NHS procurement rules ‘must be clarified to stop CCGs being sued’

20 Aug 18

Calls have been made for the government to give NHS staff clear guidance on complex health procurement rules to stop private sector providers suing clinical commission groups.

Health providers sense a growing threat of legal action where competitive procurement rules are misunderstood by clinical commissioning groups, according to Sir Chris Ham, chief executive of The King’s Fund charity.

Ham told PF: “There is growing awareness on the part of NHS commissioners and providers of a possibility of legal challenges if they misunderstand or misapply the rules of competitive procurement.”

In June the High Court ordered six CCGs in Surrey, alongside Surrey County Council, to pay out £2m to Virgincare, because the company failed to win a £82m contract in what it called a “flawed” procurement process.

Care UK, the UK’s largest private provider of health and social care, also lodged a complaint with former health regulator Monitor in 2015 over the “tender design and the conduct of the tender process” with a number of CCGs in North East London (Barking and Dagenham, Havering, Redbridge, Waltham Forest).

Ham suggested clarity on competitive procurement needs to “come from the top” and said “at a national level there needs to be much clearer explanation” of the expectations around competitive procurement.

He said CCG staff had found it hard to comply with a range of competitive procurement rules because of their complexity.

These rules included giving sufficient notice for the tendering of contracts, giving the same information to potential providers and not-favouring one provider over another.

Ham’s call echoed warnings in a health and social care select committee report from June, which urged the government to consider “changes to legislation covering procurement” to provide “greater clarity over what is permissible within current procurement law”.

Dr Tony O’Sullivan, co-chair of campaign group Keep Our NHS Public, told PF that the trend of legal challenges from the private sector “certainly will continue”.

He added: “We have a system where competitive tendering is expected, and it is subject to European competition law, the Health and Social Care Act and secondary regulation, so CCGs are very wary of being sued.”

Public Accounts Committee chair Meg Hillier expressed concern about private companies suing the NHS “where contracts are not tendered” and said it’s a trend “that needs to stop”.

David Furness, director of policy and delivery at NHS Confederation, told PF that legal challenges “are always a last resort”.

He added: “It’s important to remember that the procurement rules are there to ensure that patients and taxpayers get the best results when NHS contracts are awarded.

“We need to make sure that there is clarity for everyone as commissioners work through how to commission new models of care.”  

Virgin has continued to win contracts to provide health services, and earlier this month The Guardian revealed the company has been handed £2bn of NHS contracts in the past five years.

A report by the pressure group NHS Support Federation, towards the end of last year, showed in 2016-17 £7.1bn NHS clinical contracts were awarded through the tendering process.

The total value of contracts awarded through the market since the Health and Social Care Act (2012) came into force was £25bn, the report also found.

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