What does the Procurement Act 2023 mean for the Provider Selection Regime?
With the go live of the Procurement Act 2023 (the “Act”) fast approaching this month (24/2/2025), it is important that contracting authorities understand what the Act means for procurements under the Health Care Service (Provider Selection Regime) Regulations 2023 (the “PSR”).
In summary, the Act will not affect the processes and contracts under the PSR. The PSR will continue to apply when contracting authorities who are “relevant authorities” (NHS England, Integrated Care Boards, NHS trusts and foundation trusts, as well as local authorities and combined authorities) are procuring “relevant healthcare services”, which are defined under schedule 1 of the PSR.
Therefore, if a “relevant authority” and the service being procured falls within a relevant healthcare service (as defined in the PSR) the processes as set out in the PSR apply. The Act does not change this.
However, some aspects of the PSR are impacted by the Act. The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 set out how the PSR is amended. In short:
- Some new definitions are added in regulation 2 to reflect changes in the remainder of the PSR, including references to the Central Digital Platform, excluded supplier, excludable supplier and the debarment list.
- Regulation 20 is amended to set out some new drafting to cover off excluded and excludable suppliers.
- Regulation 20A to 20D are inserted to deal with exclusion and the debarment list.
There are also some transitional provisions included that deal with PSR processes currently under way (see regulation 34 of Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 ). Broadly, the amended regulations above do not impact processes currently under way.
Therefore, for new processes under the PSR, there will be a need to consider the new requirements on exclusion etc., but otherwise, the PSR is not impacted by the Act.
Listen to Andrew Daly’s podcast on this topic:
Click for episode transcript
With the go live date for the Procurement Act 2023 just around the corner on the 24 February 2025, we have been asked by a number of people, “What are the implications of the Procurement Act on the Provider Selection Regime?” So, thank you for joining me, Andrew Daly, I’m a partner and Head of Procurement at Hempsons LLP, and I’m here to discuss today what implications the Procurement Act will have for the Provider Selection Regime.
Just a quick reminder that the Provider Selection Regime applies where a relevant authority procures relevant healthcare services. So, relevant authorities are NHS England, ICBs, Trusts, Foundation Trusts, local authorities, and combined authorities. And relevant healthcare services are defined in the Provider Selection Regime as effectively services with a CPV code that fits within schedule one of the PSR; healthcare services broadly, and also services provided to an individual, whether physical or mental health.
So, if you are a relevant authority procuring relevant healthcare services, what will the Procurement Act mean for you when it does come into force? And the short answer is not a lot, and this I think is where the confusion is arising.
The Provider Selection Regime sets out, by reference to the Public Contracts Regulations, provisions on exclusion of suppliers. When the Public Contracts Regulations are no more, following the introduction of the Procurement Act, they will no longer be able to reference those regulations. And therefore, if you look at the Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025, once they’ve been approved by Parliament and come into force, they provide the amendments that are needed to the Provider Selection Regime regulations to remove reference to Regulation 57 etc., and to introduce the provisions around exclusions and debarment under the Provider Selection Regime.
Effectively, that is the only thing that will change. Parts of the Public Contracts Regulations will be replaced by parts of the Procurement Act 2023; everything else stays the same.
So, we’ve had a number of queries, for example, as to whether or not you would be able to run an open or closed framework under the Provider Selection Regime. The provisions on what is permitted are as per the PSR, not as per the Procurement Act. So they are still frameworks of four years. We’ve had questions as to whether or not you’d be able to run, or should be running competitive flexible procedures under the PSR. The position under the PSR is you run a competitive process as per Regulation 11 of the PSR. You’re not trying to cut across. The notices that are required under the Procurement Act, and as we know there are a number of them, they are not replicated across to the PSR. So, there will be a need remember which regime applies, which is something I covered in my podcast on the Procurement Act. But, if the PSR applies, effectively the Procurement Act can be ignored, subject to that slight tweak on exclusion and debarment.
We know that there has been some misunderstanding on the Provider Selection Regime and what it actually means for organisations in practice, and if you’d like to discuss that, then please do not hesitate to get in touch. But it’s important that you are complying with the procurement principles. You are then looking at your specific decision making processes; whether or not you have to follow some, or you have the discretion to use others, and whether or not you have a sufficient audit trail to justify the other procedures that you may be using, for example, Direct Award Process C, or how the most suitable provider process or competitive process is run. There then are the permitted modifications and also other provisions that deal with urgency, and of course, we are now getting the first few decisions from the independent patient choice and procurement panel.
So, the PSR will continue as it is, and there is not a significant change as a result of the Procurement Act. I hope that has clarified that specific issue, and as previously stated, we will be running further sessions on the implications of the Procurement Act and also the issues under the Provider Selection Regime over the course of the next year.
Thank you for joining me.
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