Aim

Contracts are the key vehicle for enabling and assuring effective changes made through commissioning. They document all the decisions and actions between partners and supports them with the backing of good governance. Understanding the contract, and using it to maximum benefit, is a key skill for commissioners. As well as the NHS standard contract, the use of other contracting models, such as those used in primary care and grants used with the voluntary, community and social enterprise (VCSE) sector, is covered.

The NHS standard contract

The aim of the contract

The NHS standard contract is a binding agreement between two or more parties – the commissioner and the provider – and it is mandated by NHS England. This formal approach helps commissioners ensure that providers comply with rules, regulations, and any local agreements. It protects all parties, as it is a formal record of what has been agreed and provides structure if difficulties arise.

The contract is mandated for use for all healthcare services (with some exceptions, covered in later in the chapter).

The contract is made up of three components and a fourth document is the technical guidance. The components are shown in Table 6.1.

The policy aim of the standard contract is not simply to allocate resources to providers; it is an instrument to improve services. It includes schedules that promote and support discussions and actions for improvement. The contract frequently includes changes to support and steer commissioners with national priorities – for example, schedule 2M was introduced in 2019 to support contracting discussions about personalised care.

Parties using the NHS standard contract

Providers

The contract should be used for all providers of services commissioned, regardless of service value or length of duration (so that includes pilots). There are a few exceptions, and these are:

• • primary care, where the primary care contract should be used;

• • financial support to VCSE organisations, where a grant agreement can be used;

• • subcontracts from a provider to another provider – they will have to use alternative agreements.

There are two forms of the NHS standard contract. The full-length is the standard contract with all requirements included. Where a lighter touch is appropriate, the shorter- form contract can be used, such as when a small organisation is delivering only one service – for example, a hospice, a care home, or a pharmacy.