Health and Social Care Bill

Baroness Thornton Excerpts

Monday 28th November 2011 Lords Chamber

Moved by

[Baroness Thornton]

136: Clause 20, page 19, line 42, leave out from beginning to end of line 1 on page 20

[Baroness Thornton]

My Lords, three amendments are tabled in this group in my name and those of my noble friends. They are principally probing in nature on some important points that need clarification. Amendment 136 would leave out the duty on the board in respect of the variation of the provision of health services; while Amendment 268 would leave out the instruction that:

“Monitor must not exercise its functions for the purpose of causing a variation in the proportion of health care services”;

while the third element of the group seeks that Clause 144 should not stand part. This clause relates to the:

“Secretary of State’s duty as respects variation in provision of health services”.

It would seem that this group of provisions provides the Secretary of State, Monitor or the NHS Commissioning Board with the ability to increase or decrease the share of market for the provision of health services held by a particular group of providers. I assume that this also applies to CCGs, but I would be grateful to the noble Earl if he could explain whether that is the case. I would also be grateful if he could say how these will impact on the provision of primary medical services and the contracting for them by the NHS Commissioning Board. Can he further say how this will affect the commissioning of services by CCGs when they propose to commission services either from hospitals, other primary care providers or private sector hospitals? I suppose that what we are seeking is clarification of the definition of “providers”. For example, let us say that a strategic decision was made by a clinical commissioning group to switch priority from secondary care to community care and that it was a deliberate decision to increase or decrease the share in the market by a particular group of providers, what would be the implications of that for other providers? We also need to think about the issues of cherry-picking that have been mentioned.

This clause was added with a certain amount of fanfare as the Government’s response to the Future Forum and attracted claims of victory by the Liberal Democrats over the threat of privatisation. I give them credit for trying to protect the NHS from the full force of the then draft Bill. But the reason why we want to explore these provisions is that we are concerned that they will not achieve what has been claimed for them. As with so many concessions, you need to scratch beneath the surface to see whether they actually achieve what you want from them.

First, are these provisions effective in achieving the aim of preventing the overt promotion of private companies in the National Health Service? The impact assessment of the Bill still states that the aim is to promote a so-called “fair playing field”, and it goes on to say that, an important way of making the market work will be to rebalance so-called fair playing field distortions, citing a report which calculated that the NHS enjoys a £14 cost advantage over the private sector for every £100 it spends. We know that at present around 3 per cent of NHS funding is spent on the private sector. This is also taken as an indicator of an unfair playing field for private providers. Therefore, in order to achieve parity between the sectors, the Bill requires that all CCGs, Monitor and the Secretary of State should provide extra subsidies to the private sector, and to promote it so that it does have parity. If this does not happen then, according to the Government’s own impact assessments, these reforms will fail.

We also know that other words and actions from the Government suggest that the promotion of the private sector is continuing unabated. The noble Earl himself reportedly told a private health company conference that the reforms offer huge opportunities for the private sector. Most recently, we have had the continuing agenda confirmed by an operating framework that sets out both the agenda for the commercialisation of commissioning support, which is a deliberate policy to remove commissioning from the public sector, and the announcement of a performance measure of the trend in value/volume of patients being treated at non-NHS hospitals. On this side of the House we are unconvinced that this intention has gone out of the Bill and remain concerned that the long-term aim of using competition law and the market to provide a wedge for privatisation has not been removed. I ask the Liberal Democrats to look at these questions very carefully. On this side of the House we question this clause because we do not think the NHS can—or should—be blind to the governance and ownership of its providers.

We think it is right that the Secretary of State should be able to say that the NHS is the preferred provider in certain situations, particularly where existing services are performing well through performance management, collaboration and professional motivation. It may be desirable for a commissioner to maintain continuity of emergency and critical care services that are not amenable to the open market and in order to do so it may need to manage the system of providers locally. We are learning the hard way from Southern Cross what happens when commissioners turn a blind eye to the governance and business models of providers of social care. We should not be afraid of saying that organisations with a social purpose should sometimes be promoted above those driven by narrow financial interests.

