17 July 2023

The Department of Health and Social Care (DHSC) has (on 13 July) published its response to its supplementary consultation with some further detail of the proposed Provider Selection Regime (PSR). Whilst the PSR remains a work in progress, this article looks at the implications of DHSC’s new proposals for remedies and enforcement relating to procurements of healthcare services.

A reminder – what is the PSR?

The PSR will (once in force) be a new set of rules to govern the procurement of healthcare services in England. The PSR is intended to provide procuring authorities (e.g. integrated care boards and local authorities) with more flexibility when selecting providers. DHSC’s express ambition is to “move away from the expectation of tendering for healthcare services in all circumstances and towards collaboration across the health and care system.”

What matters will the PSR cover?

The PSR will be of interest to anybody engaged in supplying or procuring of health - or care-related services. The PSR will cover “the procurement of healthcare services which are delivered to patients and service users”. DHSC has indicated its intention to provide further clarity about which services will fall within the ambit of the PSR and which will be regulated under the new Procurement Act (when it comes into force) by using CPV codes (although these will not be exhaustive or definitive). DHSC has also helpfully provided some further clarity on mixed procurements, stating:

the regulations will make clear that the PSR can be used to procure in scope healthcare services alongside any goods and services that are out of scope…when the main subject matter is healthcare.”

DHSC also appears to have confirmed that the PSR will be separate from the new procurement regime under the new Procurement Bill that is currently passing through Parliament (although that will also remain relevant for some parts of the health and social care market). The response states:

The Procurement Bill…will cover other goods and services. This includes healthcare or health-adjacent services which are not delivered to patients but help support the infrastructure of the NHS.”

However, it remains likely that there will still be some debate on whether a procurement is within the scope of the PSR or the scope of the new Procurement Act, particularly as the two regimes bed down alongside each other.

Remedies and enforcement under the PSR

DHSC’s response to the consultation captures real concern that the PSR enforcement regime was not robust enough. Many providers appear to have viewed a process of independent review and adjudication as essential for ensuring good governance and the updated PSR proposals indicate an independent body will be set up to review decisions which will be welcomed by providers.

DHSC states that it seeks to move away from the sometimes adversarial interactions between contracting authorities and suppliers and, instead, to promote trust, good decision-making and collaboration through transparency and dialogue, stating:

the prospect of legal action acts as a barrier to collaborative working and can lead to commissioners making risk-averse behaviours, such as the unnecessary tendering of contracts, rather than making decisions in the best interests of the patients, taxpayers and population.”

The PSR will require procuring authorities to make their intentions clear in advance (although not in every circumstance), then communicate their intended decisions publicly and observe a standstill period during which representations can be made. Ultimately, at the conclusion of the standstill period, it will be for the procuring authority to decide whether its decision will be confirmed.

A key transparency requirement will be for the intention to award notice to “include a statement explaining the decision-making body’s rationale for choosing the selected provider with reference to the relevant key criteria”. On the face of things, this appears to be a lesser requirement than under, for example, the Public Contracts Regulations 2015 but in reality may amount to the same thing.

Interestingly, DHSC had explored requiring the publication of additional information but, although those proposals appear to have been popularly received, decided against it, largely due to concerns about the extra administrative workload.

Ultimately, DHSC considers that judicial review will be open to and adequate for any disappointed supplier that wishes to challenge a procurement decision (judicial review claims are generally permitted on a narrower basis than current procurement actions under the Public Contracts Regulations 2015). Nevertheless, DHSC and NHS England also intend to establish an independent panel that will be able to “look at and advise on” issues relating to the PSR. Further information about the jurisdiction and composition of that panel is awaited.

The PSR remains subject to change. There is an indication that it will be in force by the end of year so we now await the detail of the regulations and guidance.

For more information, please contact Richard Binns or Andrew Walls of the Burges Salmon Healthcare team.

Key contact

Richard Binns

Richard Binns Partner

  • Dispute Resolution
  • Procurement Disputes
  • Procurement and Subsidy Control

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