The odd couple, can they ever live happily after? - the uncomfortable relationship between the draft Public Contracts Regulations 2015 and the NHS (Procurement Patient Choice and Competition) (no.2) Regulations 2013
Here at Mills & Reeve the procurement team kicked off its series of blog posts on the proposed draft Public Contracts Regulations 2015 by looking at some of quirky features of the UK's proposed 'light touch' regime - which will apply to the procurement of health social and some other services and which once in force will replace the current Part B services regime. Continuing the light touch theme this week we're focussing on the light touch regime specifically in the context of commissioning health services; in particular the less than happy relationship between the 'odd couple' aka the draft 2015 Regulations and our existing and snappily titled NHS (Procurement Patient Choice and Competition)(no.2) Regulations 2013 (let's call them the 'NHS Regulations' for short!).
For those who need a reminder the NHS Regulations set out the following principles-based requirements for Commissioners of NHS-funded services:
- When commissioning services Commissioners must act with a view to securing the needs of patients and improving the quality and efficiency of services (the Objective);
- Services must be commissioned from the provider most capable of delivering the Objective and who provide best value for money;
- Commissioners must act in a proportionate transparent and non-discriminatory way;
- Commissioners must ensure providers have a means through which to they can express an interest in providing NHS services; and
- Commissioners should consider using competition patient choice and integration as a way to improve the quality and efficiency of services provided.
These principles stop short of a requirement that all services must be procured competitively. Monitor's guidance is very clear on this point and states that the NHS Regulations do not establish a tender process as the default mechanism which Commissioners should use. Whether to advertise and compete a contract requires Commissioners to make a balanced judgment based on local circumstances which has regard to and is consistent with the principles in the NHS Regulations. That said Commissioners' interpretation of the specific words and language used in the NHS Regulations together with the increased incidence of challenge (and Commissioners fear of this) may often steer them towards advertising and competing a contract in any event.
But once the light touch regime is in place there will be no question about the circumstances when Commissioners must advertise. Subject to some very tightly defined exceptions health service contracts over the relevant threshold (750 000 euros) will have to be advertised in the OJEU albeit there will be more flexibility as to timings and process following this. But the big question is how Commissioners who are still getting comfortable with the 2013 Regulations then comply with those and also the light touch regime. There will inevitably be numerous cases where under the NHS Regulations awarding a contract without advertising or running a competition would be permissible but where under the light touch regime it would not. But that situation is not exclusively confined to the introduction of the light touch regime and may arise even now. This would be where the contract in question is of cross border interest; as then EU Treaty principles (including transparency) are engaged meaning that a sufficient degree of advertising of the contract is required.
As EU law will always trump UK legislation the EU Treaty and the requirements of the light touch regime will always prevail. So what's the UK's answer? Well it seems at least as far as the light touch regime goes procrastination is the order of the day! In the face of this apparent conflict and inconsistency the Cabinet Office has decided to play for time and delay the implementation of the light touch regime for health services to the last possible date (i.e. April 2016). This we assume is in the hope that a satisfactory and workable solution can be found in the meantime. Commissioners can only wait - and hope - that by the time April 2016 dawns the Cabinet Office will have pulled a rabbit out of its hat which will not leave Commissioners facing even more uncertainty and confusion but instead enable them to make robust and legally compliant commissioning decisions.
Next week in our Procurement Regulations 2015 - Ready For Law-nch? series we'll be looking at e-Procurement including the somewhat daunting new requirement to have all the procurement documentation ready and available electronically by the date the OJEU notice is published. Will your organisation be ready?