National Health Service (NHS Payment Scheme—Consultation) (No. 2) Regulations 2022

Lord Patel Excerpts

Monday 9th January 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Markham) (Con)]

My Lords, I start by wishing everyone a happy new year and welcoming the noble Lord, Lord Allan of Hallam, to his position. It gives me great pleasure to speak in this debate and I welcome the opportunity to discuss these draft regulations.

The Health and Care Act 2022 marks an important step in the Government’s ambitious health and care agenda. Noble Lords will be fully aware of how wide-ranging a piece of legislation it is. I think we can all agree with its overall objectives; making it easier for health and care organisations to provide joined-up care is vital.

With the introduction of integrated care systems came the opportunity to review how the financial frameworks in the NHS worked and tailor them to make them consistent with the new integrated approach. The Health and Care Act replaces the NHS national tariff payment system with the NHS payment scheme by inserting new Sections 114A to 114F into the Health and Social Care Act 2012. As with the tariff, the NHS payment scheme will set rules around how commissioners establish the amount to pay providers for healthcare for the NHS. It does not set the amount of money available but intends to make sure that available resources are used as effectively and efficiently as possible.

Before a new payment scheme can be published, NHS England has a duty under the Health and Social Care Act 2012 to consult on the proposals for the new scheme, as it did with the tariff. NHS England is required to consult each integrated care board, each relevant provider and other such persons it considers appropriate. It opened the consultation on the proposals for the 2023 to 2025 payment scheme on 23 December 2022, which is scheduled to close on Friday 27 January 2023.

This brings me to the purpose of these regulations, which is relevant to how those consulted respond and what this means for NHS England. The purpose of this SI is to set these objection percentage thresholds at 66%, which will be reached if the requisite percentage of either integrated care boards or providers object. I believe this is a proportionate level to ensure that a qualified majority can require NHS England to reconsider its proposals, while minor objections cannot stop them. I also consider laying these regulations to be a relatively administrative process. The objection percentages are not changing compared to previous consultations on the tariff; we are maintaining the status quo with 66%. I commend these regulations to the Committee.

[Lord Patel (CB)]

My Lords, I thank the Minister for his comments. I too wish everybody a happy new year. My question is quite simple, and it reflects the discussions we had during the debate on the Act that we passed: is 66%, which is two-thirds, too high a level for the objections? It is a higher order to achieve than, let us say, 60%.

While we await the tariff, I reiterate, so that it is on record, that the important bit is not the level at which the trusts and ICSs can object but how the tariff will vary according to the needs of the population. When we had the debate, we focused on existing inequalities in health and how to minimise and reduce them. One way of doing that is to address the needs of the population who have greater need in healthcare, and therefore the tariff needs to be different. It is a high order to require 66% of ICSs, trusts or providers to object.

I would like the Minister to confirm that the tariffs will reflect the need for the levelling-up agenda to improve healthcare, particularly in more deprived populations, and to comment on why 66%, which is two-thirds, was chosen.

[Lord Allan of Hallam (LD)]

My Lords, I am pleased to be able to take the reins from my noble friend Lady Brinton, starting with this short but important statutory instrument. I echo the happy new year wishes and thank the Minister for his welcome. I understand that a key function that we perform in this House is to ensure that legislation is implemented in the way that Parliament intended as we put flesh on the bones of primary legislation through statutory instruments such as the one we are considering today.

Today’s statutory instrument is a small element of an important part of our modern health service infrastructure: the mechanism for pricing services within the NHS’s internal market. It was a prompt for me to read more pages of tariffs and rules than I ever intended or wished to do, which is mind-boggling and fascinating in equal measure. The subject of our debate today is not the substance of the payment scheme but rather the trigger for when the scheme might be reviewed if there are objections.

As the Minister pointed out, the Government’s intention is to maintain a 66% objection rate for triggering a further consultation period, which is unexceptional as it maintains the previous level. However, like the noble Lord, Lord Patel, I am curious as to why 66% was picked, particularly as I understand that it will not trigger a referral to the Competition and Markets Authority, which would have been a major step, but simply a further consultation period. There may be an argument for why a 51% or 60% threshold would not be appropriate, given that the threshold triggers something less significant than the previous regime.

I am also curious about the experience that we have had over the last decade or so while the other tariff scheme has been in place. Does the Minister have data on the levels of objections received in previous consultations? I suspect that they were much lower than the level we are talking about here but, as we review the scheme, it would be interesting for us to understand whether we were previously getting 10% objection levels, or 50%. I assume that there must be some experience of that within the National Health Service.

Like the noble Lord, Lord Patel, I would like more words about why 66% remains the effective level, and some information about objection levels we have experienced previously. That would be helpful to put our minds at rest, but I think we are all broadly supportive of the instrument as it stands.