Warburton PDS Pilots

Alexander Hall of mfg Solicitors had an interesting bulletin this month illustrating the potential dangers of the Warburton contracts. I've copied his points as follows.

The existence of new PDS contracts devised as part of Dr Mike Warburton’s Dental Access Program has become almost common knowledge since September 2009. Apparently, the contracts will be / have been first granted to 150 dentists in areas with access problems.
The new contracts give rise to a number of concerns. Only 51% of the contract value is based on UDAs, with the rest linked to measured performance against Key Performance Indicators (KPI’s).
The contracts (as always) are long and complicated and contain many traps. They do not appear to be appropriate for dentists with existing mixed practices. It is rumoured that parts of the new contracts have found their way into standard PDS contracts (and GDS contracts!) currently being issued by some PCTs.
The BDA have expressed concern about them, and there is a real worry that the contracts will be rolled out following the initial stage (or become the only contracts on offer to new contractors).
If you are offered one of these contracts or any contract which does not appear to be a standard PDS or GDS contract (standard versions can be found on the DH website), please contact us for advice.
‘Time-limited’ temporary GDS contracts
PCTs are increasingly attempting to issue short ‘time-limited’ GDS contracts. These have been as short as 7 months long. Be aware - such GDS contracts may be invalid and leave the contractor exposed.
Regulation 13(2) of the 2005 GDS Regulations states that a GDS contract may only be time-limited if it is a temporary contract and if the PCT has terminated a contract with a previous contract-holder. Consequently, it is only in short-term emergency situations, where continuity of care is necessary and whilst the PCT arrange a more permanent solution that such temporary contracts should be used.
If a temporary GDS contract is issued, then the contractor should have the right to negotiate favourable termination provisions (clauses 309-311 of the standard GDS contract would not apply) and great care must be taken with regard to responsibility for investment in equipment. It would be unfair for a contract-holder to have to invest in equipment for only 7 months – so the standard GDS clause 68 (which places the onus on the contract-holder for provision of equipment) must be renegotiated.
Incorporation update
Many PCTs still refuse to allow the transfer or variation of GDS contracts to a new dental corporation alleging that such a change triggers the need for the PCT to put the contract out to tender. Some critics believe that this is just an excuse and PCT’s real fear is loss of control.
However, in the summer of 2008 the European Court of Justice decided in the ‘Pressetext’ case that European procurement rules (which govern the need for PCTs to follow tendering processes) do not apply to a simple contract variation to recognise a change in contract-holder as long as the original contractor remains in control of the new company contractor. This is obviously the case with dental corporations where the original dentist contractor remains a director of the dental corporation.
mfg Solicitors have written to both the NHS PCC and DH to ask for clarification of their guidance to PCTs on this matter.
You can read more about this in the article “Incorporation Prospects” written by Alexander Hall and published in the November 2009 issue of The Dentist magazine (or have a look at http://www.mfgsolicitors.com/dentists.htm)