What are PSR regulations and how do they affect NHS tenders?

PSR Regulations

Within the integrated care system, Integrated Care Boards (ICBs) are responsible for NHS budgets at a local level, arranging and commissioning the provision of health and social care services in their local area.

On January 1, 2024 the Provider and Selection Regime (PSR) came into force specifically for the procurement of health care services for:

  • NHS England
  • ICBs
  • NHS Trusts and NHS Foundation Trusts
  • Local and combined authorities

This is a massive change in procurement regulations and means that any procurement process for health care services that started after this date must be done in compliance with the new PSR regulations.

Effectively, the new PSR regulations give the NHS and associated authorities more freedom to commission frameworks in the way they want to.

The PSR regulations will also empower ICBs to ‘direct award’ contracts by carrying out their own assessments. They can also choose to reappoint existing providers and suppliers without them having to go through a formal tender process again. So, it is always worth seeing if you can leverage the new PSR regulations to your advantage if you are a long-standing provider.

PSR selection processes

The PSR has introduced three provider selection processes that relevant authorities can follow to award contracts for health care services:

  1. Direct award processes (A, B, and C). These involve 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 (direct award process A)
    – patients have a choice of providers and the number of providers is not restricted by the relevant authority (direct award process B)
    – 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 (direct award process C).
  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.
  3. Competitive process. This involves running a competitive process to award a contract.

Relevant authorities need to comply with defined processes in each case to evidence their decision-making, including record keeping and the publication of transparency notices.

We are advising our clients to speak to commissioners of any tenders they are looking to bid for, to see if there is any scope to direct award contracts to them under Direct Award Process C. Although, it is worth noting that these rules are new for everyone and commissioners are still learning what they can and can’t do to comply with the PSR regulations and how to assess potential providers.

For more information on bidding for health and social care contracts with the NHS and this may have changed due to the PSR regulations, contact us to see how we can help.


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