The government has confirmed that it is to outsource the procurement and delivery of healthcare products to the NHS.
The buying and delivery arms of the NHS will be put into a new company run by DHL, the logistics business owned by Deutsche Post.
Under the agreement, DHL will manage spending of £22bn over a 10-year period and be responsible for procuring and delivering a wide range of products – from catering supplies to medical equipment -to NHS hospitals and GP surgeries.
A plan to outsource the functions to DHL had been rumoured for weeks and the Unison union had already warned of industrial action if the “privatisation” went ahead.
Under the 10-year contract – sue to start on 1 October and which can be revoked if DHL does not meet performance targets – DHL claims it will be able to save the NHS more than £1bn.
The government said NHS staff will transfer to DHL for the duration of the contract under Transfer of Undertakings (Protection of Employment) Regulations – ie, on the same terms and conditions and with their NHS pension arrangements intact.
Health minister Andy Burnham said: “This is a good deal for staff, patients and the taxpayer. We have guaranteed that Agenda for Change pay rates will apply to all current staff and that new staff will not be subjected to the two-tier pay system that used to exist under this type of contract – exactly what the unions asked for.”
The Association of British Healthcare Industries said the move would stifle innovation and force smaller suppliers out of the market.