Procurement in a Nutshell – Provider Selection Regime: Independent Panel: Decision CR00010:25
9th May, 2025
This Nutshell will evaluate the Panel's decision relating to the award of a contract by a relevant authority utilising Direct Award Process C.
The Provider Selection Regime (PSR), set out in the Health Care Services (Provider Selection Regime) Regulations 2023, came into force on the 1st January 2024.
The PSR removes the procurement of health care services from the scope of the Procurement Act 2023, which came into effect from the 24th February 2025.
The PSR applies to NHS England, Integrated Care Boards, NHS Trusts, NHS Foundation Trusts, local authorities and combined authorities when they are procuring relevant healthcare services.
Background
The Independent Procurement Panel (the Panel) provides advice under the PSR to relevant authorities in circumstances where a provider is aggrieved by an award decision, and the provider believes the PSR Regulations have not been complied with.
The role of the Panel is to provide independent expert advice (as referred to in Regulation 23 of the PSR Regulations) and publish this advice for each review it undertakes.
Relevant authorities should note that, while the advice of the Panel is not legally binding, it is highly persuasive.
The facts
Leicester, Leicestershire and Rutland Integrated Care Board (the ICB) had directly awarded Opcare Limited (Opcare) the contract for the provision of its Adult and Paediatric Orthotics and Wheelchair Service under the PSR, using Direct Award Process C. The procurement was in response to the upcoming expiry of Opcare’s current contract in October 2025.
Direct Award Process C permits a direct award where:
- The service is not materially different from that currently provided; and
- The incumbent provider is likely to satisfy the service requirements to a suitable standard.
While the ICB deemed the orthotics service a “relevant health care service” under the PSR regulations, it admitted initial uncertainty as to whether the wheelchair service met the same criteria. The ICB concluded it could nonetheless proceed with the award, considering the contract a mixed procurement and meeting the necessary PSR conditions.
AJM Healthcare (AJM) contended that the wheelchair service did not qualify as a relevant health care service, primarily arguing that the majority of expenditure related to equipment and maintenance, which they claimed should fall outside the PSR regime. Consequently, AJM asserted that the ICB should have used the Public Contracts Regulations instead.
The decision
The Panel’s assessment focused on whether the wheelchair service constituted a “relevant health care service” under PSR regulations. It evaluated four key aspects:
1. CPV Code Classification
Despite the absence of a specific CPV code for wheelchair services in Schedule 1 of the PSR, the Panel accepted the use of the overarching “health services” CPV code, determining that the nature of the service, patient assessment and provision of bespoke mobility equipment, met the statutory definition of health care.
2. CQC Registration
The Panel acknowledged that neither Opcare nor AJM were CQC-registered. However, it accepted evidence that registration was not legally required for such services, particularly given that similar services had historically operated without registration, with clinicians such as occupational therapists and physiotherapists delivering care.
3. Clinical Involvement
The Panel found that the service involved clinical assessment and prescription by qualified professionals. The Panel argued that the patient-centred model aligned with the definition of healthcare, as it provided diagnosis and treatment through a clinical framework.
4. Expenditure
While a significant portion of spending was on equipment (approximately 80% for the wheelchair service), the Panel held that this did not negate the fundamental clinical nature of the service. Moreover, separating equipment procurement from clinical services would have been operationally impractical.
The Panel therefore concluded that the wheelchair service is a relevant health care service under the PSR regulations. Accordingly, the entire contract, including both orthotics and wheelchair services, fell within the scope of the PSR, and did not constitute a mixed procurement. The ICB was therefore entitled to proceed under the PSR, and its direct award to Opcare did not breach regulatory requirements.
What does this mean?
This decision provides important clarification for contracting authorities navigating the PSR. It reinforces the principle that the substance of a service, particularly its clinical characteristics and patient delivery model, takes precedence over CPV code technicalities or expenditure when determining applicability.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
