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Inside Contract Catering: Hospital food purchasing

19 October 2006

In an age of environmental awareness, shouldn't there be more support for sustainable food purchasing in hospitals? Rosalind Mullen reports

The Government is making a green sweep across all areas of industry and the public sector, and that includes hospital catering. But at the moment, incentives to follow the sustainable purchasing route seem rather lacklustre.

Alison McCree, chairman of the Hospital Caterers Association, says one difficulty is that the Government issues one policy to encourage sustainable purchasing, but then there's another policy that contradicts the first one and makes it unworkable.

"Think about the new hospitals - there's no kitchen or production unit," McCree says. "The main food suppliers are Apetito in Bristol and Yeo Valley Foods in Wales, so, if you operate a hospital in Edinburgh, you'll be buying from the south."

She believes the Government should encourage strategic health authorities to keep money in the NHS and maintain vibrant local authorities by making it easy for them to buy chilled food from neighbouring trusts. At the moment, however, it's up to hospital caterers to "make local arrangements".

That's what John Hughes, catering manager at the 1,000-bed Nottingham City Hospital, has done. He started purchasing locally about two years ago when the Department for Environment, Food and Rural Affairs (Defra) launched the Public Sector Food Procurement Initiative, which aimed to encourage sustainability. "We're not unique," says Hughes. "There are probably about 25 other hospitals that are doing a lot more, but everyone is working in isolation. There's no national programme."

Realistically, hospitals need to rethink their operations if they are to buy locally. Hughes points out that hospitals pursuing this policy need a kitchen so they can cook ingredients from scratch - which rules out many new hospitals.

They also require the flexibility to have a seasonal menu and to go with whatever produce is available. For instance, Hughes commits his meat budget to the local butcher and the menu moves with the seasons, through lamb, pork or whatever cuts are best value.

It's a purchasing ethos that works for Hughes. Of his £2m annual budget, he spends £350,000 on local produce - and this will increase next year to £450,000-£500,000.

But although he stresses that buying locally is deliverable, he says that his job is made harder by the lack of "political will". He reckons about 90% of hospitals are forced to put local procurement at the bottom of their list of priorities because they are "under the cosh", with all the many changes taking place in the health service.

Hughes has had his own problems, such as making sure his local suppliers are registered by the NHS Purchasing and Supply Agency (PASA) as contracted suppliers. He was frustrated that, despite having compiled a database of local suppliers over the past two years and informing PASA that he wanted to use them, there was no system in place to inform the suppliers that the contracts were up for tender. This has meant more work for Hughes to ensure that he keeps them on board.

"We can go our own way, but it means we have to tender it ourselves," says Hughes. "It's a simple process to be a contracted supplier if they meet the criteria, but there hasn't been any will at PASA to deliver it."

While central government and many hospitals support the local purchasing initiative, it could be argued that, from PASA's point of view, managing lots of small suppliers is more difficult than dealing with national companies.

Nevertheless, Hughes believes that the economic benefits of spending money locally will ultimately win the day. For every £1 spent, 80p is retained in the region, while buying from a national company means that only 20p of every £1 spent is kept in the community - mostly through labour.

"I spend £60,000 with one farmer," says Hughes. "It goes directly to him and the middleman is cut out. He has now employed two people, and business has spread to the farmer next door. The big boys would have had to give a percentage to the City."

At Nottingham, Hughes has a budget for F&B costs of £2.22 per patient per day, plus 98p for labour, and he says that the quality of food now being served outstrips what was being prepared before local purchasing was introduced.

"I do it because I have a personal commitment to build a long-term future," says Hughes. "I think we're duty-bound for the good of the economy and the environment."

Another advocate of purchasing locally is Ron McKenzie, head of catering and housekeeping for County Durham and Darlington Acute Hospital Trust. Its central production unit buys for six hospitals in the trust and, where possible, it buys locally. Organic milk, for instance, is purchased from a local farmer; a nearby bakery provides morning goods; and, although vegetables are bought pre-prepped to save time, McKenzie has asked the supplier to source seasonal produce from local farmers.

His reasons for not taking the easier central purchasing route are similar to Hughes's. "We're told we should be more green, that we should be looking at sustainability and should reduce food miles," says McKenzie. "If you think about the ingredients of a home-made steak and kidney pie, you could be getting the kidneys from New Zealand and the beef from Argentina - it will have travelled thousands of miles to get to the patient."

