Consultation outcome

Provider Selection Regime: supplementary consultation on the detail of proposals for regulations

Updated 13 July 2023

Applies to England

Executive summary

The Provider Selection Regime is a proposed new set of rules which would govern the arrangement of healthcare services in England. Our aim for the Provider Selection Regime is to move away from the expectation of competition in all circumstances and towards collaboration across the health and care system. This is intended to remove unnecessary levels of competitive tendering, remove barriers to integrating care, and promote the development of stable collaborations.

The Provider Selection Regime would give decision-makers in the NHS and local government the flexibility they need to arrange services that best promote the interests of patients, the taxpayer, and the population. This overarching objective would be underpinned by decisions made on a broad base of criteria including:

• quality and innovation
• value
• integration
• collaboration and service sustainability
• social value
• opportunities to increase access to healthcare, reduce health inequalities and disparities, and promote patient choice

To this end, the Provider Selection Regime is intended to make it straightforward to continue with existing arrangements for service provision where those arrangements are working well and there is no value for the patients, taxpayers, and population in seeking an alternative provider. Where there is a need to consider making changes to arrangements for service provision, it will provide a sensible, transparent, and proportionate process for decision-making that includes the option of competitive tendering as a tool decision-makers can use in appropriate circumstances.

Additionally, for many healthcare services, the choice of service provider is currently constrained by the nature of the service and its interdependencies with other services. The proposed regime explicitly recognises this – and makes it clear that such core services can be arranged without unnecessary competitive tendering.

The powers to establish the Provider Selection Regime are set out in the Health and Care Bill which is currently undergoing Parliamentary scrutiny in the House of Lords. Subject to the successful passage of the Bill through Parliament, the Provider Selection Regime would then be set out in regulations and statutory guidance with implementation being supported by engagement and learning materials.

Relevant decision-makers should not inform any plans on the assumption that the Provider Selection Regime will be established by an assumed date – or will be established as per the proposals set out in this consultation or the accompanying literature until these are agreed by Parliament.

Due to timing constraints, the Provider Selection Regime will not be established at the same time as integrated care boards (ICBs), which we are working to implement from July 2022 subject to the Parliamentary passage of the Health and Care Bill. DHSC is continuing to work to ensure that the Provider Selection Regime is established as soon as possible after the establishment of ICBs, subject to Parliamentary approvals and scheduling.

Introduction

Overview of this consultation

This consultation builds on the engagement and consultation activity that NHS England has undertaken over the past 3 years. It aims to build on the consensus achieved from NHS England’s consultation on proposals previously set out for the Provider Selection Regime, and does not repeat or reopen that consultation.

The Department of Health and Social Care (DHSC) is responsible for the development and delivery of the regulations which will set out the Provider Selection Regime. As such, this consultation focuses on those areas where we would benefit from further engagement with stakeholders to ensure that regulations (and, where applicable, guidance) achieve our intended aims for the arrangement of healthcare services in England. That is, that the Provider Selection Regime should allow decision-makers in the NHS and local government to move away from the expectation of competition in all circumstances and instead have greater flexibility when arranging services to better promote the interests of patients, the taxpayer, and the population.

The sections of this consultation document will provide potential respondents with the context and reasoning behind the questions we are asking and explain what previous engagement and analysis has informed the current position where relevant.

An additional questionnaire titled ‘Further questions on establishing the Provider Selection Regime’ asks respondents for information which will help us to understand how to support the system to establish the Provider Selection Regime.

Background

NHS England has previously set out proposals for new rules which will govern the procurement of healthcare services in England. These proposals were formulated in response to extensive engagement undertaken by NHS England and NHS Improvement (NHSEI) since early 2019 and are supported by DHSC.

On 28 February 2019, NHSEI launched an engagement process on implementing the NHS Long Term Plan: proposals for possible changes to legislation. This built on proposals outlined in the NHS Long Term Plan in January 2019 and invited views from across the health and care system, including patients, staff, NHS leaders and partner organisations. Responses to this exercise supported proposals to free up procurement rules by revoking section 75 of the Health and Social Care Act 2012 and giving NHS commissioners more freedom to determine when a competitive tendering exercise is needed (over 75% of respondents either agreed or strongly agreed). At the same time, the engagement exercise demonstrated high levels of support for the prioritisation of integration and collaboration in the NHS. The report by the Select Committee on Health and Social Care on the legislative proposals in the NHS Long Term Plan (published 26 June 2019) also welcomed these proposals including revoking section 75 of the Health and Social Care Act 2012 and promoting collaboration over competition as an organising principle of the NHS. The report also encouraged the adoption of a broad definition of value underpinned by concepts of wider public and social value when arranging services.

