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Monitor attempts to allay competition fears

The competition regulator has sought to allay fears around the controversial Section 75 regulations by issuing draft guidance suggesting that CCGs will not be forced to put services out to tender, even when there is more than one potential provider.

The guidance from Monitor follows fears expressed by commissioners that they would be hamstrung by the competition regulations - which state that CCGs would have to put services out to tender unless they could prove the service could only be provided by one provider – despite a rewrite by the Government.

But Monitor’s clarification suggests that CCGs can carry out a review of provision of a particular service and identify the most capable providers as part of that review, negating the need to put the services out to tender.  

CCGs will also be expected to weigh up competition and patient choice with service integration when procuring services, it adds.

However, this contradicts guidance issued last week by NHS England, which made no mention of opt-outs of tendering for the purposes of promoting integration.

Monitor´s draft guidance said: ‘It is for commissioners to determine ways of improving the quality and efficiency of NHS health care services, including the extent to which improvements can be achieved through services being provided in a more integrated way, by allowing patients a choice of provider and/or by enabling providers to compete for contracts to provide services.’

’When deciding whether or not to publish a contract notice, commissioners will need to ensure that this decision is consistent with their general objective, when procuring services, to secure the needs of people who use the services and to improve quality and efficiency including through the services being provided in an integrated way.’

The guidance identified the benefits of competitive tendering for services but it also spelled out three exemptions: where there is only one provider capable of providing the service; where a detailed review of the service provision in the region identifies the most capable provider or providers of those services; and where the benefits of competitive tendering would be outweighed by the costs of publishing a contract notice and/or running a competitive tender process.

Dr David Bennett, Monitor´s chief executive, said: ‘The guidance makes it clear that the regulations do not force commissioners to go out to tender for every service but equally commissioners should not simply roll over existing contracts without first asking how good the service is, and whether it could be improved to give patients a better deal.

‘If so, the next steps might be evaluating alternative providers if there are any and if not negotiating a better arrangement with the existing provider. These are matters for commissioners to consider in exercising their duties.’

David Worskett, chief executive of the NHS Partners Network, which represents private health providers, said: ‘We do believe the NHS would benefit from a more proactive encouragement of choice and plurality of provider. So we think it is regrettable that the guidance does not go further in this respect but we recognise the political reality.
 
‘The guidance also seems to confirm that there will be many circumstances where formal procurement will not be required. While this is consistent with what the Government had indicated, as a result there may well still be insufficient challenge to incumbent providers offering sub-optimal services. That cannot be in the best interests of patients.’

Responses to the consultation are invited until 11 July.

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