The Provider Selection Regime – some Governance Implications

The Health Care Services (Provider Selection Regime) Regulations 2023 (“PSR Regulations”) will come into force on 1 January 2024. “Relevant Authorities” (which includes ICBs and NHS Trusts/Foundation Trusts, NHS England, local and combined authorities) need to take steps to prepare for the regime for procuring relevant health care services in England.


Relevant Authorities will need to consider how decisions in relation to any process for the procurement of relevant health care services that is commenced from 1 January 2024 will be taken – for example, for ICBs, will decisions fall within the remit of an existing ICB (Place) committee?  Do any changes to the delegations to the relevant committee need to be made?

Standstill Period and Representations

Where a Relevant Authority follows Direct Award Process C, the Most Suitable Provider Process or the Competitive Process, the Relevant Authority will not be able to enter into the resulting contract or conclude the resulting framework agreement until the end of the standstill period.  A feature of the PSR is that a provider of the services to which the contract or the framework agreement relates, which:

  • is aggrieved by the decision which has been made; and
  • believes there has been a failure to comply with the PSR Regulations;

may make written representations to the Relevant Authority within the standstill period.

If a written representation is received during the standstill period and certain conditions are met, the Relevant Authority must take a number of steps which include:

  • reviewing the decision to award the contract or conclude the framework agreement, taking into account the representations made, and
  • making a further decision whether to—
    • enter into the contract or conclude the framework agreement after the standstill period has ended,
    • go back to an earlier step in the selection process and repeat that step and subsequent steps in accordance with the relevant procedure, or
    • abandon the procurement.

Relevant Authorities will need to consider what governance arrangements they will put in place to review the decision that has been taken and make the further decision.   The draft statutory guidance for the PSR states that:

… relevant authorities should, where possible, ensure that decisions are reviewed by individuals not involved in the original decision. Where this is not possible, relevant authorities should ensure that at least one individual not involved in the original decision is included in the review process.

Ideally, Relevant Authorities will want to have a separate decision-making forum to review the original decision and make the required further decision.  The more independence that the review process has, the more likely it is to carry out a robust review of the original decision, to inform the further decision.

Once the further decision has been made and has been communicated to the relevant provider(s), the Relevant Authority must allow a further period before the standstill period comes to an end.  This period will allow the relevant provider(s) time to consider the response of the Relevant Authority and to request a further review by the PSR review panel.

Having a robust review process in place may therefore help the Relevant Authority to avoid a request for further clarifications and/ or a review of its decision by the PSR review panel, with the time saving and other benefits this will bring.

We recommend that Relevant Authorities amend their governance handbooks to set out, to the extent possible for each process commenced under the PSR, the governance for initial decision-making and for the review process.

Conflicts of Interest

Relevant Authorities will need to take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising during the application of the PSR.  Conflicts of interest are defined in the PSR Regulations as follows:

the concept of conflicts of interest includes any situation where an individual has, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the procurement process

Relevant Authorities will need to ensure that their governance arrangements for making decisions in relation to the PSR can manage any conflicts of interest that may arise.

We recommend that Relevant Authorities update their:

  • procurement policy to deal with the PSR, including the management of conflicts of interest; and
  • their conflicts of interest policy to deal with the management of conflicts of interests in the context of the PSR.

How Hempsons can help

Hempsons’ governance team is experienced in developing and amending governance documents to reflect new governance arrangements. We can assist you in putting in place robust arrangements for the review of procurement processes and the management of conflicts of interest.

Working alongside the NHS England policy team and NHS England legal team, Hempsons has advised on the development of the PSR over the past two years.  We are therefore well placed to advise ICBs and other NHS bodies about the PSR Regulations and the wider regime.