Spending Wisely

The NHS needs to identify £15-£20bn of efficiency savings by the end of 2013/14. As approximately 50 per cent of the £16bn of non-pay spend is on non-medical, non clinical goods and services, the Government Procurement Service (GPS) is working closely with health customers to ensure they can help them meet this savings target.

History of the GPS

The Government Procurement Service (GPS) has overall priority to save the UK public sector money on procurement and centralise the way it buys. Previously known as Buying Solutions, it was renamed Government Procurement Service (GPS) following a Strategic Review commissioned by Francis Maude, Minister for the Cabinet Office, in July 2011, to reflect its new role at the heart of government procurement.

At the launch event Maude said: “It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods. We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn’t even any proper central data on procurement spending. So, as Sir Philip Green found, major efficiencies are to be found in government buying. The establishment of Government Procurement Service means that the days when there was no strategy and no coherence to the way the government bought goods and services are well and truly at an end.”

Maude continued: “In the last year, we have already made significant changes to drive down procurement spend by £1 billion, but this new centralised service means we will continue to deliver savings which are expected reach more than £3 billion a year. We are also determined to press ahead with measures to create a more level playing field so that small organisations and businesses can compete fairly with bigger companies for government contracts. SMEs can provide better value and more innovative solutions for government and the actions set out today will support their growth as the economy starts to recover.”

The products and services available throught the GPS are delivered by more than 2,000 suppliers, of whom more than 50 per cent are SMEs. Working with over 14,500 organisations in central government, health, local government, devolved administrations, education and the not‑for-profit sector, GPS managed over £8.4bn of customer spend through its procurement arrangements and services in the 2011-12 financial year.

Helping the NHS
As well as a wide range of frameworks for common goods and services, the GPS has a number of frameworks designed specifically with health customers in mind. These include staff – including agency nurses, medical locums, and non-medica/clinical staff – building and maintenance, vehicle conversions, modular buildings, laundry & linen services, and telecare. To get the best results for the health sector, the GPS focuses on working closely with Quality, Innovation Productivity and Prevention (QIPP) to ensure all health customers know how the GPS can help drive down costs. It works closely with NHS Supply Chain and NHS Business Services Authority to explore how it can work together to the benefit of the NHS.

The GPS aims to help the NHS to identify savings opportunities and transition spend. It also provides data management to improve visibility to help control spend and monitor compliance. It also delivers savings through arrangements which focus on aggregation of volumes, standardisation of specifications, rationalisation of core product lists and demand management.

Healthcare purchasers will benefit from dedicated relationship managers provided by the Department of Health and the NHS with a single point of contact. An NHS Customer Board meets regularly to help ensure engagement at all levels across the NHS. The GPS also provides progress reports on spend, savings, supplier performance and customer satisfaction.

NHS Taskforce Training
Understanding the complex role of procurement within healthcare, the GPS has created a training programme specifically for procurement staff in supplies, pharmacy and estates across the NHS.

Delivered by its specially trained network of NHS supplies managers, Basic Operational Purchasing Training includes the CIPS level 2 qualification, which covers basic purchasing and supply issues, fundamental principles and processes, as well as five additional modules covering further topics in operational purchasing.

Evaluation is an important part of its Basic Operational Purchasing Training. The GPS has received extremely positive feedback from previous delegates, with an average of 90 per cent scoring the training as having definitely met its objectives. All Basic Operational Purchasing Training courses are provided at no direct cost to the organisation.

Courses cover European Procurement, Working with Suppliers, Supply Chain and Materials Management, Contract & Supplier Management, Systems and Procedures in Purchasing, Importance of Purchasing Contracts, Introduction to Negotiation, and Effective Negotiation.

Organisational priorities
GPS is committed to improving service delivery through increased customer focus and commercialism, to meet the stretching strategic objectives set and to drive a programme of continuous improvement.

Its key areas of focus are: the continued delivery of savings; e-enablement of all operations; operational and financial efficiency; and development and retention of high quality professional staff.

Savings are measured in accordance with guidance provided by the Efficiency and Reform Group guide ‘Measuring Up’, which was published on 29 November 2010. The guidance aimed to introduce a unified approach to driving savings, and is based on a number of principles.

The Government Procurement Service is responsible for validating and reporting all savings for common goods and services procurement.

Making savings
All benefits are, wherever possible, calculated against a pan-government 2009/10 baseline. The baseline represented actual prices paid by central government for the same product or service during the baseline period, with transactions from 1 April 2010 eligible to generate savings.

Benefits must release cash and be net of any implementation costs (including significant whole life costs where relevant) and one‑off savings can be included where they do not represent deferred expenditure. Approved counterfactuals (inflation percentages) can be used where they are appropriate and approved by the savings team.

All savings are subject to an approved initiative methodology, supported by a formal sign off route, and must be evidenced by supplier provided transactional Management Information.

In 2011-12, GPS implemented a major change programme to transform operations and performance in order to support the delivery of centralised procurement. Fundamental changes were made to clearly focus the organisation on customer service, savings delivery and eEnablement. The aim was to provide exceptional service for its customers across government and the UK public sector. They are fully committed to ensuring all customers are able to take advantage of the benefits of the centralisation programme, driving value in an effective and transparent way.

Case study: Portsdown Group Practice
The Portsdown Group Practice operates across four surgeries and covers Portsmouth and the surrounding areas. Of the 30,000 patients, 14.5 per cent of the practice population is aged over 65. It procured Telehealth Solutions to provide a fully managed service – including clinical triage, where THSL nurses monitor the results generated by HomePods.

The benefits of the service are being analysed in a number of ways and has demonstrated significant benefits to patient outcomes and the health economy as a whole. The delivery model has been developed in partnership with Portsdown in order to create a scaleable model that can be easily replicated.

“Working in partnership with Telehealth Solutions has given us the opportunity to support our patients whilst enabling our clinicians to focus on the most complex cases. The fully managed service is the only viable option to ensure high standards of care are met and maintained during this time of efficiencies, and actually represents improved care pathways for long-term conditions through self‑management,” said Dr Julian Neal, senior partner at Portsdown Group Practice.

Case Study: The crown prosecution service
The Crown Prosecution Service (CPS) wanted a secure overnight delivery service that could flex and adapt to changing needs, whilst still offering a secure and cost efficient service.

The CPS used lot 13, document exchange, of the postal services framework to find a suitable solution. This approach meant that they could focus on the service requirements that were of particular importance to them, whilst being assured of the framework benefits regarding compliance with regulation. Preparation of the further competition, evaluation criteria and contract documents was also quicker and easier than if a full tender had been conducted.

The contract was awarded to DX Group as its solution offered a sufficiently flexible service to meet CPS’s requirements, without compromising on security or value for money. For example, CPS expects to make an average saving of 35 per cent on 1st class mail in 2012. Using the framework allowed pre‑agreed service levels and KPI standards to be customised to meet requirements to monitor supplier performance against pre‑agreed criteria.

Further information

www.gps.cabinetoffice.gov.uk