Shine A Light

‘Commercial confidentiality’ trumps public right to know in England’s new health market

In the new competitive market for healthcare created by the Health and Social Care Bill it will become increasingly difficult to know what exactly is being done with public money. 

Allyson Pollock
17 March 2012

UPDATE: Seven out of ten hospital doctors voted to reject the NHS shakeup in a poll released by the Royal College of Physicians yesterday.

In the new competitive market for healthcare created by the Health and Social Care Bill it will become increasingly difficult to know what exactly is being done with public money.

Claims of “commercial confidentiality” are already being used to prevent public scrutiny of the first contract with a private company to run an NHS hospital. In November 2011, the Government announced that Circle Healthcare would be contracted to run Hinchingbrooke hospital, the first NHS hospital to have its management taken over by a private business.

Circle Healthcare is part owned by its employees. Its chief executive is former Goldman Sachs executive Ali Parsa.  Circle began its management of the hospital, which will last for ten years, on 1st February 2012. The Hinchingbrooke contract was signed after a thirteen-month procurement managed by NHS Midlands and East, and a subsequent approval process from the Department of Health. Circle was selected from nineteen initial potential bidders from the public and independent sectors.

But it is not possible for the public to make a fully informed judgement about the contract, because both the Treasury and Department of Health have refused to release key information, despite requests by academic researchers at Queen Mary, University of London under the Freedom of Information Act (FoI). Both the Treasury and the Department of Health have said that a “redacted” version of the Full Business Case for the contract will be published at some unspecified future date, but have refused to release information on the financial models and methodology on which the contract is based.

The Government is claiming exemption from the FoI Act under Section 43 of the Act, which deals with commercially sensitive information. The Treasury letter setting out the reasons for this refusal says that “the commercial interests of the NHS and/or Circle” are more important in this case than the public interest in transparency and accountability in the use of public funds.

Ensuring that commercial confidentiality was not used as a reason to prevent public scrutiny of NHS contracts under the legislation was a key demand of the Liberal Democrat Spring Conference in 2011. And the February 2012 letter on amendments to the Bill from Nick Clegg and Shirley Williams stated that: “no one should be allowed to spend public money without telling us how they are going to use it. That is why we have insisted that decisions about patient services and taxpayers' money must be made in an open, transparent and accountable way.”

In a letter to all peers dated 22nd December 2011 Earl Howe promised regulations covering healthcare commissioners would to ensure “transparency in the commissioning process”.  However, he also wrote that these regulations would be based on the existing Principles and Rules for Co-operation and Competition in the NHS “which we will retain to ensure continuity”. These rules cover the Hinchingbrooke hospital contract.

It is always crucial to ensure proper accountability in the health system. But it will be even more important if the sprawling Health and Social Care Bill makes it to the statute book. In future healthcare will be arranged through tens of thousands of commercial contracts. The Bill as it stands does not ensure transparency and accountability in the use of public money. Ministers, civil servants, healthcare businesses and managers will be able to claim exemption from Freedom of Information legislation on grounds of commercial confidentiality. It would be outrageous if the Health Bill became law without this loophole being properly plugged.

Crossbencher Lord David Owen has agreed to deliver the Save Our NHS petition organised by 38 Degrees to the House of Lords before the Third Reading of the Health Bill on Monday 19 March. It will be carried into the House of Lords chamber just before the debate starts.

The petition will remind Lords of widespread public concern about the damage the Health Bill will do to the NHS. There is still time to sign it.


Chronology of FoI requests

10th November 2011 Request made in writing for copy of contract by Professor Allyson Pollock under Freedom of Information Act.

3rd January 2012 Email sent by Dr. Vanessa Jessop requesting copy of contract to East of England NHS

17th January 2012 Response from FOI at NHS Midlands and East

Please find below the link to the franchise agreement for Hinchingbrooke Hospital Health Care NHS Trust.

30th January 2012 Complaint sent by email to [email protected] requesting internal review and additional information:

Please could you send the FBC, the contract and all the appendixes and addendum including financial models that underpin each document.

Emails sent to DH, Treasury and SHA requesting the same information.

Necessary to request internal review before complaint to FOI Commissioner can be made:

22nd February 2012 Response from DH received

Disclosure of financial methods and methodology refused. Exemption claimed under S.43 of FOI. 

Disclosure of Full Business Case refused under S.22.

23rd February 2012 Response from Treasury received

Disclosure of financial methods and methodology refused. Exemption claimed under S.43. A “redacted” Full Business Case to be published at an unspecified future date. Key quote: “S 43 is a qualified exemption … we recognise that there is a public interest in transparency in the accountability of public funds … There is also an interest in knowing that the Government is achieving value for public money and that commercial activities are conducted in an open and honest way... However there is also a strong case for non-disclosure as we believe that release would be likely to prejudice the commercial interests of the NHS and/or Circle.”


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