The Impact of Brexit on NHS Procurement for Healthcare Services – five part series (Part One)

The Impact of Brexit on NHS Procurement for Healthcare Services – five part series (Part One)

As a team of experienced commercial advisors, health and care procurement managers and contract managers who work directly with clients to deliver commercial interventions, we are pleased to introduce a special five part series on the Impact of Brexit on NHS Procurement for Healthcare Services.  

Part one sets the scene of what Brexit means for procurement. Part two explores the option of European Economic Area (EEA), part three explores the option of Government Procurement Agreement (GPA) – Plus, part four explores a ‘No Deal’ Scenario and the fifth and final part of our series will present our guidance for commissioners in preparing for change. Each part will be published every Monday over the next four weeks, so that you can start your year prepared for change.

Part One: What does Brexit mean for NHS Procurement for healthcare services?

You’d have to be living in a cave not to appreciate that Brexit is a key issue on today’s political landscape. It will determine our entire future as a country, impacting on every aspect of our lives, those of our children and grandchildren.

Following the sanctioning of Article 50 of the Lisbon Treaty by the Prime Minister in March 2017, the UK will leave the European Union on 29^th March 2019.  This means that the UK has to remove itself from the European Union which means severing a number of ties with Europe such as exiting the single market and ending freedom of movement of citizens throughout the EU to the UK.  The European laws which we currently abide by will no longer be applicable to the UK.  Therefore, the UK will need to design it’s own legislation to ensure that the country can continue to not only survive but to thrive in the future.

In our special five part procurement series, we explore the impact of Brexit on the Public Contract Regulations 2015 with specific focus on healthcare procurements within the NHS as part of the Light touch Regime.

Clearly this is a dynamic issue with lots of exciting twists and turns, and let’s face it, no one knows what will actually happen. The Withdrawal Agreement published in November states that in relation to competition and EU procurement, the rules will continue to apply to public procurement with similar procedures applied at the end of the implementation period.  The government are clearly keen to maintain a robust competition regime going forward.

What’s the current timetable for Brexit?

This timetable assumes that the withdrawal agreement isn’t overturned or there is a vote of no confidence in our government ( on top of the Prime Minister narrowly avoiding the recent vote of confidence from her own party), both of which are bubbling away under the surface with both the Liberal Democrats and Scottish National Party claiming they will back Labour to take over.  Anyway, we digress …..

What is the existing Regulatory Framework?

The NHS and wider public sector procurement is subject to UK and EU rules and regulations. NHS Commissioners are governed by the requirements of the following:

• NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013
• The Public Contracts Regulations 2015

All procurement opportunities above the threshold of £615,278 must be advertised in the Official Journal of the European Union (OJEU) and Contracts Finder (national site). Procurement procedures are then required to be carried out electronically, ensuring fair & open competition, non-discrimination, equal treatment, transparency and proportionality, with the contract award notice being having to be posted.

There is a 10-day standstill period following the contract award, in which bidders can challenge the decision made. If a contract is found to have been awarded in a manner not permitted by the Regulations, the contract may be set aside. Commissioners may also be required to pay damages to providers who were not awarded the contract in accordance with the regulations.

What are the potential options?

While the precise details of the legislation that will exist after Brexit are not yet finalised, there are several potential options for procurement of Healthcare Services in the NHS when the UK leaves the EU. Our series will explore these in more detail, but here’s a summary:

Part two explores Option 1: European Economic Area (EEA)

This potential model uses the EU Procurement Directives as the basis of procurement-specific rules between the EU and the UK, as has been done with Norway. This model would however have minimal impact on NHS procurement for Healthcare Services, as this would be subject to the same access and rules as at present.

Part three explores Option 2: Government Procurement Agreement (GPA) – Plus:  

This potential model involves access and rules based on the World Trade Organisation (WTO) GPA but potentially supplemented by additional rules. Example additional rules could include coverage for health and social care, more stringent transparency and remedies requirements and use of a single system for notices mirroring OJEU.

Part four explores Option 3: No Deal Scenario

There is a possibility that there will be no EU-UK trade and procurement agreement in place at the time of Brexit. Therefore, the link to the EU Procurement Directives would be severed. For example, it will not be possible to advertise via OJEU or to rely on European Court of Justice’s decisions. It would be expected that the government would amend the current Public Contract Regulations 2015 and remove any reference to the EU. Of course, the NHS’s Procurement, Patient Choice and Competition Regulations 2013 (PCCR 2013) would still apply*.

*Government is still silent on whether any amendments to PCCR 2013 will be forthcoming although we know that the NHS has put forward a ‘wish list’ of legislative changes to be made as part of the imminent 10-year plan. 

What are the key considerations?

It is important for commissioners to be aware of the potential procurement models that may follow and any preparations that have been made for Brexit thus far.

The other interesting factor to be aware of is the national focus on system integration set out within the Five Year Forward View and is extremely likely to be an ongoing key factor in the NHS 10-year plan which is due to be published imminently.  Certainly, in many ways the current regulatory framework is at odds with that direction of travel. Part five of our series will present our guidance for commissioners in preparing for change.

Don’t miss part two, next week, where we explore the European Economic Area (EEA) option.