The Co-operation and Competition Panel, a body created to advise health ministers on the application of competition law within the NHS, has warned that, by commissioning services from sectors outside the NHS, PCTs could be breaching NHS competition rules. In a crucial test case, Great Yarmouth and Waveney PCT have argued that it could only accept bids from NHS organisations to run its provider arm.

This follows Andy Burnham’s actions in September last year, when he appeared to overturn existing policy by stating that, in the future, NHS providers should be regarded as the “preferred provider” of healthcare. However, no such rule changes have actually emerged to make the new approach offi cial. As such, the Panel must make its judgment based on the competition rules in force which state that potential bidders in the commissioning process should not be excluded on grounds unrelated to their ability to deliver the services tendered. Instead, the best performing service provider should be accepted as the preferred bidder. The Panel’s chief executive has therefore warned PCTs that making decisions based on the Health Minister’s words could breach current rules.