APPENDIX 2: NATIONAL HEALTH SERVICE
(PROCUREMENT, PATIENT CHOICE AND COMPETITION) (NO. 2) REGULATIONS
2013 (SI 2013/500): ADDITIONAL INFORMATION
Department of Health answers to further questions
from the Secondary Legislation Scrutiny Committee:
Consultation
Q1: In the statement Earl Howe said he was intending
to speak to some of the royal colleges. Has the redrafted version
been shown to/agreed by any or all of the Royal Colleges - if
so which?
Has it been shown to the National Commissioning
Board?
Anyone else?
A1: Earl Howe discussed proposed revisions to the
regulations with a number of stakeholders. These included the:
- Academy of Medical Royal Colleges
- The Royal College of Physicians
- The British Medical Association
- Royal College of Nursing
To confirm that the proposed revisions were also
discussed by officials with the NHS Commissioning Board.
Guidance
Q2: What is the timetable for Monitor's guidance
being a) consulted on b) issued? Has that changed?
Will the Commissioning Board briefing papers referred
to in your previous supplementary note now need revision? When
will any revised guidance be published?
A2: Monitor still expects to publish guidance for
consultation in March. The NHS Commissioning Board and Monitor
still expects to publish a briefing paper on the Choice and Competition
Framework in March. These will of course take account of the changes
to the regulations.
The Department would draw again the Committee's attention
to the guidance already published by the NHS Commissioning Board
Authority on procurement including on single tender. It would
be misleading to suggest that there has been no guidance to commissioners
and also that the guidance is in some way different in substance
to the existing guidance that was put in place by the previous
administration. For ease of reference, the procurement guidance
in March 2010 said that:
'PCT boards must act transparently and without discrimination
and be able to demonstrate rationale for decisions on whether
or not to competitively tender. In particular, where the commissioner
decides to procure through single tender the rationale must demonstrate
that there is only one capable provider to deliver the services
and, therefore, that could provide better value for money.'
Furthermore:
'Where there is only one capable provider for a particular
bundle of services or the objective of the procurement is to secure
services to meet an immediate interim clinical need there will
be a case for Single Tender Action (ie uncontested procurement).
By definition, an immediate or urgent scenario will be exceptional
and likely to only to arise on clinical safety grounds or for
example, where existing services have been suspended following
intervention by the Care Quality Commission.'
Concerns from the evidence received.
Q3: A number of the revisions made to the regulations
support the promotion of integration in services - is that seen
as a means of providing a defence for CCGs against challenges
by companies that seek to cherry-pick the easier or more lucrative
services. (This was a significant concern in many of the submissions
we received)
A3: The revised regulations provide greater certainty
for commissioners that integration of services is a key tool that
can be used to improve the quality of care for patients.
As under the Principles and Rules for Cooperation
and Competition, the overriding concern when considering anticompetitive
behaviour is what is in the patient interest. We have provided
greater clarity through the revised regulations that integrated
care and cooperation are two ways in which benefits to patients
may be achieved. There is therefore additional comfort for commissioners
that, in integrating services in order to improve them, they should
not be breaching the regulations.
The Committee would be right in an assumption that
the revised regulations would provide greater certainty for commissioners
facing pressure from providers to unbundle services. Commissioners
will decide how best to integrate services and where this was
in the interests of patients, they could not be forced to fragment
services (ie unbundle them).
The burden of proof would be on Monitor, not commissioners,
to demonstrate that the commissioning of an integrated service
was anticompetitive and, if so, that it was not in the interests
of patients (which Monitor has a duty to protect and promote).
Q4: Does this version of the regulations remove
any (perceived) problem with the position of Hospices as outlined
in para 16 of our 30th report?
What would happen if you had more than one Hospice
bidding in a CCG area? - I would assume that this is where patient
choice would operate - but would be grateful if you could confirm
their position under these regs.
A4: The power to give funding through grants, including
to Hospices, is unaffected by these regulations. This would not
be a relevant tendering situation.
