My Lords, one of the main concerns in our debates on the Health and Social Care Bill was the fear that clinical commissioning groups would be compelled to put clinical services out to tender, forcing doctors and nurses to compete with each other at huge expense and at risk of fragmentation of clinical services to patients. In response, the noble Earl, Lord Howe, told this House that commissioners would not have to create markets against the best interests of patients. He said that they would be free to commission services in the way they consider best. The regulations we are debating tonight are concerned with the circumstances in which contracts for the provision of services to patients within the NHS must be put out to tender.
When an NHS commissioner goes to tender for a service, the commissioner is already required to operate within a framework of EU and domestic law. These regulations are different from the existing regime in which NHS commissioners operate. They impose for the first time legal obligations on NHS commissioners to tender services with NHS trusts. They remove the discretion that commissioners have to decide when it is in the best interests of patients to expose the service to a compulsory competitive tendering process. We are deciding which organisation is best placed to deliver service. At the moment, commissioners can look at the needs of the NHS as a whole and make a holistic judgment about who is best placed to deliver a service. These regulations, in my contention, make it far more difficult for commissioners to take such a whole-picture approach.
Many NHS organisations, including the BMA, the Royal College of General Practitioners, and many more, have sounded the alarm about the effect these regulations will have on the NHS. Your Lordships’ Scrutiny Committee reported them with substantive criticisms for the special attention of the House on the grounds that they may imperfectly achieve their policy objective. Not least of the committee’s concerns were that because of the withdrawal of the original regulations and their hasty substitution of these ones, the Government have allowed insufficient time to enable thorough scrutiny. The committee says that it cannot be good or effective policy-making to seek their immediate implementation when they are so widely misunderstood.
The Health Minister, Mr Burns, told the other place that it was not the Government’s intention that the regulations would impose compulsory competitive tendering requirements on commissioners. But surely that is what Regulation 5 does. The only circumstance in which a CCG can avoid a tendering process is if that CCG is satisfied that the services under the contract are capable of being provided only by a single provider. The single provider test will never be satisfied apart perhaps from the case of a single rural hospital which
is the only provider for acute services in a large geographical area. I fail to see how it could operate in cities such as Birmingham or London because there will always be multiple providers. Having mentioned Birmingham, I ought to remind the House of my health interests. Hence, in those circumstances it will not be for commissioners to decide, as the Minister has assured us. It will surely be for commissioners to undertake a competitive process in all cases, unless there is no remote possibility of another capable provider coming forward. This will be bureaucratic and very expensive. One question that I want to put to the Minister is why the Government have not set a contract value below which the single provider test will not apply. Why is that not in line with all other procurement regimes?
When we met the noble Earl for a briefing a few weeks ago on the regulations he gave examples of the circumstances in which services are capable of being provided only by a single provider. He particularly mentioned the possibility of bundling services together in a single contract. But, even in those circumstances, there will often be more than one provider. I remind the noble Earl that the recently published review of the economic regulator for the NHS, Monitor, entitled A Fair Playing Field makes a number of criticisms of bundling. Monitor said that it restricted the ability of providers to enter the market and that bundling services together was likely to exclude some providers from offering services. Monitor is being asked to police the regulations. The noble Earl will have seen the letter that noble Lords have received from a number of leading charities which say that the bundling of services could put them out of reach of the voluntary sector. If that is the view of the voluntary sector, what of private companies that may feel similarly aggrieved?
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I have heard Ministers and have read the responses made to people who have written to them that the regulations simply continue the 2010 guidance issued by the previous Government. If that is so, and as the Scrutiny Committee said, if there is no difference in substance to the existing procurement regime, why are the regulations needed at all? As for the difference between regulations and guidance, there is all the difference in the world. The official guidance in 2010 made it clear that it was ultimately for commissioners to decide when and how to use the guidance. Quite. Of course, a public body can depart from guidance, but there is no discretion to depart from these enforceable rules, however much a clinical commissioning group, or indeed the National Commissioning Board, might think it would be a good thing in the interests of patients so to do.
Under the guidelines there was no legal right for a disappointed commercial contractor to sue a clinical commissioning group for damages for failure to follow guidance, but Section 76 gives a specific right to seek damages if the rules are broken. There is a genuine fear in the system among advisers, the clinical commissioning groups and in a lot of other organisations, that the regulations will create a culture of defensive contracting when commissioners will go out to tender if there is any doubt, because a failure to do so will expose them to a possible damages claim. I refer the
noble Earl to the Scrutiny Committee’s comments that respondents to that committee believed that commissioners would feel compelled to advertise a contract simply to satisfy Monitor in the event of that decision being audited by it. The Scrutiny Committee concluded that,
“the wide range of interpretations of the substitute Regulations is, we believe, likely to translate into uncertainty about how they will operate and will ,in turn, result in commissioners conducting unnecessary tendering processes simply to ensure that their decision will be ‘safe’ under the law”.
That is your Lordships’ Scrutiny Committee’s comments on these regulations.
I believe that the regulations are part of the Government’s drive to shift the culture of the NHS from a public service into a public marketplace. They are at a piece with a number of other developments that are sending the NHS along the same path. Already we have seen the creation of clinical commissioning groups where a third of GPs on the boards of those CCGs have a conflict of interest as a result of directorships or shares held in private health companies.
I referred yesterday at Oral Questions to the other two examples that I want to give on the quite extraordinary intervention of the Competition Commission into the entirely sensible proposal to merge Poole Hospital Trust and the Royal Bournemouth and Christchurch Hospital Trust on the grounds that it will reduce competition in Dorset. Is the noble Earl aware that leading clinicians in those trusts have had to sign an agreement to restrict their communications with senior clinicians in the other trusts? What other evidence do noble Lords want that there is a determination to introduce a competitive market in the health service?
Finally, there is the incredible intervention by the Competition Panel in Bristol, which ruled that the centralisation of the provision and management of head and neck services at the University Hospitals Bristol Foundation Trust and of breast care and neurology at North Bristol Trust could reduce competitive pressure. Have noble Lords ever heard such nonsense talked about the health service? Yet NHS England—and I absolutely endorse its approach—talks about the need to centralise and reconfigure services, because it knows that this will lead to better outcomes for patients.
So the panoply of arrangements that we now have means that despite clinical evidence, a competitive market is being forced upon the NHS. I am oblivious of any assurances given by Ministers to Parliament. People in the system believe that a market is required. That is why CCGs will operate defensively, because of a fear of being brought before the courts if they do not put out services to competitive tendering. I believe that we face the prospect of NHS services being placed in the middle of a costly bidding war with private companies, with discrete services cherry picked for profit, while the NHS is left to run the more complex and expensive services with less money. How can that possibly be in the best interest of patients? It cannot, and we should reject these regulations. I beg to move.