U-Turn announced for NHS procurement process

The HSJ has revealed a major u-turn in the planned operating model for procurement and the supply chain. NHS Supply Chain has announced that it will bring the management of all clinical procurement categories in-house by May 2023, with only non-clinical to remain outsourced.

30 November 2022

Despite announcing the change earlier this year, a “more challenging economic environment” has led to the shift, whereby it now intends from next year to manage the procurement of all clinical products it buys on behalf of NHS organisations.

Under the updated plans, NHS Supply Chain will bring the purchasing of all clinical products in-house, leaving just the non-clinical categories of food and facilities outsourced. Local NHS procurement leaders have described this as a “momentous” decision that will assist in undoing a number of changes and reforms to NHS procurement in recent years.

The decision to bring clinical categories in-house was based on the current challenges to the UK’s economic environment, according to a communication from NHSSC to staff and stakeholders and seen by HSJ, leading to a “need to simplify how we operate and partner more expertly with our stakeholders”.

The previously-announced updated model was going to see the eleven supply categories reorganised and condensed to five, with three of them brought in-house: personal protective equipment, large capital equipment and complex medical products. The other two, medical consumables, and food and non-medical supplies, were to be put out to tender. However, the plan now is to bring the surgical products and consumables, and rehabilitation and community products in-house to be managed directly by Supply Chain Coordination Ltd, NHSSC’s central management function.

Liaison Financial’s Head of Tax, Kenny Lee, says: “It is good to see NHS Supply Chain being responsive to current economic challenges, and simplifying the procurement process, which can be difficult to navigate. We will be letting our VAT clients know of any changes they need to be aware of following this change in due course to ensure they are fully equipped to manage their internal procurement.”

To find out more, please get in touch with your Liaison Financial VAT Advisor.

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