The Health and Care Act exempts the NHS from procurement rules © Mike Kemp/In Pictures via Getty Images
The Health and Care Act exempts the NHS from procurement rules © Mike Kemp/In Pictures via Getty Images

Criticism of NHS 'culture of exceptionalism' as Procurement Bill debated

29 November 2022

Concerns have been raised over the future of NHS purchasing amid fears the Procurement Bill contradicts health service buying rules.

Members of the House of Lords, debating the Procurement Bill on Monday (28 November), said there was “potential for confusion” in the way the new law worked with the Health and Care Act. 

The Health and Care Act, passed earlier this year, said “competitive tendering [should] continue to be a tool that the NHS and local authorities can use where it can add value”.

However, it also granted the NHS its own procurement rules, and removed the NHS from the EU Public Contract Regulations.

Baroness Sheila Noakes (Con) said: “We have to stop the culture of exceptionalism for the NHS and bring it within the ordinary rules.”

Baroness Sal Brinton (LibDem) said she had sought clarity from government over “why the NHS is treated differently from every other part of the public procurement sector covered by the Bill”.

“I have not yet heard a clear answer to that,” she said.

The government previously said only “clinical services” would be covered by NHS buying rules. However, the Health and Care Act said exemptions could also be made for “other goods or services”. 

Brinton raised concerns over how this will be implemented, saying: “While we spent a little time in the committee trying to discuss where the boundaries are, it seems to me that there are no such boundaries, and that leaves me very greatly concerned about how this will work in practice.”

Lord Philip Hunt (Lab) claimed “there is every potential for confusion as to how these two sets of legislation are to work together”.

“That leaves a lot of questions for those working in the health and social care sectors as to how they are to operate the new processes. Given the nature of NHS commissioning and services, there are big questions about what happens if a contract incorporates clinical and non-clinical services.”

Baroness Lucy Neville-Rolfe, minister of state for the Cabinet Office, said the NHS was a “special case” and “certain healthcare services should not be subject to our regime because there is often no market and because it creates undue bureaucracy to require NHS bodies to contract with themselves.

“The Bill provides for new and separate rules for healthcare services to patients and service users, although not for goods except those that are an integral part of the delivery of a clinical care services contract.”

She said the new “provider selection scheme” will establish a new NHS regime in the coming months, “with a new emphasis on collaboration”.

The Provider Selection Regime, which will replace the existing procurement rules for healthcare services, will enhance collaboration, and to remove the “rigidity”, bureaucracy and costs associated with current procurement rules, the government said. 

The debate comes after a week of scrutiny of NHS procurement following accusations by the Labour Party the government showed a “total failure of due diligence” over PPE purchasing, where contracts were awarded without tender to companies recommended by government officials.

Lord David Alton (LibDem) called on the government to confirm whether the public inquiry into Covid-19 would “deal in detail with procurement” in light of the accusations against PPE Medpro and peer Baroness Michelle Mone. 

He further noted the total cost of Covid to the government was £310bn-£410bn, with £75.3bn spent by the Department of Health. 

Alton said between 2019-21 gross spending on public sector procurement increased by £53bn, representing a 17% rise. Health spending rose by £43bn, a rise of 44%, and it is estimated that PPE contracts totalled £14.6bn.

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