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Survey suggests procurement regulation is causing waves in the NHS

As published by Health Service Journal - 16 January 2014

DWF recently published a survey in association with HSJ which suggests regulations introduced in 2013 may cause numerous challenges to procurement decisions in the coming months.

Since the controversial procurement regulations came into force, their effects are already being felt across England, with two-thirds of those responding to the survey witnessing changes in commissioning behaviour. 60 per cent of respondents feel the regulations will aid service integration and 38 per cent felt their organisations might challenge a procurement process in the next six months.

A similar number said they would consider challenging for purely tactical reasons such as delaying the procurement or influencing how future procurements were run.

To read the survey report in full please go to ‘Special report: Procurement regulation is a bone of contention’ at www.hsj.co.uk

However, DWF head of healthcare Michael Boyd suggests the impact on how much the NHS commissions from the independent sector might not be as profound as the overall response suggests.

Michael Boyd on procurement regulations

On their introduction, the procurement, patient choice and competition regulations created a storm. Critics said they would be bad for service quality and clinical outcomes. Although Monitor is of the view that the regulations only consolidate existing requirements, the previous regime was not set against a landscape where the need to achieve improvements was as great, nor the financial challenges so significant.

The survey results seem to confirm that, thus far at least, not much has changed for one of the main concerns: increased competition. However, we need to bear in mind that the regulations require much more from commissioners and providers than simply participating in procurement processes. The behaviours that are both required and discouraged are at the heart of commissioning services from the best providers and achieving choice and service integration.

The survey indicates that there is a fair way to travel before the regulations achieve this objective. Commissioning behaviours have not changed materially and little progress has been made in delivering integration. However, a business-as-usual approach will hardly lead to a step-change in either the management of services or the delivery of improvements.

Exploit flexibility

Being “principles based” as opposed to setting out rigid processes that must be adhered to at all costs, the regulations provide a flexible environment within which to operate. It is by exploiting this flexibility that commissioners can adapt their practices to fit the context they are facing, rather than repeating the same, tired processes that fail to deliver optimal results.

We do need to recognise that with flexibility come the challenges of interpretation and compliance. The regulations have teeth and providers from both the NHS and the independent sector have demonstrated a willingness to lodge complaints with Monitor when they do not feel they have been treated properly. The effects of the fear of a challenge cannot be dismissed, but it does seem that there is room for a more courageous approach, underpinned by the confidence that greater understanding can provide.

The regulations and the extension of the role of the Office of Fair Trading into mergers and acquisitions have altered the compliance landscape within the NHS significantly. Like them or not, they are here to stay - for the time being at least. The challenge for the NHS is to demonstrate not only that it knows how to use the tools at its disposal but that it is also willing and capable of doing so.

If you have any questions or would like more information please contact Michael Boyd, Head of Healthcare Group.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.