generations” What is Sustainable Development? Securing the Future, UK's Sustainable Development Strategy, HM Government 2005 …………

UK Government expectations Procuring the Future: UK Action Plan all Chief Executives held accountable mandatory minimum environmental standards performance measured against the Flexible Framework investments and auditing based on sustainable Long Term Value for Money rather than short term cost cutting

What is Sustainable Procurement? Acquiring goods & services that: Meet users needs Deliver long term Value for Money Maximise social and economic benefits Minimise damage to the environment and health UK Public Sector Spend £125 bn

Why buy sustainably? Increasing costs In 2004, NHS gas bills rose 57%; Council energy bills rose £100m Landfill tax will continue to rise to £35/tonne EPC “Cap and Trade” will place cost on CO2 emissions Domestic water bills rise 19% over 5 years Sustainable Products Use less energy, water, emissions and consumables Create less waste and easier to recycle Are less hazardous to use and dispose of Have a longer life (reusable vs disposable) An investment of 1% of global GDP could avoid costs of 5- 20%

NHS Carbon Reduction Strategy The Department of Health published its sustainable development strategy on 7 th October 2008 – “Taking the long term view: the Department of Health’s strategy for delivering sustainable development ” Sir David Nicholson, NHS Chief Executive, launched the NHS Carbon Reduction Strategy in January 2009 – ‘Saving Carbon, Improving Health’ The SDU publication “Saving Carbon, Improving Health Update” updated in January 2010 referred to savings of £180 million per year Taking the long term view: the Department of Health’s strategy for delivering sustainable development

These tell us to … Producing a Board-approved Sustainable Development Management Plan (SDMP) containing a commitment to reduce each organisation’s 2007 carbon footprint by 10% by 2015; Signing up to the Good Corporate Citizenship Assessment Model; Monitoring, reviewing and reporting on carbon; and Actively raising carbon awareness at every level of the organisation.

How does it all fit?

Hidden in most systems…..

Why me?

Still me……

Why bother? The NHS is responsible for 18 million tonnes (Mt) of CO ² each year, representing 25% of England’s public sector emissions: Procurement 11.1 Mt CO ² (60%) Building energy 4.1 Mt CO ² (22%) Travel 3.4 Mt CO ² (18%)

Context In 2008/09, the NHS expenditure was approximately £31.4bn(clinical and non-clinical supplies) Non-pay pricing is a relatively low-impact way of reducing NHS cost (i.e. it does not require clinical service reconfiguration, pay reduction, etc..) What this workstream will do Ensure that procurement is co-ordinated and optimised to get the best value for money for the NHS Provide support to enable early realisation of financial benefits by NHS Work with a broad base of stakeholders to create a functional and effective procurement landscape Challenge systems and organisations to confront the more difficult and therefore potentially more valuable spend categories * Note – this is based on extrapolated data from various sources and is intended as an indicative representation QIPP national workstream – summary content WorkstreamProcurement Workstream LeadPhilippa Slinger Current situation Local NHS organisations buy non-pay items through a range of procurement routes – from nationally-leveraged contracts (OGC Buying Solution and NHS Supply Chain) to local, low- volume direct contracts with suppliers The chart on the right shows the breakdown of how this is spent. For example, only a relatively small proportion of buying (£1.46bn) is through the NHS Supply Chain route Breakdown of how the NHS purchased non-pay items in 2008/09*