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Lords refuse to annul ‘competition’ clause in Health and Social Care Act

Fears of Monitor chasing CCGs over tendering are a ‘paranoid fantasy’

Louise Prime

Thursday, 25 April 2013

The House of Lords late last night refused to annul the controversial section 75 regulations of the Health and Social Care Act, which cover procurement of NHS services – despite impassioned claims from some peers that they mean contracts will have to be put out to competitive tender, increasing costs unnecessarily and, effectively, turning the NHS into a marketplace.

Labour peer Lord Hunt told peers of clinical commissioning groups’ fear that they 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”. He complained that “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 … 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.”

Lord Hunt warned: “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” – a test that, he said, could realistically only ever be satisfied in the case of a single rural hospital providing care for a wide geographical area, and never in cities.

But Lord Warner, who spoke against the annulment, said that the regulations are very similar to those produced under the last Labour Government “but with the addition of some sensible provisions on integration”. He said it was “almost a paranoid fantasy” that Monitor would have the time or resources to chase clinical commissioning groups that hadn’t recorded enough competitive tendering processes.

He later added: “This approach of injecting, on an agreed basis, some measure of competition and change where NHS public providers are consistently failing is in the best interests of patients.”

Lord Hunt expressed his concern over what he regarded as general change of attitude to the NHS. He said: “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.”

Earl Howe, Parliamentary Under-Secretary of State for Health, insisted that the Government had “not changed one iota the law relating to competitive tendering”, that there was no agenda to privatise the NHS services, and that the regulations do not oblige commissioners to create or promote markets.

He said: “It is NHS commissioners and no one else who will decide whether, where and how competition in service provision should be introduced.”

The move for annulment was disagreed by a vote of 254 to 146.

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