Procurement in a Nutshell – Independent Procurement Panel: Key Lessons for Relevant Authorities
11th April, 2025
This Nutshell will discuss the Independent Procurement Panel's recent statement which outlines the key lessons that relevant authorities should take into account following the first year of the implementation of the Provider Selection Regime.
The Provider Selection Regime (PSR), set out in the Health Care Services (Provider Selection Regime) Regulations 2023, came into force on the 1st January 2024.
The PSR removes the procurement of health care services from the scope of the Procurement Act 2023, which came into effect from the 24th February 2025.
The PSR applies to NHS England, Integrated Care Boards, NHS Trusts, NHS Foundation Trusts, local authorities and combined authorities when they are procuring relevant healthcare services.
Background
The Independent Procurement Panel (the Panel) provides advice under the PSR to relevant authorities in circumstances where a provider is aggrieved by an award decision, and the provider believes the PSR Regulations have not been complied with.
The role of the Panel is to provide independent expert advice (as referred to in Regulation 23 of the PSR Regulations) and publish this advice for each review it undertakes.
Key lessons
The Panel reported that if referrals continue at the current rate, they expect to review around 30 cases under the PSR in 2025. The Panel has stressed that such a small number of disputes reflects enormously well on relevant authorities, demonstrating their efforts to ensure high quality services for patients, and value for money.
To ensure that the success of the PSR continues, the Panel have outlined key lessons which relevant authorities should consider when conducting procurements.
Choosing the right procurement process
The PSR offers relevant authorities various procurement processes to select a provider for a service. For example, relevant authorities are able to choose between awarding a new contract to an existing provider (provided they performed the original contract to a satisfactory standard) or conduct a competitive process. However, in certain circumstances, relevant authorities must use a particular procurement route. If there is only one possible provider of a service, then the relevant authority must contract with that provider under Direct Award Process A without holding a competition.
In the Panel’s recent reflection of the PSR, they have stressed that a provider who objects to a relevant authority exercising its freedom to select between available procurement routes is unlikely to succeed. However, the Panel has urged that relevant authorities ensure that the procurement route they select is genuinely allowable for the service in question. This point was raised in the Panel’s decision CR0004-24 as the relevant authority was held to have utilised the Most Suitable Provider process as a means of confirming its pre-existing preference for a provider rather than as an open decision-making process. For a full discussion of this decision, please click here.
Understanding whether the service is subject to PSR
As previously mentioned, the PSR applies to healthcare services, involving diagnosis, treatment or prevention for patients. The Panel confirmed that the PSR does not apply to healthcare adjacent services, like social care, or to healthcare products, such as consumables, drugs or infrastructure.
The Panel, in decision CR0010-25, held that a wheelchair service fell inside the PSR as the service required an assessment of patient needs (which is akin to a diagnosis), and the treatment provided was the supply of a wheelchair. The Panel also felt it was important that clinically qualified employees delivered the assessments and prescribed the wheelchairs.
The Panel stated in this decision that any conclusion as to whether a service is subject to the PSR depends on whether the service’s characteristics are consistent with the definition of a health care service under the PSR regulations. A CQC registration (or lack of) will not be conclusive.
Ensuring robust procedures for evaluating proposals, supported by good record keeping
The Panel was clear in that their approach to assessing providers’ complaints about how proposals have been scored has been focused on examining the robustness of procedures.
The Panel will afford relevant authorities latitude in their scoring decisions, to reflect their knowledge and expertise, so long as they can show, through good record keeping, that they have acted in line with procedures that are designed to deliver a fair outcome.
Working openly and collaboratively with unsuccessful bidders
The Panel encourages relevant authorities to work openly and cooperatively with any unsuccessful bidder that is unhappy with a procurement process. Relevant authorities should supply unsuccessful bidders with relevant and accurate information, and actively work with them to understand and respond to issues they raise.
What does this mean?
We would advise that relevant authorities take note of the points raised by the Panel. Moving forward, relevant authorities should ensure they can sufficiently evidence their decision-making process, as well as justify their selection of a specific procurement process. Collaborating with providers throughout the procurement is also important, and will help minimise the possibility of challenge.
For further information please contact Tim Care or Melanie Pears in our Public Sector Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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