Draft Health Care Services (Provider Selection Regime) Regulations 2023
(Limited Text - Ministerial Extracts only)
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The Minister of State, Department of Health and Social Care (Andrew Stephenson)
I beg to move,
That the Committee has considered the draft Health Care Services (Provider Selection Regime) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Efford. I will begin by setting out the policy context for the regulations. The House will know that the challenges we face as a country are changing, and the NHS is changing to address them. We have an ageing population, an increase in people with multiple health conditions, and persistent inequalities in health outcomes. We must respond to those challenges. To do so, we need to provide an empowering framework that allows the NHS to combine the value of competition with collaboration, to best promote the interests of patients. These regulations do that. They will establish a provider selection regime from 1 January 2024.
In 2019, engagement across the NHS identified that use of the current procurement rules presented a bureaucratic barrier to bringing NHS organisations and partners together. The NHS wanted a framework that would allow it to be flexible in different scenarios; that allowed for competition, without defaulting to it; and that supported the increased need for alignment of services, so that we can join up care for patients. The Government developed this legislative framework in the light of those requests. In June 2019, the Health and Social Care Committee agreed that that was the right approach to
“ease the burden procurement rules have placed on the NHS, ensuring commissioners have discretion over when to conduct a procurement process”.
As colleagues from across the health system have emphasised, we must seek a balance. We want a system-driven approach to planning services, but recognise the importance of provider diversity for innovation and value. That is why my officials have worked closely with a broad range of colleagues and organisations across the system, including commissioners and providers of health care services, to prepare this statutory instrument. That work included extensive consultation. In 2021, NHS England published a consultation on the detail of the policy behind this instrument. Some 420 responses were received from NHS representative bodies and individuals, and 70% of respondents agreed or strongly agreed with the detailed proposals set out in that consultation. The Department of Health and Social Care published a further consultation in 2022 that aimed to inform the detail of our regulations.
Our voluntary impact assessment shows that in the most likely scenarios, this instrument will deliver a saving to the NHS by reducing bureaucracy. It is difficult to provide a precise figure ahead of the monitoring of any such regime, but Members who have read the impact assessment will be aware that our central estimates suggest that savings of up to around £230 million a year are possible.
Of course, as many Members will know, getting the balance of a framework right, so that it promotes the best culture and behaviour on the ground, is tricky. I am glad, therefore, that our engagement with stakeholders has resulted in an agreement to establish an independently chaired panel for contested decisions made under this regime.
Legislation and guidance are only part of the story of how the new legislation will influence outcomes. That is why my Department is committed to monitoring and evaluating this new regime from its implementation.
To summarise, this instrument reflects engagement and careful balancing to present commissioners with the right options for procurement, so that they can go about finding the most collaborative, value-adding solutions that will work for patients. I commend the regulations to the Committee.
Andrew Stephenson
I thank hon. Members for their contributions and I will try to address as many of the points as possible in the time allowed.
I thank the shadow Minister, the hon. Member for Birmingham, Edgbaston, for her support for the regulations. She talked about greater accountability and transparency, which are vital to the process. We feel that they are ingrained in the regulations, but if there is anything more that we can do to ensure that that is the outcome of the process, we are keen to work with her on that.
I have been assured by my officials that good progress is being made in putting together the independent panel, but I am keen to see it in place in good time for the commencement of the regulations. The shadow Minister asked about service user involvement in the procurement process. As she may know, commissioners must follow NHSE guidance on people and communities, which guides how commissioners must involve patients and the public in commissioning healthcare services. That advice is available online if Members want to see more details.
We probably disagree about some of the controversy around the procurement of PPE during the covid pandemic. Let me be clear that the draft regulations apply only to the arrangement of healthcare services that are delivered to patients. That does not include the procurement of goods or other services, which will continue to be procured under the wider rules in the Procurement Act 2023 from October next year.
At the same time, let me reassure hon. Members that every effort was made to quality-assure the products that the Government procured during the pandemic. Estimates of demand relied on a reasonable worst-case scenario in a very fast-moving situation, and of course the reasonable worst-case scenario was that we would need to purchase significant amounts of PPE. Despite the enormous challenge, we conducted due diligence on more than 19,000 companies, and only around 2,600 companies made it through that initial process. All offers, regardless of the route through which they were identified, underwent rigorous assessment, and, importantly, the source of the offer did not affect the way that the offer was treated. To protect patients and staff, the Government spent £12 billion on PPE for the covid response, which was a time when we needed to act fast to protect the public. Of that, only 3%, or £673 million-worth, was not fit for use.
Moving forward, we have established a contract dissolution team to maximise the value obtained from PPE contracts. The team is reviewing contracts that did not perform, either wholly or in part, to find ways to allow the PPE to be used, replaced or refunded. Our current trajectory should see the Department recovering significant amounts of money.
I turn to the contribution of the hon. Member for Wirral West and her concern about the so-called privatisation of the NHS. I recognise that that issue comes up in debates time and again. To discuss the point properly, we must recognise that the independent sector includes a broad range of organisations, all of which have an important role to play in the day-to-day delivery of NHS services. It includes the work of charities, social enterprises and cutting-edge independent diagnostic centres, each of which has its own role to play in the NHS to ensure that patients receive the best possible care—I was pleased that the shadow Minister acknowledged that.
Margaret Greenwood
I thank the Minister for making that point. He is talking about charities, but he must recognise that where a private provider is delivering NHS services, the money has to go to shareholders. That money could be spent on patient care. He can talk about charities, but that is not what I am talking about, as he knows. He is probably going to get on to this now, but can he give a clear assurance that the most suitable provider process will not lead to the replacement of NHS providers by private or other independent sector organisations when the contracts come up for renewal?
Andrew Stephenson
The most suitable provider process is designed with the NHS to give the right level of flexibility for the NHS. Commissioners can choose how to balance the key criteria, so value is used alongside the other criteria set out in the process. I know the hon. Lady has come to many debates over the years and said that the Government are privatising the NHS. In 2013-14, 6.1% of total health spending was spent on the purchase of healthcare from the independent sector. In 2021-22, the figure was 5.9%, so the idea that we are privatising the NHS is just nonsense. I want to ensure that that is on the record.
Adam Holloway
To me, this is complete nonsense. It is absolutely ridiculous to say that if a private provider does something, the profits go to shareholders and are not reinvested in the NHS. The hon. Member for Wirral West is basically saying that the means of production should be entirely in the hands of the state. What about when we buy tanks? Do we say that we should make the tanks ourselves and not let evil BAE Systems shareholders take the profits? It is preposterous.
Andrew Stephenson
My hon. Friend put that eloquently and made a very good point.
The shadow Minister, the hon. Member for Birmingham, Edgbaston, mentioned one of her recent visits, so I want to put on the record one of my recent visits. Just last week, I visited University College London Hospitals NHS Foundation Trust, which opened a Macmillan Cancer Centre in 2012. It is a diagnostic centre that treats a wide range of cancer and non-cancer conditions, and it is integrated with the Macmillan support and information service for patients and their carers and families. To me, that is integration in action, which is what we are looking at today. The statutory instrument recognises the important role that all providers play by treating none of them differently, irrespective of whether they are a statutory NHS body, an independent social enterprise or a charity. Indeed, the Committee knows that the NHS already relies on a diversity of providers, because what is most important is doing what is right by patients.
I hope I have provided sufficient answers to the questions raised by hon. Members today. The regulations are necessary to enable the transformation that the NHS needs to deliver better joined-up services, and I commend them to the Committee.
Question put and agreed to.