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A summary of the new Provider Selection Regime which came into force on 1 January 2024

25 January 2024
The Provider Selection Regime (PSR) came into force on 1 January 2024. The PSR is a set of rules for procuring health care services in England by organisations known as "Relevant Authorities".

What is 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 Authoriites, 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).

What health services are in scope?

The ‘health service’ is defined in section 275(1) of the National Health Service Act 2006 as the health service, continued under section 1(1) of the 2006 Act. Section 1(1) refers to:

“Comprehensive health service designed to secure improvement in the physical and mental health of the people of England, and in the prevention, diagnosis and treatment of physical and mental illness.”

This definition encompasses NHS health care services and the comprehensive health service that is provided in the delivery of the public health functions of the Secretary of State for Health and Social Care or local authorities under the 2006 Act.

Additionally, for the purposes of this regime, ‘health care services’ has the meaning as given in section 150(1) of the Health and Social Care Act 2012, which defines health care as:

“Health care” means all forms of “health care provided for individuals, whether relating to physical or mental health”, with a reference [in the Regulations] to “health care services” being read accordingly.

A service is in scope when a relevant authority is commissioning or subcontracting a service which satisfies the following three criteria:

  • is provided as part of the health service, whether NHS or public health;
  • consists of the provision of health care to individuals or groups of individuals; and
  • falls within one or more of the specified CPV codes.

Provider Selection Processes

The PSR has introduced three procedures that Relevant Authorities can follow when awarding contracts for health care services.

Direct Award Procedure

This is where Relevant Authorities award Contracts to providers where there is no reason to run a competition to assess various providers against one another, or seek to change from the existing provider for the following reasons:

  • The existing provider is the only provider that can deliver the services
  • Patients have a choice of various providers, and the number of providers is not restricted by the Relevant Authority
  • The existing provider is fulfilling its existing contract and therefore is likely to satisfy any new contract to a sufficient standard, and the proposed contracting arrangements are not changing considerably

Most Suitable Provider

This involves awarding a Contract to providers without running a competitive process, as the Relevant Authority can identify the most sutiable provider to deliver the necessary services.

Compeititve Process

Here, Relevant Authorities should run a competitive process to identify a Provider and award a Contract. Relevant Authorities need to comply with defined processes in each case to evidence their decision-making including record keeping and the publication of transparency notices.

Transitional arrangements and guidance

The PSR came into force on 1 January 2024. It is set out in the Health Care Services (Provider Selection Regime) Regulations 2023, which the Department of Health and Social Care introduced into Parliament on 19 October 2023.

Alongside the legislation, NHS England has published statutory guidance which assist Relevant Authorities to understand and properly apply the PSR. The Regulations set out that Relevant Authorities must have regard to the statutory guidance. As well as this, a toolkit has also been developed to support Relevant Authorities with the application of the PSR.

The PSR introduces important changes into how to procure health services, and it is important the market is aware of these changes. We at DWF are on hand to assist with navigating these changes, so please do get in contact if you would like advice from our speciailist procurement team. 

Further Reading