Q&As

What statutory provisions allow a NHS Trust to enter into significant contracts? Are there any financial limits on contracting or statutory requirements to ensure the transaction remains intra vires?

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Produced in partnership with Brendan Ryan of Pinsent Masons
Published on LexisPSL on 28/06/2016

The following Local Government Q&A produced in partnership with Brendan Ryan of Pinsent Masons provides comprehensive and up to date legal information covering:

  • What statutory provisions allow a NHS Trust to enter into significant contracts? Are there any financial limits on contracting or statutory requirements to ensure the transaction remains intra vires?
  • Power of NHS Trusts to enter into contracts
  • Public procurement
  • The Public Contracts Regulations 2015
  • TFEU general principles
  • National Health Service (Procurement, Patient Choice and Competition) Regulations 2013
  • Internal NHS rules

What statutory provisions allow a NHS Trust to enter into significant contracts? Are there any financial limits on contracting or statutory requirements to ensure the transaction remains intra vires?

Since the Health and Social Care 2012 (HSCA 2012) entered into force, most NHS procurement is under the responsibility of the National Health Service Commissioning Board (NHS England) and regional Clinical Commissioning Groups (CCGs).

However, in the areas within their responsibility, NHS Trusts retain a relatively wide vires to enter into public contracts.

Power of NHS Trusts to enter into contracts

The powers of NHS Trusts are contained in their constitutional documents and in the National Health Service Act 2006 (NHSA 2006). NHSA 2006, s 47 confers on NHS Trusts the power to 'do anything which appears to it to be necessary or expedient for the purpose of or in connection with its functions', including the power to 'enter into contracts'.

There is no statutory financial ceiling on the value of a contract an NHS Trust might enter into.

Public procurement

In practice, this freedom to contract is constrained by the somewhat complex public procurement rules which apply in the healthcare sector. Depending on the value and subject matter of a given contract, an NHS Trust might be subject to a number of different public procurement regimes,

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