Commissioning England Wales

Last updated:

NHS standard contract FAQs

What is the NHS Standard Contract?

The Standard Contract is used by NHS commissioners to commission NHS funded acute, ambulance, community and mental health and learning disability services from all types of providers.

From April 2013, the NHS Standard Contract will also be used by Clinical Commissioning Groups (CCGs) to commission services previously commissioned as Local Enhanced Services. These services will be called community-based services. Public health community-based services will be commissioned by local authorities, who have the option of using the Public Health Service Contract.

Read more about the commissioning of public health community-based services

 

Who publishes the NHS Standard Contract?

The Standard Contract is updated each year to reflect the requirements of the NHS Operating Framework. The responsibility for preparing the Standard Contract now rests with NHS England. Previously the Standard Contract was prepared by the Department of Health.

The NHS Standard Contract for 2013-14 (NHS England website)

 

What will happen to existing LES contracts?

Public health LESs: PCTs should be liaising with local authorities regarding the transfer of these services. PCTs should notify local authorities of all public health LESs due to expire prior to March 2013.

All other LESs: PCTs and CCGs should be liaising regarding current LESs. NHS England has recommended that unless there is a clear reason to the contrary, current LESs should be extended into 2013-14. NHS England has recommended that these contracts are extended with a six-month review clause, to give the CCG opportunity to review the services at some point in 2013-14. From 2014, all community based services will be commissioned by CCGs.

More information about the transfer of existing contracts (NHS England PDF guidance)

 

Will the use of the NHS Standard Contract change the procurement process for community-based services?

The procurement processes for community-based services using the NHS Standard Contract remain the same as used by PCTs commissioning LESs using LES contracts.

As PCTs are currently required to, CCGs and Local Authorities will need to provide justification for the tendering process they choose to use; whether competitive procurement, Any Qualified Provider (AQP) or a single tender process.

Under new regulations, commissioners will be required to publish details of (but not advertise) all contracts regardless of the value. Competition law requiring the advertisement and tendering of contracts will, as currently, only apply to contracts with each contractor with a lifetime value of over £100,000.

Please note: Further procurement guidance is currently being updated in the light of recent legislation and will be available again shortly.

 

Does the NHS Standard Contract mean that GPs will have to compete for every contract with other sorts of providers?

No. For some services, GP practices may be the most appropriate provider of the service. NHS England has emphasised that, as now, CCGs may make the decision to undertake a single tender action and offer the contract only to GP practices, particularly where the contract is of limited value or where GPs are the only appropriate provider. For example, a service may require a provider to have a registered list.

 

What is the process for dispute resolution under the contract?

The process for dispute resolution is outlined in clause 14 of the NHS Standard Contract General Conditions. There are three stages of escalation for a dispute under the standard contract:

  • Escalated negotiation: If a dispute arises, the parties in dispute must first attempt to settle it by any of them making a written offer to negotiate to the others.

  • Mediation: If it is not possible to settle the dispute by negotiation, the parties in dispute have to, within five working days after the end of the Negotiation Period, submit the dispute to mediation. In the case of GP practices, the contract states that this will be carried out by the Centre for Effective Dispute Resolution (CEDR) or another independent body or organisation agreed between the parties in dispute.

  • Expert Determination: If the parties in dispute are unable to settle the dispute through mediation, the dispute must be referred to expert determination, by one party giving written notice to that effect to the other parties. The Expert Determination Notice will include a brief statement of the issue or issues which it is desired to refer, the expertise required in the expert, and the solution sought.

    The parties in dispute will then agree on the identity of the expert. If that person agrees in writing to participate, they will be appointed as the expert. Where the parties cannot agree on the identity of the expert or the person does not agree to participate, any party can apply to CEDR for them to appoint an expert. The other parties can then make representations to the CEDR regarding the expertise required in the expert. Following this process, the person nominated by the CEDR will be appointed as the expert.

    The Parties in Dispute have to bear their own costs and expenses incurred in the expert determination and are also jointly liable for the costs of the Expert. The decision of the Expert is final and binding, except in the case of fraud, collusion, bias, or material breach of instructions on the part of the Expert. In those cases any of the parties are permitted to apply to Court for an Order either for the expert to reconsider his decision (either all of it or part of it) or for the Expert’s decision be set aside (again, either all of it or part of it).

It is possible, however, for the dispute resolution procedures under the contract to be modified – please see the question “Can the NHS Standard Contract be modified?” below.  We do have some concerns that the procedure outlined in the contract is overly complicated. The expert determination stage in particular also seems to imply significant costs to practices and also relies on the determination of one person rather than a panel. GPs and LMCs may instead wish to consider a two or three stage process of negotiation, informal panel and/or mediation or arbitration. We recommend that GP practices and LMCs seek detailed legal advice before negotiating changes to this section.

 

What should GP practices and LMCs do now?

GP practices and LMCs should familiarise themselves with the Standard Contract and seek legal advice if necessary when signing new contracts. NHS England has produced guidance for CCGs using the Standard Contract and it may be useful for practices and LMCs to read it.

Read the NHS England guidance

 

Can the NHS Standard Contract be modified?

It is possible for the contract to be modified so that it is appropriate for the services being commissioned. The NHS England website refers to the contract being “adaptable for use for a broad range of services and delivery models” and its guidance on the use of the contract states that “the contract is published as an eContract which will allow commissioners to produce a contract on-line which is tailored to the type of provider and the services being commissioned”.

 

Are there any clauses in particular that I should be looking to amend or negotiate?

GP practices and LMCs should seek detailed legal advice on the content of contracts before negotiating significant changes to them.  There are particular areas that GP practices and LMCs may need to negotiate and agree on a case by case basis following legal advice:

  • Liability, particularly in the case of termination or breach of contract.
  • Provision of information. GP practices and LMCs should particularly look at whether clauses in this area refer to requests for information being reasonable, how often requests might be made and any costs associated with these requests.
  • Costs associated with or outlined in the contract that are not factored into the main value of the contract.
  • As above, the process for dispute resolution.