That is not about preserving the world the way it is, or perhaps once was. We think this clause could actively prevent policies that this side supports and which have been promoted in government, including the right for NHS staff to request to set up a mutual social enterprise—we will be discussing that in a later group of amendments—with support to do so and protections from well-financed bids from multinational companies. We understood that the parties opposite supported these aims as well, but in supporting this clause they may show to the third sector that they will have no more assistance in development from this Secretary of State.

It is worth noting that while the amendment was introduced following the Future Forum, Peers will have received a briefing from ACEVO whose chief executive chaired the choice and competition strand of the Future Forum exercise. Therefore, my final remarks are from that briefing. This is what ACEVO has said:

“We believe that the unintended consequences of the Government’s policy to ‘outlaw any policy to increase the market share of any particular sector or provider’ would be that people in the NHS Commissioning Board and NHS more widely would interpret the Health and Social Care Bill to mean that capacity building and other policies which support the development of voluntary and community organisations would become illegal”.

It goes on to say that this would have the unintended consequences of:

“Stymying various Government policies, from building the capacity of charities and community groups to supporting public sector staff to form new mutuals/social enterprises (the Department of Health previously said it wanted to ‘create the largest and most vibrant social enterprise sector in the world’ … Making it harder for charities and community groups to provide services and support that many (particularly those who are vulnerable and hard to reach) rely on”.

This is a very serious probing amendment. Between now and Report it is going to be very important that all those organisations and parties who think that they have solved the problem, consider that they may, in fact, have made the situation worse. I beg to move.

[Baroness Williams of Crosby]

My Lords, I remain puzzled by these amendments from the Labour Benches because it seems quite clear that the purpose of the provision was to make sure that the commissioning groups and the board would not use their considerable influence and power to change, for dogmatic reasons, the balance between private and public sector provision. That must be right. It must be right that only quality and the response to patients’ needs should determine what that balance is. I very much welcome this provision. I thought it was an important safeguard against anybody seeing the Bill as having a particular dogmatic purpose. I was quite surprised that the Labour Front Bench took a different view and put down these amendments. It seems as if it was determined to find some flaw in this provision and it is a provision that is intended to show genuine commitment to a level playing field. It is perfectly proper for the Labour Front Bench to pursue questions about the provision but it is quite clear that it refuses to take the provision, even for a moment, at face value.

I have one or two questions. I know that the hour is late so I do not intend to keep the House for more than a moment or two, but there are some interesting questions to raise. One question was about the position with regard to the partnership that has been advocated by the Minister in other parts of this Bill and the deliberate attempt to reach partnerships between the private and public sector. For example, the private sector in its role of innovating and coming up with new ideas would be very properly in some cases partnered with a public sector body, such as a clinical commissioning group. How does the Minister see that as compatible with the wording of the Bill?

The wording of the Bill is pretty clear. It relates first to the board and then to Monitor and makes it plain that in both cases those boards should not use their particular powers to advance the cause of one side or the other. Therefore, I found it puzzling that this set of amendments should be tabled—in particular the attempt to decide that Clause 144 should not stand part of the Bill.

With those words, I wait for the Minister’s reply. I do not want to delay the Committee, but I have to say that I was genuinely puzzled by the Labour Front Bench’s decision to put down amendments of this kind and to question Clause 144.

[Baroness Thornton]

I think that I explained to the noble Baroness earlier today that these are probing amendments. When we received the briefing from ACEVO, we were very concerned, and that is why we tabled the amendments. It is very important for those of us who have been promoting the voluntary sector all these years that we find out what the truth is. They are probing amendments; there is no intention at all to press them, and I said that from the outset. They are to explore the meaning and the effect of the provisions. Sometimes amendments can have unintended consequences. I hope that the noble Baroness will accept that this is not partisan; it is a genuine effort to get some explanation for how this part of the Bill might work.

[Lord Warner]

My Lords, I hesitate to intervene in this debate, but I am prompted by the intervention from the noble Baroness, Lady Williams of Crosby. I speak as someone who is probably some way away from the Labour Front Bench on the subject of competition. I do not start from the same position as my noble friend, but like her I am extremely puzzled about what the Government are trying to do. We may be in the realm of unintended consequences.

