Oxfordshire Director of Legal

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NHS bodies urge scrapping of s.75 tendering rules and removing healthcare commissioning from Public Contracts Regulations

There is strong public and NHS staff support for scrapping section 75 of the Health and Social Care Act 2012 and for removing the commissioning of NHS healthcare services from the jurisdiction of the Public Contracts Regulations 2015, NHS England and NHS Improvement have said.

In a publication issued last month, The NHS’s recommendations to Government and Parliament for an NHS Bill, the two organisations said the Competition and Markets Authority’s roles in the NHS, as provided for by the 2012 Act, should be repealed.

“Taken together, these changes would remove the presumption of automatic tendering of NHS healthcare services over £615k,” they said. Monitor’s specific focus and functions in relation to enforcing competition law would also be abolished under the proposals.

The recommendations came in a report that called for an NHS Bill to be introduced in the next session of Parliament whose purpose should be to “free up different parts of the NHS to work together and with partners more easily”. Once enacted, it would speed implementation of the 10-year NHS Long Term Plan, they argued.

NHS England and NHS Improvement said there was now a clear and strong consensus about what this Bill should and should not contain. A highly targeted Bill would command widespread support from the public and the NHS, they argued, while there was minimal appetite for primary legislation that would trigger "yet another wholesale administrative reorganisation of the NHS".

The report recommended, amongst other things, that:

  • A better name should be found for the ‘best value’ test. “We propose that the future regime that sets rules about if and how the NHS goes out to procurement is co-produced with stakeholders including the NHS Assembly, and that it is published in draft alongside the Bill to inform Parliamentary consideration.”
  • The new regime must ensure transparency. A range of factors must be considered including quality of care, integration with other services, patient choice, access and inequalities, and social value. “We agree with the [Health] Select Committee that we must avoid services becoming ‘an airless room’, so protection of patient choice should be included in the Bill."
  • There should continue to be independent recourse and oversight of patient choice by NHS England and NHS Improvement.
  • The Bill should contain the specific flexibilities NHS England and NHS Improvement originally proposed on tariff including the ability to set a ‘blended tariff’ using a national formula, rather than only being able to set a fixed national price. “Taken together, the operation of the tariff changes and the new procurement regime would help respond to the Select Committee’s recommendation to guard against the risk of introducing competition solely on price as opposed to quality.”
  • A new ‘triple aim’ of better health for the whole population, better quality care for all patients and financially sustainable services for the taxpayer should be introduced, as reciprocal goals for NHS commissioners and providers alike. The triple aim duty should reflect the need to engage local communities and build on the existing duties of local authorities and clinical commissioning groups to engage patients and citizens, to collaborate in the performance of their functions, to integrate care delivery, and to improve the health and wellbeing of residents.
  • The Health Select Committee had agreed that NHS commissioners and providers should be newly allowed to form joint decision-making committees on a voluntary basis, rather than the alternative of creating Integrated Care Systems (ICS) as new statutory bodies, which would necessitate a major NHS reorganisation.
  • Closer collaboration with and from local government was needed. “Health and Wellbeing Boards will continue to have an important role in assessing local needs and developing joint health and wellbeing strategies. And local authorities should not only be able but actively encouraged to join ICS joint committees. Their full membership would greatly assist implementation of the NHS Long Term Plan, whilst not introducing a new local government veto over the NHS’s discharge of its own financial duties: for example, in making budgetary decisions about how best to live within a system-level NHS commissioner and provider resource limit set by Parliament.”
  • NHS England and NHS Improvement should develop statutory guidance on governance of ICS joint committees. “To increase transparency, ICS joint committees should not only meet in public, as recommended by the Select Committee, but also hold an annual general meeting and publish an annual report. Their decisions would also be subject to scrutiny by Local Authority Overview and Scrutiny Committees.”
  • The 2012 Act made provision for the repeal of the Secretary of State’s power to establish new NHS trusts. Whilst this provision has yet to be commenced, the continued use of the NHS trust model was clearly not envisaged by Parliament. "We propose that this is reversed, to support the creation of Integrated Care Providers (ICPs). In addition, we also support the recommendation of the Select Committee, that only statutory NHS providers should be permitted to hold NHS ICP contracts. This will only be possible once the NHS is outside the Public Contracts Regulations 2015."

The report also said that NHS England and NHS Improvement should be permitted to merge fully, as requested by both their boards, "and strongly supported in the engagement responses". Monitor and the Trust Development Authority should be abolished, with their functions added as necessary to the existing legislative basis of NHS England.