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New FOI figures show low levels of NHS competitive tendering

Date of publication: 29th Apr 2019

Categories: Latest news

New research conducted by IHPN has found that services awarded by competitive tender make up less than 2% of total CCG spending on NHS clinical services, despite the NHS seeking to change to law to free the health service from “overly rigid procurement requirements.

At a recent Health Select Committee evidence session as part of their inquiry into potential legislative changes in the NHS, Simon Stevens, NHSE Chief Executive, stated that their reforms are needed to give health commissioners greater discretion when procuring services.

However, a recent FOI of all English CCGs, with responses from 131, found that services awarded by competitive tender made up just 1.96% of total CCG spending on NHS clinical services.

The research, featured in the Financial Times, also found that while CCGs were awarding on average 1.3 competitively tendered contracts to NHS organisations per year, compared to 3 to non-NHS providers, the value of contracts awarded to NHS organisations was almost three times greater. Over £8.5m worth of contracts were awarded to NHS providers by each CCG every year, compared to £2.4m for non-NHS providers – calling into question NHS England’s recent claims that the legislative changes will end “NHS privatisation.”

David Hare, Chief Executive of the Independent Healthcare Providers Network, said:

“These figures demonstrate that far from being compelled into tendering clinical contracts, the NHS competitively tenders only a tiny fraction of the services it commissions, making up less than 2% of total CCG spending on NHS clinical services.

“It is absolutely right that commissioners have discretion over when to tender services and to decide how services are aligned in the best interests of NHS patients. However this needs to be balanced against the need to ensure that poorly performing providers are replaced and new providers introduced when new service models are required. This is what the public expect – 67 per cent of the public agree that the NHS should be able to replace a poorly performing public provider with a private provider if it improves the service and remains free at the point of use.

“As the government considers whether legislative change is needed to deliver the NHS Long-Term Plan, reforms must be based on the principle of securing the best possible provider of patient care, regardless of whether they are from the public, independent or third sectors.”

Notes to editors

  • Between January and April 2019, Independent Healthcare Providers Network issued FOI requests to all English CCGs to assess the extent of competitive tender contracting and the proportion of competitive tenders going to NHS and non-NHS providers.
  • 207 CCGs in England were asked how many contracts were issued to providers in the years 2015/16, 2016/17 and 2017/18; the number of those issued under competitive tender; and the number and value of those competitive tender contracts which were issued to NHS and non-NHS providers respectively.
  • The total number of CCGs that received FOI requests is 207. 131 CCGs, i.e. 63%, responded with at least some information. Of those who did respond, not all provided a complete response to every answer.
  • We asked for data relating to 2015-16, 2016-17, and 2017-18. Although we can see differences across the years, we do not have a sufficiently long timeseries to describe trends over time. Further, given that 37% of CCGs did not respond, any apparent year-on-year variation could be an artefact of incomplete data.
  • The data from CCGs doesn’t allow us to say with the same level of confidence what the % number of contracts that go out to tender are but the information we have suggests this is in the region of 7%.
  • On average, CCGs award competitive tender contract values totalling £8,716,301 per annum to NHS organisations, compared to £2,482,672 for non-NHS providers.
  • The average number of contracts awarded by each CCG to NHS organisations is 1.5, compared to 2.7 awarded to non-NHS providers.