NHS 'wasting £1 billion a year on supplies'

The NHS is wasting more than £1 billion of taxpayers' money a year as managers spend vastly differing amounts on the same supplies, the head of a government-backed healthcare efficiency drive claimed today.

John Neilson, managing director of NHS Shared Business Services (NHS SBS), said cash was being needlessly squandered by health trusts who are paying multiple prices for identical equipment - ranging from stationery to surgical instruments.

He also claimed that millions could be saved by outsourcing more NHS administration overseas to countries such as India.

In an interview with The Times, Mr Neilson said: "It's scary. We actually have multiple prices being paid for the same item in the same trust, in the same month."

He claimed that NHS trusts were routinely paying as many as 19 different prices for the same pacemaker, wasting up to £750 a time.

And he said a host of other equipment such as computers were being bought at needlessly high prices - wasting around 12% of the NHS's purchasing budget.

Mr Neilson said the offenders ranged from family doctors to elite foundation hospitals and that trusts across the country were also buying a "bewildering" amount of different equipment to do the same jobs.

The health service spends around £13 billion a year on buying equipment.

"If you talk about 12% of that, it takes us into the low billions," added Mr Neilson.

"They haven't got their purchasing under control at all."

Statistics showed that 18 NHS trusts paid 22 different prices for a J&J Linear Cutter surgical tool, with the cost ranging from an average £403, to a minimum £289.

There were also 10 different prices paid for Huntleigh flowtron boots - which prevent DVT - with 17 trusts forking out an average of £2,002. However the lowest price paid was just £482.

Mr Neilson said vast amounts of money could be saved if health managers worked together to standardise equipment and exploit the bulk buying power of the NHS.

"Out of 130 trusts we work with, only 30 of them buy the most commonly bought item. And that item is a Dell PC. Even if they all bought the same PC, just think of the savings that would produce."

He also said moving some NHS services overseas would help in the drive to save £20 billion by 2014.

Call centres in India already handle invoices and other administration for some trusts at a fraction of what it would cost in the UK.

But the health chief said there was a "UK sensitivity issue" preventing more outsourcing.

NHS SBS is a joint public-private venture set up in 2005 to get the the best value-for-money by outsourcing NHS administrative functions such as finance, accounting and payroll.

It is tracking the finances of a third of NHS trusts, who are spending £31 billion annually.

A Department of Health spokesperson said NHS SBS initiatives had so far delivered savings of over £50 million, which had been reinvested in frontline patient care.

A spokesman said: "As elsewhere across Government, we are working to use purchasing power to get the best possible deal for the taxpayer. NHS Trusts and Foundation Trusts are seeking substantial procurement savings in their planned efficiency savings of up to £20bn over the next four years."