Warner: Why I will be voting for NHS competition regulations

This week the House of Lords will debate again new regulations to be made under the 2012 Health and Social Care Act. These draft regulations have attracted another wave of criticism that they will force commissioners to put a swathe of NHS services out to competitive tender, thereby benefiting the private sector.

My reading of them is that they do little more than put on a statutory footing the competition and procurement rules produced under the previous government, with the addition of some sensible provisions on the integration of health and social care.

Labour has decided to put down a motion to annul these regulations. I consider this not to be in the interests of patients and believe it gives a clear signal of preference for NHS providers, which may not be compliant with EU competition law. I shall be voting against this motion.

Service reconfigeration

The NHS faces enormous financial and clinical challenges over the next decade. The Public Accounts Committee, under a Labour chair, has made clear that virtually every NHS trust is unsustainable in its present form. A massive programme of service reconfiguration now awaits the NHS if it is to survive the unavoidable fiscal, demographic and morbidity challenges it faces.

Two acute hospital trusts have gone bust in the last few months and there may be another 20 well on the road to the same fate. It is a fantasy to believe we can solve the NHS’ problems without the help of new providers who have new ideas and better management techniques. Other countries facing the same problems are doing just this. To allow new entrants from the private, voluntary and social enterprise sectors to enter the NHS market, fair procurement rules are required. That is what the new regulations provide in my view.

Widening choice

Adult social care has had – for nearly 30 years – a market with a diverse range of service providers, which has resulted in a wide range of services. As an example, this market has produced a privately built and run nursing home sector when public services failed to do this. The forthcoming Care and Support Bill will put “market making” for adult social care on a statutory footing.

This approach continues to be resisted by many vested interests within the NHS. A bizarre aspect of this mindset is that it is alright for GPs – who are small businesses with profit and loss accounts – to commission NHS services, including those from their own practices, but giving other independent healthcare providers a share of the NHS action is deemed to be a cause of great public angst.

These new regulations do not require the 211 new clinical commissioning groups to put all NHS services out to public tender, despite misleading claims to the contrary. There are no quotas or timetables for them to do so. In any case, this would be quite impracticable because each group could be handling up to 600 contracts a year and they do not have the staff to run competitive tendering processes for such a large number.

In practice the new commissioning groups will roll forward most of the existing contracts each year, as their predecessor bodies did. They will concentrate their change effort on those existing NHS service providers that are clearly underperforming or inappropriate. It is a scaremongering, paranoid fantasy to claim that Monitor will operate some kind of authoritarian rounding up of commissioning groups that haven’t produced enough competitive tendering processes. Aside anything else, they simply do not have the staff to do.

Putting patients first

Patient best interests are served by commissioners replacing those NHS service providers that are repeatedly underperforming and stopping some of the longstanding practices of bailing them out financially. Some of the 50 NHS trusts to which the Care Quality Commission is now paying particular attention over quality have been of concern for some time and many are likely to be financially unsustainable.

The new regulations will help the commissioning groups tackle some of their problems with clearer rules. They should be passed by Parliament forthwith.

Lord Warner was a minister of state at the Department of Health from the summer of 2003 until December 2006. In August 2010, he was appointed by the Coalition government as chair of the Social Care Funding Commission, with a remit to study future funding arrangements for older people. Before entering the House of Lords he was director of social services for Kent County Council from 1985 until 1991.