The last couple of weeks has seen controversy in the healthcare sector, following publication of the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 (the “Regulations”) which are due to come into force on 1 April 2013. Following an outcry from many practitioners and commentators, the government has now withdrawn the Regulations in their current form, and taken them back to the draughtsman for a second attempt. More on this shortly, but, before that, let’s remind ourselves of what the Regulations actually do.

They were made under the Health and Social Care Act 2012, which introduces a new commissioning structure within the NHS. Primary Care Trusts are being abolished and their commissioning function is being transferred to new G-P led Clinical Commissioning Groups (CCGs). The Act also imposes requirements on a new National Health Service Commissioning Board and the CCGs under it, to ensure good practice in the procurement of health care services for the purposes of the NHS and to prevent anti-competitive behaviour by commissioners with regard to such services. The Regulations:

  • set out the objectives of such procurement (securing the needs of people who use the services, and improving quality and efficiency);
  • include general requirements in relation to transparency, proportionality and non-discrimination;
  • set out requirements relating to matters such as advertisements and qualification criteria; and
  • set out Monitor's powers to investigate and take enforcement action in relation to breaches.

These Regulations effectively, therefore, introduce a further layer of procurement obligations on NHS commissioners as the Public Contracts Regulations 2006 (insofar as they apply to Part B services), and EU treaty principles (where there is a cross border interest) still continue to apply.

For commissioners of healthcare, these Regulations must be complied with when procuring clinical services and the regulator, Monitor, has extensive powers if they are breached. For providers of healthcare, these Regulations provide the framework within which tenders will be issued and the basis for addressing any concerns. Commissioners and providers of healthcare should, therefore, ensure that they fully understand the Regulations. In particular, from April, commissioners of healthcare must comply with them when making commissioning decisions. In advance of this they should ensure that they review and amend their Standing Orders, Standing Financial Instructions, and procurement policies to ensure that they properly reflect the requirements of the new Regulations.

The latest version of the Regulations has been withdrawn following concerns about implications of the drafting. The particular issue has been around Regulation 5 of the withdrawn draft, which stated that a new health services contract could be awarded to a single provider without competition only in three circumstances: (a) where the commissioning body is satisfied that only one provider could provide the service, or (b) for technical reasons (including intellectual property rights) only that provider is capable of being awarded the contract, or (c) for reasons of extreme urgency, it is not possible to award the contract to any other provider within the necessary timeframe.

The backlash in the sector has centred on the fears that these exemptions are narrow in scope and will in effect require commissioners to tender almost all services, leading to “privatisation by the back door". Announcing the withdrawal of this draft, Health Minister Andrew Lamb MP stated that ‘Concerns have been raised that commissioners would need to tender all services. This is not our intention and we will amend the regulations to remove any doubt that this is the case and clarify that the position remains the same as at present.’ We expect that a new draft will be issued soon and we will update you accordingly.