Provider Selection Regime: how NHS health care contracts are awarded

The Provider Selection Regime is the set of rules that NHS bodies and local authorities in England must follow when they buy health care services, and it decides whether an incumbent keeps a contract, a commissioner picks a provider directly or a competition is run. For providers, it fixes when and how a decision can be challenged. For commissioners, it sets out which of five processes to use and what must be published. This guide explains the regulations, the five processes, the key criteria, standstill, the review panel and how the Provider Selection Regime sits with the Procurement Act 2023, as of November 2026.

What the Provider Selection Regime is

The Provider Selection Regime is set out in The Health Care Services (Provider Selection Regime) Regulations 2023, statutory instrument 2023 No. 1348. According to the instrument as made, the regulations were made on 6 December 2023, after a draft was approved by both Houses of Parliament, and came into force on 1 January 2024. They were made under sections 12ZB and 272 of the National Health Service Act 2006 and section 182 of the Health and Care Act 2022. Regulation 1 says they “extend to England and Wales and apply in relation to England only.”

The PSR replaced two earlier sets of rules. The North of England Commercial Procurement Collaborative (NOECPC) explained in January 2024 that the PSR replaces the procurement of health care services by relevant authorities under the Public Contracts Regulations 2015, and “replaces the NHS (Procurement, Patient Choice, and Competition) No 2 Regulations 2013, which previously only applied to NHS England and Integrated Care Boards (ICBs).”

The PSR regulations are arranged in six parts with 16 schedules, most of which list what each published notice must contain. NHS England publishes statutory guidance, to which relevant authorities must have regard, and a toolkit. The current guidance was updated in April 2025 and replaces the version issued on 18 October 2023. NHS England says of the April 2025 changes: “None of these updates represents a major change in policy.”

Who and what the PSR covers

Regulation 3 says: “These Regulations apply where a relevant authority procures relevant health care services”. Regulation 2 defines a relevant authority, by reference to section 12ZB(7) of the National Health Service Act 2006, as “a combined authority, an integrated care board, a local authority in England, NHS England, an NHS foundation trust or an NHS trust”. Relevant health care services are health care services that fall within the common procurement vocabulary (CPV) codes listed in Schedule 1.

Mixed contracts are allowed in limited cases. A procurement that combines relevant health care services with other goods or services falls under the PSR only if two tests are met:

• the main subject matter is the relevant health care services, judged by whichever part has the higher estimated lifetime value; and
• the authority considers the other goods or services could not reasonably be supplied under a separate contract, which it may conclude only where separate procurement would be likely to have a “material adverse impact” on its ability to act in line with the procurement principles.

The statutory guidance is explicit about the boundary: the PSR “must not be used for the procurement of goods or non-healthcare services alone.” Those purchases follow the wider public procurement rules. A trust buying diagnostic equipment or catering therefore uses a different regime from an ICB buying community audiology or an urgent treatment centre.

Coverage of commissioning decisions and NHS prices sits in our policy and payers section.

Procurement principles and the five key criteria

Every Provider Selection Regime decision starts from the principles in regulation 4. When procuring relevant health care services, an authority must act with a view to securing the needs of the people who use the services, improving the quality of the services and improving efficiency in their provision, and must act “transparently, fairly and proportionately.” It may consider the value of providing services in an integrated way with other health, health-related or social care services.

Regulation 5 sets out five key criteria that authorities apply when assessing providers and offers:

1. Quality and innovation: “the need to ensure good quality services” and to support new or significantly improved services or processes.
2. Value: “the need to strive to achieve good value in terms of the balance of costs” against overall benefits.
3. Integration, collaboration and service sustainability: how far services can be delivered in an integrated, collaborative and sustainable way.
4. Improving access, reducing health inequalities and facilitating choice.
5. Social value: “whether what is proposed might improve economic, social and environmental well-being” in the relevant area.

The guidance says “The relative importance of the key criteria is not predetermined by the Regulations or this guidance.” Authorities decide the ranking for each decision but “must justify and record how they have ranked the importance of the key criteria.” For higher-value contracts, the guidance expects greater focus on value for money and on the quality and efficiency of the services. Providers must also meet the basic selection criteria in regulation 19 and Schedule 16.

The five Provider Selection Regime processes

Regulation 6 decides which process applies. Two are mandatory in defined circumstances, two are options for the authority, and one is the default. The table summarises them.

Process	When it applies	Standstill
Direct Award Process A	Must be used where there is an existing provider and only that provider can deliver the services, given their nature	None
Direct Award Process B	Must be used where patients choose their provider, the authority does not restrict the number of providers and offers contracts to all that meet its requirements	None
Direct Award Process C	May be used where a contract is expiring, the considerable change threshold is not met and the incumbent is satisfying the contract and likely to satisfy the new one to a sufficient standard	8 working days
Most Suitable Provider Process	May be used where the authority believes it can identify the most suitable provider without a competition	8 working days
Competitive Process	Used where no other process applies or the authority chooses it; required for framework agreements	8 working days

The considerable change threshold is the hinge for Direct Award Process C. It is met where the proposed arrangements are “materially different in character” from the existing contract, or where three conditions all apply: the changes are attributable to an authority decision, the lifetime value is at least GBP 500,000 higher than the existing contract’s value when signed, and it is at least 25% higher. A change of provider through takeover, merger, acquisition or insolvency does not meet the threshold on its own, and nor do changes driven by external factors such as patient volumes or a price formula in the contract.

