Proposals for new commissioning regulations

The Department has published a consultation document on proposed regulations that will apply when procuring clinical services. The Health and Social Care Act 2012 gave the Secretary of State the power to pass the regulations. This consultation is about the principles that would be enshrined in the regulations. It represents a significant change in the regulation of commissioning. In recent years commissioning of clinical services has been directed by policy (Procurement Guide for Commissioners of NHS Funded Services and the Principles and Rules of Cooperation and Competition). From April 2013 requirements will be legally binding and Monitor will have new enforcement powers to investigate potential breaches of the regulations and ensure compliance. Domestic law on procuring clinical services will go far further than EU procurement law, which of course will still apply.

The proposed regulations will address five areas: (a) ensure good procurement practice (b) protect patient choice (c) prevent anti-competitive behaviour (d) manage conflicts of interest and (e) set out the parameters of Monitor's powers. All commissioners are urged to review and respond to the proposals. They raise some potentially challenging issues for commissioners. To highlight a few :

First the proposals are for the regulations to set out a series of principles to ensure good commissioning rather than be prescriptive regarding actions that must be taken. The challenge here is to ensure the principles have sufficient clarity and are not so high level that they are open to interpretation and commissioners have to wait until there have been cases before Monitor until certainty emerges.

Second the proposed requirement regarding managing conflicts of interest addresses the potential for conflicts of interest as GPs who participate in CCGs also provide healthcare services. There is however another relationship which will need careful management: that between CCGs CSUs and the NHS Commissioning Board. The Board performance manages CCGs. Yet the Board is also host to CSUs who provide procurement support to CCGs. It is possible for a performance issue at a CCG to arise which flows from procurement decisions taken by a CSU on behalf of the CCG. Safeguards need to be built into the system around how the NHS Commissioning Board will deal with this to ensure its role as host to a CSU (and therefore having ultimate responsibility for its decision making) does not impact on its role of performance managing a CCG.

Third quite what will be the extent of Monitor's powers? Under the Health and Social Care Act 2012 it can direct commissioners to remedy a breach of the regulations withdraw or vary a tender. The consultation document does not list all the powers set out in the 2012 Act. In particular the 2012 Act provides for Monitor to have the power to declare a contract ineffective where there has been a sufficiently serious breach of the regulations. In other words Monitor can set a contract aside. This could have significant implications for commissioners and for patients. Ideally the Department should be setting out now if it intends including this right in the regulations and if so in what circumstances Monitor can exercise it.

The deadline for responding to the consultation is 26 October 2012. If you have any queries or would like to discuss the implications of the proposals do phone Gill Thomas on 01223 222237.

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