New procurement regulations could lead to greater private sector involvement in NHS

Procurement regulations that come into effect on Monday 18 April are likely to lead to greater private sector participation in the delivery of health services.

11/04/2016

Procurement regulations that come into effect on Monday 18 April are likely to lead to greater private sector participation in the delivery of health services, according to law firm Bevan Brittan.

The new regulations which are based on EU Directives mean that any contract for health services worth more than £589,148 must be put out to public tender by way of advertisement, subject to certain narrow exceptions (such as where there is genuinely only one possible provider who owns the necessary facilities).

Before, neither the general UK regulations nor the sector specific health regulations stated that health service contracts had to be publicly tendered.  There were general requirements such as transparency and equal treatment which applied, but the absence of an express and clear threshold led to a real difference in practice as to which contracts were tendered and which were not.

But from 18 April, health procurement will come into line with other public contracts as the Public Contracts Regulations 2015, which came into force for other public services in February 2015, come into force for health as well.

Emily Heard, procurement partner at Bevan Brittan, said: “It is likely that more contracts will now be put out to tender than before.  This opening of the market presents an opportunity for private players to win more business with the NHS and public health services.  There is of course nothing to stop bids from public sector organisations, like NHS Trusts, and high quality bids that represent good value for money are likely to be the successful ones, wherever they come from, but the point is that the opportunity should be one which is advertised.

"We know that CCGs and Trusts have used procurement as a means of driving innovation and efficiency for some time, but traditionally there are some areas which have been resistant to change and competition.  As from 18 April commissioners will have to think very carefully about the risks of not tendering health services.

“Running a procurement takes management time and effort, not to mention cost; the recent reports into the UnitingCare contract and process illustrate the potential problems that can arise.  The upside is that competition can equate to improvement, and be a means of securing better value for money for public services.

“The ‘privatisation of the NHS’ is often raised as a political question.  Now, it’s a legal question as well.”

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