NHS Highland. Procurement Strategy

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1 NHS Highland Procurement Strategy NHS Highland Procurement Strategy

2 Introduction Recognising that effective and efficient procurement will positively support the Board in achieving its priorities, this Procurement strategy provides a corporate vision, direction and focus for all procurement activities in the Board. It sets out the work required to ensure that NHS Highland meets the expectations of our customers, is capable of being measured against best practice and has developed consistent ways to promote continuous improvement towards procurement excellence. This updated strategy also reflects the changing face of Procurement within the NHS in Scotland including Health and Social Care Integration, the formation of the Regional Procurement Consortia and NHS Scotland Procurement Review that is currently underway. This strategy has been aligned with the NHS Scotland Procurement Steering Group Strategy published in January 2013 as well as the Procurement Reform (Scotland) Act 2014 and new Regulations to support sustainability and growth of the local economy and the Highland region as a whole. The strategy supports the Highland Quality Approach (HQA) and has been written to support the HQA s three main aims; better health; better care; better value through our approach to procurement and our values and behaviours. Structure of the strategy This Strategy sets out the work required to ensure that NHS Highland procurement meets the needs of its customers; is capable of being measured and has developed plans to promote continuous improvement towards Procurement excellence. The continued implementation of this Strategy will require close collaborative working by the NHS Highland Procurement Department with colleagues across the NHS (including Partnership working where appropriate); external consortia Boards developed through the Shared Support Services Programme; all appointed National Centres of Expertise and in particular NHS National Procurement and the East of Scotland Procurement Consortium; other external Public Sector Bodies such as local authorities. This document aligns NHS Highland Procurement with the strategic requirements of NHS Highland, vision and goals of NHSS and corporate NSS publications, and through those, aims to contribute to the required outcomes of the Better Health, Better Care Action Plan 2007, the 2020 vision and meet the obligations of the Procurement Reform (Scotland) Act 2014 and subsequent regulations. The new legislation represents the most significant change to the procurement landscape since the McClelland Report in 2006 and this strategy aligns with the new regulations and suite of Scottish Government Statutory Guidance. Health and Social Care Integration has taken two different forms in NHS Highland which is a position unique across Scotland. In line with pharmacy professional standards, medicines procurement is managed by pharmacy. Quality assured medicines are procured through robust and appropriate processes, with NHS National Procurement the main source of procurement support for pharmacy medicines procurement in NHS Highland. As described in this Procurement Strategy the NHS Highland Procurement Department will continue to work collaboratively with the Pharmacy NHS Highland Procurement Strategy

3 and other departments to ensure that assistance, guidance, consistency of standards and best practice is captured, shared and maintained. NHS Highland Procurement will provide support for the Procurement solutions for non-medicine related requirements. Aims of the strategy The aims of this strategy are to set out: What NHS Highland s Procurement Department proposes to deliver to NHS Highland over the next 2 years to assist their contribution to transforming the health and well being of the people of Highland and how NHS Highland Procurement Department will enhance both the quality of our services and our ways of working so that we become valued over that period, as a worldclass partner who consistently meet customer expectations. NHS Highland procurement also recognises that our activities have an effect on the society in which we work, and that developments in society affect our ability to work successfully. NHS Highland Procurement Department is committed to achieving environmental, social and economic aims that tackle these effects. To meet the Aims of NHS Highland, the Procurement Department will require to be consistently delivering satisfactory outcomes over the five key areas for measured continuous improvement as set out in the new Procurement and Commercial Improvement Programme (PCIP) Assessment. These are: Leadership & Governance Development and Tender Contract Key Purchasing Processes People and Skills The new assessment reflects changes taking place in procurement in Scotland and aims to drive up procurement performance and to help organisations meet the requirements of the Procurement Reform (Scotland) Act 2014 and changes to EU legislation. In its first PCIP assessment in November 2015, NHS Highland was awarded an A+ rating, the top level of attainment possible under the regime. Context and Purpose The purpose of this strategy is to provide NHS Highland service stakeholders and potential suppliers with an overview of how the procurement function plans support the delivery of key objectives and strategic ambitions for NHS Highland, NHS Scotland and Scottish Government. This document provides a mapping of strategic aims against two primary sources: 1. A 2020 Vision published by SGHSC in September Scottish Procurement Policy Handbook published by Scottish Procurement and Commercial Directorate 2008 and the Procurement Reform (Scotland) Act 2014 and accompanying new Regulations. NHS Highland Procurement Strategy

