Opening the market – NHS Wales?


Health Services Procurement (Wales) Bill — opening the market door? By Jim Gralton

When introducing the Health Services Procurement (Wales) Bill in the Welsh Senedd in February 2023 the Health Minister, Eluned Morgan MS stated that “ this is not the most exciting Bill that this Senedd has ever seen”. It is being presented as an exercise in tidying up some loose ends that follow from similar Westminster procurement legislation. But we need to be wary because there is potentially much more at stake here than merely rearranging some bureaucratic, legislative paper clips. These paper clips have the ability to picklock a very large door through which a major exercise in outsourcing and privatisation of Welsh public services could take place.

Prior to Brexit public procurement  was covered by EU legislation. This usually involved a strong market oriented approach linked to competitive tendering. While most UK major public sector activity was protected from this process the EU procurement rules applied when public service outsourcing took place. Now that we are outside the EU the UK government is re-drafting the legislative framework for procurement.
In rewriting the rule book the Westminster government has decided to have special rules of the NHS clinical service called a “Provider Selection Regime” (PSR). It is intended that would be placed on promoting collaboration and less on competition. This could mean that a full competitive tendering exercise would not always be needed. The PSR would cover most mainstream “health services” which would include community and hospital clinical services as well as catering and management consultancy.
In introducing the Bill Minister Morgan MS said “ Measures in the Bill will also aim to mitigate any potential market distortion by ensuring that the Welsh health service marketplace remains attractive to independent health service providers who may otherwise be deterred by having to participate in two different procurement regimes between England and Wales …It will retain the ability for the NHS in Wales to commission independent health service providers on a co-compliant and collaborative basis, in turn supporting and optimising financial and staff resources, supporting the NHS in Wales to deliver efficiently and effectively. “

It was left to Labour backbench Senedd Member,Joyce Watson to point out that “(w)hen I put the term “flexible procurement in the NHS”; and the Tories together, I get really concerned, as most of the country should be, because we will remember the personal protective equipment fiasco that happened with the flexible VIP fast-tracking, or, if you like, in my words, fast-profiting, regime being put together. We need to clearly keep a watching brief. We know that there is going to be a provider selection regime and we need to know more about how that will look in Wales, because you’re absolutely right not to go down the same road as we suspect the Tories in England will do and give jobs to those people who invest in that party.”
A similar concern was expressed by Rhun ap Iorwerth MS, the Plaid Cymru Health Spokesperson. He said (t)he fundamental principle is that I don’t want to see this as a means for the private sector to lay down deeper roots within the provision of health services in Wales, and to be able to set those roots far more easily than they would have been able to do in the past.

In response the Minister stated “I do share your concerns in terms of the private sector, and we have to be vigilant in that regard, but I also think that there are examples where the third sector, for example, does excellent work, and what is a barrier to them.”
This is the nub of the matter. The EU procurement rules were too prescriptive and inflexible. Their pro-market ethos might have been good for a competitive market but they were a major barrier to building long term partnerships that effective public services required. Moves to change them are welcome insofar as they go.  But there are concerns. While downgrading the role of competitive tendering has a positive side, in its absence there is genuine risk of a cosy, crony procurement process replacing it unless there are very strong and transparent governance arrangements in place. And there is no certainty that the contracted arrangements will respect the terms and conditions to minimum public sector employment standards. Overall the Welsh Government has taken an enlightened approach towards public procurement in general and there must be explicit assurances that this will carry over into this legislation. Even more fundamentally we must stop to ask what is the legislation’s ultimate purpose?

The Welsh Government’s written statement on the legislation states “The Bill will … aim to mitigate any potential market distortion by ensuring that the independent health service marketplace in Wales remains attractive to small and medium sized enterprises and third sector organisations; in turn supporting the Foundational Economy of Wales. “ And so there can be no doubt that it provides a means to more effectively undermine public service delivery in our public services.
The direction of travel of the English NHS in terms of outsourcing and privatisation is totally clear. So it is worrying that this legislation could provide the means to create an equally favourable situation for a similar process to take place in Wales.
This legislation on the procurement of health services cannot be seen as a boring, soporific routine which can be passed through the Senedd on the nod ( no pun intended).

The risks that it presents are very real. This legislation needs detailed scrutiny with clear safeguards and assurances built into it to maintain strong public service delivery in the Welsh NHS.