My Lords, I begin my comments by reminding the House that I am the current president of the BMA and a psychiatrist. The matter we are discussing this evening has been one of the most controversial aspects of implementation of the Health and Social Care Act. We are in a rather unusual situation, debating regulations that have already been subject to revision, following widespread concern about their intent and the strength or otherwise of ministerial assurances. This is remarkable. However, the opportunity has been afforded to us tonight to rehearse the issues once again and to ascertain why there is continued unease about these regulations. It is worrying that these concerns have not abated, despite repeated assurances from the Government during the passage of a Bill that we spent so many hours debating and further assurances received since the regulations were laid earlier this year.
The regulations are intended to ensure good procurement practice, as required by the 2006 EU directive and subsequent case law. They are substantially the same as those that were in place prior to the 2012 Act, which had the status of declaratory guidance and should have been enforceable in the courts. Will the Minister tell us how many legal challenges have been made since 2006 and how many organisations have deferred court action pending Monitor’s new powers? Will he also confirm that in future Monitor will provide regular reports on the scale of legal challenges and on their outcomes? The new regulations have the effect of binding the new clinical commissioning groups into the existing legal framework. This reminds us that the NHS of 2006 was a rather different organisation from today’s NHS, which is evolving rapidly after the radical changes of the Health and Social Care Act 2012.
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The regulations touch on the very sensitive question of what role competition should play in the NHS. This issue was debated at length last year. Noble Lords will recall the debate about the way in which aspirations for better integration of services might be threatened by excessive competition. The big question for today is how far the Act has further opened up the NHS to competition. I suspect that this is why there is such
strong feeling and concern. As a psychiatrist, I have already seen the effects of competition in mental health services—and it has not always been to good effect. We should remember that Winterbourne View was a private hospital providing part of a fragmented pathway. This was not good commissioning: we need better.
The Minister explained to me yesterday that the effect of annulling and not replacing the regulations would be that a firewall provided by Monitor between the NHS and the courts would be removed, leaving commissioners more vulnerable to legal challenge. If there were no regulations, Monitor would carry out its functions in accordance with primary legislation but with no further restrictions on its powers. The noble Earl further assured me that the guiding principle is to commission in the interests of patients and on quality, and that Monitor will not be able to force a commissioner to put a service out to tender or to unbundle a clinical pathway, although it could declare a CCG anti-competitive.
Monitor’s guidance for commissioners on procurement and competition will add important detail on what will be expected of commissioners and on how Monitor will discharge its functions in this area. Monitor has made it clear that commissioners should decide if and when to introduce choice and competition where it is in the interests of patients. Nevertheless, there is confusion over what is expected of commissioners around tendering and the circumstances in which commissioners would be able to award a contract without using competition. Will the Minister tell the House who will be consulted in preparing this crucial guidance?
After the initial regulations were laid in February, the Government stated, in their submission to the Lords Secondary Legislation Scrutiny Committee:
“The Department is aware that it has been suggested that the regulations would prevent commissioners from ever awarding contracts without a competitive tender, or extending contracts with providers that are performing well. This is absolutely not our intention and this would not be the effect of the regulations”.
However, there have been differing legal analyses of the practical impact of the regulations, which has added to the confusion over the circumstances surrounding the use of competition by commissioners. While the coalition Government have sought to address this confusion through revision of the regulations laid in March, Regulation 5 still appears to be the main area of concern.
We have an opportunity this evening to try to achieve the certainty being requested by the healthcare community. Given that major NHS change took place earlier this month, there is a pressing urgency to address once and for all the issue of whether commissioners will be forced to use competition. We cannot risk commissioners being unclear about what they can and cannot do. It will be to the benefit of everyone to ensure that they have a clear understanding about the rules governing commissioning.
There is widespread anxiety among doctors, who after all are the new commissioners. More clarity has been requested in a number of areas of the regulations: first, whether commissioners could legitimately seek to restrict competition where that was in the patient’s best overall interests; secondly, how much freedom commissioners would have in deciding which services should be put out to tender; and, thirdly, there is the
issue of a firm commitment that commissioners could prioritise integration over competition and choice. I think I know the answers that the noble Earl will give us.
If the Prayer to Annul finds favour with the House, will the regulations be replaced by a new set with a key difference being different wording in Regulation 5 to make it clear that commissioners will be free to commission services in the way they consider best? Should the Prayer to Annul be rejected, what steps will Ministers take to ensure that the assurances are clearly understood across the NHS? One of the concerns of the House of Lords Secondary Legislation Scrutiny Committee was that Ministers have not clearly communicated their intention and that this may lead to imperfect achievement of their policy objective. It is therefore crucial for the Government to demonstrate their intention. What concrete actions will be taken now to communicate their intention? Finally, will the Government commit to reviewing how the regulations work in practice and to looking at the regulations again if they are not working in the way that they say they will?