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The procurement of consumables by National Health Service acute and Foundation trusts

The procurement of consumables by National Health Service acute and Foundation trusts
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 48
Release: 2011-05-20
Genre: Medical
ISBN: 9780215559609

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The 165 NHS acute and Foundation hospital trusts in England spend over £4.6 billion a year on the procurement of medical supplies and other types of consumable goods. Each trust controls its own purchasing and can purchase consumables in various ways: dealing direct with suppliers; through the national supplies organisation, NHS Supply Chain; or via the regional Collaborative Procurement Hubs. They can also choose to join other trusts in collaborative purchasing arrangements for particular localities or types of supplies. The Department sees the future for NHS procurement as a 'pyramid' structure with national, regional and local procurement of different types of goods, as appropriate to the products and the supplier markets. However, this theoretical model does not reflect the current complex reality, with a profusion of bodies involved in the procurement process. Its effectiveness is open to question in the emerging landscape where Foundation Trusts act independently with no explicit incentive to co-operate. The fragmented system of procurement has produced a great deal of waste, with trusts being charged different prices for the same goods, ordering in inefficient ways and failing to control the range of products which they purchase. The NAO has estimated that trusts could save around £500 million annually, 10% of their consumables expenditure, by amalgamating small orders into larger, less frequent ones, rationalising and standardising product choices and striking committed volume deals across multiple trusts. A lack of data has limited progress towards more efficient procurement and there has not been sufficient control over procurement practices.


The procurement of consumables by NHS acute and Foundation trusts

The procurement of consumables by NHS acute and Foundation trusts
Author: Great Britain: National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2011-02-02
Genre: Medical
ISBN: 9780102969467

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A combination of inadequate information and fragmented purchasing means that NHS hospitals' procurement of consumables is poor value for money. The NAO estimates that at least £500 million a year could be saved by the NHS on its spending on consumables, and potentially much more for some products. With no central control over Foundation Trusts, the Department of Health cannot mandate more efficient procurement practices. Responsibility to demonstrate value for money in procurement falls upon the management of individual trusts. The price that trusts pay for the same items varies widely. The average variation between the highest and lowest unit price paid was 10 per cent. Some trusts are not getting value for money because they are buying many different types of the same product. For example, trusts bought 21 different types of A4 paper, 652 types of medical gloves and 1,751 different cannulas. There is also a large variation between trusts: one bought 13 different types of glove, whilst another bought 177 different types. There are unnecessary administrative costs because many trusts make multiple small purchase orders. Hospital trusts have complete freedom in purchasing decisions and can use regional procurement hubs, the NHS Supply Chain or they can buy direct from suppliers. Evidence suggests that new contracts are being established which overlap and duplicate each other. There is no national performance framework for hubs which would enable comparisons to be drawn between them or to allow an assessment of their potential optimal performance.


Child Maintenance and Enforcement Commission

Child Maintenance and Enforcement Commission
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 52
Release: 2012-05-18
Genre: Business & Economics
ISBN: 9780215045072

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Around half of all children in the UK from separated families are being brought up in poverty. In 2010-11 the Child Maintenance and Enforcement Commission collected and transferred £1.1 billion to parents caring for more than 880,000 children. Nevertheless significant, all too familiar and recurring challenges remain: parents are frustrated with the standard of support received from the Commission. Maintenance payments totalling some £3.7 billion are outstanding, but the Commission estimates that only £1 billion of this is collectable; and costs remain high. The Commission also faces further significant challenges in introducing its new child maintenance scheme. In particular, it will need to respond to substantial cost reductions and successfully implement a new system of charging fees to parents who choose to use the Commission's services. The Commission needs to deliver acceptable standards of service at a reasonable cost. The new child maintenance scheme should improve efficiency, but further changes are needed to streamline existing processes. The Commission has to deliver cost reductions of £117 million by 2014-15 and its plans are currently £16 million short of this target. Its cost reduction plans depend in part on a new IT system which is already late. To meet the current timetable critical testing will have to be undertaken in parallel with development work, mirroring poor practices that have contributed to the failure of a number of government IT projects. Each month of delay will increase the Commission's costs by at least £3 million and may delay planned income from fees.


