Background to the report

In 2016, the Carter report identified the scope for efficiencies through greater collaboration which would allow the NHS to aggregate its purchasing power, thus securing the best price.

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In 2017-18, the Department of Health & Social Care (DHSC) implemented a new operating model and delivery body for NHS procurement known as NHS Supply Chain (to replace the previous, fully outsourced model which was also called NHS Supply Chain). The new body was responsible for procuring products, warehousing, and delivering goods on behalf of the NHS.

NHS Supply Chain (Supply Chain) estimates that the NHS collectively spends approximately £8 billion annually on buying medical equipment and consumables, from gloves and paper to stents and prosthetic hips.

Scope of the report

We examined:

  • how Supply Chain was set up
  • whether Supply Chain has achieved its principal objectives of saving money and increasing its market share
  • what more Supply Chain needs to do to secure greater efficiencies

Conclusions

While Supply Chain has the potential to secure further savings for the NHS, it is not yet fulfilling that potential. Delivering the right products for the NHS at the cheapest sustainable price is essential to make every pound count for patients.

Supply Chain should be in a very strong negotiating position. If it can persuade as many trusts as possible to purchase as much as possible through Supply Chain it can aggregate a large majority of NHS spending power.

Supply Chain recognises that its systems and processes do not work well for all its customers and that it needs to do more to become, and demonstrate that it is, the best-value option for NHS procurement. To do this, it needs to optimise prices for customers, make ordering as straightforward as possible and deliver reliably on orders placed.

Trusts in turn need to make the most of the purchasing efficiencies that Supply Chain offers. While NHS England (NHSE) has started to take some positive steps to encourage and, where it is able, require trusts to make better use of Supply Chain, it recognises that it could do more in some areas, such as providing clinical sponsorship and standardisation of prices.

NHSE also needs to be clear on the roles and responsibilities of all parties in the system and ensure that they are aligned.

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Publication details

Press release

View press release (12 Jan 2024)

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