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

Last week, we introduced Part Four of our special five part series on the Impact of Brexit on NHS Procurement for Healthcare Services.  We are a team of experienced commercial advisors, health and care procurement managers and contract managers who work directly with clients to deliver commercial interventions.

Part one set the scene of what Brexit means for procurement. Part two explored the option of European Economic Area (EEA), Part three explored the option of Government Procurement Agreement (GPA) – Plus, part four explored a ‘No Deal’ Scenario and the fifth and final part of our series will now present our guidance for commissioners in preparing for change.

We hope you have found our series helpful and we would welcome you to contact us for any further advice.

Final Part Five: Summary – Three likely impacts for commissioners of healthcare services to consider

Brexit continues to make headlines across UK media – certainly we’re inching ever closer to an outcome – good, bad or ugly!

In this fifth and concluding article, we summarise the three likely impacts that current negotiations may have on the Public Contract Regulations 2015 and more specifically the impact for commissioners of healthcare services.

No Deal – What could follow?

In the case of a ‘No Deal’ scenario, the link to the EU Procurement Directives would be severed. For example, it will not be possible to advertise via the Official Journal of the European Union (OJEU) or to rely on European Court of Justice’s decisions.

We would expect the government amend the current Public Contract Regulations 2015 (PCR 2015) and remove any reference to the EU, and the NHS’s Procurement, Patient Choice and Competition Regulations 2013 (PCCR 2013) would still apply.

In case of ‘No Deal’, the UK government has stated a replacement UK-specific e-notification service will be made available, in the place of OJEU or Tenders Electronic Daily (TED). The new UK e-notification service will be available from 29 March 2019.

Commissioners would need to ensure they publish their contract notices on the UK e-notification service and the requirement would remain for below-threshold contracts to be published on the relevant domestic portal e.g. Contracts Finder.

Providers wishing to access contract opportunities from the UK public sector will need to access the new UK e-notification service and can continue to access the relevant domestic portal.

Remember – no deal could also mean the implementation of the GPA / GPA Plus option as the UK will continue to become a part of this agreement in our own right.

GPA and GPA Plus – Could this impact health procurement upon Brexit?

The GPA is the Government Procurement Agreement Regime which is part of the World Trade Organisation (WTO).  GPA Plus option allows for members to supplement additional rules to those set out in the GPA.

Unfortunately, the WTO GPA does not cover provisions for health and social care. This would mean that the UK government would have two potential options; (i) continue to not have any provisions for health and social care on the international stage –or (ii) develop alternative separate provisions which cover those services plugging the gaps between the two systems to ensure that the UK has the same level of access to EU Contracts and visa-versa – this would fall under the GPA Plus umbrella.  There is no indication at present as to whether GPA Plus is being considered as an option.

For those who don’t feel that the Public Contract Regulations have a place in commissioning of healthcare services no need to put the flags out just yet as the Patient, Choice and Competition Regulations (PCCR) 2013 continue to exist!

European Economic Area – EEA – What if we joined that?

The European Economic Area (EEA) was established via an international agreement which allows for the extension of the EU’s single market to non-EU member parties. If the UK adopted the EEA option the UK would become an EFTA state just like Iceland, Norway and Lichtenstein and as they do, we would maintain the application of the current Public Contracts Regulations 2015 the EU Law for procurement procedures for above threshold value contracts. In other words, there would be very little to no change from the current procurement procedures and process’s we use now.

What’s the right choice for healthcare services?

Clearly a great deal rests upon the government’s ability to get the Withdrawal Agreement approved through the House of Commons and Europe has indicated that no further negotiated changes are possible. Failure to achieve this without a resulting general election or second referendum puts the ‘no deal’ option up the pecking order and this might lead to the development of appropriate GPA regulation. Politically, even with a General Election, the European Economic Area – ‘EEA’ option – looks unlikely to come to fruition.

That said, if  the Prime Minister does manage to convince the Cabinet over the next month and the Withdrawal Agreement is approved in the House of Commons during January it is likely that this will spell the implementation of the EEA Option in some form, likely more akin to the EEA Minus option as one of the key points for Brexit is the UK having the ability to make its own laws and not be dictated to by the EU.

There will be a myriad of trains of thought over whether this is the right option for healthcare procurement or not, indeed some may believe the Regulations don’t have a place in securing healthcare services against the current backdrop.  Clearly this wouldn’t be the case for all NHS organisations, for those buying goods in an Acute Trust for example procurement and competition is a fantastic way to ensure that value for money is being achieved through economies of scale whilst retaining the quality of goods being purchased.

Transformation and Integration remains a key focus

Procurement of healthcare services is used less as a tool to make savings – most of the low hanging fruit has been picked by now – the general aim of the game is that we are trying to do more with the same financial resources. The focus being on how services can be transformed, and organisations can work together to take the waste and duplication out of the system, managing demand more effectively, improving patient flow and shifting the focus to preventative care and care designed around the citizen.

That magical word integration featured heavily in the Five Year Forward View and is expected to continue as a key focus of the NHS 10-year plan.  Therefore, in that context the question is raised as to whether procurement is conducive to achieving that goal and we’ve certainly heard arguments for and against.

Healthy competition is vital

We think it’s safe to say that even if procurement regulations are not the correct tool to achieve the required outcomes for commissioning of healthcare services, the benefits that competition brings will likely be lost if there is nothing to replace it.  Without effective competition, how do you ensure you are getting value for money for your services?  It’s certainly an advantageous lever in ensuring that providers are delivering the high-quality services required for our population, the last thing anyone would want to do is create a monopoly where there are no incentives for continuous improvement.

What do commissioners need to think about?

As we approach the 29 March 2019, commissioners:

• Should keep an eye on the GOV.UK website for further information and guidance about leaving the EU, including preparations that are being made for a ‘No Deal’ scenario
• Review and amend internal policies e.g. Standing Financial Instructions and Procurement Policy
• Engage with providers in advance of 29 March 2019, to provide updates on what the likely impacts will be for NHS procurements and their access to bidding for NHS contracts
• Consider any procurements started before the end of the transition period which will be subject to the current rules for their entire duration
• Talk to our experienced team for specific support

We hope you have found our series helpful and we would welcome you to contact us for any further advice.