Procurement of healthcare services update

Implementation of the Provider Selection Regime, consideration of NHS services in the Procurement Bill and the Health Service Procurement (Wales) Bill

Provider Selection Regime

The NHS Provider Selection Regime (PSR) will be a new set of rules for procuring healthcare services in England. They are intended to provide opportunities for contracting authorities to move away from the expectation of competition in all circumstances and towards a system of collaboration and partnership.  We have been waiting for news as to when we might have sight of a draft of the regulations that will set out how the PSR will operate. There is still no real clarity on this, but NHS England have recently confirmed that the regulations will not be in use before July 2023.

Our article summarising the proposals anticipated under the PSR can be found here.

NHS services in the Procurement Bill

The Procurement Bill was introduced on 11 May 2022 and is currently going through the parliamentary process. As the Procurement Bill passed through the House of Lords, one of the key themes debated was the procurement of NHS services. Despite the recently enacted Health and Care Act 2022 providing for the PSR, there was cross-party support for bringing the NHS within the scope of the Bill. Concerns were raised about the NHS being treated differently from other public services and that there had been no impact assessment covering the interrelationship between the Procurement Bill and the Health and Care Act.

The House of Lords therefore agreed to amend the definition of “public authority” in the Bill to expressly state that it includes the NHS and to remove powers to disapply the Procurement Act in respect of regulated health procurement (instead confirming that the Act applied to procurement by NHS England). However, these amendments have been overturned by the Public Bill Committee in the House of Commons. The disapplication power in the Procurement Act is the mechanism which ensures that the PSR can operate in place of the Procurement Act for the procurement of healthcare services provided to patients in England, avoiding double regulation.   

This manoeuvring is perhaps unsurprising given that we do not currently have complete clarity on how the various strands of health procurement fit together; we do not have PSR regulations nor the regulations setting out which services are to be classified as light touch. There is therefore likely to be further debate on this issue as the Bill continues its legislative journey. However, as things stand, we expect that the final version of the Procurement Bill will not apply to NHS healthcare services.

Health Service Procurement (Wales) Bill

On 13 February 2023, the Health Service Procurement (Wales) Bill was laid before Senedd Cymru. The Bill seeks to reform the way in which certain NHS health care services are procured in Wales.

It is intended that the PSR will give NHS England more flexibility to procure and arrange independent health services. However, there are currently no equivalent regulations in Wales. As a consequence, these new arrangements may have an impact on NHS Wales’s ability to maintain and secure health services in Wales when working with independent providers.

To ensure that health service procurement in Wales is not disadvantaged as a result of introducing the PSR in England, the Health Service Procurement (Wales) Bill and future regulations made under the Bill will aim to provide a supportive mechanism to maintain the current procurement ‘level playing field’ for NHS health services between England and Wales. The Bill accordingly provides a power to disapply the Procurement Act in respect of health services procurement in Wales and a power to create a new procurement regime for health services in Wales.

The Health Service Procurement (Wales) Bill will seek to obtain Royal Assent this summer, with proposed future regulations aiming to come into force in Spring 2024.

If you would like to discuss this topic in more detail, please contact Victoria Croshaw, Solicitor, or Fran Mussellwhite, Partner.