Framework focus: Analysis and Recovery

A&R, since its establishment 2010, has provided retrospective analytical reviews and recovery of overpayments to hundreds of NHS trusts and public sector bodies. In its lifetime this has recovered more than £540 million for the NHS.

Updated and refreshed Analysis and Recovery framework

The Hub’s new Analysis and Recovery (A&R) framework, which launched 1 April 2025, has superseded the previous Analysis and Reconciliation framework.

The new framework anticipates recoveries exceeding £300 million in a four-year timespan, according to current trends and forecasts. Following an open procurement under PCR2025, 19 suppliers have been awarded across 10 lots to supply through the A&R framework for an initial period of 36 months.

Comprehensive evaluation has ensured supplier capability and sustainability, making it easy and efficient to appoint a suitable provider, whatever your requirement.

With a ‘no-win, no fee’ setup, this framework supports trusts in maximising cash-releasing savings and cost avoidance at an essential time for the NHS.

How to support A&R audits through the procurement function

On average, organisations can recover 3-5% of spend through effective A&R audits. Procurement teams can add immediate value to their organisations by identifying high-spend contracts across the supply chain and appointing specialist A&R providers to initiate the process.

As these audits often require minimal internal resource and only demand attention when recoveries are identified, they offer low-effort, high-reward opportunity for financial benefit.

Many contracts include an audit clause, yet this right is often underutilised.

Procurement colleagues should review these clauses and ensure they are exercised when appropriate. Leveraging your tight to audit not only strengthens oversight but also signals to suppliers that compliance is actively monitored.

A&R reviews often reveal recoverable amounts due to supplier errors, such as invoice discrepancies or overpayments. In such cases, it may not be appropriate for the organisation to bear the cost of recovery.

For key contracts, procurement colleagues should consider including a clause that stipulates suppliers as liable for audit costs in instances where recoveries are made due to their fault. This approach ensures fairness, improves accountability and encourages accurate invoicing.

Spotlight on VAT reform

The UK government’s ongoing effort to simplify VAT refund rules for public sector bodies, including the NHS, could bring significant changes to financial planning and procurement processes.

In August 2020, HM Treasury proposed a shift to ‘full refund model’ aiming to streamline VAT recovery for public bodies. Notably, this would allow NHS bodies to reclaim VAT on all goods and services used for non-business activities, aligning their VAT treatment more closely with that of local authorities and other public sector organisations.

Key changes include:

  • Broader VAT recovery: NHS bodies can reclaim VAT on a wider range of purchases, including services and goods not currently eligible under the existing Contracted-Out-Services (COS) framework.
  • Fiscally neutral implementation: any increase in VAT refunds would be offset by corresponding reductions in departmental expenditure limits to ensure the reform does not affect public spending.
  • Simplified process: the move away from the COS system aims to reduce the need for external consultancy and minimise errors in invoice processing.

HM Treasury plans to issues a second data request to public bodies in summer 2025. This request will seek detailed information on currently irrecoverable VAT.

We encourage all NHS trusts to prepare for this request in order to contribute to, and smoothly transition, to the new VAT refund system.

Get in touch!

If you would like to discuss how your procurement function can add real value to your organisation through A&R audits, don’t hesitate to get in touch with our Corporate team to start the conversation: [email protected].