QSRC Ltd ("Qsrc"), R (on the application of) v National Health Service Commissioning Board ("NHS England") & Anor

In an interim commissioning exercise, NHS commissioners must comply with the requirements of transparency, proportionality and equal treatment under the National Health Service (Procurement, Patient Choice and Competition) (No.2) Regulations 2013. A provider that supplied specialised services to NHS patients before the transition to NHS England may qualify as an existing provider even where services were supplied through individual funding arrangements rather than a standard NHS contract. Exclusion from interim commissioning requires objective justification based on evidence. Nevertheless, a commissioner may lawfully prefer existing contracted providers where there is substantial overcapacity, no identified problem with supply, cost or quality, multiple potential providers and a pending national procurement exercise. The court must respect the decision-maker’s evaluative judgments unless they are unlawful or irrational.

QSRC challenged NHS England’s refusal to enter into an interim contract for gamma knife treatment at the National Hospital for Neurology and Neurosurgery. NHS England funded eligible patients only where treatment was provided at Barts or the Cromwell Hospital, pending a national review and procurement of stereotactic radiosurgery services.

The challenge alleged breach of the procurement and competition requirements in the Health and Social Care Act 2012 and the 2013 Regulations. QSRC also relied on Monitor’s guidance concerning existing providers and advanced an Article 1 of the First Protocol claim. The court granted permission at a rolled-up hearing and considered the merits before the limitation issues.

1. Claim dismissed. NHS England’s decision of 20 March 2015 refusing QSRC’s proposed interim contract was lawful.
2. Monitor’s guidance was not statutory and was persuasive rather than prescriptive. In context, an existing provider included a provider that had supplied specialised services to NHS patients before 1 April 2013 through arrangements other than a standard NHS contract. QSRC’s provision of gamma knife treatment through accepted individual funding requests was sufficient to bring it within that description. It should not therefore have been excluded without objective, evidence-based justification (paras 97–101).
3. The mistaken view that QSRC was not an existing provider did not invalidate the decision. NHS England had given substantive reasons for refusing an interim contract: there were at least nine potential London providers, substantial overcapacity, no known problem with supply, cost or quality, and a continuing national review and procurement exercise. Entering into a contract with QSRC alone could itself have treated it preferentially and undermined the regulatory requirements. Those were evaluative judgments for the decision-maker and were not irrational or otherwise unlawful (paras 102–104).
4. The misconception concerning the need for a consultant to be present in the building during treatment had no material bearing on the decision. Delay in the national procurement exercise likewise did not affect the legality of the decision when made (paras 106–107).
5. The court tentatively considered that the 30-day procurement limitation did not apply because no offers had been sought under the Public Contracts Regulations 2006. It also considered that the claim, brought after negotiations and complaints to Monitor, would not have been out of time or unjustifiably delayed. These observations were unnecessary to the result (paras 109–120).
6. The Article 1 of the First Protocol claim was parasitic on the unsuccessful regulatory challenge and was not separately determined (paras 121–123).

The judgment was a first-instance decision of the Administrative Court. Permission for judicial review was granted at a rolled-up hearing pursuant to an order dated 28 July 2015.