New public procurement rules for Integrated Care Boards on the horizon

There are several forthcoming changes to the rules applying to the procurement of health services by Integrated Care Boards (“ICBs”).

Section 80 of the Health and Care Act 2022 repeals the NHS Procurement, Competition and Patient Choice (No.2) Regulations (“the NHS Procurement Regs”). The Act received Royal Assent in June although s.80 has not yet come in force. Those Regulations governed procurement by CCGs (which have now been abolished and replaced by ICBs– see the earlier article by David Lock in our July newsletter).  The NHS Procurement Regulations were the product of last-minute negotiations and concessions during the passage of the Health and Social Care Bill through Parliament in 2012, and resulted in a confusing overlap in the rules governing the procurement of health services by CCGs.  CCGs were governed by both the light touch regime under the 2015 Public Contract Regulations (“PCRs”) and the NHS Procurement Regulations. So CCGs, when awarding contracts, were exposed to liability for damages under the NHS Procurement Regulations well after the expiry of the much shorter limitation periods under the PCRs.

The Government is clearly trying to tidy up this unnecessary and confusing overlap now that ICBs have been introduced to replace CCGs.

Section 79 of the new Act provides for a new set of procurement regulations relating to the procurement of health services by ICBs to be issued by the Secretary of State (referred to by the DHSC as the “new provider selection regime”). Those regulations have not yet been issued, not least because the wholesale reform of the EU law-based procurement rules in England and Wales post Brexit has not yet been completed, and until it is, the PCRs still apply to any contracting authority including ICBs.  NHS England’s website says that “The Provider Selection Regime is not expected to be in use in time for the 2023/2024 NHS contracting round. We expect more clarity on timeframes for implementation from Government to be published shortly.”

Under the provisions of the Procurement Bill (which is currently halfway through its passage in Parliament), the PCRs will be revoked and replaced by the new domestic regime set out in that Bill.  Clause 111 of the Bill gives a Minister power to disapply any provisions of the Bill to “the award or management of a contract for the supply of services or goods to which health procurement rules apply”.  Those rules will be the rules that establish the provider selection regime.  So that will remove the overlap that existed under the previous regime.  The Government has said that it will give a six-month lead time before the new regime comes into force (so perhaps this will be by autumn 2023).

As to where things stand currently in the interim period between the repeal of the NHS Procurement Regs, and the implementation of the new provider selection regime, the PCRs still apply to procurement decisions by ICBs.  The situation with the 2013 Procurement Regs is less clear. An explanatory note issued by the NHS on those Regulations states that “the substantive guidance on the Procurement, Patient Choice and Competition Regulations, and related enforcement guidance on the Procurement, Patient Choice and Competition Regulations, addressed to clinical commissioning groups (CCGs) and NHS England, should be read during the interim period as referring to ICBs and NHS England (in its role as a commissioner).”.

James Neill is a barrister at Landmark Chambers.