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Deloitte get the loot

IN ANOTHER example of how the coronavirus crisis has driven privatisation, Deloitte were given full charge of the drive-through Covid-19 testing programme: the government sees a medical emergency and turns to accountants and management consultants. Deloitte subcontracted much of the work to the likes of Sodexo and Mitie.

A new report reveals Deloitte also played a central role in the development of NHS Supply Chain, which has struggled so badly to provide PPE supplies to NHS workers in the pandemic.

Its involvement emerged in a report by University of Greenwich professor David Hall, co-published with the anti-privatisation group We Own It. Dr John Lister, both a health expert and redoubtable campaigner also co-wrote the report, which examines the history of the agency that buys and distributes most NHS “consumables,” including PPE. It’s already had some coverage in the Morning Star, but I wanted to look at some details.

NHS Supply Chain was first formed in 2006 when Labour privatised NHS Logistics. Many hospital trusts continued to buy their own consumables, however, often forming consortia to bypass the privatised, centralised NHS Supply Chain. So in 2017, then-health secretary Jeremy Hunt set up Supply Chain Co-ordination Ltd (SCCL) to transform and manage NHS Supply Chain. Around £500m was taken from trusts to force them to buy more via the revamped central system.

Though state-owned, SCCL is run more like a private firm, managed by Jin Sahota, a former French telecoms executive, helped by Rob Houghton, a former Post Office IT boss whose review into the scandal-hit Horizon computer system was mysteriously abandoned.

Having drawn money in from NHS hospitals, SCCL then passes on both the purchasing and supply to private companies under a series of contracts with firms such as DHL, Vizient, Akeso, Compass and Unipart doing the work under “eleven specialist buying functions, known as category towers.” As Hall’s report makes clear, this baroque system puts hospital money into a complex web of contracted middlemen, often at some remove from actual manufacturers.

The government’s aim might have been to cut hospital purchasing costs, but the system, as seen in the Covid-19 crisis, has failed spectacularly in deliveries of PPE supplies. So who might have designed a system that serves the public sector so badly? Management consultants and accountants. In 2017, Ernst & Young was given up to £20m to design the new central purchasing system. And in 2018, Deloitte was paid £400,000 to design the “category towers” buying system.

Deloitte’s role has angered experienced NHS buyers. The Health Care Supply Association, representing NHS buyers, pointed out that “the NHS has enough capacity and knowledge to be part of the solution, rather than have the solution done to us.” Two years on, NHS Supply Chain’s centralised PPE shortages do resemble something done to rather than by the NHS.

 

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