NHS Provider Selection Regime

Purpose and scope

The Provider Selection Regime (PSR) came into force on 1 January 2024.

The PSR is a set of rules for procuring health care services in England by organisations termed relevant authorities. Relevant authorities are:

  • NHS England
  • Integrated care boards (ICBs)
  • NHS trusts and NHS foundation trusts
  • Local authorities and combined authorities.

The PSR does not apply to the procurement of goods or non-health care services (unless as part of a mixed procurement), irrespective of whether these are procured by relevant authorities.

The PSR was introduced by regulations made under the Health and Care Act 2022. In keeping with the intent of the Act, the PSR has been designed to:

  • introduce a flexible and proportionate process for deciding who should provide health care services
  • provide a framework that allows collaboration to flourish across systems
  • ensure that all decisions are made in the best interest of patients and service users.

Provider selection processes

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

  • 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).
  • 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.
  • 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.

Timings and support for implementation

The PSR came into force on 1 January 2024.

The PSR is set out in the Health Care Services (Provider Selection Regime) Regulations 2023, which the Department of Health and Social Care introduced into Parliament on 19 October 2023.

NHS England has published its statutory guidance to support implementation of the PSR regulations, setting out what relevant authorities must do to comply with them. The statutory guidance sits alongside the PSR regulations supporting relevant authorities to understand and apply the PSR. Relevant authorities must have regard to the statutory guidance.

A toolkit has also been developed to support relevant authorities with the application of the PSR.

Transitional arrangements

PSR legislation has removed the procurement of health care services by relevant authorities from the scope of the Public Contracts Regulations 2015 and has revoked the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013.

Where relevant authorities have started a procurement exercise before 1 January 2024 under the previous rules (the Public Contracts Regulations 2015 and the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013), then these will not be affected by the PSR and can conclude under the previous rules.

A contract award process is considered to have started under the previous rules if any of the following began before 1 January 2024:

  • a contract notice has been submitted to the UK e-notification service for publication in accordance with the Public Contracts Regulations 2015
  • the relevant authority has contacted any provider to:
    • seek expressions of interest or offers in respect of a proposed contract
    • respond to an unsolicited expression of interest or offer received from that provider in relation to a proposed contract.

If you have any queries about the PSR, please email psr.development@nhs.net.