In conversation with Beth Loudon: procurement lessons from the NHS
If any, what lessons could the wider public sector learn from how the NHS approaches procurement?
The challenges that are faced are fairly common across the public sector and I am sure there are lessons that can learnt right across the system. Lord Carters’ leadership as an ambassador for procurement within health in recent years has done a huge amount to raise the profile of the role of procurement and the opportunity within the NHS. This has also demonstrated that whilst it is not always comfortable we shouldn’t shy away from exposing the variation in the standards of procurement at a local level. League tables have certainly focused the attentions of organisations who had previously given procurement very little consideration. A relentless focus on transparency has led to the development of price benchmarking tools that are for more sophisticated than previous versions.
In your view, what is the greatest barrier to achieving efficiencies through procurement at the NHS?
The widely held perception that procurement is a back office activity which is solely focused on securing lower prices. The opportunity for efficiencies through procurement are extensive when we start considering, for example, demand management opportunities and new commercial solutions. Securing lower prices for what we buy today is the tip of very large iceberg of opportunities that can be leveraged through procurement and commercial interventions – a better understanding of the return on investment in the skills and systems to support this will help I believe to start to change minds on what procurement is really all about.
Would you agree that developing core commercial skills are key to improving the procurement function across the public sector?
Absolutley. Contracting in the public sector is more complex than it has ever been with an increasing range of innovative commercial solutions being offered in many markets, a much wider and deeper range of commercial expertise and experience is needed to maximise the opportunity. Also, we are becoming all too familiar with the risks associated with the failure of poorly executed contracts in the public sector. This is exposing the fact that investment is needed to ensure that robust methodologies and processes are used in the procurement process and contract management activities to ensure that risks are continuously understood and mitigated throughout the life of the contract.
Beth Loudon is Head of Procurement Development & Growth at NHS Shared Business Services, and will be speaking on the routes to fast, effective and efficient procurement, at the Public Sector Solutions Expo on 20 November. To register or find out more, please click here.