The Provider Selection Regime

The guidance note outlines key considerations for purchasing clinical NHS healthcare services under the Health Care Services (Provider Selection Regime) Regulations 2023 effective from 1 January 2024.

Background

Between April 2016 and 1 January 2024, the procurement of NHS healthcare services was regulated by the “light touch regime” of the Public Contracts Regulations 2015 (“PCR 2015”); this implemented the requirements of the 2014 EU public procurement directive.

While the light touch regime did allow commissioners of NHS healthcare services to apply a higher value threshold than that which applies to standard services contracts, and to opt for certain flexibilities in the way a light touch procurement process is run, it still required a fully competitive process to be run for these contracts.

This changed on 1 January 2024 when The Health Care Services (Provider Selection Regime) Regulations 2023 came into force, allowing for these services to be procured without a fully competitive process being run in certain circumstances. 

Healthcare services that do not fall within the scope of the PSR will continue to be regulated by the Light Touch regime of the Procurement Act 2023.

 

To which services does the PSR apply?

The PSR applies to healthcare services in England for the purposes of NHS that are procured by a relevant authority. A comprehensive list of the services covered, which are distinguished by their Common Procurement Vocabulary (CPV) codes, can be found at Schedule 1 to the PSR regulations. 

Generally, the PSR will apply to healthcare services, such as primary care, eye care, cardiology, rehabilitation, hospital and related services, and ambulance services. 

It will not apply to goods, works, non-healthcare services or healthcare adjacent services such as business consultancy, administration or catering, which are not directly related to a patient’s healthcare. 

Where there is a mixed procurement, where the contract covers a mix of healthcare and non-healthcare or healthcare adjacent services, an Authority should carefully consider the main subject matter of the contract with reference to the value over the lifetime of the contract. If the main subject matter of the contract, i.e., over 50% of the value of the contract, is comprised of healthcare services, the contract will be covered by the PSR.

It is however important to consider (and record) whether non-healthcare services could be provided under a separate contract and, if not, why they should be provided together, to justify coverage by the PSR. Authorities should be able to produce an audit trail which clearly sets out this reasoning.

Standstill and representations from suppliers

Under Regulation 12, a standstill period is required where any of Direct Award C, Most Suitable Provider, or a Competitive Process is being followed. 

Under the PSR (unlike under the Procurement Act 2023) the standstill period begins on the working day after publication of a contract award notice to the central digital platform and lasts for a minimum period of eight (8) working days. If no representations are made by suppliers to the Authority during the standstill period, the contract can be entered into.

Unlike under the Procurement Act 2023, while a supplier may make representations to the Authority during the standstill period, under the PSR there is no “automatic suspension” process to mirror that under the Act.

The standstill period is calculated differently under the PSR than under the  Act (where the eight working day standstill period begins on the date that the contract award notice is published). 

Review of PSR procurements

NHS England has established the Independent Patient choice and Procurement Panel to advise on issues relating to the application of the PSR. The panel has two responsibilities as follows:  

  • reviewing supplier representations in relation to the Provider Selection Regime (PSR); and
  • reviewing patient choice complaints.

Decisions made by the panel are listed here.

PSR Regulations
Statutory Guidance
Independent Panel

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