At least two procurements for commissioning support services have been paused, HSJ has learned. This comes amid uncertainty over how stranded costs will be paid for if a commissioning support unit loses a contract.

  • At least two commissioning support procurements using “lead provider framework” paused
  • CCGs raise questions over who will bear “stranded costs” if CSU loses contract
  • Commissioners also unsure if they need to pay VAT on some support services

Both procurements involve a group of clinical commissioning groups jointly tendering for a full package of “end to end” support services, such as back office finance and HR, or GP IT services, HSJ has been told.

They were due to set up new contracts for externally provided support services via NHS England’s “lead provider framework”. The procurement mechanism was established at the beginning of 2015, giving CCGs a choice of nine accredited providers of end to end support services.

The paused procurements are in the south of England. One, which was widely anticipated by suppliers, was stopped before it was formally launched.

The other was paused after bids had been invited. A note on the procurement framework’s web portal said the closing date for the procurement had been pushed back by four weeks to 2 September.

This was described as “a temporary indicative extension”, rather than a firm deadline.

NHS England has told all CCGs they must go to market to procure support services by April next year. The first wave of procurements is underway.

HSJ understands CCGs using the framework have raised questions with the national body about who will bear “stranded costs” relating to CSUs that lose business under the framework.

For example, if a CSU loses a significant amount of its business to a non-NHS body, it is still unclear who will be liable for any remaining commercial contractual obligations. Three private sector suppliers are accredited on the framework.

Bob Rickets

Bob Ricketts told north of England CCGs that they would have to pay stranded costs if they brought services in house

CSUs have extensive networks of non-NHS suppliers and partners, having been instructed by NHS England to follow this course since their inception.

There are also questions over what happens to CSU assets, such as computer equipment and software licenses.

CCGs are unsure whether bringing in a private sector supplier will mean they will have to pay VAT on some service lines for the first time. If VAT is applied, it would increase the costs of those services by 20 per cent.

NHS England’s director of commissioning support services strategy Bob Ricketts told CCGs in the north of England earlier this year that they would have to pay stranded costs if they brought services in house rather than go to market.

NHS England declined to comment.

Topics