Regulatory and compliance

The next milestone approaches in the UK NHS net zero supplier roadmap

Published on 6th Nov 2023

From April 2024, the NHS will proportionately extend the requirement for suppliers to prepare Carbon Reduction Plans to all procurements

People in a meeting, hands holding pens and going over a graph on a screen

 

The NHS Supplier Roadmap was devised to help the NHS achieve net zero by 2045. Earlier this year (April 2023) the NHS introduced a requirement for suppliers to prepare carbon reduction plans in every procurement for a contract with a value above £5 million per year. (See our earlier Insight for more on this.)

The NHS net zero supplier roadmap

The NHS Zero supply Map

The next milestone: April 2024

 

In April 2024, the NHS will adopt a two-tiered approach to aim at proportionately extending the requirement for suppliers to prepare carbon reduction plans to all procurements, not just those for contracts with a value above £5 million.

TierWhat is required?Which procurements will it apply to?How does a business make sure it is compliant?

 

1

 

A full Carbon Reduction Plan

For contracts with a value above £5 million (excluding VAT).

This requirement will apply as a pass/fail check in the Standard Selection Questionnaire.

Suppliers must prepare a fully compliant Carbon Reduction Plan, which confirms a commitment to achieve net zero by 2050 (at the latest). The plan must be published on the supplier's website and on contract award it must provide the authority with a URL to confirm this.

See all other necessary requirements for the Carbon Reduction Plan.

Suppliers are encouraged by the NHS to set an earlier net zero target of 2045, which is in line with the NHS's own goals. However, for current purposes, a target of 2050 will still be deemed compliant.

For new frameworks operated by Major NHS Framework Owners* irrespective of the value of the contract, where it is relevant and proportionate to the framework.**

*Major NHS Framework Owners = NHS England, NHS Supply Chain (NHSSC), NHS Shared Business Services (NHS SBS), NHS Procurement Hubs and the Crown Commercial Service (when running frameworks expected to be solely used by in-scope organisations).

**Where it is not deemed proportionate or relevant to the framework, suppliers will need to provide the Net Zero Commitment requirements (tier 2).

 

2

 

A Net Zero Commitment

For contracts of lower value (below £5 million per annum excluding VAT and above £10,000 excluding VAT).

This requirement will apply as a pass/fail check in the Standard Selection Questionnaire.

Suppliers must make a public commitment to achieve net zero by 2050 and confirm they are taking steps to reduce greenhouse gas emissions.

This must be made publicly on a supplier's website. On contract award, they will be asked to provide a website URL to confirm this.

All remaining new NHS frameworks operated by in-scope organisations.

 

What happens if my business fails to comply with these new requirements?

A supplier who fails to meet the minimum requirements for a Carbon Reduction Plan or the Net Zero Commitment will not proceed to the next stage of the procurement process.

In exceptional circumstances (full details in Annex 1), a failure to meet the requirements may not result in a disqualification from the procurement.

For example, if emissions in a supplier's Carbon Reduction Plan are not reported for any scopes or for some scopes but an acceptable explanation why is given, it might be the case that the supplier is able to stay in the procurement process.

Osborne Clarke comment

This helpful new guidance from the NHS is a signal to the market that it is committed to implementing the net zero supplier roadmap in a proportionate manner.

Suppliers need to be aware of what will be required of them from April 2024 so that they can start to prepare now. Board approval is required when a supplier intends to make a commitment to net zero. This commitment must also be published and signposted on a supplier's website. Any supplier making this commitment needs to be clear about what this means and must carefully consider the implications of making this commitment publicly. 

If you have any questions about what might be expected of your business in an upcoming NHS procurement, get in touch with the public procurement team at Osborne Clarke.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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