Case studies
Yorkshire & Humber Strategic Health Authority, Growing the Region's Businesses with NHS Investment: NHS Yorkshire & Humber Commercial Procurement Collaborative
SNAPSHOT
Yorkshire and Humber Strategic Health Authority has collaborated with the Regional Development Agency, Yorkshire Forward, to find ways to redirect a proportion of NHS spending back into the region’s economy. They aim to help improve employment opportunities, skills development and the health of the local population.
HIGHLIGHTS
- 700 regional suppliers trained on how to sell to the NHS
- 9 regional suppliers awarded YHCPC contracts
- 135 NHS procurement staff trained on sustainable development
- Raised profile and reputation of NHS procurement in region
- Provided buyers and suppliers new confidence to participate in tendering process
Costs
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Savings
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Compliance
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In early 2006, following a feasibility study showing that just 28% of contracts were with local first tier suppliers (i.e. suppliers supplying directly to the NHS rather than sub-contractors or other businesses further down the supply chain), Yorkshire Forward committed £250,000 to the ‘Growing the Region’s Business with NHS Investment’ project.
This project was developed by a partnership between Yorkshire and Humber’s SHA and Regional Development Agency, and managed by the Yorkshire and Humber Commercial Procurement Collaborative.
The aims of the project were to:
- Identify potential NHS procurement opportunities for SMEs in the region
- Develop awareness of local procurement and associated skills in NHS procurement personnel and develop appropriate procurement processes
- Incorporate social considerations into NHS contracts
- Achieve a shift in the proportion of procurement from outside to within the region
The project included a number of pilots to identify and demonstrate the benefits of local procurement to the region’s economy, to increase awareness of NHS procurement policies, processes and opportunities amongst potential suppliers in the region, and to increase understanding of the benefits of purchasing from local suppliers.
The Pilot Projects
1. Sheffield Trusts - Food Procurement
The aim of this project was to explore opportunities for sourcing local milk and bread, and sourcing chilled meals from an existing Trust food production facility within the region. A Local Food Procurement Group (LFPG) was created, which included interested suppliers and catering managers from different trusts within Sheffield.
The chilled food pilot has now been formalised as a Service Level Agreement (SLA) between the Sheffield Teaching Hospital Trust (STH) and Sheffield Care Trusts and continues to this day. The trial and subsequent SLA has transferred the production of circa 40 meals per day from Wiltshire to Sheffield, with the added benefit of a reduction on costs of circa £80 per month. Overall, the Trust has reduced food miles, C02 emissions, and benefitted from better quality, and fresher food. Additional benefits include the benefits of local employment, increased catering staff onsite as well as local drivers.
The group also established a collaborative way of working between different trusts, and identified scope for other local food-related procurement opportunities.
2. Barnsley PCT - Food Contract
The aim of this project was to explore the potential for local supply of sandwiches, meat and poultry, bread and milk. Barnsley PCT held a “meet the buyer” event to explain the tendering requirements and the Trust’s desire to procure locally. They also provided ongoing support to suppliers in sourcing meat and poultry, milk and cream, filled sandwiches and bread by allowing an extended timescale for suppliers to complete paperwork, providing a telephone support service for queries and granting access for one-to-one support from the Regional Food Group.
As a result, the PCT was able to procure fresher, tastier food, reduce food miles and its carbon footprint, and help increase the speed at which suppliers could respond to their needs. Contracts to the value of £19,000 per year (sandwiches) and £30,000 (meat and poultry) were awarded to South Yorkshire suppliers for an initial two year period. Unfortunately, bread and milk contracts were won by national suppliers, based on price considerations and the requirement for refrigerated milk vehicles. Since the contracts were awarded back in 2007 the contract for sandwiches has been extended and is used by Barnsley NHS Foundation Trust and the local council as well as by Barnsley PCT, and the meat supplier has won a place on the nation framework agreement managed by NHS Supply Chain. Barnsley PCT demonstrated the key steps involved and the resources required to support local procurement effectively.
3. Barnsley Hospital NHS Foundation Trust - Waste Management Pilot Project
The aim of this project was to deliver cost savings and environmental benefits through increased recycling, using local recycling services suppliers. Supported by the project through Recycling Action Yorkshire (RAY, now CO2sense Yorkshire), the Trust conducted waste analysis and prepared a Waste Management Strategy. A costing tool was developed to analyse waste costs per department/patient. Contracts for eight of the hospital’s waste streams, including wood, plastics and furniture, were awarded locally.
CO2sense Yorkshire helped the Trust develop a good understanding of the kind of waste they were producing, and the costs associated with different departments. It estimated that over 160 tonnes of waste have been diverted to recycling with a reduction in carbon dioxide emissions by 300 tonnes in one year. The Trust estimates that it has made annual savings of £67,000 on waste management costs - 43% of average annual cost, much of which has been redirected back into patient-care. (NB: a proportion of cost savings has been absorbed by significant increases in the cost of disposal to landfill).