On 26 September 2019 NHSEI set out its recommendations to government for an NHS bill, in response to their engagement. These recommendations aim to remove barriers and promote collaboration between NHS organisations and their partners to help speed the implementation of the NHS Long Term Plan. This reiterated proposals to:

• revoke section 75 of the Health and Social Care Act 2012
• remove underlying regulations (the National Health Service (Procurement, Patient Choice, and Competition Regulations 2013) (No. 2) (PPCCR 2013))
• take arrangements between NHS commissioners and providers out from the scope of the Public Contracts Regulations 2015 (PCR 2015) with the aim of replacing these measures with a new regime

The report also recommended, based on engagement, that legislation should:

• establish a new regime for the arrangement of healthcare under which commissioners of NHS healthcare services must act in the best interests of patients, taxpayers, and the population when making decisions about arranging healthcare services. They would also have to act in accordance with criteria set out in statutory guidance
• permit NHS commissioners to make such arrangements with greater discretion (that is, without having to undertake a full tendering exercise first unless it would be in the interests of patients, taxpayers, and the population), subject to adherence to related statutory guidance
• establish a delegated power to issue statutory guidance to which NHS commissioners must have regard when making such arrangements with providers
• ensure that these changes should apply to commissioners when making decisions about healthcare services only. It is not intended that other NHS procurements (such as procurement of goods or pharmaceuticals) are taken out of the scope of the PCR 2015

The intention of these proposals is to ensure that tendering only takes place where it adds value, by giving commissioners the discretion to choose either to award a contract directly to a provider, or to undertake a competitive tendering exercise, in either case with the clear aim of ensuring good quality care, good patient outcomes, and value for money when designing healthcare services. DHSC accepted these recommendations and took forward work to deliver the recommendations through the Health and Care Bill which was introduced to Parliament on 6 July 2021.

On 11 February 2021 NHS England published a public consultation with more detailed proposals for a new regime to govern the arrangement of healthcare services in England known as the Provider Selection Regime. The proposals set out in this consultation covered the essential elements of the new regime including on the regime’s aims, scope, application (including when it is appropriate to renew a service, arrange a service without a competitive tendering exercise, or use competitive tendering to select providers), criteria for assessing providers, alignment with proposals to strengthen patient choice, and transparency and scrutiny of decision-making.

As with the previous consultation exercise, responses provided a clear and strong consensus on the detailed proposals from a wide range of stakeholders, with 70% of respondents either strongly agreeing or agreeing with the proposals. Respondents welcomed the move away from de facto competition and the greater focus on integration and collaboration, as well as acknowledging the benefit of the proposed regime in reducing unnecessary costs and bureaucracy. Several key themes could be drawn from the consultation including:

• 70% of respondents agreed that decision-making bodies should be able to continue arranging services with an existing provider or choose a most suitable provider without having to go through a competitive process
• around 80% of respondents agreed or strongly agreed that the proposed key criteria were appropriate considerations when selecting providers
• over 60% of respondents agreed with the proposals for a notice period during which representations can be made – viewing this as necessary to show transparency in decision-making and allow for decisions to be reviewed by those affected by them
• over 80% of respondents agreed or strongly agreed with the proposed steps to promote transparency
• additionally, the consultation responses provided a range of views about transparency, from questions about specifics of timings and availability of any published notices, to comments about the need to balance transparency with the associated burden on the system

Context: details of the Provider Selection Regime

Overview

The proposal is that the Provider Selection Regime will be a new set of rules for arranging healthcare services, which is intended to give decision makers a flexible, proportionate decision-making process for selecting providers to deliver healthcare services to the public. It will be introduced by regulations made under the forthcoming Health and Care Bill, and therefore its introduction is subject to Parliament passing the bill, and any changes that may arise from that process.

The Provider Selection Regime would replace the existing procurement rules for healthcare services (as defined in the scope section of this document). The aim of the Provider Selection Regime is to make it easier to integrate services and enhance collaboration, and to remove the rigidity associated with the current procurement rules, and the related bureaucracy and cost. However, under the Provider Selection Regime, the competitive procurement of health services will continue to have an important role where this is in the best interests of patients, taxpayers, and the population.

The rest of this section gives important context on the features of the Provider Selection Regime which will be helpful in understanding our questions in this consultation.

Decision-making circumstances

The intention is that the Provider Selection Regime will need to be applied as part of the commissioning process whenever contracts for healthcare services are coming to an end, changing considerably, or being awarded for the first time. The first step decision-makers will need to take when applying the Provider Selection Regime is to identify which of the following decision circumstances is applicable. The decision-making circumstances are listed below.

Decision-making circumstance 1A and 1B: continuation of existing arrangements

This is for circumstances where the incumbent provider is the only viable provider due to the nature of the service, or where alternative providers are already available via patient choice routes.

Decision-making circumstance 1A: the type of service means there is no realistic alternative to the current provider or group of providers (for example, type 1 and 2 urgent and emergency services).

Decision-making circumstance 1B: a range of accredited alternative providers are already available to patients (for example, where patient choice arrangements allow patients to choose accredited providers). This may be because these services are:

• elective services led by a consultant or mental healthcare professional
• other non-consultant led elective services where commissioners have established a list of providers that patients can choose from and where the number of providers is not limited by the decision-maker
• core primary care services commissioned on the basis of continuous contracts (for example, where patients have the right to exercise choice at the point of registration with a GP surgery). This will ensure that the Provider Selection Regime does not create another layer of additional bureaucracy for primary care services which are provided by existing contractual arrangements

Some of the proposals in this consultation document (such as, those regarding considerable change, contract variations, and transparency) are not relevant to decision-making circumstances 1A and 1B. This is because these circumstances by their definition do not require a decision-making body to select between providers. A contract award notice will be published for arrangements made under 1A and 1B to ensure that these arrangements remain transparent.

