Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Set out how NHSE will challenge and support NHS Supply Chain's modernisation plans.
Recommendation
NHSE has been weak in its oversight and support of NHS Supply Chain. Both the Department and NHSE failed to validate the cumulative £3.3 billion savings claimed by NHS Supply Chain, instead, they relied on NHS Supply Chain to make these checks – effectively marking its own homework. This undermines the confidence we can have in these reported savings. NHSE has not given NHS Supply Chain the full financial support NHS Supply Chain considers it needs to transform and modernise its business. For 2023–24, NHS Supply Chain requested a £252 million revenue budget to operate the organisation and implement its transformation projects for the year. NHSE provided just £240 million. NHSE acknowledges that this shortfall would delay a new IT system but explains there are many other calls on NHS funding and that it must get the balance right between other competing priorities and NHS Supply Chain. We were surprised at the decision to reduce NHS Supply Chains request for an extra £12 million investment in IT when it is expected to save £500 million by 2026–27. Recommendation 2: NHSE should set out how it will provide adequate challenge of and support for NHS Supply Chain, particularly regarding NHS Supply Chain’s plans to modernise and transform its business.
Government Response Summary
The government states that NHSE already provides challenge and support to NHS Supply Chain through existing annual business plan reviews, quarterly accountability meetings, a shareholder director on the Board, and various other regular engagement points.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. oversight. There are a number of ways in which NHSE provides challenge and support to the company to effectively hold it to account and support it to deliver its objectives. Importantly, there is an annual process in place through which NHSE critically reviews and works with NHS SC to develop and agree the company’s business plan and revenue and capital funding requests for the following year. The company’s annual plan and budget are approved by NHSE’s Board, which allows for a balanced decision on the appropriate level of funding provided to the company to drive modernisation and transformation weighed against other NHSE priorities. NHSE also holds quarterly accountability meetings chaired by the Chief Commercial Officer (CCO). This allows NHSE to track performance against the business plan and remain informed on the transformation and modernisation plans. In addition, NHSE has a shareholder director on the Board of the company who is also a member of the Audit and Remuneration Committee. Attendance at the Board and Committee provides regular opportunity for NHSE to challenge on operational performance (including finance, risk, transformation and pay and reward), provide support, and identify where work within NHSE may be required to support the delivery of the company’s objectives. There are a number of other regular points of engagement with the company, including monthly finance and operations meetings, fortnightly meetings between NHSE’s Chief Commercial Officer and NHS SC’s CEO, and updates to the NHSE Board which take place at least twice per year.