In February 2013 the Government published draft regulations governing procurement practice as required by the Health and Social Care Act 2012. This briefing outlines our response.
Increasing competition for the provision of care in the NHS was one of the key elements of the coalition Government's Health and Social Care Act 2012.
In February 2013, the Government published draft regulations governing procurement practice as required by the primary legislation, only to withdraw them shortly after. Substitute regulations were then published in March 2013.
Under the terms of the revised 'section 75' regulations, a commissioner can award a new contract to a single provider without competition, provided it is satisfied that the services in question 'are capable of being provided only by that provider'.
This parliamentary briefing places the debate within its wider strategic context and recommends that the Government hold to its commitment to continue developing the evidence base around competition and integrated care so that commissioners and providers have accurate information when forming decisions.
Our view is that the confusion over the role that existing competition law will play in shaping procurement decisions has been compounded by an absence of formal guidance for commissioners on how to interpret and use the new regulations.
Its main observations are that:
- Given the relative lack of case law in this area, practical examples are vital to avoid at one extreme, risk averse commissioning policies that result in unnecessary, wasteful tendering, and at the other end, unjustifiably anti-competitive behaviour that works against the patient and taxpayer interest.
- The scope of competition law to apply to health care services has considerable strategic relevance. In the context of a financially stressed acute sector, commissioners need to be confident that any preferred solutions can withstand the robust scrutiny from competition authorities seeking to determine whether large scale changes are in the patient interest.
- Recent documents published by the Cooperation and Competition Panel between December 2012 and March 2013 are a helpful attempt to fill some of the knowledge gap but potentially risk commissioners perceiving the scope for regulatory action as being so wide that it inhibits service redesign and innovation.
The report is the latest in a sequence of Nuffield Trust policy briefings that analyse the main areas of controversy surrounding the Health and Social Care Act and which suggest several measures for their resolution.
Our experts continue to examine NHS reform in detail, both in terms of the Act as well as more widely. For further details of our current projects, as well as links to relevant publications, blogs, video interviews, interactive data and charts, and slideshows, visit the dedicated area of work on NHS reform and our research project into competition in the NHS.
Nuffield Trust (2013) NHS procurement, patient choice and competition: response to draft regulations. Briefing.