FRAMEWORK FOR PROCUREMENT, PATIENT CHOICE AND COMPETITION

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1 FRAMEWORK FOR PROCUREMENT, PATIENT CHOICE AND COMPETITION

2 Subject and version number of document: Owner of the policy: Framework for procurement, patient choice and competition v3 South of England Procurement Services (SoEPS) Operative date (first created): 1st April 2013 This document applies to: Policy Implications: All Staff All staff to be made aware of the policy Equality Analysis Completed? Consultation Process Approved by: Yes Senior Managers Team Governing Body Governing Body Date approved: 28 th January 2015 Next review date: December 2017 Dissemination of policy: Action Date completed Uploaded to website June 2017 Available on the W drive, insert location January 2015, W:\CCG Business\Plans and Policies\Policies\Policies -Frameworks- Strategies\Corporate Policies\Framework for procurement - patient choice - and competition_v3.doc Article in staff newsletter N/A

3 1. INTRODUCTION & PURPOSE 1.1 This document sets out the policy of NHS Southampton City Clinical Commissioning Group (CCG) in relation to clinical services procurement, and the basis on which the CCG will carry out its procurement activities. It does not cover non-clinical procurements. This policy seeks to achieve the use of targeted and effective procurement approaches to: i. Support the achievement of NHS Southampton City s CCG s Clinical Commissioning Strategy, strategic business plans and priorities and commissioning intentions; ii. effectively stimulate the local healthcare market and promote system reform; iii. ensure access to a range of responsive providers to support patient choice; iv. create more choice where necessary and particularly when specific services lack alternatives and credible challenge within the local healthcare system; v. ensure that the CCG offers Southampton patients choice of location, care setting, provider type and type of treatment; and vi. aid full and commercially viable use of the clinical service delivery sites, that are strategically important to the CCG, including the Adelaide Health Centre and the Royal South Hants; 1.2 The CCGs Senior Management Team operates as a sub-committee to the CEG Board and will be responsible for making initial decisions about procurement activities and options and overseeing procurement processes. 1.3 The CCG is supported in its procurement processes by South of England Procurement Services the Procurement Transaction Service through its contract with NHS Commissioning Support South. However, the CCG remains responsible and accountable for making decisions throughout the process. It also recognises that it needs to maintain a positive reputation for its procurement activities nationally and locally to attract the best possible response from potential providers of services. 1.4 Due Process must be followed in all procurement activities and is supported by the CCG s Standing Orders and Standing Financial Instructions contained within its Constitution. As a public body, the CCG needs to adhere to legislation that governs the award of contracts by public bodies, including the Public Contracts Regulations 2006, and needs to satisfy the obligations of transparency, equal treatment and non-discrimination set out in the regulations. 1.5 The CCG has adopted the Procurement Guide, which should be read in conjunction with this document. The guide will be updated from time to time by South of England Procurement Services as the detailed guide to accompany of financial policies to outline the various procurement process options available. 1.6 The purpose of this document is to provide a framework for the Clinical Commissioning Group to interpret and apply the Regulations1 introduced under section 75 of the Health and Social Care Act 2012 (The Act)2.

4 1.7 Section 75 is the section within the Health and Social Care Act 2012, which places procurement, patient choice and competition into the Bill and the requirements into Law. In this Framework, it is referred to as the Act. 1.8 Section 75 of the Health and Social Care Act requires the CCG to: Adhere to good practice in relation to procurement Protect and promote the right of patients to make choices for NHS Services Not to engage in anti-competitive behaviour 1.9 This Framework will detail the applicable legal instruments and published guidance to provide a structure and decision making process to support the CCG when it commissions services for its patients. For more detailed guidance regarding procurement, the Monitor support guidance or South of England Procurement Services our procurement experts should be used. 2. BACKGROUND 2.1 Choice and competition have existed in the NHS in England for many years and the Government sees them as powerful incentives for improving the quality of care provided to patients. 2.2 The Health and Social Care Act 2012 established Clinical Commissioning Groups who have greater autonomy within the legislative framework. The Regulations have been incorporated into law as the Secretary of State will no longer have extensive powers to intervene in the NHS The Regulations build on existing rules, The Principles and Rules for Cooperation and Competition 2010; Framework for Managing Choice and Competition 2008 and the Procurement Guide for Commissioners of NHS-Funded Services The Act established Monitor as an independent regulator to enforce certain requirements on commissioners. In addition the Act gives monitor concurrent or shared powers with the Office of Fair Trading to enforce provisions of the Competition Act 1998 and the Treaty on the Functioning of the European Union 4. 1 Statutory Instrument 2013 No 500, NHS (Procurement, Patient Choice and Competition) (No 2) Regulations Health and Social Care Act 2012 Section Explanatory Memorandum to The NHS (Procurement, Patient Choice and Competition) (No 2) Regulations SCOPE & DEFINITIONS

