§ Mr. WhittingdaleTo ask the Secretary of State for Health what levels of savings in purchasing and administrative costs have been targeted by the NHS Supplies Authority for the years 1994 to 1996.
§ Mr. SackvilleThe authority is preparing its business plan for 1994–95, and the national health service management executive has not yet, therefore, agreed purchasing or running cost savings targets with the authority for that or subsequent years. The NHS management executive will, however, require the authority to build significantly on the purchasing savings of £57 million which it is on target to achieve in 1993–94, and further to reduce its warehousing and distribution costs through the new logistics strategy currently being prepared.
§ Mr. WhittingdaleTo ask the Secretary of State for Health what assessment she has made of the extent to which the NHS Supplies Authority's financial savings and efficiency targets could be improved or accelerated by transfering it to the private sector; and if she will make a statement.
§ Mr. SackvilleAfter taking independent, specialist consultancy advice, our assessment is that privatisation of the National Health Service Supplies Authority in its present form would not offer the prospect of increased financial savings or increased efficiency, and would risk diverting management effort from the significant service improvements and cost reductions which are being planned. However, the core function of the authority is acknowledged to be purchasing and contracting. Its other activities, particularly warehousing, distribution, and information technology services, could gain added value from more extensive use through market testing of private sector skills, experience and resources. This will be taken forward by the authority as it develops its new logstics and IT strategies.