NHS England spends over £20 billion every year on goods and services, which typically accounts for around 30% of the operating costs of each hospital. A significant part of the remainder of NHS non-salary budget involves the commissioning of health care services. This expenditure and commissioning is controlled by NHS procurement rules, which in part derive from EU law. Different procurement rules apply in different countries within the UK, and both Scotland and Northern Ireland both have separate regulatory schemes. Even though this post only focuses on the situation in England, some issues reflect broader concerns in the UK context. Generally, NHS procurement rules are regularly criticised for imposing excessive red tape and compliance costs on the NHS, and calls for NHS procurement reform to free it from such strictures are common.
In this context, Brexit could be seen as an opportunity to overhaul NHS procurement and to move away from the perceived excesses of EU law (see eg Cram: 2016). However, I think that it is far from clear that such reform could not fit within the blueprint of EU law, and that most of the constraints on NHS procurement rather derive from independent decisions adopted by the UK over the last 25 years. Moreover, from an economic perspective, Brexit will probably hurt the functioning of the NHS (including its procurement), with or without significant regulatory reforms.
This post is based on my presentation at the event Brexit, Regulation and Society, held by ManReg on 13 June 2017, and concentrates on two issues. First, does EU law prevent significant reforms of NHS procurement and, if so, can Brexit suppress such constraints? Second, is the way the Brexit process is unfolding conducive to an improvement of NHS procurement, both from an economic and a regulatory perspective? (more…)
The airport Berlin-Brandenburg, Stuttgart 21, and the Elbphilharmonie have one thing in common. Irregularities in the procurement process and delays in execution led to immense cost explosions to be covered by taxpayers. Thus, given the risks of corruption, favouritism and misuse of public funds, the award and management of public contracts requires a high level of scrutiny to avoid mismanagement and waste.
Moreover, even when things go well, improvements in public procurement law can have significant effects. Today, over 250 000 public authorities in the EU spend around 14 per cent of the GDP on the purchase of services, works, and supplies. Even small relative efficiency gains through carefully crafted rules can therefore result in savings in the billions. Therefore, the design of procurement rules need to reach a balance between safeguarding economic efficiency through competition and ensuring the proper level of transparency and accountability. (more…)
My most recent edited collection has now been published:
GS Ølykke & A Sanchez-Graells (eds), Reformation or Deformation of the EU Public Procurement Rules (Edward Elgar, 2016). It features contributions from a gender-balanced group of 16 young political science and EU economic law scholars based in 9 different EU/EEA Member States, including a number based at top UK universities. It is the result of a two year research project generously funded by the Copenhagen Business School and the Danish Gangstedfonden.
Using an innovative interdisciplinary ‘law and political science’ methodology, the book carries out a critical assessment of the reform of the EU public procurement rules in the period 2011-2014. It does this by a detailed assessment of the initial Commission proposal for new rules, the travaux preparatoires behind it, as well as the several inter-institutional negotiation and compromise texts that resulted in the 5th generation of EU public procurement directives in 2014. (more…)
EU public procurement law relies on the specific enforcement mechanisms of the Remedies Directive, which sets out EU requirements of administrative oversight and judicial protection for public contracts. Recent developments in the case law of the CJEU and the substantive reform resulting from the 2014 Public Procurement Package may have created gaps in the Remedies Directive, which led the European Commission to publicly consult on its revision in 2015. One year after, the outcome of the consultation has not been published, but such revision now seems to have been shelved. In a chapter* I am contributing to an edited collection, I take issue with the shelving of the revision process and critically assesses whether the Remedies Directive is still fit for purpose. (more…)
In the current state of turmoil, it is difficult to speculate on the exact relationship between the EU and the UK that can result from the Brexit vote and the future negotiations to be held under Article 50 TEU, in case it gets triggered. However, in order to contribute to the debate of what that relationship should look like in the interest of taxpayers in the UK, it is important to consider the implications that a post-Brexit deal could have in terms of the potential disappearance of the EU rules applicable to the control of how public funds are spent. A reduction in the control mechanisms applicable to certain types of public expenditure could indeed diminish the effectiveness of policies funded by taxpayers in the UK and create shortcomings in public governance more generally. (more…)
With a few days to go for the all important UK referendum on EU membership, it may be worth focusing the analysis on one of the issues that can affect trade between the UK and the EU to a very large extent: that is, the regulation of public contracts.
There has been some serious thought put into the potential implications of Brexit for the ways in which the UK public sector buys supplies and services—or, in technical terms, on the Brexit implications from a public procurement perspective. Academics, such as Dr Pedro Telles, and practitioners such as Michael Bowsher QC, Peter Smith, Roger Newman or Kerry Teahan have started to reflect on the likely consequences from a legal and business case perspective. (more…)
However, this trend will not reverse in the immediate future, whatever the outcome of the consultation based on the 2015 Green Paper ‘Fulfilling our Potential: Teaching Excellence, Social Mobility and Student Choice’. English universities will continue needing to adapt to increasing commercial pressures. However, they seem to have the cards stacked against them. English universities are not entirely free to pursue whichever commercial approaches they see fit. Their activity is highly regulated, and they are bound by significant constraints, both under domestic and EU law.
One area of increasing controversy is the possibility for English universities to move away from what are considered burdensome and restrictive public procurement procedures and adopt a strict commercial approach to the way the purchase supplies, services and commission works. Such flexibility would allow them to choose their suppliers and contractors more freely, reduce the red tape associated to their day to day operations, and some claim that this would unleash innovation. Unsurprisingly, this is catching the attention of practitioners in the field, and the Higher Education Procurement Academy is prioritising this issue. The trouble is that, while some practitioners have made claims supporting the adoption of such a commercial approach, others consider that reforms in the English higher education system are insufficient to warrant such a change.
In order to tackle these issues, together with my colleague Andrea Gideon, I looked in detail into the constraints that EU public procurement law impose on English universities. In our paper*, (more…)