Sustainable Procurement Forum

Friday 22 nd October 2010

Stephen Heard MBA MCIPS Regional QIPP Director

NHS Cambridgeshire (on secondment to the EoE SHA) Post Graduate Certificate in Sustainable Business from University of Cambridge Programme for Industry (2007) Member of the University of Cambridge Programme for Sustainability Leadership

What is Sustainable Development?

“To enable all people throughout the world to

satisfy their basic needs & to enjoy a better quality of life… …without compromising the quality of life of future generations”

Securing the Future, UK's Sustainable Development Strategy, HM Government 2005 …………

UK Government expectations

Procuring the Future: UK Action Plan • all Chief Executives held accountable • mandatory minimum environmental standards • performance measured against the Flexible Framework • investments and auditing based on sustainable Long Term Value for Money rather than short term cost cutting

What is Sustainable Procurement?

Acquiring goods & services that: Meet users needs Deliver long term Value for Money Maximise social and economic benefits Minimise damage to the environment and health

Why buy sustainably?

Increasing costs • In 2004, NHS gas bills rose 57%; Council energy bills rose £100m • Landfill tax will continue to rise to £35/tonne • EPC “Cap and Trade” will place cost on CO2 emissions • Domestic water bills rise 19% over 5 years Sustainable Products • Use less energy, water, emissions and consumables • Create less waste and easier to recycle • Are less hazardous to use and dispose of • Have a longer life (reusable vs disposable) An investment of 1% of global GDP could avoid costs of 5 20%

NHS Carbon Reduction Strategy

Taking the long term view: the Department of Health’s strategy for delivering sustainable development 2008 2011

The Department of Health published its sustainable development strategy on 7 th October 2008 – “Taking the long term view: the Department of Health’s strategy for delivering sustainable development 2008 11” Sir David Nicholson, NHS Chief Executive, launched the NHS Carbon Reduction Strategy in January 2009 – ‘Saving Carbon, Improving Health’ The SDU publication “Saving Carbon, Improving Health Update” updated in January 2010 referred to savings of £180 million per year

These tell us to …

Producing a Board-approved Sustainable Development Management Plan (SDMP) containing a commitment to reduce each organisation’s 2007 carbon footprint by 10% by 2015; Signing up to the Good Corporate Citizenship Assessment Model; Monitoring, reviewing and reporting on carbon; and Actively raising carbon awareness at every level of the organisation.

How does it all fit?

Hidden in most systems…..

Why me?

Still me……

Figure 4: 2004 NHS England CO2 emissions - 11.07MtCO2 procurement sub-sector breakdown

4.50

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00

4.06

1.66

0.98

0.97

0.72

0.63

0.53

0.39

0.36

0.32

0.13

0.1

0.22

Why bother?

The NHS is responsible for 18 million tonnes (Mt) of CO ² each year , representing 25% of England’s public sector emissions: Procurement Building energy Travel 11.1 Mt CO 4.1 Mt CO ² 3.4 Mt CO ² ² (60%) (22%) (18%)

QIPP national workstream – summary content

Workstream

Procurement

Workstream Lead

Philippa Slinger Context

• In 2008/09, the NHS expenditure was approximately £31.4bn(clinical and non-clinical supplies) • Non-pay pricing is a relatively low-impact way of reducing NHS cost (i.e. it does not require clinical service reconfiguration, pay reduction, etc..)

Current situation

• Local NHS organisations buy non-pay items through a range of procurement routes – from nationally-leveraged contracts (OGC Buying Solution and NHS Supply Chain) to local, low volume direct contracts with suppliers • The chart on the right shows the breakdown of how this is spent. For example, only a relatively small proportion of buying (£1.46bn) is through the NHS Supply Chain route

Breakdown of how the NHS purchased non-pay

COLLABORATIVE OGC BUYING SOLUTIONS NHS SUPPLY CHAIN DH CMU DRUG TARIFF DISPENSING FEES CPHs Balance

What this workstream will do

• Ensure that procurement is co-ordinated and optimised to get the best value for money for the NHS • Provide support to enable early realisation of financial benefits by NHS • • Work with a broad base of stakeholders to create a functional and effective procurement landscape Challenge systems and organisations to confront the more difficult and therefore potentially more valuable spend categories * Note – this is based on extrapolated data from various sources and is intended as an indicative representation