4 NHS Highland faces significant economic and financial challenges, in the years ahead, balancing our budgets will require innovation and creativity in how we meet our priorities. This strategy aims to deliver the following benefits during : Procurement activity delivered in a compliant manner. Procurement savings targets delivered. Strategic Training Plan for procurement staff. Continue to develop and embed Highland approach to Community Benefits, Sustainability and Fair Work Practices within the procurement process. Robust contract management process embedded. Formalise strategic internal and external stakeholder engagement. Influence national strategic procurement decisions. Collaboration NHS Highland depends on external organisations to provide goods and services. It is therefore important that NHS Highland maintains a clear corporate strategy for selecting, purchasing, receiving and managing these resources. The Scottish Procurement Directorate and the Centres of Excellence have a vital role to play in promoting best practice, delivering efficiencies and maximising the use of limited resources through collaboration There may also be scope to develop the provision of procurement services to assist other organisations to deliver sustainable efficiencies. This will be particularly relevant with partner organisations within the Local Authorities and other Public Bodies. In addition the scale of some partner organisations may limit their capacity to deal with the increasingly complex area of procurement legislation and therefore their ability to ensure compliance. This is a further area where NHS Highland through both its own procurement Department working along with NSS Central Legal Office and NHS National Procurement can deliver packages of professional expertise. NHS Scotland Procurement Framework The purpose of the NHS Scotland Procurement Framework is to provide NHS Scotland service stakeholders and procurement professionals with an overview of how the procurement service can support the delivery of key NHS Scotland and Scottish Government strategic ambitions. The document provides a mapping of strategic aims against two primary sources: A 2020 Vision published by SGHSC in Sep 2011 Scottish Procurement Policy Handbook published by Scottish Procurement and Commercial Directorate Procurement Reform Act 2014 The Procurement Reform Act is a significant element of the continuing Public Procurement Reform Programme. The Programme centres on the Scottish Model of Procurement, which puts procurement at the heart of Scotland s economic recovery. It sees procurement as an NHS Highland Procurement Strategy

5 integral part of policy development and service delivery. It is a simple concept - business friendly, socially responsible. Looking at outcomes not outputs, it uses the power of public spend to deliver genuine public value beyond simply cost/quality in purchasing. The Procurement Reform (Scotland) Act builds on the work achieved so far in the reform of public procurement in Scotland. It will establish the laws regarding sustainable public procurement, and allow us to maximise the economic benefit brought to Scotland from effective and efficient public procurement activity. Strategy Ownership and Contact Details Neil Stewart Head of Procurement, NHS Highland Tel: neil.stewart2@nhs.net NHS Highland Procurement Strategy

6 2 PURPOSE AND VISION Purpose, Mission, Values and Vision The Highland Quality Approach underpins everything that the Procurement department undertakes to do. As part of the development of this Strategy, work has been undertaken to ensure our purpose, mission values and vision for NHS Highland Procurement are closely aligned to the HQA. Purpose The purpose of NHS Highland Procurement within NHSS is to deliver effective local, national and specialist services which enable and support improvements in the health and well being of all the people of Scotland. Within that context NHS Highland Procurement is tasked with delivering an efficient and effective range of customer focussed procurement activities, in a manner, which delivers sustainable value for money and improved experience of care, through the ethical purchase of goods and services on behalf of NHS Highland and support growth of the local economy and the Highland region as a whole. Vision The NHS Highland procurement vision over the period of this strategy is to support the board s efforts to ensure Better Health, Better Care and Better Value. We will strive to do this through a process of continuous improvement, to become valued as a world class Procurement Department that equitably enables and supports the delivery of the business plans of all NHS Highland stakeholders and external collaborative partners. Mission NHS Highland Procurement supports the Board s mission to improve the quality of care to every person every day through the delivery of best practice and value for money procurement of goods and services. Values NHS Highland s values, which are reflected throughout this strategy, are: Teamwork Excellence Integrity Caring NHS Highland Procurement Strategy