We go back to July 2010, when the Government published a White Paper that said that the aim was to make the NHS the largest set of social enterprises in the world. That was the Government’s policy. It is quite difficult to achieve that, I would suggest, without some capacity building—and I was one of the Ministers involved in setting up the Social Enterprise Unit in the department, under the previous Government. The Minister will know about the case of the East Surrey nurses and their attempt to set themselves up as a social enterprise. It is very difficult for people to set up these new forms and organisations without some assistance and capacity building.

Looking at the data, you can see that the voluntary and community sector currently delivers only a tiny proportion of NHS services. The National Audit Office estimated that over 2007-08 PCTs spent less than 0.5 per cent of the NHS budget on commissioning services and support from the voluntary sector. So we are dealing with a minute proportion of the provider side of the NHS when we talk about social enterprises and voluntary organisations. Those sectors cannot grow bigger without some assistance; they have to be given some help; there has to be some investment of resources in capacity building so that they can compete for contracts and provide alternative ways of providing services outside hospital in a community setting. In many parts of the country, they are the big hope for actually producing a set of services which are not based on in-patient care of individuals. We are never going to get to that brave new world without some capacity building. As far as I can see, in their attempt to reassure their coalition partners on the subject of competition the Government may have shot themselves in the foot on this issue.

We need some clarity about what the Government are up to on the subject of the voluntary and social enterprise sectors. Forget the private sector; we need to know how they will grow those sectors, which seems to be their declared aim, without some capacity building and without altering the proportion of services that those sectors provide in the coming years. I would be glad to be reassured by the noble Earl but, as I and ACEVO understand it, the Bill as drafted freezes the proportion. We need to understand from the Minister whether the Government are going to amend it to clarify that position, because it is certainly exercising the outside world.

--- Later in debate ---

[Earl Howe]

My Lords, let me explain. Monitor cannot on its own do anything. It cannot drum up competition from thin air even if it wanted to. We will come to that in a later part of the Bill. The aim of these duties is to prevent national policies which aim explicitly to influence market share. The duty would apply in the same way as it does for secondary care—the noble Baroness, Lady Thornton, asked that question in the context of primary care. The board may take steps which have the effect of increasing market share in order to meet some other purpose—for example, filling a gap in provision—but the board cannot act with the aim or intention of increasing or decreasing the market share of a particular type of provider. That is the distinction. We are clear that there should be an absolute prohibition on Monitor and the board acting with the intention of varying the market share of a particular type of provider.

[Baroness Thornton]

My noble friend is puzzled and I am too. How will they do that? What mechanism will be used to change the market share?

[Earl Howe]

My point is that either for the board or Monitor to act with a specific view to change the market share for its own sake would run counter to these provisions. However, that does not mean that the market share of the NHS, the independent sector or the voluntary sector could not change. It depends entirely on what is seen to be in the interest of patients. In a particular area of the country, one might find that there was a considerable case for increasing the share of social enterprises in order to meet the needs of patients. That would not be illegal. What would be illegal would be the board setting out with the express intention of expanding a particular sector for the sake of it. That is the distinction here.

--- Later in debate ---

[Earl Howe]

My Lords, we will come quite soon, I hope, to Part 3 of the Bill, which deals with competition more generally. Much will be revealed at that time, but I can say to my noble friend Lord Greaves that I would be happy, if it would help him, to wrap up the meaning of that particular phrase in the letter which I am going to send on these examples. They are—I ask him to believe me—well chosen words.

[Baroness Thornton]

My Lords, I thank the Minister for his answer. I wish I could say that I now completely understand everything about these clauses, but I do not think that is true. I will read what the Minister has said and look forward to reading his letter. It may be that what we actually need is to have some discussion with the voluntary sector—with ACEVO, NCVO, the Social Enterprise Coalition—so that we, and they, can be completely clear that this is indeed a benign part of the Bill and is not going to affect their work or their future. If the noble Lord, Lord Greaves, thinks that this wording is a bit difficult, just wait until we get to Part 3. I beg leave to withdraw.

Amendment 136 withdrawn.