£150m cash-releasing savings delivered through NHS Supply Chain

Published: 13-Apr-2016

Significant savings milestone achieved through collaborative working, driving vital savings for NHS trusts

Chairman of the NHS Customer Board, Sir Ian Carruthers, has today announced that through collaborative working, product standardisation and rationalisation, NHS Supply Chain has reached its target of delivering £150m in cash-releasing savings by 31 March 2016.

“Identifying sustainable long-term savings is fundamental to driving value for the NHS and by focusing on sustainable cash-releasing savings means that not only do prices remain low, but it prevents price hikes or supply shortages that could happen if prices were slashed to unsustainable levels” said Sir Ian.

Supporting Lord Carters’ Operational Productivity & Performance in English NHS acute hospitals: Unwarranted variations report, NHS Supply Chain has worked with the Department of Health (DH), the NHS Business Services Authority (NHSBSA), NHS Customer Board, its suppliers, and with healthcare trusts to deliver the £150m, and will continue to work collaboratively to deliver the next wave of £150m in savings.

Sir Ian said: “The NHS Customer Board has worked nationally and regionally with trusts to engage and ensure that NHS Supply Chain’s cost saving programmes will work at trust level. It has been a sizeable challenge to accelerate sustainable savings in a relatively short time frame, but by working innovatively with trusts and suppliers NHS Supply Chain and the NHS Business Services Authority have been able to establish cost reduction initiatives with longevity.”

The savings programmes include:

  • NHS Core List – achieving best value by reducing the range of like-for-like products that the NHS purchases
  • Compare and Save– allows trusts to review potential comparative product savings
  • DH Consumables Fund – Achieving price reductions on high-usage product lines through national volume commitment
  • DH Capital Fund - Maximising savings through bulk purchasing deals on capital equipment
  • Price Ranking – At-a-glance price ranking sheets have been developed so that supplier pricing can be reviewed with ease
  • Stationery core range
  • Product Rationalisation – product range has been reduced from over 600,000 product lines down to 316,000 product lines.
  • Facilitating price decreases by suppliers

Sir Ian said: “NHS Supply Chain and the NHSBSA are currently continuing to work with the NHS to maintain momentum and to aggregate demand, rationalise and standardise their use of consumable products in order to deliver the next £150m in cash-releasing savings to achieve the £300m overall target by September 2018.

It has been a huge effort with many trusts and suppliers’ working hard to play their part in reaching this target and it’s important to remember that this process will only continue to drive significant savings if the commitment and support is continued by all parties.

“These savings are contributing to the savings that Lord Carter is looking to realise from the procurement of consumable medical products that are in NHS Supply Chain’s scope.”

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