NHS: Health and Social Care Act 2012

Earl Howe Excerpts

Wednesday 9th October 2013 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and draw the House’s attention to my health interests in the register.

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

My Lords, Part 3 of the Act does not change the requirements on clinical commissioning groups when they tender health services. The rules are the same as under the Public Contract Regulations 2006, introduced by the previous Administration, and as set out in the rules for commissioners.

[Lord Hunt of Kings Heath]

My Lords, the noble Earl will recollect our debates on the Health and Social Care Act 2012, when repeated assurances were made by Ministers that clinical commissioning groups would not be forced to tender out services. However, all the evidence to NHS England and the advice which clinical commissioning groups are getting from their lawyers suggests that under Section 75 of the Act, they have to do so. Does the noble Earl agree that that is an awful waste of money and effort, and that all it is doing is fragmenting services?

[Earl Howe]

My Lords, commissioners do not have to use competitive tendering for all services. First, acute elective care—which represents the vast majority of NHS services—is not secured through competitive tendering at all, and that will continue to be the case. Secondly, a single-tender action may be justified on the basis that there is only one provider able to meet the clinical quality and safety standards that the commissioner requires. There will be guidance coming out on that, and draft guidance has already been published. Any confusion that exists among commissioners should be clarified by that means.

[Lord Winston (Lab)]

My Lords, would it be fair to say that the noble Earl is somewhat between Scylla and Charybdis on this issue? On the one hand tendering is certainly more expensive but, on the other, if tendering does not take place, is there not a real risk that services will be offered at the price that the market will bear rather than the one that it really costs the health service? The health service has not always managed to cost out its treatments effectively.

[Earl Howe]

The noble Lord makes a good point. There is, I think, a desire on everybody’s part not to see competition result in a race to the bottom on price. That is why we have specified that commissioners must make clear what standards they expect and apply those consistently to whoever is tendering for the service in question at a price which reflects a fair value. We believe that the current rules protect the NHS but also protect those bidding. I emphasise that competition will not be pursued as an end in itself; it will be pursued as a means to drive up quality.

[Lord Alderdice (LD)]

My Lords, it is quite clear that there are certain kinds of services that benefit from being grouped together and provided by large providers who can do so economically but to a high quality. However, there are other services that are better provided locally by people who know the circumstances and are often working in relatively small charitable bodies; for example, in the mental health sector. It is very difficult for these to tender in the way that larger companies can. Can my noble friend give me some reassurance that the Government recognise this dilemma and are trying to find ways in which smaller, local, charitable providers in certain areas can be protected, facilitated or encouraged, so that we are not simply taken over by larger corporations, which may not be in the best interests of patients?

[Earl Howe]

My noble friend makes an important point. I think that it is common to all sides of the House that charities and social enterprises play an important part in providing NHS care. They have done so for many years, and give patients more choice of where and how they are treated. We have a set of rules which, at least in theory, should protect those groups of providers. If a commissioner fails to take account of providers who are capable of providing a service and simply, for example, rolls over an existing contract, then it is open to the provider in question to complain to Monitor, which will be the adjudicator of any anti-competitive conduct.

[Baroness Pitkeathley (Lab)]

My Lords, with reference to the last question, would it be possible to give voluntary and charitable groups that wish to provide services in some kind of consortia financial help and encouragement in order to help them form those consortia? These do not just happen because people want them; they need time and effort to be formed.

[Earl Howe]

My Lords, that has already happened to an extent, not least under the previous Government, who made sure that the nascent social enterprises that were formed out of transforming community services were set up on a sustainable basis. However, we have built into the 2012 Act a provision which prevents active discrimination in favour of one sector or another, so government help specifically for a particular sector is, I am afraid, not legally possible.

[Lord Walton of Detchant (CB)]

Is the noble Earl satisfied that the commissioning processes under NHS England relating to the commissioning of highly specialised services will take full account of the important necessity of concentrating these highly specialised services in a smaller number of major centres? Is he also satisfied that the interests of the Rare Disease Consortium under the Rare Diseases Advisory Group of NHS England will be fully recognised in the processes to which he is referring?

[Earl Howe]

I can give the noble Lord an absolute assurance on both those counts.

[Lord Naseby (Con)]

Surely my noble friend can confirm that, broadly speaking, the tendering processes under the Act have gone well and are broadly within budget. Although there are various dimensions to the tendering process as raised by my noble friend from the Liberal Democrat Benches, nevertheless, in broad terms, we are well satisfied with the way that it has gone. If there are differences and small amendments are necessary, will my noble friend confirm that those will be looked at speedily?

[Earl Howe]

My Lords, I agree with my noble friend in that I am not aware of any tendering process that has gone horribly awry. Certainly the Government are always open to looking at any provisions that are not working as they should, but I am not aware of any.