This month the Co-operation and Competition Panel published its commentary on its first 12 months in operation. In its first progress report, which can be accessed here, the panel reviews its cases to date and comments on recurring themes, such as the often-overlooked point that for the panel any bringing together of control amounts to a “merger” even if the parties think all they are doing is agreeing to work together as an interim arrangement. This was not news because the panel has been publishing its advice and findings alongside its decisions.
However, the panel appears to have taken the Department of Health by surprise with the following paragraph, criticising PCTs for poor procurement practice: “In the panel’s experience, a significant number of commissioners take procurement decisions at risk of challenge under the principles and rules. Problems we have observed include using different criteria to evaluate bidders than initially described in the bid documents, excluding potential bidders on grounds unrelated to their ability to deliver the services tendered, and failing to select the best-performing service provider as the preferred bidder.”
The department was swift to point out that no cases have been referred to the panel so far on procurement grounds (implication: so how would it know?), which was true up to the referral of Great Yarmouth and Waveney PCT for (in its view) following Department of Health policy that the NHS is the preferred provider. What this analysis overlooks however is the considerable amount of informal advice the panel has been giving both to PCTs and SHAs on procurement cases that have not (or not yet) been referred to the panel. It is also true that some of the formal merger referrals to the panel have been about mergers forged through procurement by commissioners - so even though the panel’s remit was to evaluate the merger, it may have been difficult for staff who are, after all, procurement experts too, not to notice any shortcomings in procurement practice.
As readers may be aware, in the last few days it has been announced that the Great Yarmouth and Waveney procurement has been cancelled on the instructions of the Department of Health and the CCP has closed its file. In response, the shadow health minister Andrew Lansley has asked the Office of Fair Trading to investigate the “NHS as the preferred provider” policy. The question is limited to Government policy (which is outside the remit of the CCP), rather than the actions of NHS bodies, but as Government policy is what drives the behaviour of NHS bodies the move does have the potential to extend into other areas of Government policy if the OFT accepts the case. Obvious candidates are Transforming Community Services, NHS mergers and all of the work of the CCP. In addition, NHS Confederation Partners (the private-sector-providers-to-the-NHS section of the NHS Confederation) has issued a statement that excluding the private sector from competition to provide NHS services is “unacceptable and potentially unlawful”. We await further developments with interest!