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Volume 475: debated on Thursday 15 May 2008

To ask the Secretary of State for Health what mechanisms he has put in place to monitor the effectiveness of the NHS's contract with DHL for the delivery of medical supplies; what estimate he has made of the effect on costs of the contract over its lifetime; and if he will make a statement. (204127)

DHL is contracted to run the business operation now known as NHS Supply Chain and has committed to key performance indicators (KPIs), including service delivery and financial targets. A business plan has been submitted to deliver savings of £1 billion over 10 years.

While the contractual high level KPIs are used for performance and penalty reporting, lower level KPIs are used predicatively and diagnostically to forecast and understand performance.

KPI information is produced for the lifetime of the contract in the form of standard reports, which are monitored and evaluated by the Supply Chain Management Division (SCMD) of the NHS Business Services Authority (NHSBSA) which has been set up to manage DHL performance. Along with KPI measurement, rigorous process evaluation and gateway reviews, the SCMD are audited to ensure processes and procedures for managing the contract are robust.

The SCMD will liaise with key stakeholders via appropriate forums and feedback routes to ensure that service delivery reflects customers' needs and that the outsourcing delivers value for money. The master service agreement gives the NHSBSA full audit rights of NHS Supply Chain.