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Knowledge Hub

Tariff money to fund new procurement model

Will tariff change benefit trusts’ procurement practices?


NHS providers are to have more than half a billion pounds withheld from them over 2019-21.


The money is to come from tariff payment income that is usually paid to NHS trusts.


The £510m is to cover the costs of introducing the NHS procurement model.


The Department of Health and Social Care hopes the new funding model will prompt trusts to spend more with NHS Supply Chain because they will be effectively funding it themselves.


The percentage of tariff income to be withheld from trusts differs depending on the type of provider is proposed to be:

  • acute trusts 0.4%
  • community trusts 0.2%
  • mental health and ambulance trusts 0.1%


In total, NHS trusts receive an estimated £70bn in tariff payments each year.


Health Service Journal says the percentages have not yet been agreed by NHS England and NHS Improvement. They form part of the discussions for the 2019/20 tariff.


Further information

HSJ: Half a billion pounds to be withheld from trusts over two years

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