Ambiguity on how to proceed in commissioning new care models must be resolved quickly

“Most capable provider” was good while it lasted. The method emerged with the blessing of Monitor a couple of years ago, as an alternative to a full-blown tender. For some commissioners, it has offered a practical way to comply with procurement rules while collaborating with existing providers to redesign services and contracts.

Now, just as it was starting to catch on, it appears to have been killed off by a new tranche of EU procurement rules.

As we reported in HSJ last week, these new rules give commissioners a new duty to publicly advertise all contracts, rather than jointly design service changes with an existing provider.

The operative word here is “fear”. Would the council have been challenged in the courts if it had not put social care to competitive tender?

The effects are already being felt, and can be seen in evidence to the Commons health committee. The EU regulations kicked in for councils a year ago. In Somerset, the fear of falling foul of the new rules has prevented the council from rolling social care into a proposed joint commissioning project.

The operative word here is “fear”. Would the council have been challenged in the courts if it had not put social care to competitive tender? We don’t know, but the possibility of that happening is as important an influence on commissioner behaviour as the letter of the law. The notional risk of an expensive and embarrassing legal challenge that prevents or delays change taking place will be enough to cause other commissioners to change their behaviour.

The committee also heard that Monitor told the local clinical commissioning group that most capable provider “is not available to NHS organisations after April”, thanks to the new rules. National guidance to the same effect would be welcome. The arm’s length bodies have been oddly quiet about all this so far.

We should remember that most capable provider was a workaround that answered anxieties about an earlier set of procurement rules. It is conceivable that ways around the new EU rules will also be found. If they are, they should be publicised sooner rather than later.

The process succeeded where an earlier competitive one failed, in part because it recognised that change is best achieved by building trust

Space to experiment

But if most capable provider as we know it has no future, what are we losing? We’ll never know because it is too early to chalk up any firm “success stories”. However, note what happened in Oxfordshire: a long term adult mental health contract was awarded to a consortium led by the existing provider.

The process succeeded where an earlier competitive one failed, in part because it recognised that change is best achieved by building trust, and that there is no point behaving as though there is a mature market for providers when for many services there is not. The method seemed to be tailor made for vanguards, where commissioners and providers are given a mandate to collaborate.

But interestingly, one vanguard site has this week announced it has entered into an innovative arrangement via a competitive process. Tower Hamlets CCG has made local GPs the “prime contractor” for community services. Under this intriguing arrangement, the borough’s GPs – as a CCG – are delegating their responsibility for integrating and improving community care to themselves, in the form of the local GP provider company.

However, there are two reasons why Tower Hamlets doesn’t necessarily solve everything. First, the whole process took two years – a standard timeframe for big procurements, but one which would delay implementation of the Five Year Forward View if everywhere else had to do the same thing.

Second, Tower Hamlets had to keep its procurement process and vanguard work separate. This raises the possibility that in other places tenders could deliver results that do not fit new care models so neatly. Ambiguity over how procurement rules relate to new care models has given vanguards space to experiment and begin setting up new arrangements – but it cannot last forever.

Soon, national leaders will have to give the wider NHS a clear steer on how they should go about commissioning for new care models.

GPs handed control of community services in landmark deal