29 May 2024

On 15 May 2024, the Independent Patient Choice and Procurement Panel (IPCPP) published its first review of a proposed contract award following the new NHS Provider Selection Regime (PSR). The review found that North East and North Cumbria Integrated Care Board (NENC) had not followed the correct process to award a contract to an incumbent provider of an online ADHD service.

The decision is notable in demonstrating that the requirement to use Direct Award Process B where the relevant criteria are satisfied is absolute. The decision also provides some insight into the timescales we might expect from future reviews carried out by the IPCPP.

The Provider Selection Regime

The PSR, which came into force on 1 January 2024, establishes a series of rules for when certain organisations – otherwise termed “relevant authorities” – procure health care services in England.

The PSR has introduced three key provider selection processes that relevant authorities can follow when awarding contracts. These are the:

1. Direct Award Processes (A, B, and C), enabling relevant authorities to directly award contracts to providers where certain conditions apply –

a) Process A should be followed where, due to the nature of the health care services, there is only one capable provider able to fulfil the contract requirements;

b) Process B should be followed where the patient has a choice of provider and there is no restriction on provider numbers;

c) Process C should be followed where the relevant authority intends to continue working with the existing provider on the basis that the existing provider is satisfying the existing contract and will continue to under the new contract;

2. Most suitable provider process, where a contract is awarded without running a competitive procurement process, because the relevant authority can identify the most suitable provider; and

3. Competitive process, where a competitive procurement process is run.

The decision

NENC decided to award a new contract to the incumbent provider of the online ADHD services, following Direct Award Process C. NENC subsequently published its intention to award the new 12-month contract on 26 March 2024. A Panel review of NENC’s provider selection decision was then requested.

The IPCPP found that the decision to use Direct Award Process C was flawed, and that Direct Award Process B should instead have been followed.

The review establishes NENC’s rationale for following Direct Award Process C. One reason behind the decision was that NENC wanted to maintain continuation of the existing arrangements in North Cumbria. The review also highlights that NENC was of the view that it had the option of awarding contracts for ADHD services under Direct Award Process B or Direct Award Process C.

Nevertheless, the IPCPP’s evaluation focussed on whether patients using the ADHD services have a legal right to choose their provider, and, if so, whether NENC was free to use Direct Award Process C under the PSR.

The IPCPP’s review sets out that patients, when referred by their GP, do have the right to choose their provider of ADHD services – a right which is given legal effect by Part 8 of the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) Regulations 2012.

The review reasserted that “commissioners must use Direct Award Process B to contract for all services where patients have a legal right to choose their provider, and Direct Award Process C is not available to commissioners in situations where Direct Award Process B must be used.” Consequently, the IPCPP concluded that the award by NENC to the incumbent provider under Direct Award Process C would be in breach of the PSR Regulations.

Key takeaways

The review provides helpful insight into how the Direct Award Processes should be applied in practice under the PSR. While the IPCPP’s conclusions are only advisory in nature, the review states that if a provider is unhappy with NENC’s final decision following the IPCPP’s advice, it “could choose to seek a judicial review of that decision”, demonstrating the significance of the outcome.

In terms of timing, the IPCPP accepted the case for review on 10 April 2024. The IPCPP then published its decision roughly four weeks later, on 15 May 2024. This timeline gives some insight into the turnaround periods we may be able to expect in future cases reviewed by the IPCPP.

Key contact

Patrick Parkin

Patrick Parkin Partner

  • Healthcare
  • Procurement and State Aid
  • Commercial

Subscribe to news and insight

Burges Salmon careers

We work hard to make sure Burges Salmon is a great place to work.
Find out more