5 3.1 The Government s view is that competition is a means to improving services and not an end in itself 2. In addition Monitor has stated that it is the will of Parliament, expressed during the passage of the Bill, that the sector regulator should not promote competition for its own sake The Regulations were revised to make clear that 5 : There is no requirement to put all contracts out to competitive tender. This means that commissioners are able to offer contracts to a single provider where only that provider is capable of providing the services Monitor has no powers to force the competitive tendering of services. Decisions about how and when to introduce competition to improve services are solely up to clinical commissioning groups. Competition should not trump integration commissioners are free to use integration where it is in the interest of patients 3.3 What is less clear in all published documents is whether every contract the CCG hold comes under the scrutiny of the Regulations and what is meant by the use of the word new before contracts when talking about exemptions. Until clarity is received on this point, the CCG will deem the services detailed in table 1 as being considered for the purposes of this Framework, this will need to be kept under review. 3.4 For the avoidance of doubt paragraph 3.3 asserts that all annual contract renewals that are not covered within the service categories in table 1 are awarded by the CCG in compliance with its duties under sections 14Q, 14R and 14Z1 of the Act 6. This includes all major NHS contracts. Table 1 Services which will fall under the Framework for Procurement, Patient Choice and Competition New services, pathways or service models To extend the current choice offer Renewal of previously tendered services which have reached the end of their contract term Expansion of existing services where there is a significant increase in activity or size of service Underperforming services where contract management has failed to address the underperformance Where pilots or proof of service trials are to be incorporated into the health system.

6 3.5 Under its responsibilities imposed by the Act or acting under the Competition Act 1998, Monitor may: - Investigate any complaint received that the CCG has failed to comply with the Regulations On its own initiative, investigate whether the CCG has demonstrated anti-competitive behaviour. A definition of Anti-competitive behaviour as defined by the Act and the Competition Act is provided in section 5 4. Regulation and guidance (for more detail and the most up-to-date regulations, please see the South of England Procurement Services Procurement Guide.) Section 75 - Health and Social Care Act As stated, Section 75 is the section within the Health and Social Care Act 2012 which places procurement, patient choice and competition into the Bill and the requirements into Law. 4.2 Section 75 of the Health and Social Care Act requires the CCG to: Adhere to good practice in relation to procurement Protect and promote the right of patients to make choices for NHS Services Not to engage in anti-competitive behaviour Statutory Instrument 2013 No. 500 The NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations The above statutory instrument, referred in this Framework as The Regulations were issued as a negative resolution procedure to exercise the powers conferred by The Act. The core requirements are listed in paragraphs The regulations require that when procuring health care services CCG must act with a view to: Securing the needs of the people who use the services Improve the quality of the services Improve efficiency of the services 4.5 When doing so the CCG must: Act in a transparent and proportionate way Treat providers equally and in a non-discriminatory way 4.6 The CCG must use providers who: Are capable of delivering the objectives in 4.4 Provide best value for money in doing so 4.7 In improving quality and efficiency it should secure services through: Services being delivered in a more integrated way Enabling providers to compete to provide the services

7 Allow patients a choice of provider 4.8 A CCG may award a new contract without a competition where the CCG is satisfied that the services are capable of being provided only by that provider. This requirement is addressed in more detail in section The CCG must not engage in anti-competitive behaviour. This requirement is addressed in more detail in section In addition to the requirements in paragraphs the Regulations also stipulate advertising rules, qualification of providers, recording of contracts awarded, all of which are addressed in procurement procedures. The Principles and Rules for Cooperation and Competition 2010 Framework for Managing Choice and Competition 2008 Procurement Guide for Commissioners of NHS-Funded Services The above guidelines were applicable up to 31 st March 2013 but will not apply to CCG under the Act. Under Section 78 of The Act, Monitor has a responsibility to publish updated guidance and it is recorded 5 that Monitor s approach will continue as now under the above guidelines. 5. Principles 5.1 In managing the Regulations and Guidance summarised in this Framework the CCG will adopt the key principles set out below when considering procurement, patient choice and competition. Principle One 5.2 The CCG will consider the issues and impact of integration as the primary consideration for all services detailed in Table 1. Principle Two 5.3 The CCG will invite competition for the provision of its commissioned health services as detailed in table 1 unless there is a robust rationale to consider alternative approaches as outlined in this Framework / the South of England Procurement Services Procurement Guide. Principle Three 5.4 The CCG will maintain a complete auditable documentation trail suitable for any review or appeal request