An authority that starts one discretionary process and decides another would suit better may abandon the procurement under regulation 15 and switch. The guidance describes Direct Award Process C as a route that “can be used where an existing provider is satisfying its contract”, and the most suitable provider process as the option where the authority “cannot or does not wish to use direct award process C.”

Running a PSR award step by step

Under the PSR, the steps for Direct Award Process C are set out in regulation 9; the most suitable provider and competitive processes, in regulations 10 and 11, follow the same pattern with extra steps at the start. A commissioner typically works through this sequence:

1. Check scope. Confirm the authority is a relevant authority, the services are relevant health care services under Schedule 1, and any mixed procurement meets regulation 3.
2. Choose the process. Apply regulation 6, including whether the considerable change threshold is met.
3. Announce where required. For the Most Suitable Provider Process, publish a notice of intention to follow that process; potential providers cannot be identified until 14 days after it is submitted. For the Competitive Process, set the award criteria and publish a notice inviting offers.
4. Assess. Apply the key criteria and basic selection criteria, and record how the criteria were ranked.
5. Publish a notice of intention to award on the central digital platform, with the content set in the relevant schedule.
6. Observe the standstill period of 8 working days, starting the day after the notice is published.
7. Handle representations, review the decision and communicate any further decision in writing with reasons.
8. Award the contract once standstill ends, and publish the award notice “within 30 days of the contract being awarded.”
9. Record and report. Keep the decision record, including declared conflicts of interest and how they were managed, and include the award in the annual summary.

Under the Provider Selection Regime, Direct Award Processes A and B have no standstill period, because regulation 12 applies standstill only to the other three processes. The authority must still submit a notice of the award for publication within 30 days under regulations 7 and 8, and keep a decision record under regulation 24.

Standstill, representations and the review panel

Regulation 12 governs challenges. Under Direct Award Process C, the most suitable provider process and the competitive process, the authority must not sign the contract until the standstill period ends. A provider that is aggrieved and believes the regulations have not been followed may make written representations “before midnight at the end of the 8th working day after the day the standstill period begins.”

If representations arrive, the authority must give the provider a further chance to explain, promptly share information it is required to record (unless disclosure would harm commercial interests, fair competition or the public interest), review its decision and decide whether to proceed, repeat earlier steps or abandon the procurement. It must communicate that further decision promptly, in writing, with reasons. Standstill then ends only when the authority is ready and at least 5 working days have passed since its last decision was communicated. Working days exclude weekends and public holidays in England.

Above this sits the Independent Patient Choice and Procurement Panel. The guidance says “NHS England has established the Independent Patient Choice and Procurement Panel to provide independent expert advice”. A provider must ask for a review “within 5 working days of receiving the relevant authority’s decision” following the authority’s review of its representation. If it does, “the standstill period should continue, other than in exceptional circumstances.” The panel may consider whether the authority complied with the regulations, after which, the guidance says, “The relevant authority should then make a further decision about how to proceed.” Neither the guidance nor the panel’s own page describes the advice as binding.

The panel publishes its advice or a summary. As of November 2026, its reports page lists 36 entries, grouped under 2024 (4), 2025 (22) and 2026 (10), two of which are case acceptance decisions. They cover services such as urgent treatment centres, NHS 111 integrated urgent care, non-emergency patient transport, GP and alternative provider medical services, community audiology, talking therapies and insourced services. The earliest case, CR0001-24, concerned online ADHD assessment, diagnostic and management services for North Cumbria; for context on that market, see our report that independent providers run over half of NHS-funded ADHD assessments.

Contract modifications and urgent awards

Regulation 13 allows a contract to be changed during its term without a new procurement where the change was clearly provided for in the contract, results from corporate succession, or responds to external factors such as patient volumes or a price formula. A change driven by external factors must not make the contract “materially different in character”.

Under the Provider Selection Regime, a change resulting from the authority’s own decision is allowed only if it does not make the contract materially different in character and the cumulative change in lifetime value is below GBP 500,000 or less than 25% of the original value. Contracts awarded under Direct Award Process A or B can be modified without a monetary test, as long as they do not become materially different in character.

Where a modification results from an authority decision and the cumulative change in lifetime value is GBP 500,000 or more, the authority must publish a notice on the central digital platform within 30 days. The guidance adds that the PSR has no retrospective effect on contracts entered into before 1 January 2024, but later modifications to those contracts must follow the PSR rules.

