Background to the PSR
The PSR was introduced by the Health and Care Bill (2022), and after working its way through Parliament came into force on 1 January 2024.
The PSR is a set of rules for procuring health care services in England by "Relevant Authorities", which include:
- NHS England
- Integrated Care Boards (ICBs)
- NHS Trusts and NHS Foundation Trusts
- Local authorities and combined authorities
The PSR removes the commissioning of NHS healthcare services from the scope of the Public Contracts Regulations (2015). The new rules apply specifically when Relevant Authorities procure health care services for the purposes of the health service in England (subject to provisions on mixed procurements).
This is the first report published by the Panel under this new regime, rendering it of particular interest, as it gives a primary insight into how we can expect the regime to be applied. You can read more on the PSR in our previous article here.
The procurement
The details of the procurement in question can be summarised as follows:
- The Commissioner was NENC and Proposed Provider was Psychiatry UK (who was also the existing supplier).
- The service subject to the procurement was Online ADHD Assessment, Diagnostic and Management Services for adult patients (aged 16+) in North Cumbria.
- The value was approximately £1.1 million per year.
- The contract length was 12 months.
NENC intended to use Direct Award Process C under the PSR. This process is for awarding contracts to existing providers deemed to be performing well.
The Owl Centre Limited (TOC) requested that the Panel review NENC's decision to award the contract. TOC argued that the selection process lacked transparency and did not consider all potential providers.
The report
The Panel concluded that NENC breached healthcare procurement regulations by selecting Psychiatry UK through Direct Award Process C. This process is meant for situations where a single provider is best suited, but the report found that patients have the legal right to choose their provider for ADHD services.
Since offering choice is required by law in such cases, NENC should have used Direct Award Process B, which requires commissioners to offer patients a choice of qualified providers.
As a result, the Panel advised NENC to abandon the current selection process and recommence it using Direct Award Process B. This will allow other providers, including TOC, to compete for the contract.
Comment
This first report by the Panel takes a strict approach in applying the PSR, highlighting to public bodies the importance of following the correct procedures when awarding contracts under the new PSR regime.
If you would like to discuss how to award contracts in compliance with the PSR, please do not hesitate to get in touch with a member of the DWF Procurement Centre of Excellence team.
With assistance from Emily Crees, who is a trainee in our Commercial Team.