Decision-making circumstance 1C: continuation of existing arrangements

This circumstance is used when the incumbent is assessed to be doing a good job (in relation to the key decision-making criteria), is likely to continue to do so, and the service is not changing.

Decision-making circumstance 2: identifying the most suitable provider when the decision-maker wants to use a new provider or for new/substantially changed arrangements

This is for circumstances where existing arrangements need to change considerably; where a new service is being arranged; where the incumbent is no longer able and/or no longer wants to provide the service; or where the decision-making body wants to use a different provider and the decision-making body considers it can identify a suitable provider without running a competitive procurement process.

Decision-making circumstance 3: competitive procurement

This is for situations where the decision-making body cannot identify a single provider or group of providers that is most suitable without running a competitive process or wants to test the market.

Key criteria

We intend that the Provider Selection Regime will include a set of key criteria that may be considered when making decisions about provider selection under the regime. These criteria are summarised as follows.

Quality and innovation

Ensures that decision-making bodies seek to maximise the quality of services and the performance of providers, to innovate and improve services, and to proactively developing services that are fit for the future.

Value

Ensures that decision-making bodies seek to maximise the value offered by a service by selecting the option with the best combination of benefits to individuals in terms of outcomes and to the population in terms of improved health and wellbeing and brings value to taxpayers by reducing the burden of ill health over the lifetime of the arrangement and as such reducing the cost.

Integration, collaboration, and service sustainability

Ensures that decision-making bodies seek to maximise the integration of services for patients to improve outcomes, that decision-making bodies give due consideration to how their decisions may affect the stability and sustainability of services over time across providers, and that their decisions are consistent with local and national plans around integrating care and joining up services for patients and service users.

Access, inequalities, and disparities, and choice

Ensures that decision-making bodies seek to maximise the choices available to patients, and that services and treatments are offered and accessible to all individuals who need them, with a particular focus on tackling health inequalities and disparities.

Social value

Ensures decision-making bodies seek to maximise the social value created by the arrangements, recognising the role the health service plays in local communities including its leadership role in achieving a net zero carbon footprint. The criteria and metrics for social value will align with guidance on social value published by Cabinet Office and by NHS England.

Application of the criteria

Our intention is that decision-making bodies will need to consider all of the key criteria in the Provider Selection Regime when making decisions under circumstances 1C, 2 and 3.

In these circumstances, decision-making bodies will need to be able to justify their decisions for arranging services in relation to the key criteria and keep a record of this.

Scrutiny and standstill

Decisions made under the Provider Selection Regime should be subject to scrutiny. In decision-making circumstances 1C, 2 and 3 there will be a standstill period that follows a decision to award a contract, which must close before the contract can be awarded.

This period will also need to be observed when a decision is made due to a large contract variation.

The purpose of this period is to allow an opportunity for providers (who have been impacted by a decision and have reasonable grounds to believe that the decision-maker has not applied the Provider Selection Regime correctly) to make representations to decision-makers, and discuss any concerns or issues, and for decision-making bodies to respond to representations received.

The intention is that the standstill period will be a period during which representations can be made and responded to – lasting for a maximum of 30 days (unless extended by mutual agreement). If a provider has been impacted by a decision and has reasonable grounds to believe the decision-maker has failed or potentially failed to apply the Provider Selection Regime correctly, they will be able to make a representation to the decision-making body within 10 days of the initiation of the standstill period.

Proposals: scope

Overview

The aim of establishing the scope for the Provider Selection Regime is to ensure that the regime is applied with reasonable exclusivity to those services which are intended to benefit from the new rules.

The scope of the regime must be very clearly defined in respect of both the bodies and services covered. This is essential to ensure clarity about who can use the Provider Selection Regime and which contracts are appropriate for these bespoke healthcare-specific rules, and to ensure coherence with the government’s wider regulatory scheme for public procurement.

For more information on government’s proposals for wider public procurement reform please see the transforming public procurement green paper.

Background

Engagement in 2019 on reforming the rules for arranging healthcare services saw considerable support for new rules which would govern the procurement of NHS healthcare services. In 2021, NHS England consulted on more detailed proposals for defining the scope of the Provider Selection Regime. This included a definition of healthcare services as services involving the provision of all forms of healthcare provided for individuals, whether relating to physical or mental health. The consultation document informed respondents that the Provider Selection Regime would only apply to healthcare services arranged by NHS bodies and local government and that it would not apply to:

• social care services
• any public health services not arranged by NHS bodies or local government (for example those arranged by DHSC directly, or by executive agencies such as the UK Health Security Agency (UKHSA))
• other non-clinical services such as business consultancy or catering
• procurement of goods or medicines
• community pharmaceutical services (as separate regulations already set out how community pharmaceutical services are to be arranged)

Engagement during that consultation process identified some concerns that excluding social care wholesale from the scope of the Provider Selection Regime would not help achieve increased integration and collaboration across healthcare and social care in particular when decision-makers may be seeking to arrange a service which contains a mixture of healthcare and social care services. For further information on social care and proposals for mixed procurement of health and social care please see the section on ‘proposals: mixed procurement’ in this consultation document.

