NHS Procurement Rules under attack

An online campaign survey has revealed huge support for an overhaul of the current procurement requirements within the NHS and to free the NHS from overly rigid procurement requirements.

A survey run by 38 Degrees asked “to what extent do you agree that the law should be changed so that contracts to run NHS services no longer have to be put up for auction?” In response to this, 89% expressed that they strongly agreed.

Over the years, NHS procurement rules have been heavily criticised for imposing excessive red tape and compliance costs on the NHS. In its 2019 consultation document setting out proposals as part of the NHS Long Term Plan, NHS England said that the current rules were at odds with efforts to develop greater collaboration and promote integration within the health service.

The proposed changes to legislation include a major shift away from the specific procurement requirements in the Health and Social Care Act 2012 (requiring NHS bodies to put contracts over a certain value out to tender) in favour of something more flexible.  The existing regulations present real problems both (i) in terms of lack of clarity around procurement rules; resulting in “defensive procurement” where people put contracts out to tender whether or not it is required to avoid the risk of legal challenge and, therefore, incurring wasted procurement costs and (ii) in terms of wasted time/costs in the event that there is a legal challenge.  The move is designed to make it easier for the NHS to integrate services by freeing commissioners from the burden of having to tender service contracts on the open market.

Under the new proposals, existing procurement rules will be scrapped and NHS commissioners given discretion as to the circumstances in which they should use procurement; subject to a “best value” test taking into account factors such as the likely impact on quality of care and health outcomes and patients’ best interests. The idea is that the NHS will have freedom over whether to put services out to competitive tender with the aim of cutting the delays and costs of the NHS automatically having to go through the procurement process.

Unfortunately, whilst there is clearly massive support for reform in this area, the ability to do so is uncertain pending the outcome of Brexit.  A “no deal” Brexit is more likely to give the required flexibility to pass new legislation and the World Trade Organisation has already confirmed that the UK will join the Government Procurement Agreement (GPA) as an independent member if we leave the EU without a deal, but this will inevitably take time and may not be the Government’s top priority.  Indeed, at a meeting of the NHS Assembly last month whilst discussions were generally supportive of the proposals, it was pointed out that even if successful they will not come into force immediately. NHSE’s director of strategy Ian Dodge commented that “even if the process were to move as rapidly as we could conceive…it is quite hard to see how we can get provisions up and running before April 2022.”

In conclusion, whatever the ultimate timeframe for implementation might be, accession to the GPA will ensure that that NHS continues to benefit from increased choice and value for money on contracts which are open to international competition.  Private social care providers would do well to keep abreast of the proposed changes to legislation in order to make the appropriate future business plans, especially in view of the implications of Brexit.

Blundell_Rebecca-web Written by Rebecca Blundell, solicitor at BLM

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