Tracking everything that’s new in care models and progress of the Five Year Forward View, by our senior correspondent on integration David Williams.

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The week in new care models

The vanguards and EU procurement law

An interesting question about vanguards that has never been definitively answered is, “What about procurement law?”

That question is about to get more complicated with the introduction of a new set of EU procurement rules affecting pretty much all NHS service commissioning from 18 April.

I’ve already written about this. The main points are:

  • NHS commissioners will have to publicly advertise most service contracts, and treat all bidders equally.
  • This raises concerns over the future of non-competitive “most capable provider” type processes used by some vanguards and other forward looking clinical commissioning groups.
  • PACS vanguards are worried enough about falling foul of procurement law to have called on the national bodies to clarify that they are not expected to competitively tender for new models of care.
  • Sam Jones’ response to this has been to state: “The law is the law and the rules are the rules.” This is pretty clear, although maybe not the right kind of clarity for vanguards keen to avoid the risk of legal challenge without using public procurement.

Silence from the centre

This story also has a very interesting sub-plot. As their name suggests, the new EU procurement rules – the Public Contracts Regulations 2015 – largely kicked in last year. Government guidance says the NHS was given a year to prepare for their impact. Yet the Department of Health, NHS England and NHS Improvement haven’t put out anything explaining to commissioners or providers how to handle the changes.

The DH will put out something “shortly”. Whether or not it’s before 18 April is at this stage a moot point.

This is all a bit odd. Perhaps officials though that clarity on this issue might have clashed with the overriding message to vanguards (and the NHS in general) – which is to get on and do what they think is right.

Ask a lawyer

Normally when you ask a few lawyers about a change in the law, you get a range of opinions. But, strikingly, the profession is pretty unanimous on this one: the new EU regulations may well lead to more tendering, and it is a particular problem for vanguards and the most capable provider process.

A couple of quotes:

Sharon Lamb from Capsticks said that until now procurement has been regulated by Monitor and interpreted “very loosely” – whereas from 18 April, potential bidders will have the right to take commissioners to court if they don’t advertise an opportunity.

But, she adds, commissioners still have a lot of flexibility. They can meet their obligation to advertise and still run a quick process, which can explicitly take factors such as continuity, affordability and the comprehensiveness of services into account.

In the NHS, procurement is often associated with processes that take one to two years. It need not necessarily be so.

The real problem is how commissioners react to the new rules: “Naturally, this might cause commissioners to feel more nervous about the consequences of non-compliance and become risk averse,” Ms Lamb says. So commissioners may undertake bigger, more resource-sapping procurements than is necessary in the belief this will better protect them from legal challenge.

Robert Breedon of Gowling WLG agrees that“it is difficult to see how commissioners are going to be able to do anything other than run an OJEU advertised competition for most contracts”.

He highlights some specific challenges for vanguards, where providers and commissioners are collaborating: how robust was the process for picking the participants? “If no selection or assessment process is followed there must be a risk of challenge that commissioners have not fulfilled their duties under procurement law.”

And, he adds that having to run a competitive process – even if it isn’t a very big one – “will pose an interesting challenge for the speed of implementation of new models of care”.

There are a couple of other legal opinions in my story.

More procurement

Now would be a good moment to tip your hat in the direction of Nuffield Trust chief executive Nigel Edwards, who clocked this issue about 18 months ago in a blog about how people sometimes get worked up about the wrong things. These regulations might end up being more significant for the NHS than the Transatlantic Trade and Investment Partnership, he suggested at the time.

The prospect of more procurement going on in the NHS does not fill Mr Edwards with joy. “The question that I’m most concerned about is that procurement burns up large amounts of time for not much benefit.

“In too many examples it is being used to get a price reduction, or as a method of dealing with things that should have been dealt with managerially.

“There is a strong presumption that it has probably destroyed more value than it has created at the moment because of the way it’s done. This new regulation might make it more transparent, but is unlikely to make things better.”