Proposals

NHS England and DHSC have continued to develop the scope of the Provider Selection Regime with stakeholders and partners across government so that a workable definition of scope which is true to the aims of the regime can be implemented effectively in regulations.

Primary legislation and regulations will set out the scope of the Provider Selection Regime by articulating 3 separate criteria which must all apply in order for a service to be arranged under the regime. For an arrangement to be in scope the service must be:

1. for the purpose of the health service in England as defined in section 1(1) of the National Health Service Act 2006: a “comprehensive health service designed to secure improvement in the physical and mental health of the people of England, and in the prevention, diagnosis and treatment of physical and mental illness”
2. a healthcare service which is provided directly to individuals or has an outcome directly for an individual (for example, a diagnostic service). This intends to exclude healthcare adjacent services (for example, hospital catering contracts, business consultancy for healthcare organisations)
3. arranged by:

• integrated care boards (ICBs) when commissioning healthcare services for the purposes of the health service (whether NHS or public health)
• NHS England when commissioning healthcare for the purposes of the health service (whether NHS or public health)
• local authorities and/or combined authorities when arranging healthcare services as part of their public health functions
• local authorities and/or combined authorities when arranging NHS healthcare services as part of section 75 partnership arrangements with the NHS
• NHS trusts and foundation trusts when arranging the provision of healthcare services by other providers

The purpose of this approach is to ensure that the Provider Selection Regime only applies to those services for which the regime will help promote the best interests of patients, the taxpayer, and the population. In summary, these are healthcare services and public health services which are arranged by NHS bodies and local government, provided directly to individuals or patients under the NHS Act 2006 and have a direct impact in the prevention, diagnosis, and treatment of physical and mental illness.

This is intended to exclude services for which a more competition orientated approach may still be suitable including for health adjacent services such as cleaning, catering, and business consultancy contracts.

Community pharmaceutical services that are subject to the National Health Service (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 (which set out the routes by which pharmacies provide services to the NHS) are not within the scope of the Provider Selection Regime.

However, there are 3 situations where pharmaceutical services are in scope: 

• services commissioned directly from pharmacies under the NHS Standard Contract such as an anticoagulant service
• local enhanced services such as COVID-19 vaccination
• local pharmaceutical services where pharmaceutical services are commissioned outside the scope of the Community Pharmacy Contractual Framework

The procurement of goods and pharmaceuticals are also excluded from the Provider Selection Regime.

Services arranged directly by ministerial departments or their executive agencies are excluded from the Provider Selection Regime.

Finally, social care services are excluded from the Provider Selection Regime although see the next section on ‘proposals: mixed procurement’ for instances where social care may potentially fall within the regime in specific circumstances.

Engagement with stakeholders with procurement expertise has also indicated (in addition to the tests set out above) that the scope of the Provider Selection Regime may be further clarified by including a list of common procurement vocabulary (CPV) codes in the regulations. However, we would like to continue to test the merits of this approach with a wider audience.

Below we have proposed a list of CPV codes to capture healthcare services (including physical and mental health as well as public health).

CPV code	Description
85100000-0	Health services
85110000-3	Hospital and related services
85111000-0	Hospital services
85111100-1	Surgical hospital services
85111200-2	Medical hospital services
85111300-3	Gynaecological hospital services
85111310-6	In vitro fertilisation services
85111320-9	Obstetrical hospital services
85111400-4	Rehabilitation hospital services
85111500-5	Psychiatric hospital services
85111600-6	Orthotic services
85111700-7	Oxygen-therapy services
85111800-8	Pathology services
85111810-1	Blood analysis services
85111820-4	Bacteriological analysis services
85111900-9	Hospital dialysis services
85112200-9	Outpatient care services
85120000-6	Medical practice and related services
85121000-3	Medical practice services
85121100-4	General-practitioner services
85121200-5	Medical specialist services
85121210-8	Gynaecologic or obstetric services
85121220-1	Nephrology or nervous system specialist services
85121230-4	Cardiology services or pulmonary specialist services
85121231-1	Cardiology services
85121232-8	Pulmonary specialist services
85121240-7	ENT or audiologist services
85121250-0	Gastroenterologist and geriatric services
85121251-7	Gastroenterologist services
85121252-4	Geriatric services
85121270-6	Psychiatrist or psychologist services
85121271-3	Home for the psychologically disturbed services
85121280-9	Ophthalmologist, dermatology, or orthopaedics services
85121281-6	Ophthalmologist services
85121282-3	Dermatology services
85121283-0	Orthopaedic services
85121290-2	Paediatric or urologist services
85121291-9	Paediatric services
85121292-6	Urologist services
85121300-6	Surgical specialist services
85130000-9	Dental practice and related services
85131000-6	Dental-practice services
85131100-7	Orthodontic services
85131110-0	Orthodontic-surgery services
85140000-2	Miscellaneous health services
85141000-9	Services provided by medical personnel
85141100-0	Services provided by midwives
85141200-1	Services provided by nurses
85141210-4	Home medical treatment services
85141211-1	Dialysis home medical treatment services
85141220-7	Advisory services provided by nurses
85142000-6	Paramedical services
85142100-7	Physiotherapy services
85143000-3	Ambulance services
85144000-0	Residential health facilities services
85145000-7	Services provided by medical laboratories

To what extent do you agree or disagree that the inclusion of a list of CPV codes in the regulations for the Provider Selection Regime would help to clarify the scope of the regime and promote understanding of when the regime applies?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that the list of codes presented here accurately represent our aims for defining the scope of healthcare services?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Are there CPV codes that you think should be included in the list?