HM Revenue & Customs

HM Revenue & Customs
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 44
Release: 2012-05-24
Genre: Business & Economics
ISBN: 9780215045195

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HMRC estimates that the tax gap - the difference between taxes due and the amount actually collected - stood at £35 billion (7.9% of tax due) in 2009-10, although other estimates suggest the figure is much greater. The Compliance and Enforcement Programme brought in £4.32 billion of tax revenue over the five years to 2010-11and is expected to generate a further £8.87 billion by 2014-15. However, in shedding more than 3,300 staff, the Department lost £1.1 billion in potential tax revenue: about £10 in tax lost for every £1 in running costs saved. The Committee is also not confident that the Department is sufficiently clear about the marginal rate of return it could achieve from different levels of spending. In order to live within funding limits, the Department had to defer the introduction of new systems or reduce their scope. In particular, by delaying implementation of its new Caseflow and Spectrum systems, the Department reduced the expected additional tax revenue of £743 million by 2010-11 to £547 million by 2014-15. In this Spending Review period £917 million has been allocated to further activities to tackle tax evasion and avoidance, and to collect more debt. This investment is more than double the money spent on the Programme over the last five years, and is expected to generate an additional £7 billion a year by 2014-15. It is therefore essential that the Department learns and applies lessons learnt. There was also alarm at reports that the Department had advised that the use of managed service companies to avoid tax could ever be appropriate for full-time employees of public bodies


Ministry of Defence

Ministry of Defence
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 48
Release: 2012-05-25
Genre: Technology & Engineering
ISBN: 9780215045256

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The Ministry of Defence announced in the summer of 2010 that it had a funding gap of £38 billion over the next ten years. As part of the Government's efforts to reduce the deficit, the Department also needs to reduce its annual spending by 7.5% in real terms by 2015. It intends to achieve a significant proportion of its required savings by reducing its civilian personnel by 29,000 and its military personnel by 25,000, which it estimates will save £4.1 billion between 2011 and 2015. The Department is currently enacting a transformation programme to change its way of working in order to deliver on the Strategic Defence and Security Review priorities with fewer staff. However, the Department has put plans in place to implement reductions in its workforce before it has finalised its new operating model. The operating model will set out how the Department will meet its objectives in the future, but its reductions in workforce will be well advanced before the model is agreed. There is concern that plans to reduce the workforce have been determined more by the need to cut costs than by considering how to deliver its strategic objectives and that there is a risk of further skills gaps developing. This could make the Department increasingly reliant on external expertise with consultancy expenditure having already grown from £6 million in 2006-07 to £270 million in 2010-11.


Reorganising central government bodies

Reorganising central government bodies
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 44
Release: 2012-04-24
Genre: Political Science
ISBN: 9780215043764

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Under the Public Bodies Reform Programme the Government is reducing the number of its arm's length bodies from 904 to between 632 and 642 by the end of the current Spending Review period and will have a substantial and lasting impact. The Programme is intended to improve accountability for functions currently carried out at arm's length from Ministers. The Cabinet Office says it is on track to make £2.6 billion of administrative savings by 2015. However there are substantial reservations about the robustness of this claim. Key concerns are that: there is a risk departments are claiming savings which are actually cuts to services, when they should be including only genuine savings arising from administrative reorganisations; estimates of transition costs such as redundancy and pension costs are incomplete; the savings estimate does not fully take account of the ongoing costs to other parts of government of taking on functions being transferred from abolished bodies and some departments have wrongly included wider savings from bodies being retained, rather than just administrative savings from bodies being abolished or substantially reformed. The Cabinet Office has accepted that its savings estimate needs to be reassessed and has undertaken to 'rebase' it. Focus now needs to be on managing the Programme effectively. Departments have decided on the form of individual reorganisations themselves without clear direction from the centre, leading in some cases to inconsistent treatment of bodies with similar functions. Furthermore, departments may not be getting the best value for money from the sale or transfer of assets of bodies being abolished


Department for Business, Innovation and Skills

Department for Business, Innovation and Skills
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 44
Release: 2012-03-23
Genre: Education
ISBN: 9780215043382

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The Department for Business, Innovation and Skills and the Skills Funding Agency provide funding for further education students aged 19-plus. The Department for Education and the Young People's Learning Agency fund further education for 16-to-18-year-olds. These two departments provided £7.7 billion in funding to the sector during the 2010/11 academic year. The various government bodies that interact with the sector have different funding, qualification and assurance systems. Differences in the information required and collected create an unnecessary burden for training providers and divert money away from learners. To provide value for money, the systems need to be appropriate, efficient, avoid unnecessary duplication, and balance the protections they provide for public money with the costs of the bureaucracy they impose. No one body is currently accountable for reducing bureaucracy in the further education sector. Instead, the two Departments and the two funding agencies maintain separate responsibilities based on their funding streams. BIS has a stated policy objective of reducing bureaucracy imposed on further education providers but would not accept overall responsibility for bringing together efforts to reduce bureaucracy in the sector. Both BIS and DfE, and their funding agencies, have launched separate initiatives designed to simplify the requirements they place on providers. However BIS does not manage the simplification as a programme with a clear and consistent goal. While BIS has required the Agency to reduce its own administrative costs by 33%, there is no rational view on the amount by which they would like to reduce bureaucracy in providers nor do they accept that measurement of progress is necessary.


