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Section 75 Regulations

Application of the NHS (Procurement, Patient Choice and Competition) Regulations 2013
 
Section 75 regulations of Health and Social Care Act, as they are known, have inadvertently created confusion and generated significant concerns about their effect. This continues despite the Government’s recent redraft of the regulations to address people’s concerns that this would have opened up every part of the NHS service to private competition.
 
The redrafted regulations retain the clause that commissioners can only award contracts without competition if they can show no other provider could offer the service. It is this wording which has caused the most angst and legal challenges. However this is perhaps due to a lack of understanding of procurement law and process by the majority who are challenging Section 75.
 
The circumstances in which a commissioner may award a contract without a competition, under the regulations will be identical to the requirements of existing procurement law, as reflected in mandatory guidance to the NHS applicable since 2008. Mandatory guidance published in July 2010 stated:
 
‘Where there is only one capable provider for a particular bundle of services or the objective of the procurement is to secure services to meet an immediate interim clinical need there will be a case for Single Tender Action (i.e. uncontested procurement)’. 1
       
Further examples of services where there may typically only be one capable provider include:
acute hospital services on single sites and accessible 24 hours a day 7 days a week;
a range of integrated services delivered in the community;
highly specialised care; or
services in more rural or remote areas of the country.  
Therefore, absent the regulations, the requirements of procurement law would continue to apply to the NHS. The BAD continues to apply these principles to service issues and commissioning challenges across England.
 
Under the regulations, commissioners continue to have discretion to decide whether, where and when to introduce the conditions needed to stimulate or create a market for services. The regulations do not impose compulsory competitive tendering requirements on commissioners and expressly preclude Monitor in their new role from directing a commissioner to hold a competitive tender.
 
Where the commissioner requires an integrated service, there is nothing in the regulations which requires them to procure a cheaper alternative that does not meet their requirements.   Regulations also require commissioners to choose the provider which can meet their requirements and provides the best value in doing so. ‘Best value’ is the best combination of quality and price. Monitor’s pending guidance will make this absolutely clear.
 
The redrafted regulations will be debated on 24 April in the House of Lords and are likely to be approved.

The full version of the BAD review of the Application of the NHS (Procurement, Patient Choice and Competition) Regulations 2013 is available here.
 
Further notes on each regulation under section 75 and 77 of the Health and Social Care Act 2013 prepared by the DH are available here.

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 1. Procurement guide for commissioners of NHS-funded services, July 2010

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