The Secondary Legislation Scrutiny Committee has today published its report on the section 75 regulations (see this report from Cutcher and Reynolds on what section 75 is). The regulations, quietly creeping through parliamrent until campaigners intervened, would require virtually all NHS services to provided in competitive markets - a direct contradiction of ministerial assurances made to Parliament and health workers. Though the government has announced it will “revise” the legislation this report contains some crucial reading. Summarising, the report warns that “the Department [of Health] will have a major task in explaining these provisions to health staff and persuading them to accept the Department’s interpretation of them.” The DoH ‘interpretation’ appears highly imaginative, to say the least.
The Committee reports an “unprecedented” public reaction to the legislation - over 2,000 submissions were sent:
“…all of which indicate a widespread belief that these Regulations go beyond what was promised during the passage of the Act: in particular, that they require CCGs to undertake competitive tendering for the procurement of services…”
It was a key assurance made by both Andrew Lansley and Earl Howe that the decisions about when and how to use competition would be left to the CCGs.
“It is a fundamental principle of the Bill that you as commissioners, not the Secretary of State and not regulators, should decide when and how competition should be used to serve your patients’ interests. The healthcare regulator, Monitor, would not have the power to force you to put services out to competition.” (Andrew Lansley)
Bearing the above statement in mind, it’s worth quoting the following section from the Committee report at length:
“Regulation 4(2) requires CCGs to publish a contract notice on the website maintained by the National Health Service Commissioning Board for that purpose [tendering]… Regulation 5 allows CCGs to award a new contract without a competition where there is only a single provider capable of providing those services. But the CCGs’ discretion is further restricted by regulation 5(2) which states that the services are to be determined as capable of being provided by a single provider only for “technical reasons” or for reasons of “extreme urgency” brought about by unforeseeable events.
8. Other regulations give Monitor extensive powers to investigate a complaint that a CCG has failed to comply with the requirements (reg 13), and to enforce breaches of them either by giving a direction (reg 15) or, in serious cases, by declaring a contract ineffective (reg 14).”
In response the DoH appears to have fallen back to the claim that they are doing no more than Labour did:
“…commissioners should be able to award contracts without the unnecessary cost and delay of a competitive tendering process where they are satisfied that there is only one provider capable of delivering their requirements.”
This is a long way from the assurances given that commissioners would choose “when and how competition should be used”: they seem to dictate, top-down, an extremely narrow range of scenarios in which competition can be bypassed. Though they do seem to be acknowledging, at least, that where more than one provider is available a competitive process is indeed compulsory:
“Where there are several providers capable of meeting a commissioner’s request… the regulations would… require a transparent and fair process to determine who can best meet the needs of their populations.”
So the DoH are conceding that except in very rare circumstances all NHS services will now be tendered – regardless of the wishes of CCGs or doctors. A submission from the Royal College of Midwives gives a good example of just why it is that the medical profession reject this legislation:
“The most effective way of ensuring that women are cared for by a named midwife is by commissioning one provider to deliver care across the pathway... under the new regulations this could be ruled out because it effectively restricts competition. The problem is that most independent maternity providers do not provide the full range of maternity care ...or are intent on ‘cherry picking’ the least expensive and risky elements of care, such as antenatal classes or breastfeeding support (as per AQP policy).”
The Committee explains in point 14 that,
“While the Regulations do not appear to oblige commissioners to break up contracts to open them to a wider range of providers, their decisions remain open to challenge under regulation 10(2): “an arrangement for the provision of health care services for the purposes of the NHS must not include any restrictions on competition that are not necessary for the attainment of intended outcomes”. Any supplier who has not been awarded the contract will have a clear incentive to challenge the procurement process. The general view of the professional institutions, which we assume have technical resources to obtain an expert view of the effect of the legislation and will fully understand the context of the NHS procurement process, is that the Regulations have the effect of making competition the default approach, whilst imposing a burden of proof on commissioners wishing to restrict competition.”
Part of the problem with “sneaking” legislation through, as many have claimed, is that it becomes difficult to give appropriate warning and guidance to those expected to implement the changes. The report continues,
“These Regulations will come into force in less than a month’s time but the guidance referred to in the Government’s Explanatory Memorandum is not fully available yet. [Although] the NHS Commissioning Board Authority has developed a series of procurement briefings for CCGs that summarise the key elements of legislation, they are obviously not well known in the health sector.”
The Coalition appear intent on compounding mendacity with incompetence.
“…we have received submissions from individuals involved in CCGs who question the plans, for example Dr Richard Grimes, a patient representative on his local CCG, who is concerned that cherry picking of services “for competition’s sake could make other services unsustainable” or Alison Dean who says “We do not have the staff to manage the existing system at the same time as tendering large parts of it”.
Onto the central claim of whether the regulations are indeed at odds with ministerial statements during the passage of the Bill, something raised in “almost every one of the submissions”, the report notes:
“A basic reading of regulation 5 seems to indicate relief from the obligation to advertise contracts only in cases of extreme urgency of for technical reasons, terms which are undefined and therefore appear to leave CCGs open to challenge from any supplier who has not been given the opportunity to bid. The Department clearly perceives a far greater flexibility in this provision than other readers do and the House may wish to press the Government to give a clearer explanation of the legislative provisions that led them to this conclusion.”
In layman’s terms, the DoH’s claims do indeed appear likely to be both false and in breach of assurances made while the health Bill was going through Parliament.
The report concludes,
“Whilst those commissioning health services were previously encouraged to use competitive tendering, these new Regulations appear to require them to do so for most services. This is a significant change and rather more than the generalised duty not to be anti-competitive that the health sector evidently expected… The Department’s response robustly defends its position and maintains that these Regulations fully match the undertakings given by Ministers during the passage of the Bill. It is clear that both the professional institutions and a wide range of individuals across the country do not share that view. The House will wish to examine the wording of the legislation carefully.”
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