This is according to Anenta, an independent environmental services contract management partner.
Anenta asserts that up to £35m could be saved, equating to an average of £168,000 per Clinical Commissioning Group (CCG) by specifying contracts accurately, stabilising pricing schedules and optimising service provision to use capacity more effectively.
Graham Flynn, Anenta’s Managing Director, explains: “Anenta has already saved the NHS £3.2m in the last four years on existing contracts across 19 CCGs. If the business model we have deployed were to be adopted as standard by the NHS, savings of 10 times this figure could realistically be expected in a similar time frame.”
Unnecessarily complicated procurement and contract management processes lie at the heart of the issue. The challenges are summed up:
Poor specification
Anenta’s analysis of waste management contracts across the NHS has highlighted a serious disconnect between those responsible for procuring waste management contracts and their understanding of the NHS’s waste management requirements.
Contracts are therefore incorrectly specified from the start and the result is that many Trusts are paying for waste management services which are either not fit for purpose financially, or do not deliver the specific requirements including innovative efficiencies, adding further strain to an already stressed system.
Correct specification of waste management contracts equates to improved operational efficiency and is a real alternative to cuts which impact directly on front line services.
Limitations of procurement framework
The provision of high value services where contracts are greater in value than £118,133pa are subject to a Supply, Services and Design Contract standard framework. This framework works against the very thing it is designed to secure – best value for the Trust.
Typically the public sector issues standard and out-dated specifications resulting in recycled tender responses being returned. These out-dated responses therefore do not take into account any new industry efficiencies as they do not form part of the specification.
Bidders are always cautious of being innovative within their bids as it is possible that the evaluation teams could score them negatively for not directly responding to the requirements within the specification.
In effect it means there is a catch 22 situation where bidders may feel they could go beyond the specification and demonstrate real innovation, but are unwilling to risk losing the opportunity of winning the business by thinking outside the box.
Ineffective contract management
Anenta’s analysis of NHS contracts has highlighted that in the majority of cases, once the service has been procured, it is not managed effectively and in a significant number of cases, it is not managed at all by the customer.
Many Trusts rely upon contractors to self-manage and indeed, for some, there is no viable alternative. A lack of waste contract management expertise combined with a lack of ownership within the NHS means that in many instances it falls to inexperienced staff, to handle waste management contracts – something which they have neither the time nor appropriate expertise to do.
Another unfortunate reality is the overriding perception that once a service has been procured, the job is complete. That can only lead to low levels of efficiency at best and high levels of waste, or front line cuts, at worst.
Poor collaboration
Despite the fact that within the NHS channels such as forums exist to facilitate discussions on new ideas, specific issues and share best practice, change is not forthcoming.
A lack of contract management expertise or knowledge of how poorly some waste management contracts perform in reality is only part of the problem. Clear ownership is required to drive effective collaboration between departments and Trusts and of course, with contract management partners.
Dedicated online contract management platform
The efficiencies and financial savings delivered so far by Anenta follow the development of a dedicated online contract management platform that provides transparency and allows customers to proactively manage their environmental services. The platform is currently used to manage waste contracts, but could be tailored to incorporate other environmental functions such as energy, water and cleaning services.