7 Key Strategic Procurement Objectives The NHS Highland Procurement Strategy is underpinned by NHS Highland s corporate objectives which are outlined below. People we attract and develop the best Teams To attract staff and improve our staff experience working for NHS Highland by: Making NHS Highland the employer of choice Ensuring staff are proud of their contribution to delivering safe and effective care Increasing the number of staff who feel engaged and valued as part of our team Quality we relentlessly pursue the highest quality outcome of care To improve access to and coordination of services by: Improving timely access to the right person who can best meet people s needs Increasing the number of people who can be supported through the use of modern technology Providing timely access to clinically appropriate care Care we create a caring experience To improve the experience of care and caring for people by: Minimising the time that individuals have to be away from home and their families to receive care Supporting more individuals and their families to make choices about their care, particularly when nearing the end of their life Preventing people from falling In working towards helping to meet our corporate objectives, the Procurement Department will specifically focus on four key areas. Legal Compliance and Governance NHS Highland will adopt all best practice aspects of the Procurement Reform (Scotland) Act 2014 and new Procurement Regulations to deliver best value through procurement activity and ensure compliance with statutory and regulatory requirements. Key Actions: Update NHS Highland Standing Financial Instructions to reflect the new regime in Scotland Adapt NHS Highland procedures, processes and templates in relation to the above Consider training requirements to ensure staff and customers are well informed on how procurement will operate under the new regime. Collaborate with Central Legal Office as necessary to ensure compliance NHS Highland will utilise the Scottish Government Procurement Journey for all regulated Procurement Exercises. NHS Highland will strive to retain and improve upon our A+ PCIP rating. NHS Highland Procurement Strategy

8 Savings and Added Value Procurement will support NHS Highland to achieve procurement savings targets whilst delivering added value and promoting early engagement with procurement. Key Actions: Use management information to target influencable spend Identify, target and negotiate with key suppliers to deliver savings and added value Promote and further embed supplier management across NHS Highland Utilise more effective commercial criteria whole life/life cycle costing Reinforce the importance of early engagement with procurement to enable strategic sourcing Review key national and sectoral collaborative frameworks to determine best value Identify Purchase to Pay Improvement, efficiencies and potential cost savings Highlight and promote savings and benefits achieved by procurement to the organisation Leaner, More Efficient and Effective Procurement Function Procurement will remove aspects of the process which do not add value to achieve leaner processes and improved documentation as well as develop an appropriately skilled and resourced workforce. Key Actions: Identify and target duplication of tools and documentation internally and externally Continue to utilise collaborative frameworks where appropriate Develop our relationships with other Boards and the wider Public Sector Review commodity categorisation to identify new business opportunities Identify and prioritise training for procurement staff and wider organisation Utilise enhanced data gathering processes and analysis Investigate potential process improvements relating to Information and Communication Technology Embed new procurement legislation into business as usual processes Deliver Sustainable Procurement Procurement will support NHS Highland in compliance with the Procurement Reform (Scotland) Act 2014 and the duties contained therein, including Sustainable Procurement Duty, in a relevant and proportionate manner, to achieve wider social, economic and environmental benefits to the Highland region. Key Actions: Utilise Scottish Government Sustainable Procurement Tools to prioritise projects Utilise the Scottish Government Flexible Framework Self-Assessment Tool to ascertain the level of performance of sustainable procurement Continue to support and improve access to procurement opportunities for SMEs, supported businesses, co-operatives and third sector NHS Highland Procurement Strategy

