Health service procurement: draft statutory guidance - Section 1: introduction

The Health Service Procurement (Wales) Act 2024 (“the 2024 act”) amended the Procurement Act 2023 (“the 2023 act”) and the National Health Service (Wales) Act 2006 (“the 2006 act”) to put in place legislative changes to enable the Welsh ministers to disapply provisions of the 2023 act in relation to services provided as part of the health service in Wales. The power inserted by the 2024 act into the 2006 act enables alternative provision to be made in that respect which has a whole system approach that is equitable with health services delivering the same high-quality care, and achievement of more equal health outcomes for everyone in Wales.

As part of these legislative changes, section 116A of the 2023 act provides a power to disapply the procurement regime in relation to NHS procurement in Wales. Section 10A of the 2006 act enables the Welsh ministers to make specific (alternative) provision about the procurement of services provided as part of the health service in Wales.

The Health Services (Provider Selection Regime) (Wales) Regulations 2024 (“the regulations”) made under section 10A of the 2006 act introduces a new regime for arranging the procurement of those health services for relevant authorities – the provider selection regime (“the regime”).

Due to a focus on competition, the 2023 act is considered to create barriers on collaboration and result in complex procurement processes. Therefore, the regulations will remove the procurement of relevant health services from the scope of the 2023 act.

The Welsh Government has co-developed the regime iteratively by drawing on the expertise of commissioning and procurement professionals working within relevant authorities. The Welsh Government also consulted on the operational principles of the regulations as part of a public consultation in November 2023 and received 34 responses from a range of stakeholders. The responses to the consultation exercise helped inform the development of our policy, the regulations and statutory guidance. Respondents welcomed the clarity that the new regime would provide for commissioners and providers: moving away from competition, having a greater focus on collaboration, and removing bureaucracy, as well as bringing increased flexibility, proportionality and consistency whilst providing clarity of processes and facilitating transparency of procurement processes.

Under the regime, relevant authorities are expected to:

• act in the interest of patients and individuals who use the services, improving the quality of the services, and improving the efficiency in the provision of the services
• ensure decisions about which organisations provide health services are robust and defensible, with conflicts of interest appropriately managed
• adopt a transparent, fair, and proportionate process when following the regulations

The regime makes it possible to continue with existing arrangements for service provision where those arrangements are working well and there is no value for people who use the service in seeking an alternative provider. Where there is a need to consider changing arrangements for service provision, it provides a fair, transparent, and proportionate process for procurement processes, which includes the option of using competitive tendering.

This guidance is published under section 10A(6) of the 2006 act, which requires the Welsh Ministers to publish guidance about compliance with the regulations.

This guidance sets out how the regulations must be followed by the relevant authorities to which it applies:

• a county council (CC)
• a county borough council (CBC)
• a local health board (LHB)
• a National Health Service trust (NHS trust)
• a special health authority (SHA)

It also details the scope of the regulations and how relevant authorities must apply it while considering key criteria and transparency requirements. The guidance also outlines how relevant authorities are expected to manage conflicts of interest.

Relevant authorities must apply the regulations, must have regard to this guidance, and are expected to read it alongside its annexes, which give further detail on the regulations and the transitional arrangements in place for when the regulations come into force.

The Welsh Government has developed a toolkit to accompany this guidance, which organisations may use in applying the regime to arrange the provision of health services.

When exercising functions to comply with the regulations, relevant authorities must continue to comply with other legal obligations, where applicable.

This guidance does not specify how to comply with other legal obligations.

Any reference made within this statutory guidance to legislation, or a legislative provision is a reference to it as amended, extended, or re-enacted from time to time. Relevant authorities are advised to also be aware of other requirements and duties not set out in legislation. For example, relevant authorities are expected to adhere to Welsh Government’s net zero emissions requirements and carbon budget, A healthier Wales, Welsh procurement policy notes and the Welsh procurement policy statement requirements in the procurement of NHS goods and services (this list is not exhaustive).