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Procurement UnpACked: health and social care procurement - what does good look like?

The commissioning of social care has taken place during times of budgetary constraints and considerable demand for decades, where contracting authorities have used a variety of tools such as award by lots, frameworks and dynamic purchasing systems under the Public Contract Regulations 2015. There are often issues around contract management or its lack thereof. So, what does the Procurement Act 2023 (PA 2023) herald? What kind of behaviours should we encourage to decrease practices such as off-framework and off-contract purchasing? 

The key issues to be addressed are:

  • the increase in costs when the Government releases limited increases in funds; and
  • the role of social care in alleviating the pressures on the NHS is seemingly not readily acknowledged by the Government. 

How do we create collaborative and personal procurement processes where co-working and team-based approaches are facilitated – cooperation between individuals, providers and commissioners in fulfilment of their Care Act duties?

Where to start

The first step is to understand the nature of the health and social care services and prepare a commissioning plan, considering all of the options for their provision which could include in-house provision, provision by a local authority trading company or outsourcing whilst ensuring market sustainability.   

When considering outsourcing health and social care services, a contracting authority needs to determine whether the services should be procured under the PA 2023 as ‘light touch services’ or under the Provider Selection Regime (PSR).

It is important for contracting authorities to engage with the market, using preliminary market engagement to inform their initial thinking. Contracting authorities have the opportunity to highlight the key issues being the increase in costs in times when limited increases and the role of social care in alleviating the pressures on the NHS, to the market. Contracting authorities should consider the commissioning cycle for services and not just each procurement on a case-by-case basis and discuss this with the health and social care market and the NHS, to see where commissioning and contract management can be aligned. 

Flexibility under the Procurement Act 2023

The PA 2023 refers to ‘light touch contracts’ and many sections of the PA 2023 do not apply to light touch contracts. This is intended to provide flexibility when procuring light touch services.   

Frameworks are a popular tool for procuring health and social care services and we briefly explored frameworks in our previous blog. While the new ‘Open Framework’ may have initially looked like it could be useful, it is purely a scheme of successive frameworks and not the flexible contract mechanism where a contracting authority can open the framework for new suppliers to join at any time. The light touch contract flexibility is highlighted by the absence of a time limit on the length of a traditional framework and the rules regarding the competitive selection process not applying to a light touch contract framework. 

Contracting authorities can provide for call-off contracts under a framework to be awarded without competition where a service would like continuity of care. There is no limit on the length of frameworks under the PA 2023, which may assist contracting authorities in generating long-term relationships with the market at the time of procurement but will reduce the flexibility to add new entrants to the market.   

The new dynamic markets may benefit contracting authorities, allowing them to establish a dynamic market to procure public contracts. Dynamic markets cannot be used to procure below-threshold services, however, if a contracting authority needs to directly award a contract where a service user wants continuity of service a dynamic market is not the answer.   

The PA 2023 sets out a number of justifications for making a direct award of a contract with one such justification being ‘user choice contracts’. The contract has to be for user choice services which are ‘light touch services’, supplied for the benefit of an individual and where the contracting authority is required under an enactment, to have regard to the views of the individual or their carer concerning the supply of the services. Contracting authorities are required to consider the views of the individuals receiving services under the Care Act 2014.

What does good look like?

So, what does good look like? First and foremost, it should be using the PA 2023 and the PSR to best meet the needs of individuals and consider the health and social care services and the market as a whole. The approach should be person-centred and contracting authorities should look at the opportunities in the market, including the NHS and under the PA 2023 and PSR. To reduce the purchasing of health and social care services which are off-framework and off-contract, contracting authorities can use a mixture of long-term framework arrangements and user choice contracts. Contracting authorities will need to manage the light touch contracts under the PA 2023 and such contract management will provide greater insight to the market for contracting authorities to facilitate their commissioning intentions. 

Although there has always been scope for contracting authorities to consider how health and social care services are commissioned as a whole and links to other services, implementing the PA 2023 and the spectre of local government re-organisation may be an opportunity for contracting authorities to rethink their approach. 

For more information

For more information about implementing the PA 2023, please Sophie McFie-Hyland.

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Tags

procurement, procurementact2023, health and social care, local government, light touch, contracts