Are there CPV codes that you think should be excluded from the list?

Proposals: mixed procurement

Overview

Inevitably, some procurements may contain multiple elements, some of which are clearly within the scope of the Provider Selection Regime, and other elements that are within the scope of the wider procurement regulations. The latter already sets out the legal mechanism for such scenarios where part of the procurement is covered by the PCR 2015 and another part is covered by another legal regime (such as the Provider Selection Regime). The approach taken under the Provider Selection Regime must be consistent with these rules to ensure coherence between the 2 schemes and provide clarity for procurers when pursuing a mixed procurement approach.

Our aim in relation to mixed procurements is to ensure that decision-making bodies can apply the Provider Selection Regime when arranging different types of services together under a single contract, either because it is essential in order to deliver a healthcare service or because it is explicitly in the interests of patients, the taxpayer, and the population to do so.

Background

Integral services

One of our priorities is to ensure that the regulations adequately account for the complexity of healthcare services in England. This means that our proposals relating to the mixed procurement should allow healthcare services to be arranged under the Provider Selection Regime on the principle that the primary aim of those services is to deliver a healthcare service.

For example, an immunisation service will require trained clinicians to vaccinate patients and service users. However, for the service to be delivered effectively against established safety and information management requirements it is likely that the contract must also contain provisions for administrative support staff to organise the effective flow of patients and to record information accurately and responsibly. In this example, the administrative element of this service may even account for a greater monetary value of the total contract value than the clinical elements. Despite this, this type of service remains a de facto health service delivered to individuals and would be in scope of to be arranged under the Provider Selection Regime.

Social care

During the consultation led by NHS England in 2021, respondents expressed concerns that excluding social care services wholesale from the scope of the Provider Selection Regime would inhibit the integration of healthcare and social care services. DHSC has published its proposals to make integrated health and social care a universal reality for everyone across England regardless of their condition and of where they live.

Although stand-alone social care services will fall out of the scope of the Provider Selection Regime, we understand that some packages require a mixture of healthcare and social care services to be arranged under a single provider (or partnership of providers). Furthermore, the Health and Care Bill has been drafted with the express intention of supporting collaborative and integrated practices. .

As such, we want to ensure that the establishment of the Provider Selection Regime does not lead to the fragmentation of healthcare and social care services which when arranged together have led to improved outcomes for patients, the taxpayer, and the population or inhibit future opportunities to do so. So far, stakeholders have identified the following packages as those that require some extent of mixed procurement of healthcare and social care services:

• NHS continuing healthcare services
• packages arranged under the Better Care Fund
• Discharge to assess services
• mental health aftercare services
• prison healthcare services
• asylum seekers healthcare services
• veteran healthcare services

Proposals

We propose that the regulations setting out the Provider Selection Regime should allow for the arrangement of a service for which the primary aim is to deliver a healthcare service, even if some services within the contract are not healthcare but are essential to deliver the healthcare element of the contract safely and effectively.

We propose that mixed contracts of healthcare and social care services (when those services are provided directly to an individual) may be arranged under the Provider Selection Regime when both of the following apply:

• the main subject matter of the contract is the delivery of healthcare services to individuals
• procuring these services under separate regimes in separate contracts would adversely impact care quality, lead to overall contract aims remaining unfulfilled, or would not be in the best interests of patients, taxpayers, and the population

We also welcome respondents’ insight on other types of services which when arranged in a single contract with healthcare may further promote the best interests of patients, the taxpayer, and the population.

Finally, we welcome respondents’ views on the extent to which CPV codes may be helpful to clarify the scope of services which may be arranged with healthcare as part of a mixed procurement. The list of CPV codes relating to social care are identified as:

CPV code	Description
79622000-0	Supply services of domestic help services
85000000-9	Health and social work services
85300000-2	Social work and related services
85310000-5	Social work services
85311000-2	Social work services with accommodation
85311100-3	Welfare services for the elderly
85311300-5	Welfare services for children and young people
85312000-9	Social work services without accommodation
85312100-0	Day-care services
85312110-3	Child day-care services
85312200-1	Home delivery of provisions
85312300-2	Guidance and counselling services
85312310-5	Guidance services
85312320-8	Counselling services
85312400-3	Welfare services not delivered through residential institutions
85312500-4	Rehabilitation services
85312510-7	Vocational rehabilitation services
85320000-8	Social services
98513310-8	Home-help services
98514000-9	Domestic services
55521100-9	Meals-on-wheels services

What other types of service (apart from social care) do you think may be arranged in a contract (for which the main subject matter is healthcare) which we should be aware of?

To what extent do you agree or disagree that the list of codes presented here accurately represent the scope of social care services which may be arranged with healthcare services?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Are there CPV codes that you think should be included in the list?

Are there CPV codes that you think should be excluded from the list?

