Plans to integrate NHS England into the Department of Health mark an important shift in the UK’s healthcare management. From a political point of view, the Prime Minister Sir Keir Starmer described this move as a strategy to reduce administrative layers and thereby enhance the democratic management of health services, while the Health Secretary, Wes Streeting, stated that he believed it would free up frontline workers to focus more on patient care.
However, this significant restructuring is not just a political manoeuvre. It is also a recalibration of procurement processes and supply chain management within the National Health Service. The shift may therefore also be intended to decentralise certain responsibilities to regional health boards, although this may raise concerns regarding how such decentralisation could upon impact the quality of frontline services, from GP care to specialised hospital treatments.
Significantly, the absorption of NHS England’s responsibilities into the Department of Health and Social Care (DHSC) may mean that local Integrated Care Boards (ICBs) will have increased autonomy over procurement decisions. This could allow for more region-specific health service adaptations but might also lead to inconsistencies in the availability of medical treatments across different areas.
From the point of view of the public procurement regime, much of NHS procurement had already been removed from its scope by what was regulation 12A of the Public Contracts Regulations 2015, as a result of the Health Care Services (Provider Selection Regime) Regulations 2023 [1] made under sections 12ZB and 272 of the National Health Service Act 2006 and section 182 of the Heath and Care Act 2022.
These 2023 Regulations, which came into force over a year ago on 1 January 2024, provide, by virtue of regulation 3, that the Regulations apply where a relevant authority procures “relevant health care services” for the purposes of the health service in England, whether alone or as part of a mixed procurement. Relevant health care services are defined in Schedule 1 to the 2023 Regulations, by reference to a list of CPV Codes.
Mixed procurement consists of the procurement of relevant health care services for the purposes of the health service in England and other goods or services procured with them where the main subject-matter of the procurement is relevant health care services (assessed by a determination of which has the higher estimated lifetime value) and the relevant authority is of the view that the other goods or services could not reasonably be supplied under a separate contract.
Where these 2023 Regulations apply what is referred to as the “provider selection regime” to the procurement of these relevant heath care services by a relevant authority, henceforth the provisions of the Procurement Act 2023 will not apply either, by virtue of regulation 43 of the Procurement Regulations 2024, made under section 120(1) of the 2023 Act.
The relevant authorities are defined in section 12ZB(7) of the National Health Service Act 2006 and comprise a combined authority, a combined county authority, an integrated care board (ICB), a local authority in England, NHS England, an NHS foundation trust and an NHS trust established under section 25 of the 2006 Act.
Even for the procurement by these relevant authority of goods and services other than relevant health care services, which will still be covered by the Procurement Act 2023, both NHS England and, of course, the Department of Health and Social Care are deemed to be a “central government authority” for the purposes of Schedule 1(5) of the 2023 Act and regulation 44 and Schedule 2 of the 2024 Regulations.
The consequence of this was that the relevant threshold for the supply of goods or services under section 3 and Schedule 1 paragraph 1 of the 2023 Act for both NHS England and the DHSC, as central government authorities, was the same, at £138,760, whereas should the procurement be undertaken by, for instance, an individual ICB, as a sub-central government authority, then the relevant threshold would be £213,477.
[1] Corresponding Regulations were made in Wales by the Senedd Cymru, namely the Health Care Services (Provider Selection Regime)(Wales) Regulations 2025, made under sections 10A and 205 of the National Health Service (Wales) Act 2006 and section 120A of the Procurement Act 2023
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