9 Encourage innovation by utilisation of outcome specifications and variant bids where relevant and proportionate Create, manage and maintain a sustainability register to capture, monitor and report on sustainable outcomes Continue to support key NHS Highland policies linked to sustainable procurement such as Fair Work Practices, Equalities and Climate Change. Utilise the National Supported Business Framework, considering Supported Businesses wherever possible with an aim to increasing spend with them. Community Benefit Clauses NHS Highland is committed to maximising Community Benefits from its procurement activities. This will be achieved through the inclusion of specific clauses within procurement contracts known as Community Benefit Clauses. Community Benefit Clauses are contractual requirements which deliver wider benefits in addition to the core purpose of the contract. These clauses can be used to build a range of economic, social or environmental conditions into the delivery of contracts. The current legal framework and Scottish Government statutory guidance enable public bodies to include Community Benefits in the procurement process, in certain circumstances. Governance The Director of Finance is accountable to the Board for the achievement of the objectives associated with the procurement strategy. Specific responsibility for the delivery of the strategic objectives is vested in managers who are professionally accountable in relation to procurement activity. The Head of Procurement is expected to influence all non-pay spend and develop formal plans to ensure spend is appropriately managed through a single procurement gateway, in line with public procurement reform best practice, for the delivery of the strategic objectives. NHS Highland Procurement Strategy

10 Finance / Spend Information NHS Highland purchases a variety of supplies, services and works from stationery to medical supplies to multi-million pound capital works contracts. NHS Highland s trade expenditure per annum was 107,476,818 in financial year 2015/16. Our top 10 categories of spend from 2015/16 are listed below. SPEND BY COMMODITIES Category Spend Healthcare 32,823, Social Community Care 13,451, Human Resources 10,774, Facilities and Management Services 8,853, Construction 8,037, Information Communication Technology 6,156, Utilities 4,923, Financial Services 3,972, Catering 2,512, Environmental Services 2,375, NHS Highland is committed to supporting the local economy but in 2015/16 only 14% of spend was with local suppliers. Spend with SMEs in the same period was more encouraging, with 56% of our spend going to SMEs. Estates works, services and goods are the responsibility of NHS Highland s Estates function. The way in which Highland procures goods, services and works is defined in the Standing Financial Instructions. NHS Highland Procurement Strategy

11 Policies, Procedures and Reporting Policies NHS Highland operates its service delivery against a defined set of policies and strategies. Procurement activities will continue to promote relevant policies of which most are embedded within the existing procurement processes and procedures as detailed below: Scottish Government Suppliers Charter The Scottish Procurement Policy Handbook NHS Highland Health and Safety Policy NHS Highland Sustainable Procurement Policy NHS Highland Carbon Management Plan NHS Highland Equalities and Human Rights Policy NHS Highland Ethical Procurement Policy In addition, we utilise the Public Contracts Scotland website to advertise all of our Tender opportunities, and Public Contracts Scotland Tender (PCST) as our electronic tendering system. We also utilise the Public Contracts Scotland Quick Quote facility for Quotation value requirements. Therefore, we would encourage both new and existing suppliers to register with Public Contracts Scotland to ensure that they do not miss any opportunities both with NHS Highland and many other Public Sector Organisations across Scotland. Public Contracts Scotland PCS-Tender NHS Highland s full list of current Contracts can be found on the NHS Highland Procurement web page. NHS Highland Contracts Register Procedures NHS Highland Standing Financial Instructions apply to all purchases or contracts for supplies, services and works made by or on behalf of NHS Highland. However, they do not apply where contracts are put in place by Scottish Procurement, National Procurement or any other central purchasing body. Monitoring, Reviewing and Reporting on the Strategy The strategy will be monitored via the Actions in Appendix 2 and performance against the action plan will be reviewed and reported to and monitored by the Head of Procurement and the Director of Finance. The Head of Procurement will escalate any issues that may prevent the delivery of the outcomes. The action plan will be subject to review by internal audit. In addition, we will continue to use our existing Key Performance Indicators to manage, track and measure continuous improvement. These indicators will be reported into the senior finance team on NHS Highland Procurement Strategy

12 a periodic basis. This strategy will be reviewed on an annual basis to ensure continued alignment with NHS Highland objectives and priorities. NHS Highland Procurement Strategy

13 APPENDIX 1 Reporting Lines The diagram below (Diagram 1.0) illustrates the reporting lines for the Procurement Department and associated governance relationships. These may change as Public Sector Procurement evolves. Diagram 1.0 Scottish Government Health Department NHS Highland Board Strategic Leadership Team NHS Highland Procurement Dept NHS National Centre Of Excellence Scottish Procurement Directorate Public Sector Procurement Group NHSH Stakeholders NHS Highland Procurement Strategy

14 APPENDIX 2 NHS Highland Procurement Strategy