PROCUREMENT
Implications for the NHS of the Procurement Act
Mark Roberts, UK Public Sector director at Jaggaer, takes a look at the potential impact on the healthcare sector of the Procurement Act 2023, which came into force in February, and outlines technology’s role in, for example, complying with the new requirement to continuously monitor supplier performance and ethical behaviour throughout a contract’s lifecycle.
As the UK separated from the EU, it was no longer subject to the obligations of the EU Public Contract Regulations 2015. A new piece of legislation, the Procurement Act 2023, was therefore drafted, with the hope of overhauling previous policies. The Procurement Act 2023 was made law on 27 October 2023, but pending a change in government, its coming into force was postponed to 24 February this year, alongside the publication of the National Procurement Policy Statement. The new bill has the aim of
‘improving and streamlining the way procurement is done’, and ‘benefiting prospective suppliers of all sizes, particularly small businesses, start-ups, and social enterprises’,1
by changing
how public bodies buy goods and services. While these changes will without doubts pose challenges to NHS bodies, by leveraging technology and automation, procurement teams can integrate the bill’s requirements into existing procedures, minimising setbacks or delays.
Then vs. now – what is going to change? Previously, NHS procurement was regulated by the Public Procurement Contracts Regulation (PCR) 2015, and the Health Care Services (Provider Selection Regime) Regulations 2023 (PSR 2023), a set of bespoke regulations covering procurement of certain healthcare services in England (excluding Wales). The scope of these services covers those delivered to patients and users by relevant authorities. The PSR 2023 is applicable to NHS England, Integrated Care Boards (ICBs), NHS Trusts and NHS Foundation Trusts, local authorities, and combined authorities. The new Procurement Act will apply to the procurement of all goods and services outside the scope of PSR 2023, delivered by relevant authorities that are out of scope for the PSR, such as facilities management and estates services including cleaning, catering, consultancy, and more. An exception are services that are part of a mixed procurement covered by the PSR. The Procurement Act also applies to the procurement of healthcare services when purchased by public bodies and organisations not listed as authorities under the PSR,2
such as Trusts.
Contracting authorities will need to clearly understand whether their purchases fall under the Procurement Act or the PSR 2023. The new bill aims to promote transparency, competition, and sustainable procurement, broadening the supplier pool for the NHS to include SMEs, and ‘local, diverse, and sustainable businesses’. This focus means shifting from the Most Economically Advantageous Tender (MEAT) principle to the Most Advantageous Tender (MAT) one for assessing suppliers and their values. Now, procurement teams will need to take into account
value-enhancing factors such as carbon footprint, diversity, contribution to local communities, and overall social values, as well as the financial cost-based element, when faced with otherwise equal proposals.
A ‘more open and inclusive’ procurement process This ‘more open and inclusive’ procurement process requires increasing the number of reporting of results to the Cabinet Office, and making underlying performance data public, thus increasing transparency. In addition, the bill requires all additional notices – from planning through to contract expiry – to be published, mandating that procurement teams continuously monitor and track performance to reveal how suppliers are delivering
May 2025 Health Estate Journal 69
The author says: “Now, procurement teams will need to take into account value-enhancing factors such as carbon footprint, diversity, contribution to local communities, and overall social values, as well as the financial cost-based element, when faced with otherwise equal proposals.”
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