Proposals: threshold for ‘considerable change’

Overview

The aim of having a robust and well-formulated threshold for what constitutes a considerable change will ensure that the Provider Selection Regime is applied in the best interests of patients, the taxpayer, and the population. This requires setting a defined threshold which, for services coming to the end of their contract, will effectively differentiate between services which may be rolled over (decision-making circumstance 1C) and services for which decision-makers should have to compare with alternative providers, either through using the approach to identify the most suitable provider (decision-making circumstance 2) or through a competitive tender exercise (decision-making circumstance 3).

Background

NHSEI’s 2019 engagement process on ‘Implementing the NHS Long Term Plan: proposals for possible changes to legislation’ identified support for the proposal that commissioners should have flexibility to choose how to arrange services where they consider this in the best interests of their population.

Building on feedback from that process and from further engagement, in February 2021 NHS England proposed several decision-making circumstances which decision-makers would be able to utilise under the Provider Selection Regime. This included allowing decision-makers to decide to continue service provision with an existing provider (decision-making circumstance 1C), and to arrange a service where there is an identifiable single most suitable provider without using a competitive tendering exercise (decision-making circumstance 2). Decision-making bodies would also still be able to run a competitive tendering exercise if they wished to do so – if they cannot identify a single most suitable provider or wish to test the market (decision-making circumstance 3). These proposals received widespread support from respondents with over 70% agreeing or strongly agreeing that decision-making bodies should be permitted this flexibility.

As per NHS England’s proposals, a decision-making body should be able to continue to contract with a provider if that the service is not changing considerably, and the provider is doing a good job such that there is no overall value in seeking a new provider (decision-making circumstance 1C). If the service is changing considerably, then the decision-making body would not be able to continue the contract with the current provider without first making an assessment to identify the most suitable provider (decision-making circumstance 2) or run a competitive tendering exercise (decision-making circumstance 3), which would involve the direct comparison of the current provider with alternative providers. To this end, a threshold should be applied to determine whether a service is changing considerably or not.

Proposals

To determine whether a service is changing considerably, we propose that a decision-making body should make an assessment based on all the variations made to the service since the last contract was put in place, and any proposed new changes to the service that may be put in place if the contract is re-awarded.

However, we also propose that there should be several kinds of changes that are permitted, and should not be deemed considerable, regardless of any resulting change in value, and irrespective of when they are made (such as, during the contract term or when a contract is rolled over). Changes which are not considerable may be one of the following:

• the variation is clearly and unambiguously provided for in the original contract (that is, that the scope and nature of the potential change has been described) and published as part of the original process carried out under the Provider Selection Regime
• the variation is solely because the identity of the provider changes (for example as a result of a corporate takeover or merger) where this does not affect the ability of the (new) provider to deliver the service and there are no other considerable changes to the contract
• the variation has occurred because the decision-making body decides to make a variation in response to external causes beyond the control of the decision-making body, including but not limited to the following:
  • changes in contract value which are driven by changes in patient volume
  • changes in contract value which are related to uplifts in prices published in the NHS payment system (national tariff), or in accordance with a formula (for example, index linking) provided for in the original contract, and is referenced in the published contract award notice as part of the original application of the Provider Selection Regime

Otherwise, we propose that a change is deemed considerable if it materially alters the nature of the contract or when all of the following conditions are met:

• the change is initiated by the decision-making body
• the cumulative change in the lifetime value of the contract is above £500,000
• the cumulative change in the lifetime value of the contracts is over 25% of the original lifetime value of the contract

The aim of this proposed threshold and use of both a test based on total contract value change and percentage change is to reflect the variations in contract value which may be arranged across the healthcare system. We have developed this threshold with the aim of avoiding capturing relatively small changes to large contracts while still capturing considerable changes to small contracts. It is important to note that the consequence of meeting the considerable change test is to rule out a simple roll-over, and require either the identification of the most suitable provider or a competitive tendering exercise. We welcome respondents’ views on this suggested formulation of what constitutes a considerable change.

To what extent do you agree or disagree that a threshold for considerable change should require both a change of set amount (£) in contract value and a percentage change in contract value?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that a change in contract value of over £500,000 is an appropriate threshold when considering what constitutes a considerable change?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that a change in contract value of over 25% is an appropriate threshold when considering what constitutes a considerable change?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

Do you have any views on how this formulation may be improved?

• yes
• no

If answering ‘yes’, what changes would you make and why? Please provide specific examples and rationale.

Proposals: contract variations

Overview

A contract is likely to vary during the course of its life. There may be a point at which a contract has varied so significantly, that the Provider Selection Regime should be reapplied to ensure that the service arrangements are still in the best interests of patients, the taxpayer, and the population.

However, it is normal that certain minor variations in a contract would not necessitate a decision being remade. To this end, regulations should be clear on the level of variation which does not require reapplication of the regime and significant variation which does warrant the reapplication of the regime (such as, using decision-making circumstance 2 or decision-making circumstance 3 to select a provider).

Proposals

There will be situations where contracts need to be varied within the course of the contract to account for changes in circumstances. Some variations can be minor and of little consequence, but there are occasions where changes in circumstances will require considerable variations in contracts. 

