asked the Secretary of State for Social Services what proposals he has for improving the procurement arrangements in the National Health Service.
The National Health Service is not making the best use of its purchasing power. I know that the Public Accounts Committee and others have been critical of the present arrangements, and I am sure that in spite of some progress there is scope for a better service to users, better value for money and economy, and better co-operation with suppliers.It is primarily for health authorities themselves to bring about these improvements, and they must continue to do all they can to cut out waste and to economise locally in ways which will release money to be spent directly on the care of patients. But in addition they need certain common services, notably a more intensive evaluation programme giving them the information they need to make the best choice from the goods offered to them by suppliers, and a better system for the co-ordinated purchasing, at the appropriate level, of supplies items which they wish to buy in this way.Hitherto, the responsibility for such services has been uneasily divided between my Department and the National Health Service. I now intend to transfer the major responsibility to the Service, through the establishment of a supply council as a special health authority. This will be a small body of 12—of whom only three will be from outside the NHS—the chairman, an officer of my Department and a representative of the health care industry. I shall issue a circular early in the New Year. I will expect the council to seek the views of users before reaching its conclusions, and to be sensitive to their needs.I shall be asking the council to examine urgently how financial incentives can be used to cut waste and secure better value for money, and I shall call for regular reports from the council, including estimates of resources made available for direct patient care through savings effected by it in the procurement of supplies.