Regulation 14 allows an urgent award or modification where the authority considers it must act urgently, the urgency was neither foreseeable by nor caused by the authority, and delay would likely pose “a risk to patient or public safety.” A notice must be submitted within 30 days, and the guidance asks for a justification of the length of any urgent contract over 12 months. A separate limb lets an authority extend an expiring contract during a standstill period while it seeks advice from the panel; it may only extend the length and must not otherwise modify the contract.

How the PSR sits with the Procurement Act 2023

The Procurement Act 2023 came into force on 24 February 2025, according to the government’s procurement reform pages. Section 120 of the Act gives ministers a “Power to disapply this Act in relation to procurement by NHS in England”, covering “regulated health procurement”, defined as procurement “subject to provision made under section 12ZB” of the NHS Act 2006, the power under which the PSR was made.

The practical result is two regimes side by side. The PSR covers relevant health care services, while the guidance says goods and non-health care services “must be arranged using the Procurement Act or, where transitional arrangements apply, the PCR”, meaning the Public Contracts Regulations 2015.

The PSR was amended on the same day. The Procurement Act 2023 (Consequential and Other Amendments) Regulations 2025 (SI 2025/163) inserted regulations 20A to 20D on 24 February 2025, covering sub-contractors, providers that threaten national security, notification of exclusions and debarment. Under regulation 20A an authority must ask whether a provider intends to subcontract and check intended subcontractors against the debarment list.

The same instrument substituted wording in the notice provisions of regulations 7 to 15, which now refer to publication on the central digital platform, and replaced the exclusion rules in regulation 20 with references to excluded and excludable suppliers under sections 57 and 58 of the Procurement Act 2023.

Wales has taken a different route from the English Provider Selection Regime. A written statement by Cabinet Secretary for Health and Social Care Jeremy Miles on 7 January 2025 said The Health Services (Provider Selection Regime) (Wales) Regulations 2025, made under the Health Service Procurement (Wales) Act 2024, would come into force on 24 February 2025, subject to Senedd approval, and would disapply the Procurement Act 2023 for health service procurement in Wales. The instrument is Welsh Statutory Instrument 2025 No. 99 (W. 23).

As of November 2026, legislation.gov.uk shows the revised text of the English PSR regulations with amendments dated 24 February 2025 and states that there are no known outstanding effects.

What the Provider Selection Regime means for providers and commissioners

For incumbent and new providers

Incumbents can be reappointed under the PSR without competition under Direct Award Process C if they are satisfying their contract and the new contract is not a considerable change. Challengers have tight windows: 8 working days from the notice to make representations, and 5 working days after the authority’s further decision to ask the panel for a review. Notices of intention on the central digital platform are the signal to watch. Because the key criteria carry no fixed weighting, the authority’s recorded reasoning on each criterion, not price alone, is what a challenger has to test.

For commissioners

Commissioners carry publication and reporting duties. The guidance says: “Relevant authorities must publish an annual summary of the procurements they have arranged under the PSR.” Summaries must appear “no later than six months following the end of the financial year it relates to”. The first covered 1 January 2024 to 31 March 2025. Each must report contracts awarded under each process, framework agreements, urgent awards and modifications, new providers and providers that ceased to hold contracts, the number and nature of representations, and, under the guidance, details of any panel reviews. Authorities must also monitor and publicly report compliance each year, including on conflicts of interest.

The buyers are changing. NHS England’s strategic commissioning framework says commissioners must “be able to use the PSR to secure system goals”. The Health Bill ICB fact sheet says ICBs are expected to control around GBP 179 billion of 2027/28 commissioning budgets, and NHS England says most of its direct commissioning functions will transfer to ICBs from April 2027, subject to Parliament. More PSR decisions will therefore be taken by fewer, larger ICBs. NHS England also sets national prices for some services, as in its planned consultation on ADHD and autism prices.

What to watch next

• The panel after NHS England. NHS England set up the Independent Patient Choice and Procurement Panel, and the government intends to abolish NHS England by March 2027, subject to Parliament. The Health Bill fact sheets on ICBs and on the restructured DHSC do not mention the PSR or the panel.
• ICB renewals. As ICBs take on contracts from NHS England, due from April 2027 subject to parliamentary approval, and merge further on 1 April 2027, their use of Direct Award Process C and competition will show up in notices and annual summaries.
• Annual summaries. Summaries for 2025/26, the first to cover a single financial year, were due by the end of September 2026, six months after that year ended. Summaries for 2026/27 are due by the end of September 2027.
• Panel advice. Ten entries were listed under 2026 by November; the pattern of cases shows where providers are contesting awards.
• Amendments. Any change to the regulations will appear on legislation.gov.uk; none was listed as outstanding as of November 2026.

We track Provider Selection Regime decisions, panel reports and related NHS contract awards on The Tracker. For providers and commissioners alike, the Provider Selection Regime rewards clear records: a decision that shows how each key criterion was weighed is the one most likely to survive standstill.