Clinical Commissioning Groups (CCGs) will have a
power to make grants under section 14Z6 of the NHS Act 2006 (inserted
by section 26 of the Health and Social Care Act 2012). This provides
that:
'A clinical commissioning group may make payments
by way of grant or loan to a voluntary organisation which provides
or arranges for the provision of services which are similar to
the services in respect of which the group has functions.'
Q5: Does the Department have any response to the
comments about the recommendations in the Francis Report (see
para 18 of our 30th report)
A5: The Department will formally respond to the Francis
Report later in March.
The recommendations from the Francis Report that
have been raised with the committee (124-127, 129-132) concern
commissioners appropriately setting and monitoring the quality
of services delivered by providers. The Department considers that
the regulations are entirely consistent with the intention of
these recommendations. Rather than in some way hindering their
implementation, as has been suggested to the Committee, we would
expect the regulations to help secure these goals. This is because
the objective of commissioners in procuring NHS services under
the regulations is to improve the quality of those services.
DH response to 30th report
Q6: The EM has not changed significantly - Is
there any short statement/ additional material that DH would wish
to provide to present its view to the House?
A6: Further information on the changes to the regulations
is available from the below link:
https://www.wp.dh.gov.uk/publications/files/2013/03/Changes-to-the-National-Health-Service-Regulations-2013.pdf
Further to the earlier memo provided by the Department
there is some additional information we would consider it would
be helpful for the Committee to have further to its written report.
In particular:
The Department and Ministers have always been very
clear that the regulations to be made under section 75 would cover
the procurement of services including competitive tendering (paragraph
3 of the Committee's report refers) and not just anticompetitive
behaviour. For example:
- The Bill clauses debated during the passage of
the Health and Social Care Bill, explicitly mention that the regulations
may include requirements on good procurement practice and competitive
tendering.
- The Government's response to the NHS Future Forum
Report stated that;
- 'We will narrow Monitor's powers over anti-competitive
purchasing behaviour by the NHS Commissioning Board or clinical
commissioning groups, so that these are more proportionate and
focus on preventing abuses rather than promoting competition as
though it were an end in itself. Monitor will also ensure the
application of UK and EU procurement law by commissioners, currently
reflected in the Principles and Rules of Cooperation and Competition.'
- The consultation document published by the Department
was very clearly about the procurement of services by commissioners
and the requirements in relation to procurement that would be
set out in the regulations: http://www.dh.gov.uk/health/2012/08/consultation-commissioners/
A number of examples were included in the Committee's
report where the Committee may find it helpful to have further
information.
The Committee notes an example given by the Royal
College of Midwives of circumstances in which it is most effective
that services are commissioned from one provider to deliver care
across a pathway. This would not be ruled out as the RCM suggest.
The RCM notes that there are limited providers who are capable
of delivering such care. In circumstances where there was only
one provider that could meet the commissioners' requirements there
would be the case for a single tender. Alternatively, the commissioner
would be able to specify the integrated pathway of care required
and tender that specification so that the provider best able to
meet the needs of their patients delivers the integrated care
required.
The Committee notes a concern from the Royal College
of Nursing about price competition and that quality may be a 'secondary
consideration'. The regulations do not introduce or require competition
on price. Quality could not be a secondary consideration under
the regulations as the objective of any procurement must be to
improve the quality of services for patients (regulation 2). Commissioners
must record how their actions have met their duties as to quality,
effectiveness and the promotion of the integration of services.
The Department would also wish the Committee to note
a key point that, absent the regulations, procurement disputes
would be resolved through the courts (under the Public Contract
Regulations 2006) without the benefit of a health specific regulator
with a duty to promote and protect the interests of patients in
everything it does (paragraph 10 of the committee's report refers).
Finally, the Committee notes in its conclusion that
there has been a 'significant change' in the policy on competitive
tendering as a result of the regulations. The Department would
reiterate that the policy on the use of competitive tendering
and, in particular, the circumstances in which a single tender
may be pursued, has not changed from the procurement guidance
published as far back as March 2010. The revised regulations make
this clear.
14 March 2013
| 
