For the NHS, improving operational efficiency is a real alternative to the budget cuts that affect frontline services. As one of the world’s highest spending organisations with an annual budget of more than £100bn, it has attracted considerable criticism in this area so the challenge to reduce waste throughout the supply chain has never been more pressing.
In his 2016 report, Lord Carter noted that NHS trusts spend around £9bn a year buying goods and services. Operating costs, the report indicated, ranged from £100 to almost £1,000 per sq m, and included everything from lighting to cleaning bills.
But with such variation between individual sites and between operating practices of the trusts themselves, the scale of potential savings is clear. Lord Carter’s report estimates a saving of £1bn a year on running costs if each NHS trust performed as well as the best. Further savings could be made by other entities within the NHS such as clinical commissioning groups (CCGs).
Contract management business Anenta has identified significant potential savings within waste management contracts. Such issues include overcomplicated procurement and contract management processes, ambiguous pricing subject to change over time, a lack of clarity on contract deliverables, and poor monitoring and communications. Coupled with inadequate data analysis, poor use of suppliers’ capacity, frequent failures in agreed service levels, and low levels of staff feedback and engagement, there is clearly a significant opportunity to deliver changes for the benefit of all NHS stakeholders.
The ability to manage waste contracts closely has been sorely lacking. The issue is compounded by the fact that so many are poorly specified, while tender packs are often reused by bidders and offer no service enhancements. Such a lack of control and documentation, which should form part of the contract, has hamstrung organisations’ ability to reduce running costs and improve operational efficiency.
To realise benefits, Anenta invested more than £1m to develop a proprietary online waste management platform. The goal was to provide every customer with a system that delivered a bespoke service and provided best value. Technology was the enabler while Anenta’s experience in the healthcare sector provided the know-how.
anenta authority kpi dashboard
Recording and tracking every customer interaction, the platform is completely auditable, makes pertinent information available to stakeholders and allows customers to manage their site’s services and specifications via a single interface.
This then provides a basis under which in-voicing and data validation can take place, while giving insight into future expenditure. Service issues are reported and managed proactively, missed collections investigated and rescheduled promptly, and ad-hoc requests made and authorised as required.
This level of control and accuracy of specifications means the customer has control over all elements of the contract, including self-management of the number and types of bins, the frequency of collections, and can view a calendar of deliveries, collections and expenditure.
Working as NHS England’s managing agent for North London Primary Care (NLPC) waste, Anenta’s platform has enabled the team to align and standardise pricing schedules across the region’s service providers, matching the NLPC’s requirements accurately to multiple contracts, and optimising the service provision to use capacity more effectively. In as little as 18 months, savings of £1.8m were delivered.
The ability to analyse data has also enabled Anenta to highlight charges to NHS customers for services that have not been provided by waste management suppliers. Inappropriate miscellaneous charges totalling more than £2m have been identified across the customer base and, in the past three years, waste contractors have refunded more than £500,000.
In four years, this new way of working has enabled savings of £3.2m on existing contracts across 19 CCGs – extrapolated across England, potential minimum savings of £7.5m annually become apparent.
Some changes that could be made may seem obvious:
- Volume and transportation costs can be reduced by linking local authority and CCG collections
- Collections can be moved to an on-demand basis where capacity is not fully utilised
- Non-infectious waste can be moved to the municipal waste stream where permitted
The contribution that more effective waste management processes can make is not only significant in monetary terms, but a key factor in establishing a level playing field between suppliers and customers. Most importantly, it puts control back in the hands of the customer.
The case for change is clear, giving the NHS an improved chance of hitting its £22bn savings target by 2020, and enabling the waste management sector to strengthen its relationship with customers and improve the delivery and longevity of individual contracts.
Graham Flynn is managing director of Anenta