The food-miles savings on fuel and haulage mean that local purchasing doesn't work out to be more expensive than using PASA's recommendations. McKenzie still manages to meet the patient budget of £2.50-£2.70 a day for breakfast, two hot meals, tea and snacks.

Besides saving food miles, buying from local farmers and suppliers also helps to build trust and working relationships in the vicinity, which can lead to further savings and better quality.

The Cornish initiative

The Cornwall Food Programme was started in 2001 with the aim of sourcing Cornish produce for hospital patients, staff and visitors across five trusts. Under the initiative, local suppliers and producers are given year-round contracts, which cut food miles and increase the nutritional value and freshness of meals.

Mike Pearson, head of hotel services at Cornwall Partnership Trust and project director of the food programme, explains that many of the region's hospitals are now supplied with Cornish-produced cheese, eggs, sandwiches, ice-cream, yogurt, fish, fruit, vegetables, milk and meat. The trust has also become one of the first to source fresh rather than frozen fish. And instead of the less-sustainable cod, it uses locally caught haddock.

Plans are also on target to get a central production unit up and running at Camborne by next year. This would replace the tired catering facilities at the Royal Cornwall Hospital in Truro and be able to produce 3,000 meals a day for Cornwall's hospitals. Other food businesses would be able to use the cutting-edge equipment, such as blast-freezing, to process food locally and again reduce food miles.

Pearson explains: "It will mean we can provide a good, nutritional meal for all hospitals in the region and can forge stronger links with local farmers, who can grow crops for them."

He adds that the trust uses the central purchasing facility only for items such as custard powder and flour, which aren't produced in Cornwall.

While sourcing local produce has proved possible, buying organic produce has in most cases proved to be too expensive. Pearson's budget is £2.45-£2.50 per adult and £2.20 per child - a rise of only about 15p in the past two years.

He has, however, managed to source organic burgers for child patients from a local butcher and, at certain times of the year, can afford organic produce such as tomatoes and cauliflowers, buying them in bulk and freezing them.

A farm shop has been opened at the Royal Cornwall, which sells organic and local produce, mainly to staff.

Pearson admits it's a challenge to make plans within the context of the NHS, what with trusts merging and budgetary problems. "I always feel under threat," he says. "There are always changes in finance."

But he adds: "I think the way we're working, using local suppliers and produce in Cornwall, is the right way. We will use NHS Supply Chain if we want to, and not if we don't."

The DHL/Novation deal

Earlier this month, German transport company DHL began a 10-year contract to store and deliver everything from food to bandages for the NHS. It subcontracted the purchasing side to US group Novation and plans to open new stockholding hubs in 2008 and 2012.

The Purchasing and Supply Agency, which sets up purchasing contracts for the NHS, still exists, but will work with DHL under the NHS Supply Chain umbrella name.

Under the agreement, the new department will manage a £22b spend and will target more than £1b savings over the contract period. Many hospital caterers fear that the deal will force prices down to the lowest common denominator.

"They can cream off the profit, so it's back to the bad old ways of cheap produce, which will hammer suppliers and hammer farmers," says John Hughes, catering manager at Nottingham City Hospital.

Hospital caterers can opt out and continue to buy locally - but they must prove they can source food that is competitively priced.

Hughes is adamant that he will continue to purchase locally and sustainably. "I will have to tender my milk contract and build in sustainability," he says. "So, assuming the price is competitive, they will get it."

Looking ahead

There has been constant change in the NHS in recent decades. One of the big changes under way is that hospitals are being converted into foundation trusts. This means they get access to central development budgets without having to submit formal bids, and are able to establish private companies.

The aim is to devolve decision-making from central government to local organisations and communities.

At Nottingham City Hospital, catering manager John Hughes is expecting to find more purchasing freedom as a foundation hospital. He has plans to make the catering department more commercial and expand the Coffee City retail concept from four outlets on campus to 15 and roll it out to hospitals across the country. Along with vending machines, this concept brings in more than £1.5m a year.

There are also plans to open a carbon-neutral central production unit kitchen in two years' time, which will be used by hospitals as well as schools.

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