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Revealed: GPs face losing public health funding under DH guidance for local authorities

Exclusive GPs face having to compete for many of the public health services that they currently provide under new Department of Health advice to local authorities that urges them to put most local enhanced services out to tender when they come up for renewal.

In advice published last month, the DH advised local authorities that GPs should not be given ‘preferred provider status’ and they should use ‘appropriate procurement approaches’, that under current rules, legal experts claim will result in the majority of LESs being put out to a full competitive tender.

This means practices providing services - such as cardiovascular screening, sexual health services and smoking cessation services - are likely to become embroiled in a long-winded and labour-intensive administrative battle to preserve their income.

It comes as LMC leaders warn that local authorities are preparing a large-scale review of the way they spend the £5.45bn two-year public health budget they will control from April, and that smaller practice-led services might be overlooked.

Pulse can also reveal that after concern from GPs over the impact on their funding, the GPC is currently preparing guidance on how they can combat the shift in responsibility to local authorities.

The new DH guidance says: ‘Once the transferred contracts expire, local authorities should commission services from providers in a manner which ensures delivery of high quality public health services and which supports continuity, integration and easy access to, services.

‘Primary care contractors and other providers do not have preferred provider status for any newly commissioned public health services by local authorities and appropriate procurement approaches will need to be used.’

Why are local authorities subject to different rules to CCGs?

  • Unlike CCGs, local authorities are not subject to the Health and Social Care Act, which has its own procurement rules in the form of Section 75, itself the subject of debate.
  • Local authority procurement processes are governed by EU law - under Article 81 of the Treaty of Lisbon, non-health public bodies cannot do anything ‘which in any way prevents, hinders or distorts competition’.
  • Under UK law – in the form of the Local Government Act 1999 – councils must achieve ‘best value’, and providers are able to take them to court if they do not feel the EU and UK principles have not been adhered to.

Janet Roberts, director of the procurement advisory service Tendering for Care, said in practice local authorities will run a full tendering process for the public health LESs to cover themselves from possible legal action.

She said: ‘The easiest way to demonstrate that the principles have been employed is actually to run a tender process.

Click here to read Jane Roberts’ full quotes

‘If I am going to go to court and stand there in the witness box and answer a challenge, the safest thing to do is to say “I ran a compliant tender process”, job done. So that is why the local authorities will do it, after doing a risk assessment and ensuring that they comply with their standing orders.’

GPC deputy chair Dr Richard Vautrey said: ‘We are in the process of finalising guidance which will address all of these issues and we hope to issue it shortly as we know practices and LMCs need this information as soon as possible.’

GPC negotiator Dr Chaand Nagpaul added: ‘There was always a concern about public health services falling under a local authority remit and the fact that local authorities have operated a competitive tendering process.’

LMC leaders have warned of an emerging picture on the ground where the default position is for all contracts to be reviewed and strong indications that they will be put out to full competitive tender.

Sefton LMC chair Dr Andrew Mimnagh said: ‘With regard to the competition element it is difficult certainly because the tendering specification process is to favour large formats, and I suspect as individual practices that is quite difficult to do. It may be one of the drivers on federated working.’

Dr Nigel Watson, chief executive of Wessex LMCs, urged local authorities to use their legal ablility to procure for best value to continue effective services in primary care.

He said: ‘There may be some services which are best provided outside the practice but local authorities are perfectly able to, within the law, to look at the overwhelming reasons to why they should commission certain services to GPs. They need to think: is there an overwhelming  and compelling reason why I should replace these services [provided in primary care] with some other, external service.’

‘The sort of stuff that they will be tendering for, it will be far too complicated and far too expensive to go through a full tendering process. Based on our discussion with some of the public health teams, they don’t yet have a full understanding of the extent of the services we are providing. Are we concerned about what might happen? Absolutely.’

He added: ‘I do think practices do need to prepare for a process of tendering.’

A DH spokesperson said: ‘It will be for local authorities to decide how best to procure public health services from April 2013. The decisions they take should be in line with the priorities set out in their joint health and wellbeing strategies. They will have a duty to take appropriate steps to improve the health of their local communities and they will be accountable to local people for the quality of the services they arrange.’

The DH set out its ring-fenced budget for public health in January, with the 2013/14 budget set at just under £2.7 billion and the 2014/15 the budget rising to just under £2.8 billion.