General election - implications for procurement

We look at the implications of the general election result for procurement practitioners in the health sector and small and medium sized suppliers.

The Labour Party had committed to repealing the Health and Social Care Act 2012, and the section 75 Regulations made under it to encourage the opening up of the NHS to competition, within 100 days of taking office. Of course following the Conservative Party victory this is now off the agenda, and instead the new government will need to work out, before the April 2016 deadline for implementing the EU Procurement Directive, how to fit together those section 75 Regulations with the Light Touch Regime (LTR).

The essential difficulty is that the section 75 Regulations impose no absolute duty to open up clinical health services to competition, although this must be considered (and it is also possible that, as has always been the case, the general EC Treaty principles may require a competition to be held). On the other hand, the LTR does impose an absolute requirement to run a competitive (if light touch) process, if the £625,050 LTR threshold is exceeded.

The conflict has been dealt with to date by simply excluding clinical health services from the scope of the PCR 2015, but this can only be done until April 2016, by which time the EU Directive must be implemented in full, including in relation to clinical health services. We expect to see drafting amendments before then to the PCR 2015 and/or the section 75 Regulations and associated Monitor guidance.

We can also expect to see a continuation of the previous government’s commitment to the use of procurement legislation, policy and guidance to increase opportunities for SMEs to bid for public contracts. This can be seen in the “Lord Young” reforms now enshrined in statute at part 4 of the Public Contracts Regulations 2015, together with the forthcoming regulations, which we expect to be made under the new Small Business, Employment and Enterprise Act 2015.

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