Procurement and commissioning of services fraud

Strategic intelligence picture

It is almost certain that some decision-makers during the pre-tender phase may be susceptible to bribery and corruption from suppliers, utilising multiple techniques to disguise their behaviour and receive bribes; for example, private residency building work or colluding and accepting other benefits like hospitality. This may be via established methods such as single tender waivers, contract splitting; falsifying quotes and tenders; and failing to declare conflicts of interest.

It is assessed a realistic possibility that the Provider Selection Regime (PSR) may enable those in decision-making positions to avoid competitive tendering by arguing that a change of current supplier is not required, or a supplier for a new contract has already been identified. As such, procurers and suppliers may become more susceptible and/or tempted to bribery and collusion by hiding behind the auspices of PSR.

As a result of the Health and Care Act 2022, the transferring of responsibilities from Clinical Commissioning Groups to Integrated Care Boards (ICBs) may now mean that unscrupulous behaviour by those in decision-making positions and/or suppliers will likely impact larger populations than before.

It is highly likely that bribery of some NHS staff may occur at both the procurement and monitoring phases of the commissioning cycle as those staff members may be tempted to accept a bribe or initiate the idea with the supplier that they can be bribed. This means the supplier could initiate the bribe to secure the contract or for the contract to continue despite performance issues.

Pre-tender fraud can also exist by contractors colluding and manipulating the bidding process through a variety of practices, such as bid rotation, bid suppression^j and kickbacks^k. As this occurs outside of the NHS arena it could likely result in the NHS paying more than necessary or receiving lower quality products and services.

Similarly, change has occurred with the Procurement Act 2023 which now allows all suppliers, irrespective of size and how established they are, to compete for public contracts through a centralised application and tender process. These rule changes significantly increase transparency of NHS trusts as there appears to be increased emphasis on the final stage of the commissioning cycle, which could lead to negating some of the threat of post-tender fraud. However, there is a remote chance that opening the process to all suppliers could increase the potential for fraudulent practice.

It is likely for pre-tender fraud to occur if frameworks and thresholds are circumnavigated. However, a lack of oversight and contract management can enable spend to exceed thresholds. Vulnerabilities to fraud and error will likely be exacerbated as procurement thresholds have increased.

It is almost certain that the threat of payment diversion fraud, or mandate fraud, remains with instances of cyber enabled fraud by criminals to divert genuine payments or falsify payments. This will include phishing email communications purporting to be from suppliers and NHS staff, such as CEOs, to change bank account details.

Post-tender fraud extends to unsolicited requests where criminals use office supply scam invoicing to contact NHS organisations. This may be for items not received by the organisation; or indeed wanted; or the organisation has been sent inferior products but charged an inflated fee.

It is assessed as highly likely there will be continued reliance on external agencies to provide healthcare provisions. The threat of commissioning of services fraud is especially prevalent for NHS organisations when providing sufficient staffing levels through the procurement of agency staff.

However, flexibility for trusts to take the ‘break glass’ option and procure off-framework continues as the NHS will prioritise patient care and safety over cost, which could be manipulated for financial gain. As such, there may be ongoing collusion between employment agencies and non-framework agencies to fill vacant shifts and charge a significantly inflated rate.

Fraud may extend to agencies sending staff into the NHS who

• are inadequately trained
• are under qualified
• lack specialist knowledge for the role
• carry fake documents
• are working beyond the hours their status allows.

Information reports received for procurement and commissioning of services fraud

The change in the number of fraud reports received in relation to procurement and commissioning fraud from 2020 - 2021 to 2024 - 2025 is illustrated in the below chart:

Horizon scanning

It has been announced that over the next two years NHS England will be merged with the DHSC , however this may impact how some commissioning is conducted in the future, possibly causing delays to reforms and projects. Also, as ICBs are required to reduce running costs by 50% during 2025 – 2026, it is yet unclear how this would impact procurement and commissioning processes and freedoms they have held since the reforms of the Health and Social Care Act 2012. However, the government’s review of the New Hospital Programme (NHP) will see an increase in funding up to £15 billion over each consecutive five-year period from 2030. Additionally, the seven RAAC hospitals will continue to be prioritised.

The government and NHSE have proposed to reduce agency staff expenditure and reliance against the backdrop of an agency staff spending cap. They have also proposed that organisations such as the NHS take overt steps to prevent modern slavery in their operations and supply chains. This will require the NHS to liaise with suppliers to review that supply chain risk to modern slavery is mitigated and practices are improved.

The 10 Year Health Plan published in July 2025 sets out the intention to deliver a shift towards a more digital, community-based and preventative NHS by 2035, including to centralise decision-making and purchasing of technology.

10. Bid rotation and bid suppression are forms of bid rigging within the procurement process.
11. Kickbacks are a form of bribery