Preparations for the roll-out of smart meters

Preparations for the roll-out of smart meters
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 68
Release: 2012-01-17
Genre: Business & Economics
ISBN: 9780215040480

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Under European Directives, all member states are required to install 'intelligent metering systems' - smart meters - to at least 80% of domestic electricity consumers by 2020. The UK Government has opted for a more challenging programme, with plans for energy suppliers to install smart electricity and gas meters in all homes and smaller non-domestic premises in Great Britain by 2019. The Department estimates that the smart meters programme will cost some £11.7 billion. This large complex programme requires replacing around 53 million gas and electricity meters, with significant uncertainties over the estimated costs and benefits involved. Installation costs will be borne by consumers through their energy bills, but many of the benefits accrue in the first instance to energy suppliers. No transparent mechanism presently exists for ensuring savings to the supplier are passed on to consumers, and the track record of energy companies to date does not inspire confidence that this will happen. There remain significant uncertainties in a number of key areas in the programme and the Department needs to address these by conducting proper trials to identify and manage the risks associated with an IT project involving such a substantial amount of money which is financed by individuals as consumers. The Department needs to ensure that the vulnerable, those on low incomes and those who use prepayment meters also benefit from smart meters. It would be unacceptable if these consumers bore the costs of smart meters through higher charges without getting a share of the potential benefits.


Preparations for the London 2012 Olympic and Paralympic Games

Preparations for the London 2012 Olympic and Paralympic Games
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 56
Release: 2012-03-09
Genre: Business & Economics
ISBN: 9780215042842

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The Olympic Delivery Authority's management of its building programme has been exemplary but, due to significant increases in the cost of venue security, the likelihood of staying within the overall £9.3 billion Public Sector Funding Package is very finely balanced. The Funding Package does not cover the totality of the costs to the public purse of delivering the Games and their legacy, which are already heading for around £11 billion. Operational and financial risks have emerged in areas of the London Organising Committee of the Olympic and Paralympic Games' responsibility, and LOCOG itself now has almost no contingency left to meet further costs, even though it has done well in its revenue generation. The number of security guards required in and around the venues has more than doubled, and renegotiation of the contract for venue security does not appear to have secured any price advantage. With only 109,000 new people regularly participating in sport against an original target (which the new Government chose not to adopt) of 1 million by March 2013, the Department for Culture, Media and Sport has got poor value for money for the £450 million spent through sporting National Governing Bodies. It is unclear what the sporting participation legacy of the Games is intended to be. Responsibility for delivery of all legacy matters is shared across many different parts of Government, and this rings alarm bells about the effective integration of the various legacy plans and about clear accountability to the taxpayer.


The cost effective delivery of armoured vehicle capability

The cost effective delivery of armoured vehicle capability
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
Publisher: The Stationery Office
Total Pages: 44
Release: 2011-12-09
Genre: Technology & Engineering
ISBN: 9780215038968

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Armoured vehicles such as tanks, reconnaissance and personnel-carrying vehicles are essential for a wide range of military tasks. Since the 1998 Strategic Defence Review, the Ministry of Defence has attempted to acquire the vehicles it needs through a number of procurement projects. However, none of the principal armoured vehicles it requires have yet been delivered, despite the MoD spending £1.1 billion since 1998, including £321 million wasted on cancelled or suspended projects. As a result there will be gaps in capability until at least 2025, making it more difficult to undertake essential tasks such as battlefield reconnaissance. Partly as a result of this £1.1 billion failure to yet deliver any armoured vehicles, and to meet the specific military demands of operating in Iraq and Afghanistan, the MoD was provided with a further £2.8 billion from the Treasury Reserve to buy Urgent Operational Requirements (UOR) vehicles. Over the past six years, the Department has removed £10.8 billion from armoured vehicle budgets up to 2021. This has left £5.5 billion available for the next ten years, which is insufficient to deliver all of the armoured vehicle programmes which are planned. The MoD needs to be clearer about its priorities, and stop raiding the armoured vehicles chest every time it needs to make savings across the defence budget. It will also need to set more realistic requirements in future if it is to deliver projects on time and to budget. The Committee expressed concern that the Department was unable to identify anyone who has been held to account for the clear delivery failures. Further, the MoD has yet to balance its defence budget fully and devise a plan to close capability gaps, despite having conducted the SDSR and two subsequent planning exercises. It needs to determine its armoured vehicle equipment priorities and deliver these as rapidly and cost-effectively as possible, including making an assessment of which of its existing vehicles should be retained after combat operations in Afghanistan cease.