How CCGs can tackle the ever-shifting procurement regime

Clinical commissioning groups have a clear vision to put clinical expertise at the centre of commissioning but, in seeking to achieve that vision, there remain a raft of operational issues which they will have to grapple with. The procurement regime is difficult to navigate by the most capable purchasing and commissioning mariners, but in the midst of a huge sea change in the way clinical services are to be commissioned, looms another significant tidal wave of reform.

The transition from PCT to CCG will not, in and of itself, alter the existing legal compliance framework around procurement issues – the Public Contracts Regulations 2006 (PCR 2006) will apply to CCGs in exactly the same way as to PCTs. CCGs will as currently understood still have to comply with the principles of the DoH “Procurement guide for commissioning NHS-funded services”, notwithstanding the fact that provision has been made in the Health & Social Care Act 2012 for the Secretary of State to introduce regulations dealing with how procurements are undertaken (as yet unused).

Proposed Changes – Part A and Part B distinction to be removed

The significant change in the area of procurement comes from Europe and has developed quite separately from the NHS reform agenda.

The European Commission published its proposals for the reform to the public procurement regime across the EU back in December 2011after having undertaken research into the previous 10 years’ experience of procurement in action. One of their key proposals is to abolish the distinction between what are called Part A services and Part B services (bearing in mind that it was always intended that this distinction was meant to be an interim arrangement).

Under the existing regime, health and social care services have traditionally been considered to be national or local in scope and, on the face of it, not of sufficient cross-border interest to require them to be subjected to the full procurement regime under PCR 2006 and hence have been classified as Part B services. This being the case, the vast majority of the core purchasing decisions of commissioning bodies across the NHS have historically been made without recourse to, or the requirement to comply with, PCR 2006.

If the European Commission’s reform proposals, make it into law across the EU this position will change dramatically. NHS bodies are those that are most likely to be affected by the removal of the distinction between Part A services and Part B services. That said, there remains in the proposals a recognition that health and social care services ought still to be treated distinctly when being procured by suggesting the need for a higher threshold (€500,000) being applied than for other services before the full gamut of the PCR 2006 is to be complied with.

The reform proposals nonetheless will introduce an additional layer of regulated process into the commissioning activities of CCGs. Some might say that this amounts to an unnecessary burden generally while others would argue that all it is doing is actually consolidating procedures which ought to have been undertaken by responsible commissioners in any event – either way, undeniably, the reforms are likely to demand a high degree of attention and resource at a time when CCGs are still relatively nascent – the EU proposals are expected to have been implemented by the end of June 2014 at the latest.

Faced with this challenge, CCGs will need assurance that they have the expertise at their disposal to handle procurements in a robust way. Failure to comply with the detailed requirements of the procurement regime does give rise to the risk that decisions will be challenged and, more importantly, that service redesign is delayed. CCGs have the options of building up procurement capabilities internally, sourcing these from emerging commissioning support services or engaging with commercial providers of procurement support. 

Whichever option is chosen, CCGs will need to develop sufficient understanding of procurement matters to be able to identify issues on which they need support and assess the quality of the support they are receiving. Faced with many competing priorities, time spent learning the basics of procurement will have been well spent if this helps to reduce the risk of expensive and time consuming challenges. 

The future holds a series of not insurmountable hurdles to the smooth operation of the new CCG commissioning structure in procurement compliance terms, particularly since there appears to be an appetite across the EU to treat all purchasing decisions of public bodies in exactly the same way. This being the case, it will be interesting to see how the new lean CCG structure is able to adapt to the ever-changing sea-scape.