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Published 21 February 2022
In the first of our series of 6 briefings focused on the changing procurement landscape, we consider the potential impact of both the NHS Provider Selection Regime (part of the Health and Care Bill 2021) and the Government’s response to consultation on its 2020 Green Paper ‘Transforming Public Procurement’, on procurement in the health and social care sector.
In July 2021 the publication of the Health and Care Bill set out major reforms to the NHS in England, and included the power of the Secretary of State to create regulations to implement a new provider selection regime in place of the NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013, while at the same time removing the commissioning of healthcare services from the scope of the Public Contracts Regulations 2015.
During the same period, the Public Contracts Regulations 2015 (‘the Regulations’) have themselves been subject to major scrutiny and, based on the Green Paper and the Government’s response to consultation on the Green Paper, published in December 2021, will be undergoing significant change in the near future. We anticipate the new Procurement Bill to be published later this year. One of the changes proposed is the scope of the Light Touch Regime, which currently includes the procurement of contracts for NHS and non-NHS health and social services falling within the CPV codes set out in Schedule 3 to the Regulations. The Government’s response to the Green Paper indicated that the Light Touch Regime will stay – but what will it cover if healthcare services are now to fall under the NHS Provider Selection Regime (‘the PSR’)?
Which services fall within which regime?
The PSR is intended to apply to the commissioning or arrangements for the provision of healthcare services by Integrated Care Boards, NHS England, local authorities (in certain situations) and NHS trusts and foundation trusts. The following are expressly excluded from the PSR:
The PSR consultation document implies that the following would also be excluded:
The implication is therefore that if these are excluded from the PSR they must then fall within the new Light Touch Regime under the new Procurement Bill. Those falling above the contract value thresholds would be subject to the full regime; those within the Schedule 3 CPV codes, with a contract value above the Light Touch Regime threshold, will, we assume, be subject to the Light Touch Regime.
Where mixed contracts are concerned, until the detail of both new statutory regimes is published the position is unclear; however we anticipate a mechanism similar to the current provisions in Regulation 4 PCR 2015 which allocates the contract to either the full regime or the Light Touch Regime according to the “main subject-matter of the contract”, which is determined with reference to the estimated values of the respective services involved.
An ‘Even Lighter Touch’ Regime?
However, the Government’s response to consultation on the Green Paper suggests that not all the services currently covered by the Light Touch Regime would continue to be subject to those provisions in the new regime. There is mention of certain services being “treated differently” i.e. being removed from the scope of the Light Touch Regime, but still being subject to some of the rules on transparency and notices. Specific services mentioned include adult and children’s residential care, fostering and special education services; more broadly, those requiring individual care and service user choice, on the basis of legislative obligations for choice in the Care Act 2014 and the Children and Families Act 2014. We anticipate that community pharmaceutical services would also be considered to be outside the scope of both the PSR and the new Procurement Bill. We have the prospect therefore of some services being outside of either regime (much as we had with Part B services pre-2015).
The precise nature and extent of the legislation to be put in place for these services is not yet known; nor has there been any indication of relevant thresholds which might be applied. If it is to be even more flexible than the Light Touch Regime, which itself was originally due to be removed entirely in light of the new Competitive Flexible Procedure, the purpose of the Light Touch Regime itself may become less clear. On a more practical note, the lack of clarity around the future applicable rules for procuring social care services creates uncertainty which is likely to translate into increased cost for this already stretched sector.
To muddy the waters even further, the response to the Green Paper indicates that there would be “improvements to [the] scope and application” of the Light Touch Regime, in light of stakeholder concerns around the proposed lower threshold for this type of procurement potentially resulting in more procurements being subject to the full regime and its increased burden of transparency and notices for contracting authorities. How the new improved Light Touch Regime will sit alongside the Competitive Flexible Procedure, which itself is intended to encourage much of the flexibility of the Light Touch Regime, also remains to be seen.
While the retention of the Light Touch Regime will be welcomed by many, the overall impact of slotting light touch services back into the new procurement regime may complicate rather than simplify procurement for some of the key services within the health and social care sector. Where services such as social care are in danger of falling between two stools, those involved in pipeline planning for these services should keep their procurement options open, and remain alert to the differing potential costs involved.
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