131.The Executive Summary of the White Paper set out the Department’s proposals to amend the Health and Social Care Act 2012 in relation to procurement and the delivery of healthcare services to better reflect the needs of individual ICSs. The ambition is to legislate to reduce the bureaucracy that inhibits flexibility and integration and to streamline accountability. The proposals include:
132.The Proposals would also:
133.Commissioners will be given more discretion over when to use procurement process to arrange services, with proportionate checks and balances; the commissioning of healthcare services will be removed from the scope of the Public Contracts Regulations 2015 and Section 75 of the Health and Social Care Act 2012; and the Procurement, Patient Choice and Competition Regulations 2013 will be repealed.
134.The Academy of Medical Royal Colleges supported removing the jurisdiction of the Competition and Markets Authority and the decision to repeal Section 75 of the Health and Social Care Act 2012. The BMA were of a similar view. It stated that that Section 75 regime had resulted in costly procurement processes, increased fragmentation of care and has destabilised NHS services. It also stated that the provisions of Section 75 had resulted in:
Private sector companies cherry picking some of the NHS’s most profitable contracts, as well as successfully “suing” the NHS for anti-competitive awarding of contracts or behaviour at a significant cost to the NHS.
135.UNISON also welcomed the proposal. It believed that this would result in commissioners no longer operating under a “default assumption of using competition to arrange services” and therefore would have a greater level of discretion in commissioning. In addition, the Royal College of General Practitioners stated that the Section 75 powers had “acted as a significant barrier to the development of new care models and collaboration between NHS providers over the last decade”.
136.The Academy of Medical Royal Colleges also supported the proposal to remove the jurisdiction of the Competition and Markets Authority, as did Unison who described this as a “move away from the current adversarial system”. The Royal College of Physicians also welcomed the proposal to repeal the competition role of the Competition and Markets Authority.
137.However, the BMA argued that the Bill should include provisions to establish the NHS as the preferred provider of services to protect the NHS from instability and prevent further privatisation. The BMA also highlighted the importance of adequate provisions in the Bill to facilitate sufficient scrutiny and transparency over the tendering and awarding of contracts. However, it cautioned that any new financial arrangements must work to enable and support collaboration and integration and do not act as a barrier.
138.The Nuffield Trust broadly welcomed the proposed reforms to procurement, as did NHS Providers, who believed that the proposals to move away from “competitive retendering and burdensome procurement processes” was a positive step. However, the Nuffield Trust highlighted the risk of the proposals establishing “an overly cosy approach that favours incumbents and excludes innovators”. Therefore, it stated that clear and transparent criteria were required for commissioners to test whether an existing provider was doing a “sufficiently good job.” In a similar vein, the Nuffield Trust noted that “elective services which rely on cross-specialty working” that meet the threshold for renewal: could cover “a very broad range of services”. To counter this, the Nuffield Trust suggested the introduction of “formal and particular monitoring of the proportion of contracts which change from year to year”.
139.The King’s Fund noted that healthcare in England “has never been a truly competitive market” and that the evidence for the benefits of competition was at best “equivocal”. However, it saw a need to include in the Bill, provisions to mitigate the risk that new contracts were “automatically handed out to incumbent providers”, and to facilitate “a diversity of provision from voluntary sector, social enterprise, and NHS organisations”.
140.When he gave evidence to us, Sir Simon Stevens said that the changes to the procurement regime “would free up a lot of time and wasted effort from some of the transactional purchasing arrangements, which tend to reinforce the fragmentation of care that we have otherwise seen”. He believed that formalising those changes would ensure that they were both transparent and accountable.
141.Sir Simon Stevens further told us that the combined effect of the Section 75 regime and public contract regulations 2015 had resulted in the need to run competitive tendering processes that led to “some pretty spurious processes”. As examples, he cited competition requirements for specialist cancer services and cardiovascular tertiary services when the reality was that there were no competitors that could replace the Royal Marsden or Guy’s and St Thomas’ or Central Manchester foundation trust. In his opinion, that aspect of procurement was little more than “spurious activity”.
142.Amanda Pritchard also told us that the proposed legislation would make it “easier to avoid having to go through multiple competitive tenders” where “people have gone for very short term, very inflexible contracts that have had to be relet almost year on year”. She described the benefits of the proposals as the ability to “allow a different process that does not require the same sort of formalised procurement arrangement”. However, she stressed that there would be “a proper framework in place, not just to roll things over without due process around looking at value for money, quality and patient feedback and, clearly, an expectation of continuous improvement”.
143.Amanda Pritchard also told us that a key role for ICSs in this would be to share “good practice and innovation”. She added that while this hadn’t been discussed in relation to legislation, it was something that NHS England was considering issuing guidance on in relation to “the role of ICSs, the role of regions more generally, and our whole approach as we think about planning guidance for the next year”.
144.We welcome the proposals to reduce bureaucracy in NHS procurement, which have been broadly well received by stakeholders. If they are implemented in a clear and transparent way, they have the potential to both streamline Trusts’ procurement practices and reduce their financial and administrative burdens. That said, a framework of clear guidance and monitoring will need to be put in place to ensure that a lighter touch regime does not inadvertently establish practices that favour incumbents and excludes innovators. We note that implementation of the Health and Social Care Act 2012 led to unintended consequences in terms of bureaucracy and procurement and therefore for this set of changes it is extremely important to make sure implementation is well executed.
146.Because of the importance of implementation, the Committee puts the Government on notice that we will return to these issues before the end of the Parliament in time to assess how effectively the plans have been put in place. We will also ask the Secretary of State, NHS representatives and patient groups to return to the Committee on a regular basis to brief us on progress in implementation.
198 , Executive summary
199 , para 3.13
200 , para 3.15
201 , paras 5.42–43
202 , para 5.46
203 , para 5.47
204 Academy of Medical Royal Colleges ()
205 BMA ()
206 BMA ()
207 UNISON ()
208 The Royal College of General Practitioners ()
209 Academy of Medical Royal Colleges ()
210 UNISON ()
211 The Royal College of Physicians ()
212 BMA ()
213 Academy of Medical Royal Colleges ()
214 NHS Providers ()
215 Nuffield Trust ()
216 Nuffield Trust ()
217 Nuffield Trust ()
218 King’s Fund ()
219 King’s Fund ()