As such, we propose that a contract variation does not warrant the reapplication of the Provider Selection Regime (such as, using decision-making circumstance 2 or decision-making circumstance 3 to select a provider) if the variation is one of the below:

• the variation is clearly and unambiguously provided for in the original contract (that is, that the scope and nature of the potential change has been described) and published as part of the original process carried out under the Provider Selection Regime
• the variation is solely because the identity of the provider (for example as a result of a corporate takeover or merger) where this does not affect the ability of the (new) provider to deliver the service and there are no other considerable changes to the contract
• the variation has occurred because the decision-making body decides to make a variation in response to external causes beyond the control of the decision-making body, including but not limited to the following:
  • changes in contract value which are driven by changes in patient volume
  • changes in contract value which are related to uplifts in prices published in the NHS payment scheme (national tariff), or in accordance with a formula (for example, index linking) provided for in the original contract, and is referenced in the published contract award notice as part of the original Provider Selection Regime process
• the variation is initiated by the decision-making body and does not considerably alter the nature of the contract and the cumulative change in the lifetime value of the contract (taking into account all of the variations made to it since it was let) is one of the following:
• less than 25% of the original lifetime value
• remains below £500,000

We welcome respondents’ views on this formulation of contract variations which would not warrant reapplication of the Provider Selection Regime.

15. To what extent do you agree or disagree that the above list of variations should not warrant the reapplication of the Provider Selection Regime (such as selecting a provider through decision-making circumstance 2 or decision-making circumstance 3)?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that a threshold for considerable change for the purpose of contract variations should be subject to both a change of set amount (£) in contract value – or – a percentage change in contract value?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that a change in contract value of over £500,000 is an appropriate threshold when considering what constitutes a considerable variation for this purpose?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

To what extent do you agree or disagree that a change in contract value of over 25% is an appropriate threshold when considering what constitutes a considerable variation?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

Do you have any views on how this formulation may be improved?

• yes
• no

If answering ‘yes’, what changes would you make and why? Please provide specific examples and rationale.

Proposals: patient choice

Overview

One of the aims of the Health and Care Bill is to protect and strengthen arrangements around patient choice, including to ensure that patients may continue to exercise their right to choose a provider for elective treatments. Additionally, the Provider Selection Regime should work seamlessly with the provisions on patient choice including when and how the regime may be used to make a list of potential providers from which patients may choose.

Background and proposals

Consistent with current patient choice rules, it will not be possible for a decision-making body to limit the number of providers to deliver an elective service under the Any Qualified Provider (AQP) list where a patient has a statutory right to choose a provider to deliver that service (that is, the legal right to choice of first outpatient appointment with a consultant or a member of a consultant’s team, or a mental healthcare professional). This means a list can have any number of qualified providers. NHS England has proposed that a list of stated service criteria should be introduced into regulations on patient choice. Where a provider meets these stated conditions and wishes to be an option for patients, they must be offered the NHS standard contract by the decision-making body. The provider can then register its services on the electronic referral system (ERS) lists from which patients make their choice.

Decision-making bodies will also continue to be able to voluntarily establish additional lists of providers for non-legal right to choice services (where a patient is offered a choice of provider other than in respect of a first outpatient appointment with a consultant or a member of a consultant’s team, or a mental healthcare professional) from which patients can choose. Decision-making bodies can restrict the number of providers on these voluntary lists.

Where no limit is being set on the number of providers on the list, the contracts would be directly awarded without a competitive or comparative process, using circumstance 1B of the provider selection regime because an unlimited list of providers (who have already fulfilled qualifying criteria under AQP requirements) does not necessitate further selection between those providers by the decision-making body.

However, where these lists are limited to a set number of potential providers, we propose that decision-making bodies use circumstances 2 or 3 of the Provider Selection Regime to establish which providers can be on the list.

As such, we welcome views from respondents on whether the Provider Selection Regime should be applied to select which providers should form a list when that list is intended to be limited to a set number of potential providers for non-legal right to choice services. We also welcome views from respondents on whether the Provider Selection Regime should be applied when reviewing the list for non-legal right to choice services.

If establishing lists of providers for non-legal right to choice services for patients to exercise choice, do you think that decision-making bodies would intend to limit these lists to a set number of potential providers?

• yes
• no
• not sure

Please explain your answer.

If so, why do you think decision-making bodies would decide to limit these lists?

If establishing or altering lists of providers for non-legal right to choice services with a limited number of providers, do you agree or disagree that decision-making bodies should select providers using decision-making circumstances 2 or 3 of the Provider Selection Regime?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

Proposals: transparency

Overview

The principle of transparency in public procurement is central to the integrity and accountability of the system and the fight against corruption. It ensures opportunities are accessible, and processes and decisions can be monitored and scrutinised.

The aim of transparency arrangements in the Provider Selection Regime is to ensure that the outcomes of decisions made under the regime are made public and that sufficient scrutiny is applied to ensure the regime is followed in good faith.

Background

Transparency in the health and care system is upheld by a wider range of duties, some of which are referenced here for context. Under the NHS Act 2006, NHS England must publish a business plan and an annual report. Following Parliamentary passage of the Health and Care Bill, NHS England will also be required to publish a report summarising the results of the performance assessments of ICBs that NHS England has conducted each year, as well as publish any directions given to an ICB about the management or use of financial or other resources.