8 Principle Four 5.5 The CCG will approach procurement, patient choice and competition in line with the principles laid down in the CCG Procurement Policy. Namely, Transparency; Objectivity; Proportionality; Non-Discrimination; Accountability; Subsidiarity; Consistency; No Double Jeopardy; Interdependency. Principle Five 5.6 All activity surrounding procurement, patient choice and competition will be undertaken in strict compliance with the CCG s Conflict of Interest Policy and the CCGs Constitution which makes clear statements around how conflicts of interest should be handled, especially where a GP Board Member or Member Practice has an interest in the award as described in our Constitution. Principle Six 5.7 If the CCG makes the decision to award a new contract without competition on the basis of the guidance contained in this Framework then the CCG will evidence a clear and transparent rationale for this in accordance with section 7 of this Framework and will be presented at the Finance and Audit Committee for agreement and reported to the Governing Body. Transparency 5.8 The CCG will need to account publicly for its expenditure and actions by: publicly stating its commissioning strategies (on its website); publicly stating the outcome of service reviews and how services will be secured, e.g. competitive tendering, Any Qualified Provider (AQP) or single tender action; advertising procurements and OJEU, where appropriate (i.e. where high value and/or cross-border interest); publishing evaluation and scoring criteria in its procurement documents; 6. Decision Process 6.1 When making decisions regarding procurement, patient choice and competition the CCG will adhere to the statutory requirements highlighted in section 4 and follow the principles listed in section 5 in this Framework. 6.2 The CCG is able to use procurement when it choses in line with the requirements of law and recognising the time and costs involved in procurement. There are also times when services might benefit from tendering where current services fail to meet the needs of service users or where service improvements can be secured through competition. 6.3 The CCG will follow to the decision making and approval process as detailed in figure 1 below. Further guidance can be obtained from the Chief Financial Officer of the CCG or South of England Procurement Services our procurement service operated through our contract with NHS South Commissioning Support Unit.

9 Does the service come under this framework? (See table 1) Are there integration requirements for the service? Yes No Can the integration only be provided by one provider? Should competition be applied to the service? No Yes No Yes Complete Award without Competition Form Approval, SMT<500k CEG > 500k < 2m Governing Body> 2m Contract Variation or new Contract 1/4ly Audit Committee Report Conduct competition

10 6.4 All decisions made against this Framework must be agreed as follows: a) Initial agreement with regards to the decision to tender and the supporting business case should be agreed at the CCGs Senior Team Meeting, the SMT should be assured of clinical input in the service specification, more discussion may be had at the CCGs Clinical Executive Committee. b) By the CCGs Senior Management Team where the annual value is less than 500k. Decisions to award a contract will still be reported to the Governing Body. SMT does not have delegated authority to award a contract where the award of contract involved either primary care services or is a service which involves a documented conflict of interest. In such instances the award of contract is reserved by the Governing Body. c) By the Clinical Executive Group Committee where there is proposed to be an award of contract with / without competition with the annual contract value of more than 500k but less than 2m. Decisions to award a contract will still be reported to the Governing Body. CEG does not have delegated authority to award a contract where the award of contract involved either primary care services or is a service which involves a documented conflict of interest. In such instances the award of contract is reserved by the Governing Body. d) By the Governing Body where there is proposed to be an award of contract with / without competition over the annual value of 2m. e) The contract award values are driven by the Terms of Reference for the CCGs Commissioning Executive Group as approved by the CCGs Governing Body, should there be any difference in the values contained in this document and the CEG Terms of Reference then the Terms of Reference will be the overriding document. 7. Award of Contract without Competition 7.1 The Regulations state that the CCG may award a new contract for the provision of health care services to a single provider without advertising an intension to seek offers from providers in relation to that contract where the CCG is satisfied that the services to which the contract relates are capable of being provided only by that provider. 7.2 In addition to this requirement the CCG must not engage in anti-competitive behaviour [see definition 7.3.1] unless to do so is in the interests of patients and may include: - a) By the services being provided in an integrated [see definition 7.3.2] way; or b) By cooperation between the persons providing the services in order to improve the quality of services 7.3 Definitions a) Anti-competitive behaviour 7 Anti-competitive behaviour means behaviour which would (or would be likely to) prevent, restrict or distort competition and a reference to preventing anti-competitive behaviour includes a reference to eliminating or reducing the effects (or potential effects) of the behaviour

