Health Bill

Debate between Lord Hunt of Kings Heath and Earl Howe

Committee stage
Wednesday 28th October 2026 Lords Chamber

[Earl Howe (Con)]

My Lords, Amendment 5 stands in my name and that of my noble friend Lord Kamall. I am grateful to the noble Lord, Lord Hunt of Kings Heath, for his Amendment 211 in this group.

Amendment 5 concerns the future ownership and governance of Supply Chain Co-ordination Limited following the abolition of NHS England. It is a rather more specific amendment than the one we have just debated, but it raises an important question about the wider process of transition, in particular how the Government intend to ensure that essential services and functions continue to operate effectively as NHS England is abolished.

As I emphasised earlier, NHS England sits at the centre of an extraordinarily complex and interconnected healthcare system, with responsibilities, contracts, assets and operational relationships extending throughout the NHS. When we interfere with one part of that system, we need to be certain that we understand what depends upon it. This is particularly important in relation to procurement and supply chains.

NHS England currently holds the shares in Supply Chain Coordination Limited, which plays a central role in the NHS Supply Chain arrangements through which hospitals and other healthcare providers obtain essential equipment, medical devices and supplies. These are functions which may not attract a great deal of public attention, but they are absolutely fundamental to the day-to-day operation of the health service. Hospitals depend on reliable access to medical equipment, consumables and other essential supplies in order to deliver treatment. When those supplies are disrupted, the consequences can obviously be very serious indeed. Procedures can be delayed, costs can increase and clinical staff can find themselves unable to provide the care that their patients need. It is therefore essential that, as the Government undertake this reorganisation, we do not inadvertently destabilise or create disruption in areas of the health service which are currently operating effectively.

That is the concern which this amendment seeks to address. As NHS England is abolished, its shareholding in Supply Chain Coordination Limited will need to be transferred. Our amendment does not seek to prevent that transfer, nor does it prescribe what the future ownership arrangements should look like. Instead, it asks the Government to set out clearly how that transfer will be managed, who will be responsible for the company afterwards and what measures will be taken to ensure that its operations continue without interruption.

There are some fairly straightforward questions here. First, who will assume ownership of the company and who will exercise the shareholder responsibilities, both during and after the transition? It surely cannot be intended that day-to-day control of the organisation will fall to the Secretary of State. But if not, then to whom and under what organisational structure? Secondly, pursuant to that, what governance and accountability arrangements will be put in place? Will there be any changes to the company’s operating model, and, if so, what assessment has been made of their potential consequences? Thirdly, and perhaps most importantly, what assurances can the Government give that the transfer will not disrupt the procurement, storage or distribution of essential supplies across the health service? I would be particularly interested to hear what assessment has been made of the risks involved in transferring these responsibilities and what contingency arrangements will be available if the process proves more complicated than anticipated.

Procurement and supply chain management depend on experienced people, established relationships and systems which have been developed over many years. We know that NHS reorganisation will involve staff cuts. To what extent will this organisation be subject to cuts in staff, and at what levels? What steps are being taken to ensure that the relevant expertise is retained and has any independent assurance been obtained about the resilience of these arrangements during the transition?

More broadly, I regard this amendment as representing a microcosm of the larger questions that surround the abolition of NHS England. The success of this reorganisation will depend not only on whether the Government can transfer functions and responsibilities on paper but on whether the systems that patients and clinicians rely upon continue to work in practice. I hope the Minister will be able to provide some reassurance on these points. I beg to move.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I very much agree with the noble Earl, Lord Howe, that procurement is important in itself, but that it is an illustration, in a sense, of how the new arrangements might play out. Where I disagree with him is that he was really implying NHS Supply Chain is doing a good job, and we do not want to disrupt it. Actually, there are a lot of concerns about the current performance of the supply chain, which I would like to come to, because this is an opportunity to improve what it does, and, in particular, to try and get the relationship between NHS Supply Chain and local NHS bodies on a much better footing.

My Amendment 211 is grouped with Amendment 5 and has the support of the noble Lord, Lord Markham, the former Health Minister, who has been a great advocate of value-based purchasing. I declare an interest as patron of the Health Care Supply Association, the organisation for professionals in health service procurement, who contribute so much to a very important function.

Procurement is there to ensure value for money for the health service, but it can do much more. We know since Covid of the essential need for supply chain resilience. Effective procurement can provide this, ensure investment in innovation and support UK industry. I believe it can link closely with the Government’s ambitions on matters of sovereignty, regional development and growth. NHS Supply Chain has a clear role in this, and it is absolutely right to scrutinise what the arrangements are going to be when the shares transfer from NHS England to the Department of Health.

In particular, I want to raise the shortcomings of NHS Supply Chain. The 2024 Public Accounts Committee report found that NHS England had been weak in its oversight and support of NHS Supply Chain. The PAC reported that neither NHS England nor the department had validated the savings the company reported, and that trusts’ satisfaction with the service was already “in steady decline”. Nor was the committee’s criticism confined to NHS England. It found that the department, which owned the company before 2021, had been “far too lenient” in its oversight.

Returning the shareholding to the department really does not change this one way or the other, but, as I said earlier, it is a chance to put the relationship between NHS Supply Chain, its shareholder, Ministers and the NHS organisation it serves on a much clearer footing. I want to make the point that it is there to serve the NHS. It does not, however, behave in a way that actually recognises that its customers are local NHS bodies. I should say here that there is a view that it is very arrogant in its dealings with NHS bodies. This is what we want to see changed, and I hope ministerial control will actually do something about it.

The ABHI has also reported to me that currently, NHS Supply Chain does not publish the agendas, papers and minutes of its board meetings. I find that very surprising. The noble Lord, Lord Scriven, will raise this in relation to Clause 11, but at the very least I hope to get some assurance that this will be put right.

I also ask the Minister whether, under the department, NHS Supply Chain will continue with its commitment to value-based purchasing. This is very important. I have long argued for it, and the noble Lord, Lord Lansley, is very much with me on this. The point is getting away from always going for the lowest price, and going for quality to improve patient outcomes. I acknowledge we are making progress, and the department itself is very supportive.

I want to quote one example. Value-based purchasing was launched this year to ensure a higher quality of healthcare by raising the standard of procurement. During a pilot in the South Tyneside and Sunderland NHS Foundation Trust, working with Essity, patients were provided with the most appropriate absorbent continence product for their clinical needs and preferences, even if that product was more expensive than other options under consideration. The results showed an 8% reduction in the number of continence products used and a 48% reduction in leaks, and 71% of patients said they would now find it easy to change the product themselves. This is a wonderful example of hugely improved patient outcomes because they did not go for the cheapest products—so this is what this is all based on.