Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Deferred
Complex challenges hinder NHS Supply Chain's ambitious transformation programme, rated red/amber for delivery risk.
Conclusion
NHS Supply Chain has started a transformation programme which aims to bring key improvements to the business. This programme runs from 2022–30 and its focus includes replacing or upgrading legacy IT and improving inventory management and supply chain capacity.23 The transformation programme was rated red/amber by NHS Supply Chain in its risk register as at August 2023, recognising the complex delivery challenges involved.24 NHS Supply Chain acknowledged the difficulties with transformation, in particular how to modernise while continuing to run the day-to-day business. It told us about the seven ‘cornerstone’ projects happening this year which it described as ‘incredibly challenging’ and outlined the challenges of moving from old technology to new. More positively, it noted good progress with a new warehouse near Gorsey Point which it expects will resolve capacity problems in the North.25 It did however confirm it will be unable to achieve 80% market share until it has procured more warehousing space in the South of England, along with technology modernisation, and that will take at least three years.26
Government Response Summary
The government agrees with the committee’s observations regarding the transformation programme, stating that NHS Supply Chain is developing a business case for the modernization programme, which will be submitted by Winter 2024 and subsequently requires approval from NHS England, DHSC, and HMT before delivery.
Government Response
Deferred
HM Government
Deferred
5.1 The government agrees with Committee’s recommendation. Target implementation date: Winter 2024 5.2 NHS SC has been developing a variety of inputs required to deliver the modernisation programme. These will be brought together for submission of the business case by winter 2024. This submission will consider the overall timetable and include a programme for the recommended approach including a benefits realisation plan. 5.3 Key activities that will enable the implementation of the business case include: • agreement of the annual business plan for 2024-25 by NHS England in May 2024 • the Department’s approval of a professional services business case • development and submission of the business case by NHS SC by Winter 2024 • approval to proceed with the recommended option by NHS England, DHSC and HMT • delivery of the plan by NHS SC (subject to business case approvals) 5.4 NHSE’s approval of NHS SC’s annual business plan and funding is inextricably linked to its own funding settlement being confirmed by government. NHS funding for the 2024-25 financial year was confirmed at the Spring Budget published in March 2024. NHS funding beyond 2024-25 will be agreed as part of the next 2024 Spending Review.