Under this legislation, NHS England and NHS foundation trusts must involve the people to whom it provides services in the planning, development, consideration, and decisions affecting arrangements where they would create certain impacts or affect the operation of services.

Relevant health bodies (including NHS England and NHS trusts) and local authorities are also subject to transparency measures in the Public Bodies (Admission to Meetings) Act 1960, which stipulates that they must hold any meetings open to the public, unless the public are excluded due to business of a confidential nature or other specified reasons. ICBs and integrated care partnerships (ICPs) will be added to the list of relevant bodies to which this Act applies. Similar duties also apply to NHS foundation trusts under the NHS Act 2006.

In addition to existing legislation, the Health and Care Bill will introduce measures to further promote transparency in ICBs. ICBs will have a duty to publish their constitution and their annual report. ICBs will also have a duty to maintain a register of interests of members of the board, its committee, and employers; the ICB must publish these registers or make arrangements so that members of the public can access to the registers. The ICP will have a duty to publish their integrated care strategy.

Local authorities are required to publish data on procurement following the practice set out in the Local Government Transparency Code 2015.

The Provider Selection Regime also includes proposals for transparency to complement the above requirements.

In 2019 NHSEI’s engagement process on ‘Implementing the NHS Long Term Plan: proposals for possible changes to legislation’ noted that a new regime for arranging healthcare services must ensure transparency. In 2021, NHS England consulted on a range of transparency requirements for the Provider Selection Regime.

Respondents broadly agreed with the steps at which decision-making bodies should issue notices when selecting providers and the requirement to publish an annual summary. During this consultation some respondents asked how and on which platform information would be published. At this time, we are working towards notices being published on the Find a Tender Service (FTS) and any successor to the FTS which may be established by Cabinet Office proposals on wider public procurement.

The steps on transparency and issuing of notices for each of the decision-making circumstances are presented below.

Transparency step required	Decision-making circumstance
Publishing details of the intended approach in advance	1C, 2
Publishing a notice for competitive tender	3
Recording internally the decision-making process and rationale	1A, 1B, 1C, 2, 3
Responding to unsuccessful bidders	3
Publishing an intention to award notice	1C, 2
Standstill and resolution period	1C, 2, 3
Publishing the confirmation of award	1A, 1B, 1C, 2, 3

Proposals

Notice on the intended approach

When a decision-making body is using decision-making circumstance 1C or 2 then they must publish a notice making it clear to the public that this is their approach.

At a minimum, this notice should include the following information:

• the approach they are intending to take (such as, does the decision-making body intend to rollover the contract or identify the most suitable provider)
• the committee or group who made the decision on which approach to take

Notice of intention to award a contract

In decision-making circumstances 1C and 2 a decision-making body must publish a notice stating that they intend to award a contract to the provider (such as, the ‘publishing an intention to award notice’ step in the above table).

At a minimum, this notice should contain the following information:

• the contract title or reference
• the name of the provider to whom the contract is intended to be awarded and the address of its registered office or principal place of business
• a description of the services intended to be provided
• approach taken to select provider (such as, rolled over or identified the most suitable provider)
• whether it is a new or existing contract
• whether it is a new or incumbent provider
• the contract value (the total amount to be paid under the contract, or where the total amount is not known, the basis of payments to be made to the provider)
• the dates between which the services are intended be provided
• which committee or group made the decision
• declared conflicts of interest (COIs) by the committee or group and how these conflicts are managed
• the date by which any representations must be made

Additionally, we welcome views on whether the following information should also be published in this notice (if publishing is required as per any decided threshold):

• a statement explaining the decision-making body’s intended balancing of key criteria which they used to make a decision
• a statement explaining the decision-making body’s rationale for choosing the successful provider

Confirming the decision

Once the standstill period is over, the decision-maker must update the previous notice to confirm the status of the contract as ‘awarded’ within 30 days of the last signatory.

To what extent do you agree or disagree that the notice which states the decision-making bodies intention to award a contract to a provider should also include:

a) a statement explaining the balancing of key criteria which they used to make a decision?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

b) a statement explaining the decision-making body’s rationale for choosing the successful provider?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answers.

Is there other information that you think would be helpful to publish in this notice? Please explain your answer including reference to advantages and disadvantages.

Annual summaries

One of the original proposals made by NHSEI was that decision makers would need to publish annual summaries of their contracting activity, and also audit their compliance with the Provider Selection Regime. The intention behind this is to provide high-level data on contracting and allow better understanding of commissioning activity and trends.

We have now developed specific proposals on this – decision-makers must publish a summary of their application of the Provider Selection Regime annually (for example, via the decision-making body’s annual report or annual governance statement). This summary must include: 

• the number of contracts re-awarded under decision-making circumstances 1A, 1B and 1C in that year
• the number of contracts let through decision-making circumstances 2 and 3
• the total number of providers contracted with; number of new providers contracted with; number of providers who no longer hold any contract
• the numbers of representations received and the outcome of those representations

To what extent do you agree or disagree with our proposals around annual summaries?

• strongly agree
• agree
• neither agree nor disagree
• disagree
• strongly disagree
• don’t know

Please explain your answer.

Is there any additional information you would suggest for inclusion in these summaries? Please provide specific examples where possible.