Health and Care Bill: all change for provider selection

Rona McPherson considers the impending changes to the commissioning of healthcare services and procurement rules outlined in the Health and Care Bill.

The NHS in England is undergoing a major reorganisation following the publication of the Bill in July 2021. New rules and structures are proposed and the deadline for these changes is April 2022.  As we await the Bill’s passing, this article serves as a reminder as to what’s changing in relation to healthcare service procurement and what’s not changing as well as further information on what the new rules might look like.

Currently, the Bill is going through a Public Bill Committee, which will report back to the House of Commons by 2 November before a third reading in the Commons. Readers who’d like to know what the rest of parliamentary process entails before the Bill is enacted can find more information here.

What’s changing?

The Bill provides for changes to the procurement regime which applies to NHS and public health service commissioners when arranging clinical healthcare services, such as hospital and community services. It does this by firstly removing the procurement of such services from the scope of the Public Contracts Regulations 2015 by repealing Section 75 of the Health and Social Care Act 2012 and the NHS (Procurement, Patient, Choice and Competition) (No2) Regulations 2013 (i.e. the legislation which said when and how healthcare services had to be competed). The Bill then allows for the introduction of new procurement rules.

The explanatory notes accompanying the Bill say the provisions will enable the development of: “…a new procurement regime for the NHS and public health procurement, informed by public consultation, to reduce bureaucracy on commissioners and providers alike, and reduce the need for competitive tendering where it adds limited or no value”.

The new rules will only apply to the procurement of clinical healthcare services. However, there is scope for mixed procurements in the new regime, where a contract involves a mixture of health care and other services or goods, such as if a health service is being commissioned but in the interests of providing joined-up care, some social care services are also commissioned as part of a mixed procurement.

What’s not changing?

The procurement of non-clinical services, such as professional services or clinical consumables, will remain subject to the Public Contracts Regulations 2015 rules and Cabinet Office procurement processes.

The new provider selection regime will not apply to social care services or public health services not arranged by NHS bodies or local authorities.

The new look regulations

The Bill does not give us any guidance as to what the new regulations will look like but does state that these regulations may make provision for the purposes of:

  • ensuring transparency or fairness in relation to procurement;
  • ensuring that compliance with the new regime can be verified; and
  • managing conflicts of interest.

However, we can get a good idea of the direction of travel by considering the consultation carried out by NHS England and Improvement earlier this year in February and for which NHSEI published its response during the summer. Input was received from a wide range of stakeholders “with 70% of respondents either strongly agreeing or agreeing with the detail” set out in the consultation.  On the basis of the support received for the various proposals, NHSEI have recommended to the government that the proposals “are taken forward as set out”.

The aim of the regime proposed in the consultation is to enable decisions about care provision to be taken where possible without using competitive tendering where this can be shown as being in the best interests of patients, tax payers and the population. NHSEI want to ensure there is the ability to continue with an existing provider where everything is working well rather than put organisations through a potentially expensive and time consuming commissioning exercise. 

The plan under the consultation is to have three routes to contract for decision-makers to consider:

  • continuing with the existing provider;
  • selection of a new provider, for example for a new or changing service, where a competitive process is considered inappropriate; or
  • carrying out a competitive process where it is appropriate.

Whichever route commissioners opt for, there are a number of key criteria identified in the consultation which decision-making bodies will be bound to consider when deciding who to arrange services with. Broadly, these criteria are:

  • Quality (safety, effectiveness and experience) and innovation
  • Value
  • Integration and collaboration
  • Access, inequalities and choice
  • Service sustainability and social value

It’s important to note too that the central tenet of the proposed new regime is transparency. Despite the proposed removal of the obligation to tender there will be steps that must be followed by commissioners in regards to justifying their decision whether that decision is to continue with an incumbent or to go out to tender. Therefore, it’s not unrealistic to envisage requirements in respect of documenting decisions perhaps akin to current obligations under Regulation 84 of the Public Contracts Regulations 2015.

Right to challenge decisions

The consultation did not envisage there being any procedure in the new regime to challenge commissioning decisions in the way that providers can do so now. Instead, interested parties can make “representations” within four to six weeks after award and commissioners will be obliged to address complaints prior to signature. What commissioners will have to do to “address complaints” is not clear and, again, is something about which we will have to wait for the new regulations to enlighten us.  Judicial review will be available to challenge the lawfulness of any commissioning decision. While we have not considered stakeholders’ responses to the consultation in detail here, it is worth noting that NHSEI stated in its response that judicial review, in the general opinion of respondents, “would potentially not be the most appropriate route through which to bring a challenge in any event.”  However, NHSEI has not moved on its position.

What’s next?

As mentioned, NHSEI has recommended governmental implementation of its consultation proposals.  However, the government is the ultimate decision maker here and, as with all consultation proposals – the devil is in the detail. And we will have to wait for publication before such devilish detail is revealed.

Next time, as a follow up to this article, we’ll be setting our thoughts on the implications of the new procurement regime for the independent health sector.

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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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