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Expert analysis: 'There could be Section 75 challenges in the courts'

Any CCG that fails to put services out to full tender risks a challenge in court, says lawyer Oliver Pritchard

The regulations clearly state that commissioners may award a contract to a single provider without a competitive tender where they are satisfied that there is only ‘one capable provider’ for those services. It is not at all clear what, if any, other reasons will be deemed by Monitor to be acceptable. 

For example, can a commissioner decide not to run a tender because they don’t want to risk financially destabilising a local NHS provider? 

I could well imagine a private or voluntary sector operator objecting to Monitor if they are denied the opportunity to bid to run services which they believe they can deliver to a higher quality and/or more efficiently than the NHS provider simply because of concerns about the financial stability of the local NHS provider.

On the face of it this would seem to discriminate unlawfully in favour of the NHS provider, but we won’t know for sure how Monitor will deal with this situation until we see the outcome of the first few test cases. Furthermore, it may be that challenges are brought directly in the courts, bypassing Monitor, if aggrieved complainants believe that this will give them a better outcome.

Oliver Pritchard head of commercial health at legal firm Browne Jacobson

Readers' comments (5)

  • Everyone is out to make a quick buck, families will buy services from relatives, that is how it works!

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  • The question regarding competition was dealt with in detail when the MONITOR CEO appeared before Mr. Dorrell's health select committee last week . See Parliament TV.

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  • As I commented to Pulse a week or so ago, and as Mr Pritchard rightly says, regardless of what ministers or civil servants say, in the end these matters will be decided by the courts against a background of UK and EU case law and EU Treaty obligations. The H&SC Act allows providers two options if they are aggrieved a) Monitor; or b) The Public Contracts Regulations i.e. directly to the courts, bypassing Monitor. This has nothing to do with "quick bucks". That is quite demeaning for the many many charitable and small family sized providers which have been providing excellent, committed services over the years. They have every right to compete to deliver services.
    Of ourse people may use their own money to buy services from relatives, but where that money emanates from the state, then competition is required which is fai and transparent. In implementiing s75 purchaers will be required to provide evidence that no other route was possible. The only way to do this is to run a competitive proces and show that no suitable providers offered their services.

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  • The Health Industry has lagged behind many other sectors in getting to grips with the proper specification and tendering for services. The end result, as in any business which awards contracts on non-commercial or opaque criteria, is that customer rarely benefits from the best service, and pays an unjustified premium. Getting high-quality, complex, services at an appropriate price is a skill. It requires additional effort, but the extra expense is more than repaid by cutting out waste, poor service and the fraud of fund-holders awarding themselves contracts.

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  • I couldn't agree more with Mr Pritchard. The words only "one capable provider" are very clear and, in my view, Monitor's current guidance simply doesn't reflect those very clear words. If Monitor applies its own guidance around the "flex" that it seems to think NHS England and CCG commissioners have but which is not borne out by those words then I await the first application for judicial review with interest.

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