Posted in: General News
Public sector finance will be hit by the EU referendum but there are still huge untapped savings opportunities across the NHS and local government.
Public sector finances have just got worse. Since the the pound has dropped 10% against the euro and the dollar. This means the cost of imports will rise. The NHS will be particularly badly hit because many of its purchases are from overseas businesses, but all parts of the public sector need to look at their procurement processes.
Now is the moment to make them as efficient as possible or price increases could swallow up most of the purchasing savings that the and other parts of the public sector are trying to make to put more money into frontline services, including patient care.
The [pdf], from which the current NHS procurement strategy is derived, are inadequate for today’s challenges.
Fortunately, there are still some huge untapped savings opportunities that have not been exploited. For example, [pdf]. NHS Shared Business Service has introduced a technology in the Salford Royal Foundation Trust that can .
Another example is the Countess of Chester Hospital, where the commercial procurement team has introduced a light therapy sleep mask to tackle progressive blindness caused by diabetes and macular degeneration. It is claimed that it could. The benefits to patients from both these initiatives would be huge.
One might expect every NHS trust to scramble to adopt these opportunities. However, the opposite is the case. Businesses tell me that selling to the NHS is a nightmare. Even when a product is approved, is on a purchasing agreement and the savings and patient bluehost benefits are huge, they still have to attempt to persuade each hospital, one by one, to adopt it. Small- to medium-sized businesses cannot afford to do this. Several have told me that they are giving up on the NHS and are looking to the growing market in south-east Asia.
However, these issues are not confined to the NHS, as the communities and local government inquiry into procurement [pdf], though NHS trusts may be the most reluctant to adopt initiatives proven in other trusts.
There are many other excellent initiatives by suppliers, people working in the public sector and sometimes the public. How much could the NHS save if such initiatives were quickly rolled out nationally throughout the relevant parts of the public sector?
There are a number of problems suppliers face. First, procurement people focus on reducing purchase prices rather than looking at the bigger picture of what delivers lowest cost for their organisation. Second, suppliers cannot get to see the relevant people, eg budget holders and clinicians. Third, the fragmented purchasing structure of the public sector turns the adoption of new products into a postcode lottery.