Industry hits back at MPs' call for NHS Trusts to be more

15 March 2007 by
Industry hits back at MPs' call for NHS Trusts to be more

By Chris Druce

Calls by an influential group of MPs for NHS trusts to be "more hard-headed" in their negotiations with contract caterers have been criticised by industry figures.

The Public Accounts Committee (PAC) report on food procurement in the public sector, published last week, said that contract caterers could be earning as much as £95m from volume discount and year-end rebate payments from their suppliers, based on the volume of their public business.

Edward Leigh, chairman of the PAC, said: "Negotiations with major contract caterers should be much more hard-headed, especially over the hidden rebates and discounts which those caterers can achieve but too often fail to pass on to the public sector."

However, Diana Spellman, managing director of consultancy Partners in Purchasing, said that while caterers had been opaque about true material cost in the past, clients could sometimes be unrealistic about prices.

She said: "If buyers made more effort to investigate the true value of ingredients, it would give caterers more opportunity to put forward a truly commercial offer, which in the long run has to be beneficial."

And Nigel Forbes, managing partner of catering consultancy the Litmus Partnership, said that confusion over discounts and rebates was a symptom of a wider problem usually caused by the different aspirations of contractor and client.

"Whether food services are delivered in-house or via a third-party contractor," he said, "the ‘missing ingredient' is the application of commercial knowledge, garnered from experience within the catering arena, from the very outset - knowledge that must be applied to ensure proposals are equitable and viable to both parties."

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