Procurement Act 2023 & NHS Provider Selection Regime: Lessons from Recent Failures and How to Stay Compliant

The introduction of the Procurement Act 2023 and the NHS Provider Selection Regime (PSR) has transformed the landscape of NHS procurement. These frameworks demand greater transparency, fairness, and accountability, placing NHS Trusts and Integrated Care Boards (ICBs) under unprecedented scrutiny.

With stricter rules around award routes, documentation, and publication of notices, the stakes have never been higher. Legal challenges—often driven by “no win, no fee” firms—are increasing, and the consequences of non-compliance are severe: paused tenders, cancelled contracts, financial penalties, and reputational damage.

Recent Case-Based Risk Insights

Here are some real-world examples that highlight the risks:

  1. Northwest ICBs – Non-Emergency Patient Transport (NEPTS)
  • Contract Value: £58 million/year
  • Issue: Legal challenges halted the procurement before a preferred bidder was announced.
  • Failure: Design flaws in the process posed “unacceptable risk” of further legal action.
  • Outcome: Entire process scrapped; current contract extended until March 2026.

Lesson: Poor process design can derail procurement entirely.

  1. Lancashire & Cumbria – Criminal Justice Healthcare Services
  • Issue: Procurement for services supporting vulnerable individuals breached PSR rules.
  • Failure: Independent panel found the award process lacked fairness and transparency.
  • Outcome: NHS England Northwest instructed to re-run or abandon the process entirely.

Lesson: Governance and adherence to PSR guidance are non-negotiable.

  1. Mersey and West Lancashire Teaching Hospitals NHS Trust
  • Contract Value: £65 million
  • Issue: Legal action by an unsuccessful bidder challenged the award.
  • Failure: Trust failed to demonstrate compliance with transparency and equal treatment obligations.
  • Outcome: Procurement abandoned mid-process to avoid further litigation.

Lesson: Transparency and equal treatment must be demonstrable at every stage.

  1. Multiple ICBs – Failure to Publish Award Notices
  • Issue: Several ICBs failed to publish mandatory notices and observe standstill periods.
  • Failure: Breached PSR transparency requirements, denying suppliers the right to challenge.
  • Outcome: Contracts paused or withdrawn following internal reviews and supplier complaints.

Lesson: Publication obligations are critical for compliance.

Recommendations for Audit Committees and Procurement Leaders

To mitigate these risks, NHS bodies should:

✅ Ensure PSR Compliance: All healthcare service contracts must follow one of the five PSR award routes with documented rationale.
✅ Monitor Transparency Obligations: Confirm publication of award notices and adherence to standstill periods.
✅ Review Departures from Guidance: Require justification and audit trail for any deviation from statutory PSR guidance.
✅ Strengthen Governance: Embed procurement risk assessments into board-level decision-making.
✅ Conduct Retrospective Reviews: Audit recent awards for compliance with PSR and Procurement Act principles.

How We Can Help

Our Procurement Advisory team specialises in helping NHS organisations navigate the complexities of the Procurement Act 2023 and PSR. We provide:

  • Compliance audits and risk assessments
  • Governance frameworks and process design
  • Training for procurement teams and boards
  • Support with documentation and transparency obligations

Contact us today to safeguard your procurement processes and avoid costly mistakes.