18.03.15
EXCLUSIVE INTERVIEW: ‘We’ll never get £22bn savings by driving down the cost of rubber gloves’
As part of the Five Year Forward View senior leadership must prove to trusts that the expected £22bn efficiency savings are achievable by having the right mechanisms in place, Lord Carter of Coles, chair of the NHS Procurement Development Delivery Board (NHS PDDB), has told NHE.
The DH’s ‘procurement champion’ told us: “But we’ll never get £22bn by driving down the cost of rubber gloves.”
In an exclusive interview with NHE in the Palace of Westminster, Lord Carter discussed the work of the NHS PDDB and how delivering efficiencies through procurement will come down to a variety of ‘simple’ metrics, including having good specification and an effective e-cataloguing system.
Although the work of NHS PDDB has been done somewhat under-the-radar, Lord Carter gave an update talk recently at the ‘NHS procurement: better, simpler, smarter’ event, and addressed the London Procurement Partnership community.
Currently, the Board is assessing data from a cohort of NHS trusts and is expected to report back in June 2015.
But discussing Simons Stevens’ Five Year Forward View, Lord Carter told us: “We have to start on the process and say we can do this much now, and in 2016-17 we can do this, and if we all do it we might reasonably expect this in 2018-19.
“[Stevens’] challenge calls for a 2-3% productivity increase. Well if you have £120bn of revenue, 2% is £2.5bn a year, but that is the first year. You then have to find the same, which is larger than your base, the following year. By the end of the fourth year you should be saving £10bn compared to year one. That is why it is hard. No-one can turn around and say we can take £10bn out of here, part of our culture is tremendous but part of it needs to change when it comes to how we spend money.
He added that there are some “easier areas” where trusts can make savings. He highlighted the government’s recent NHS Energy Efficiency Fund, for example.
“We all know that if you put LED lighting in and build combined heat and power plants, you can substantially reduce your operating costs,” he said. “Those are things we might be able to help people do straight away. You can only do that once, but later on you can go into stuff which is more complex. You can go into workflow, for example, and whether trusts are organised correctly.”
Another area where Lord Carter feels some traction could be made is through collective buying, but he realises this is not an easy challenge to overcome.
The full interview is in the March/April edition of NHE.
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