Blog post

Changes to procurement rules open up new possibilities for the NHS

Find out about the Public Contracts Regulations 2015 which come into force on 26 February.
Elisbetta Zanon

2 March 2015

All NHS bodies should take note that the new Public Contracts Regulations 2015 entered into force last week (on 26 February), implementing domestically new EU public procurement law. This is good news as the new rules will help the NHS to improve the way it purchases goods and supplies, making the procurement process more efficient and flexible, writes Elisabetta Zanon, director of the NHS European Office. 

All NHS bodies should take note that the new Public Contracts Regulations 2015 entered into force last week (on 26 February), implementing domestically new EU public procurement law. This is good news as the new rules will help the NHS to improve the way it purchases goods and supplies, making the procurement process more efficient and flexible. 

For a long time, the NHS has been told it needs to improve how it buys things and been criticised for wasting public money when purchasing technologies, devices, drugs and a range of other goods and supplies. To respond to this, as part of our efficiency agenda, plans have been put forward for changing NHS procurement practices to ensure that money is spent more smartly and more efficiently. More specifically, the NHS Procurement Programme has set a target to save £1.5 billion by cutting wasteful spending and reinvesting the savings into front-line services.

While many of these improvements rely on changing some of the procurement practices, and stronger leadership in NHS organisations, an improved and more flexible regulatory framework undoubtedly also plays a key role in helping NHS bodies to buy better and cheaper. 

It is well known that public procurement rules have been perceived by many as too complex, rigid and unclear, and this has led NHS bodies to behave in a risk-averse fashion and to continue to purchase in the usual way, without seeking to make use of innovative procurement practices. And many NHS managers also complain that procurement rules have acted as a barrier to the development and spread of innovation.

One of the main reasons for this is that purchasers too often decide not to hold consultations and discussions with potential suppliers in the market, for fear of legal threats by operators that may consider they have been discriminated against during the consultation process. Gaining a better understanding of the market, and the different solutions it offers to respond to specific patient or organisational needs are, however, crucial for the take up and spread of innovation in the NHS.

Helpfully, the new legal framework addresses this by broadening and clarifying the possibility for purchasers to negotiate with bidders during the tendering process. More specifically, NHS bodies will be allowed to use procurement procedures with negotiations each time their needs cannot be met without adaptation of readily available solutions. 

The new rules also provide clarity on how to conduct market consultations prior to the launch of the tendering process, to assess the structure, capability and capacity of the market. 

In addition, the new regulations will introduce a new procurement procedure, called Innovation Partnership, specifically for the development and subsequent purchase of innovation. This procedure will allow NHS bodies to launch a single procurement process to cover both the research and development phase and the purchase of any resultant successful innovation. 

The Innovation Partnership will be structured in successive phases following the sequence of steps in the research and innovation process, setting intermediate targets to be attained by the partners and providing the possibility to halt the process in case targets are not met.

These innovations are important as collectively they will help NHS organisations to buy products and services that are better adapted to their specific needs and the needs of patients, as all as to achieve better commercial outcomes.  

The NHS European Office pushed hard for these key changes when the new EU Directive on Public Procurement was negotiated in Brussels. I welcome the UK Government’s decision to enact these changes into national regulations before the set deadline of April 2016, so that NHS bodies can take advantage of the new flexibilities sooner.  

It is crucial now that NHS bodies become familiar with these new rules and profit from the different processes and tools they offer to buy better, smarter and cheaper.  A range of resources, including training material, handbooks and guides, have been produced by the Government to help with this and I encourage NHS colleagues to make use of them so that we can make progress towards better NHS procurement as quickly as possible.

Elisabetta Zanon is director of the NHS European Office, a part of the NHS Confederation. Follow the organisation on Twitter @NHSConfed_EU
 

For further, head to the NHS European Office's section on public procurement and download New EU Directive on Public Procurement: Implications for NHS Commissioners and Providers

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