The NHS is under immense pressure to deliver more for less. With budgets stretched and demand rising, procurement has become a frontline issue for sustainability. Yet despite best intentions, repeated re-procurement exercises often inflate costs rather than reduce them. Fragmented approaches, short-term fixes and lack of alignment between clinical, operational and commercial teams can lead to higher outlay and missed opportunities.

The Frontline Productivity programme, which has replaced the previous Frontline Digitisation programme, is putting a greater focus on getting the most out of the digital tools the NHS already has. This means organisations need to think strategically about how they approach re-procurement.

By looking at the system as a whole, not just individual contracts, NHS trusts can avoid duplication, reduce unnecessary spending and free up funds to reinvest where they matter most: on the frontline.

Why re-procurement costs spiral

Re-procurement should, in theory, create opportunities for better value. New suppliers can compete on price, innovation and service quality. However, the reality often plays out differently. Costs rise because of:

Fragmented contracts: Departments or trusts procure solutions independently, leading to multiple overlapping agreements for similar services. This lack of scale undermines bargaining power and increases administrative burden.
Short contract cycles: Frequent tendering may appear to maintain competitive pressure, but it brings transition costs, staff retraining and the risk of service disruption.
Inadequate exit planning: Poorly defined handover processes mean the NHS pays twice – once for the outgoing supplier and again for the incoming one – while integration is resolved.
Hidden legacy costs: Older technologies or systems that are not fully retired continue to attract maintenance or support charges long after replacements are procured.

Each of these issues compounds, creating a cycle where the pursuit of cost savings paradoxically increases long-term expenditure.

The value of a cost-out service

A cost-out service takes a systematic approach to breaking this cycle. Rather than focusing only on negotiating lower prices during re-procurement, it considers the wider landscape of costs, risks and opportunities across the entire lifecycle of a service.

Key elements of this include:

Holistic spend analysis: Mapping procurement across regions and trusts to identify duplication and opportunities for consolidation.
Lifecycle costing: Considering the total cost of ownership, from implementation to decommissioning, rather than focusing narrowly on upfront price.
Supplier rationalisation: Reducing the number of suppliers for similar services to create efficiencies, streamline management and secure economies of scale.
Exit and transition planning: Embedding structured processes for handover to avoid service overlap and mitigate double charging.
Demand management: Challenging unnecessary consumption and encouraging adoption of shared platforms or services where possible.

By embedding these practices, the NHS can capture sustainable savings that extend far beyond the procurement event itself.

Aligning procurement with strategy

One key reason costs can spiral is the gap between procurement activity and the NHS’s wider strategy. Often, procurement teams are under pressure to cut costs, clinical leaders focus on maintaining high-quality care, and IT departments concentrate on keeping systems stable. When these groups work in isolation, decisions are made in silos, with each team optimising for its own priorities rather than the organisation as a whole.

A cost-out approach helps bridge this gap, turning procurement into a strategic enabler of organisational goals. Today, with the NHS shifting its focus from implementing new technologies to making the most of the digital tools already in place, re-procurement decisions need to consider more than just price. For example, when updating electronic health record systems, trusts should look at how the solution fits with regional digital strategies, supports interoperability and reduces long-term costs.

Bringing stakeholders together earlier in the process helps ensure decisions are future-proof, avoiding expensive adjustments later and helping the NHS get real value from the technology it already owns.

Building sustainable savings

One of the biggest risks in NHS re-procurement is chasing short-term wins. A supplier may offer an attractive upfront discount, but without addressing inefficiencies in the system, savings evaporate quickly.

Sustainable savings can be achieved through:

Standardisation: Harmonising requirements across trusts reduces complexity and lowers costs of implementation and support.
Technology rationalisation: Retiring legacy systems decisively prevents ongoing “shadow costs” of outdated infrastructure.
Contract flexibility: Building in mechanisms to scale services up or down helps avoid overpaying for unused capacity.
Data-driven decisions: Using analytics to track usage, demand and supplier performance allows continual refinement and optimisation.
Re-investment of savings: Financial benefits from smarter procurement and digital initiatives can be used to address funding gaps and support sustainable improvements in frontline care.

The Frontline Productivity programme emphasises the need for sustainable digital change, encouraging trusts to focus on making the most of existing technologies and embedding long-term efficiencies. Although this approach requires investment in capability and governance, the returns are significant: reduced duplication, improved supplier performance and a culture of accountability that drives real, lasting savings.