It is over a year since commissioners inherited PCTs’ commissioning arrangements. Many are now planning to commission in a radically different way in order to deliver outcomes-focused care for the population and to meet financial challenges. But how do you achieve the best results and avoid the legal pitfalls?

1.  Equality Impact Assessments

You will need to fully understand the likely impact of any proposed changes to local NHS services on disabled people, the elderly, racial minorities or any other group that has a protected characteristic under the Equality Act. If you are proposing changes to services that will have an effect on a large number of patients who are in groups that have “protected characteristics”, you will need take steps to meet the needs of people who share those characteristics and encourage their participation in service design. Courts talk of this being an “essential preliminary” and not a “rearguard action”.

Achieving the needs of groups with protected characteristics might be impossible given competing pressures (such as the need to break even). The weight to be given to countervailing factors is a matter for you. The courts will only intervene if your assessment is unreasonable or irrational.

2.  Compliant public consultations

If you are planning service changes, you will need to consult the public and probably the local authority. Consultation should begin when proposals have been formed but no decision has been reached.

Keep thorough records of proceedings and be careful about the language used in project documents, which must reflect that you are genuinely consulting about options and have not already made a decision. If a commissioning decision is challenged in the courts, the documents will have to be disclosed and the  court will look at how the decision was taken and whether due process was followed. It will be no defence that you clearly took the right decision.

The consequences of failing to comply with the requirement to involve the public can be severe. You could face legal challenges from individuals or groups of service users and current providers who risk losing out. Even if their claims are not successful, they will cause delay.

3.  Choose the best procurement process and engage with the market

Take legal advice on the choice of procurement process at an early stage in large procurements. It will save time and expense and will help you achieve the best service possible.

Whichever process is used, engage with the market prior to commencing your process, but avoid speaking to only one or two providers. It is important to ensure that no potential providers obtain an advantage over any others, either by having an opportunity to gear the service requirements towards their own offering, or by obtaining more or earlier information than others.

If the service is so complex that you cannot identify what the market could offer ahead of going out to tender, the competitive dialogue process allows you to ask suppliers for service solutions.

4.  Effective collaboration arrangements

Make sure you have robust and fit-for-purpose collaboration arrangements in place with your joint commissioners, giving each commissioner the assurance it needs regarding the effective discharge of its duties in relation to commissioning new services.

5.  Contracts that focus on  outcomes

The NHS Standard Contract for clinical services contains new flexibilities around CQUIN, National Tariff and contract sanctions, which allow for the possibility of more innovative outcomes focused contracts. Consider using the new flexibilities and more innovative contracting models.

Appoint one or two officers to take editorial control of the development of the contract, to ensure consistency between the various schedules to the contract. The quality requirements in the contract should contribute to achieving the key outcomes and should not be too numerous or fragmented. The information requirements should enable you to monitor the delivery of services and providers’ achievement of outcomes. Incentive schemes (CQUIN and local) should incentivise the achievement of outcomes.

Develop robust service specifications that include key outcomes. Resist input-based specifications. Involve your clinical leads in developing the service specifications but avoid dealing with one clinician to the exclusion of all others. Always give an opportunity for all potential providers to comment on the specifications at a market engagement event, before they are finalised.

6.  Manage conflicts of interests

If any of your clinicians might be interested in bidding for any element of the delivery of the service, then they will need to declare their conflict of interest and those conflicts will need to be managed by the CCGs, in accordance with the constitutions and the law.

If many of your own clinicians have conflicts of interests, you may need to plan for other clinicians to join your project team, the procurement evaluation team and/or the committee ultimately tasked with agreeing the final contract award.

7.  Understand the consequences of decommissioning

Undertake an audit of the contracts that will be affected by your service transformation plans that you may need to terminate. The aim of the audit should be to review the provisions within affected contracts, such as expiry dates, compensation on termination (if any) and provisions relating to staff transfer (TUPE). Audit will enable you to properly inform bidders of any potential staff transfers to them from the outgoing providers, plan your decommissioning activities, mitigate any risk of breach of contract with an existing provider and minimise any financial consequences.