11 b) Integration 8 Each CCG must exercise its functions with a view to securing that health services are provided in an integrated way where it considers that this would improve the quality of those services (including the outcomes that are achieved from their provision); reduce inequalities between persons with respect to their ability to access those services; or reduce inequalities between persons with respect to the outcomes achieved for them by the provision of those services. 7 - Health and Social Care Act 2012 Section 64 (para 2) Health and Social Care Act 2012 Section 26 (Para 14Z1) The CCG must consider the issue of integration as the first principle and step in the decision making process for services which are listed in Table 1. Competition or extending patient choice through the Any Qualified Provider process may be waived if it can be demonstrated that the services in question can only be provided by one provider or may be the subject of one of the circumstances set out below. a) the services can only be provided by one provider and the services must be provided in an integrated way. b) in very exceptional circumstances where the Accountable Officer OR Chief Financial Officer decides that formal competition would not be practicable or the estimated expenditure or income would not warrant formal competition; c) where the requirement is covered by an existing contract and the requirement will secure incremental change/improvement to the service; d) where a consortium arrangement is in place and a lead organisation has been appointed to carry out tendering activity on behalf of the consortium members; e) where the timescale genuinely precludes competitive tendering but failure to plan the work properly would not be regarded as a justification for a single tender. 7.5 The circumstances set out above may be sufficient to justify award of contract without competition but these grounds may not necessarily preclude a successful challenge so in each case the risk of a challenge will need to be considered 7.6 If, after a risk assessment, and consideration of the principles contained within this Framework the CCG determines that a competitive tender is not required or is inappropriate, the reasons shall be recorded on the Award without Competition Form.

12 7.7 Even though a provider may have been appointed without a competition, the CCG will demonstrate, as far as possible, that the benefits associated with a contested approach (such as the specification of services and robust service levels) have been achieved. 7.8 Basic financial and quality assurance checks will be undertaken in respect of providers before adopting an alternative contract arrangement e.g. financial viability, economic standing, clinical capacity and capability/ governance, quality, affordability and demonstration of value for money. 7.9 All decisions made to award a contract without competition will be recorded and reported to the Finance and Audit Committee on a quarterly basis. 8. Challenges and Dispute Resolution 8.1 Any challenge or dispute raised against the behaviour or a decision made by the CCG against this Framework should be addressed to the Chief Officer who will deal with the challenge in accordance with the CCGs Dispute Resolution Process. 8.2 Monitor, under the powers granted to it in the Regulations may investigate a complaint received by it that the CCG has failed to comply with the requirements imposed by the Regulations or The Act. 8.3 In addition, Monitor may, on its own initiative investigate whether the CCG has engaged in anti-competitive behaviour or has included terms or conditions which restrict competition which is not necessary for the attainment of the objectives listed in paragraph 4.4.

13 EQUALITY ANALYSIS TOOL Analysing the Impact on Equality Template 1. Title of policy/ programme/ framework being analysed Procurement Policy 2. Please state the aims and objectives of this work and the intended equality outcomes. How is this proposal linked to the organisation s business plan and strategic equality objectives? The policy is based on DH guidance and procurement law and is designed to ensure that procurements are carried out in accordance with the law and best practice which requires that the process is transparent, fair and that there is no discrimination of any nature. The policy is designed to ensure that the services set out in the CCG s Commissioning specifications are secured for the population. The specifications themselves have to meet equality requirements and adhere to best practice. 3. Who is likely to be affected? e.g. staff, patients, service users, carers Patients, Carers 4. What evidence do you have of the potential impact (positive and negative)? Step one: Gather evidence - List the main sources of evidence (including full references) reviewed to determine impact on each equality group or protected characteristic. This can include national research, census data, Joint Strategic Needs Assessment (JSNA), surveys, reports, research interviews, focus groups, engagement with stakeholders. Step two: Consider the impact On the basis of the evidence and findings from engagement activity, what is the impact of your work on each equality group/ protected characteristic? Identify whether the evidence shows potential for differential impact, if so state whether positive or negative and for which groups. This could be barriers to access, or different levels of needs, experiences or health outcomes. Identify how you will mitigate any negative impacts. Also how you will include certain protected groups in services or expand their participation in public life. How do the proposals impact on elimination of discrimination, harassment and victimization, advance the equality of opportunity and promote good relations between groups? (See Guidance Note) 5. Action planning for improvement (See Guidance Note) Please give an outline of the key action points based on any gaps, challenges and opportunities you have identified. An Action Plan template is appended for specific action planning.

14 Sign off Name and signature of person who carried out this analysis James Rimmer Date analysis completed July 2013 and reviewed December 2014 Name and signature of responsible Director James Rimmer Date analysis was approved by responsible Director July 2013 and reviewed December 2014

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