Private Eye on the Problems of the Government’s Medical Central Purchasing Company

Mike’s article about the government’s privatisation and centralisation of the purchasing of PPE and other essential medical equipment for combating the Coronavirus follows a report in last fortnight’s Private Eye for 21st April – 7th May 2020 about the problems besetting the state-owned company the Tories had set up to do this. Centralising the purchase of PPE was supposed to lead to massive NHS savings. However, according to the Eye it has led instead only to its chiefs awarding themselves massive salaries, and staff shortages and poor pay at the bottom. The article on page 10, ‘SKIMPING OUTFITS’ runs

The government-owned company struggling to supply masks, gloves, aprons and eye protection to hospitals and GPS was set up explicitly to reduce spending on NHS supplies.

Supply Chain Coordination LTD (SCCL) has been in charge of procuring NHS supplies and the warehouses and lorries getting PPE out to the NHS since April 2018. The government argued that one centralised buying system would “generate savings of £2.4bn over a five-year period” through “efficiency”. In fact it has led to big salaries at the top and lower pay and staff shortages at the bottom.

SCCL was set up as a government-owned company in response to the Carter review of NHS productivity. Lord (Patrick) Carter argued that too many NHS trusts buying their own kit was inefficient and the government could “rationalise the procurement landscape, reduce spend and consolidate purchasing power”. Jin Sahota was brought in as SCCL chief executive from French media firm Technicolor on £230,000 a year, after the government allowed higher salaries for “commercial staff”. I’ll be absolutely blunt”, he told Civil Service World last year, “If the salary levels were somewhat different, maybe it wouldn’t have attracted me.”

In May 2019, Rob Houghton, former Post Office chief information officer, was made SCCL’s “IT focused” director. As the last Eye’s special report on the Post Office’s Horizon IT scandal noted, in 2016 Houghton launched a review into the malfunctioning system, which was mysteriously abandoned. The courts later found that a matter of “great concern”.

SCCL manages procurement of NHS bulk supplies and contracts distribution of NHS essentials through a five-year, £730m deal signed in 2018 with UK logistics firm Unipart, which runs the NHS warehouses and lorry deliveries. In September 2018, Steve Barclay (then a health minister, now at the Treasury) said the SCCL/ Unipart deal was “streamlining” the NHS.

Meanwhile, £500m is being taken from NHS trusts to fund the new system and “incentivise” trusts to use it. However, any “savings” delivered look more like penny-pinching than efficiency: in December, HGV and 7.5 tonne drivers on the SCCL/ Unipart contract had to threaten strike action to get decent sick pay and push their rate above an industry low of £10.24 an hour.

At the start of April, union Unite said warehouse staff were exhausted and struggling to keep up with demand. In a cuts-driven system, there was no slack to deal with the extra burden of a pandemic. The government’s solution was to send in the army to help in the warehouses. This has provided some relief – but once the immediate crisis passes, will it return to its ill-conceived “savings” plan?

It looks like Boris’ decision to privatise the purchasing process is a result of this company’s embarrassing failure. But Deloitte and co. aren’t going to fare much better, if at all. What’s at fault is the whole notion of centralisation itself. This was used to destroy local DHSS and inland revenue offices in the 1980s and 1990s, all in the name of efficiency. I don’t believe it made the process any more efficient. In fact, given the delays benefit claimants experienced in the processing of their claims, even before IDS’ stupid and murderously destructive Universal Credit was rolled out, it made it much, much worse.

It also won’t solve the problem of a poorly paid, overworked and demoralised staff working flat out for a grossly overpaid senior management. This is now general throughout business and what used to be the civil service. It’s how the outsourcing companies were able to generate their profits in the first place – they laid off staff in order to give their shareholders nice fat dividends and senior management nice fat salaries and bonuses.

What is causing the problems is the Tories’ decimation of the NHS across its services. As Mike and others have reported, other countries like Germany were able to respond more effectively to the pandemic because they had spare capacity in beds. But the Tories had removed that in the NHS in the name of efficiency.

It’s time these false economies were wound up. Purchasing should be handed back to NHS trusts, and the NHS and the rest of the civil service properly funded.

And the Tories and their obsession with centralisation, rationalisation, privatisation and rewarding overpaid, greedy managers and board chairmen thrown out of government.

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One Response to “Private Eye on the Problems of the Government’s Medical Central Purchasing Company”

  1. A6er Says:

    Reblogged this on Tory Britain!.

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