Health and Social Care Act

Earl Howe Excerpts

Tuesday 5th March 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, I shall now repeat as a Statement the answer to an Urgent Question given in another place by my honourable friend the Minister for care services earlier today on the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013. The Statement is as follows:

“I know that the right honourable gentleman and others have raised concerns about the effect of the regulations, and I would like to address these. First, however, I would like to make it absolutely clear that the regulations must be fully in line with the assurances given to this House during the passage of the Health and Social Care Bill.

The former Secretary of State said to clinical commissioning groups in 2012 that,

‘commissioners, and not the secretary of state, and not the regulators, should decide when and how competition should be used to serve patient interests’.

This absolutely must be the case. I made it clear in health Questions last week that we would review the regulations to ensure that this is the case and that they are not open to any misinterpretation.

The right honourable gentleman himself gave guidance to primary care trusts, which made it clear, in 2010—and again I quote:

‘Where there is only one capable provider for a particular bundle of services or the objective of the procurement is to secure services to meet an immediate interim clinical need there will be a case for Single Tender Action (ie uncontested procurement). By definition, an immediate’—

or urgent—

‘scenario will be exceptional and likely to only … arise on clinical safety grounds or, for example, where existing services have been suspended following intervention by the Care Quality Commission’.

The next bit is very important:

‘A decision to procure through a single tender action should always take account of the potential to secure better value by investing in a competitive process, as long as this is justified by the scale and importance of the opportunity (ie it has to be worth it)’.

As we committed in the Government’s response to the Future Forum report, we want to ensure that the regulations simply continue this approach. However, I fully recognise that the wording of the regulations has inadvertently created confusion and generated significant concerns about their effect. I have therefore listened to people’s concerns and my department is acting quickly to improve the drafting so that there can be no doubt that the regulations go no further than the previous set of Principles and Rules, inherited from the previous Labour Government. As we also committed in response to the Future Forum’s report, the Co-operation and Competition Panel has been transferred to Monitor and this will ensure consistency in the application of the rules.

Concerns have been raised that commissioners would need to tender all services. This is not our intention and we will amend the regulations to remove any doubt that this is the case and to clarify that the position remains the same as at present—and as stated in the former Secretary of State’s letters in 2012. Concerns have been raised that Monitor would use the regulations to force commissioners to competitively tender. However, I recognise that the wording of the regulations has created uncertainty and we will therefore amend them to put this beyond doubt.

Concerns have also been raised that competition would be allowed to trump integration and co-operation. The Future Forum recognised that competition and integration are not mutually exclusive. Competition, as the Government made clear during the passage of the Bill, can only be a means to improving services for patients, not an end in itself. What is important is what is in patients’ best interests. Where this is co-operation and integration there would be nothing in the regulations to prevent this. Integration is a key tool that commissioners are under a duty to use to improve services for patients. We will amend the regulations to make this point absolutely clear”.

My Lords, that concludes the Statement.

--- Later in debate ---

[Earl Howe]

My Lords, first, I understand perfectly the anxiety that has been voiced about the way the regulations are worded. This is a problem centring in almost every respect on legal drafting. Our intention and our instructions have been as they always have: to create a set of regulations—as expected under the terms of the Act, as the noble Baroness knows—which reflect in every way the assurances given by Ministers during the passage of the Health and Social Care Act, no more and no less.

However, to the lay reader, certain parts of the regulations which, in legal terms, do as they were intended appear not to do so. We took very seriously the fact that perception differed from reality—perceptions matter—and therefore, early last week, I put in train a programme of work to revise the regulations. However, we also determined that we could not come to Parliament with half a story and that we would have to present our fully formed response to the concerns by tabling a set of revised regulations. We were not in a position to do that until this week. It was therefore not the case that the Opposition’s Motion forced us into this position. I was well aware that we had to respond to the concerns voiced not only in this House but in the wider healthcare community.

The noble Baroness said that she thought our competition policy lacked clarity. Our competition policy is based on competition law as it now appears and as it was during the previous Administration. There is no question of our changing that. The idea that we are trying to marketise the NHS is, as the noble Baroness knows, not true. In the Health and Social Care Act, we included a specific provision which prevents the Secretary of State or anyone else preferring independent sector providers over the NHS. That was something which the previous Government did not see fit to do.

