Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
NHS England withheld full requested funding, potentially delaying NHS Supply Chain IT improvements.
Conclusion
NHS Supply Chain recognises it needs to provide a better service to trusts, and increase trusts’ use of NHS Supply Chain, and has a programme of planned improvements that aim to transform and modernise the business.17 However, NHS Supply Chain considers that it needs NHSE’s support for this to be successful. NHS Supply Chain requested a £252 million revenue budget for 2023–24 to operate the organisation and implement its transformation projects for the year. NHSE did not approve the full amount requested but instead provided £240 million. We asked NHSE why it did not give NHS Supply Chain the full amount of funding requested. NHSE initially acknowledged that this shortfall would delay a new IT system but explained that there are a lot of calls on NHS funding and it has sought to get the balance right between other competing priorities and giving sufficient resource to NHS Supply Chain. It told us that, working with NHS Supply Chain it considers it has found a way to still target the original savings target of £500 million by 2026–27.18 NHSE’s role in challenging trusts use of NHS Supply Chain
Government Response Summary
The government agrees with the committee's finding and explains that NHS England's subsidiary company model provides proportionate oversight through annual business plan reviews and quarterly accountability meetings, which allow for balanced decisions on funding requests for modernization and transformation.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2024 2.2 The subsidiary company model provides NHSE with a proportionate level of 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. 2.3 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. 2.4 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.