The scale of the NHS commercial sector is huge. We are one of the biggest commercial organisations in the country, responsible for around £30 billion of spend every year, with over 80,000 suppliers. We are the largest area of government procurement spend, fulfilling 8 million orders annually, supporting frontline staff to provide world-class care to patients. It’s statistics like this that demonstrate the responsibility that NHS Commercial has to ensure that we are making every pound go as far as possible.
Over the past 12 months, we have taken steps to formalise our ambitions so that we can ensure we are delivering on our commitment to the taxpayer and making the most of the significant buying power of the NHS.
In November, I was incredibly proud to launch the new Strategic framework for NHS Commercial, which sets out the ambitions and objectives of NHS Commercial over the next 5 years. This framework is the first of its kind and marks a step change in the way that NHS Commercial will work, so we can continue to deliver the best care for patients.
The strategic framework covers 4 key themes, which will support the NHS to raise overall productivity and efficiency.
- Our people – we need to continue to attract the best and most diverse commercial talent to the NHS and accredit, develop and connect this workforce.
- Digital and transparency – we need to drive consistency in the systems that we deploy, so that quality data can be used as a strategic asset and can support us to ensure greater transparency.
- How we work – we need to remain agile and make sure that across the NHS, we are buying in a consistent way, to get the best value for money.
- Influence and scale – we need to leverage our influence and scale to strengthen partnerships, foster healthy supply markets, develop and shape the market, unlock benefits from innovation, and deliver wider social value and economic benefits through NHS procurement.
Our vision, as NHS Commercial, is to be a globally renowned commercial function in healthcare, supporting the NHS to deliver world-class patient care and outcomes. The 26 strategic statements outlined in the framework will support us to achieve this.
There are already examples of brilliance across the NHS where these things are happening, but the aim of the framework is to come together as one commercial community to deliver these ambitions and in doing so find savings for reinvestment into patient care.
This is a framework for the commercial community, by the commercial community, and it’s our collective buy in and adoption of the framework that will make it a success.
NHS Commercial has already delivered on a key ambition set out in the strategic framework. When we spoke to our commercial community, energy was clearly identified as one area where NHS Commercial could help secure a better deal for the NHS. Our review into energy procurement demonstrated that across the health service there were around 200 different energy contracts in place in trusts across England, each with varying value that have been purchased in different ways.
It was clear that the NHS could be leveraging its buying power more effectively. With this in mind, from this month, the NHS will use its buying power to purchase energy nationally, driving down costs for all trusts, with savings reinvested into frontline patient care. NHS commercial leaders worked alongside the Crown Commercial Service to develop this national approach to buying energy, which means the NHS can achieve greater value for money, ensure price stability and resilience and budget predictability.
There are several benefits to procuring at a national level, including:
- bulk discounts based on consumption volume
- greater price stability and resilience to external events
- increased budget predictability for trusts.
It is estimated that this agreement could save the NHS between £60 million and £100 million a year, over the lifetime of the initial three-year agreement. It’s significant savings like this that demonstrate how making the most of our huge purchasing power will support the NHS to find efficiencies for reinvestment into patient care and frontline services.
I am excited about where the commercial function of the NHS is heading, and I look forward to progressing our vision and supporting the NHS to deliver world-class care for patients and efficiencies for the taxpayer. You can read more about the Strategic framework for NHS Commercial on the NHS England website.