PSR regulations coming into force from 1 January 2024

What are the PSR Regulations and who do they apply to?

The PSR Regulations are a new set of rules relating to the arrangement and procurement of healthcare services by the relevant authorities in England which came into force on 1 January 2024 known as the Provider Selection Regime (PSR).

• Healthcare means all forms of healthcare provided for individuals, whether relating to physical or mental health, which fall within one or more of the CPV codes specified in Schedule 1 of the PSR Regulations.
• The authorities include NHS England, NHS Trusts and NHS Foundation Trusts, Integrated Care Boards and Local Authorities and Combined Authorities.

The PSR will not apply to the procurement of goods or non-health care services (unless they are a part of a mixed procurement).

 

Purpose of PSR Regulations

The purpose of the PSR Regulations is to:

• introduce a flexible and proportionate process for deciding who should provide healthcare services;
• provide a framework that allows collaboration to flourish across systems; and
• ensure that all decisions are made in the best interest of patients and service users.

The PSR is set out in Health Care Services (Provider Selection Regime) Regulations 2023, replaces the old regime for the procurement of healthcare services pursuant to The Public Contracts Regulations 2015, and The Procurement Patient Choice and Competition Regulations 2013.

 

Selection Process

The PSR introduces three processes that authorities can follow to award contracts:

1. Direct award processes (A, B and C).

Direct award process A involves awarding contracts to providers when there is limited or no reason to seek to change from the existing provider or to assess providers against one another, because the existing provider is the only provider that can deliver the health care services.

Requirements for this process:

• Authority to publish a notice to award, within 30 days of the contract being awarded, including contract value and details of the award decision-maker.

Direct award process B applies where patients have a choice of providers, and the number of providers is not restricted by the relevant authority. The relevant authority will offer contracts to all providers to whom an award can be made because they meet all requirements in relation to the provision of healthcare services to patients.

Requirements for this process:

• Authority to publish a notice to award, within 30 days of the contract being awarded, including contract value and details of the award decision-maker.

Direct award process C applies where the existing provider is satisfying its existing contract, will likely satisfy the new contract to a sufficient standard, and the proposed contracting arrangements are not changing considerably.

Requirements for this process:

• Authority applies key criteria (Quality and Innovation, Value, Integration, Collaboration and Service Sustainability, Improving Access, Reducing Health Inequalities and Facility Choice and Social Value) and basic selection criteria when making the decision to extend the contract. The basic selection criteria and exclusions are set out within the Schedules. The regulations state that the basic selection criteria is to be decided by the authority but may relate to the following:
• Suitability to pursue a particular activity;
• Economic and financial standing; and
• Technical and professional ability.

• The Authority publishes an “intention to award notice” triggering a standstill period lasting for a maximum of 30 days (unless extended by mutual agreement).
• The Authority publishes a notice to award if no representations are received during the standstill.

2. Most suitable provider process.

This involves awarding a contract to providers without running a competitive process, because the relevant authority can identify the most suitable provider.

Requirements for this process:

• Authority publishes intention to follow the Most Suitable Provider Process.
• The Authority identifies potential providers with reference to key criteria and basic selection criteria (both as described above in direct award process C).
• The Authority publishes an “intention to award” notice triggering a standstill period lasting for a maximum of 30 days, unless extended by mutual agreement.
• The Authority publishes a notice to award if no representations are received during standstill.

3. Competitive process.

This involves running a competitive process to award a contract.

Requirements for this process:

• Authority determines award criteria (taking into account the key criteria and basic selection criteria (both as described above in direct award process C)).
• The Authority publishes contract notice.
• The Authority assesses offers in accordance with the criteria.
• The Authority publishes an “intention to award” notice triggering a standstill period lasting for a maximum of 30 days (unless extended by mutual agreement).
• The Authority publishes a notice to award if no representations are received during standstill.

NHS England have also published a list of FAQs which can be found here.

Further Government guidance can also be found here.