The noble Baroness asked me what the programme ahead looked like. We intend to revoke the current regulations and substitute regulations with amended wording within a few days.

[Baroness Jolly]

My Lords, I thank my noble friend for meeting Members from these Benches on this issue nearly two weeks ago. Will he confirm for the House that, in line with assurances given during the course of the Bill last year, the regulations will promote integration of services in the best interest of patients?

[Earl Howe]

I think that everybody was agreed during the passage of the Health and Social Care Bill that we wish to encourage integration in the way that services are commissioned. Integration in this context should be taken as a term that reflects the experience of the patient. The patient has to feel that he or she is on a seamless pathway of care. That care may be provided by a number of agencies, if necessary, whether in the NHS or social care, but the patient’s experience should not be disjointed. Therefore, as my noble friend will remember, numerous provisions were inserted into what is now the Act to ensure that commissioning should be on that basis. Nothing in these regulations interferes with that, but it is very much in our minds to make it crystal clear that integration of services is one of the main factors which commissioners should take into account.

[Baroness Morgan of Drefelin]

My Lords, can the Minister reassure the House that the new draft regulations are consulted on before they are tabled—very swiftly, I am sure—to safeguard against misinterpretation again by lay audiences? Perhaps a very swift consultation programme could be developed with stakeholder organisations, royal colleges, patient groups, and so on, so that we can avoid the misunderstanding to which the noble Earl refers.

[Earl Howe]

I intend to meet some of the royal colleges, and I have met one already. I do not feel that a full-scale consultation is appropriate because the Government’s policy has not changed. It is the wording of the regulations that has given rise to anxiety. I therefore think that, having taken on board, as I hope I have, all the concerns that have been raised, a clarification of the regulations is all that is necessary and there is no need to consult on the policy yet again.

[Lord Harris of Haringey]

My Lords, is it not the case that the Government have form on producing regulations that are virtually incomprehensible as far as the lay reader is concerned, particularly in respect of these health service changes? We had the incident with Healthwatch only a few weeks ago. Even though there is a short timescale, is it therefore not imperative that there is proper consultation to make sure that whatever emerges reflects the very fine and helpful words that the Minister has given us this afternoon? Will he also tell us whether Ministers ever read these draft regulations before they are laid before the House?

[Earl Howe]

My Lords, it is my intention to issue an invitation to noble Lords to join me in a meeting so that we can discuss these matters. I am very happy to do that over the coming days. The answer to the second question is yes. We read these regulations in conjunction with the Explanatory Memorandum and the line-by-line interpretation that we have also published in this case which make it crystal clear that these regulations do no more and no less than reflect the law and the Government’s policy. However, others have chosen to misinterpret the regulations, and that was something that I could not predict.

[Lord Warner]

The Minister may know that I do not always see totally eye to eye with all my colleagues on these Benches on the subject of competition. Will he say how much discussion there has been with the voluntary sector and social entrepreneurs on these regulations? In my experience they have always struggled to make their presence felt when contracts are available within the NHS.

[Earl Howe]

My Lords, the department consulted on its proposals for these regulations between August and October last year on the basis of the commitments that had previously been given. All sectors had an opportunity to feed in their comments. Our proposals for the regulations did not give rise to any anxieties at that time.

[Lord Whitty]

My Lords, the Minister should have been made aware of the concern I expressed the other night in relation to the reference to Monitor in the Enterprise and Regulatory Reform Bill and to its supervision by the proposed Competition and Markets Authority which seems to some of us to introduce by the back door a situation where the CMA would override Monitor, making, in effect, competition trump integration and co-operation. Will he now advise the noble Viscount, Lord Younger, to delete the reference to Monitor in that Bill?

[Earl Howe]

My Lords, I took the opportunity to read the noble Lord’s comments a few days ago, and I am grateful to him for them. He will be receiving a communication in a few days’ time to clarify this issue. I thank him for raising it. The short answer to his question is that it is not our intention for competition to trump integration.