Health and Care Bill (Twelfth sitting)

Justin Madders Excerpts

Committee stage
Thursday 23rd September 2021 Public Bill Committees

[Karin Smyth]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 67 ordered to stand part of the Bill.

Schedule 11 agreed to.

Clause 68

Procurement relations

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I beg to move amendment 95, in clause 68, page 61, line 32, leave out “health care services” and insert “services required”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 99, in clause 68, page 61, line 35, at end insert—

“(1A) The regulations must provide that no contract for the provision of the services specified in subsection (1)(a) and subsection (1)(b) may be awarded other than to a relevant authority unless a formal competitive tendering process provided for by the regulations has been followed.”

Amendment 96, in clause 68, page 62, line 1, at end insert—

“(3A) The regulations must—

(a) include the power for integrated care boards to continue to commission the services provided by an NHS trust or Foundation Trust without any requirement for any re-tendering process,

(b) require that, prior to commencing any formal procurement process for a service provided by an NHS provider, where the contract value exceeds a threshold set by the relevant integrated care partnership, the integrated care board must conduct a public consultation and publish the business case for opening the service to a competitive tender process,

(c) require an assessment to be made of alternative ways of providing a service using NHS providers before a contract with a non-NHS provider may be extended or renewed,

(d) be based on the assumption that the NHS is the preferred provider of services, and

(e) require providers to pay staff in line with NHS rates of pay and to provide terms and conditions of employment at least equivalent to NHS terms and conditions.

(3B) NHS England must publish a report each year on the proportion of contracts subject to the regulations which are awarded to each of NHS, third sector, local authority and independent sector providers.

(3C) NHS England and each integrated care board must publish a plan every three years on reducing the provision of NHS services by private providers and increasing the capacity of NHS providers to provide those services.

(3D) Integrated care boards must publish, in full and without any recourse to commercial confidentiality, all—

(a) bids received for contracts,

(b) contracts signed, and

(c) reports of routine contract management.”

New clause 12—NHS as the preferred provider of NHS contracts—

“(1) The NHS is the preferred provider of NHS contracts.

(2) NHS contracts must be provided by NHS suppliers unless the NHS supplier is unable to fulfil the terms of that contract.

(3) Where the NHS is unable to fulfil the terms of a contract, a competitive tender must be held to identify an alternative provider.

(4) For the purposes of this section—

(a) ‘alternative provider’ means private companies and independent sector treatment centres, and

(b) general practice and GP-led community services are NHS suppliers.”

This new clause would establish NHS suppliers of services as the preferred providers of NHS contracts. Independent sector providers could hold NHS contracts after winning a competitive tender.

[Justin Madders]

It is a pleasure to see you in the Chair this afternoon, Mr McCabe. We have arrived back at the start: the need to end the bureaucratic, expensive and ultimately corrosive requirement for compulsory competitive tendering for health services, which led the drive from NHS England and its former chief executive to first ignore the Lansley Act and ultimately push for its repeal. It turned out that trying to implement the requirements of that Act gave rise to all the problems the Opposition foresaw a decade ago.

Has the Minister seen any impact assessment of the benefits to the NHS of removing the requirements? Is he able to give us a total amount of the cost to the NHS of this folly over the past decade? Is he able to quantify exactly how much public money has been spent on lawyers and consultants going through all the hoops that were laid down by Lansley? I am not just talking about the extra work in putting the contracts out to tender in the first place, never mind the millions that will have been spent on defending and justifying decisions taken from disappointed bidders, which is a big part of it as well. Let us not forget that, as a result of that legislation, we had the obscene spectacle of the NHS being sued by Virgin Care. That certainly was not one of the benefits trailed by the Government of the time back in 2012.

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[Justin Madders]

I picked up some interesting points. There was, I think, some common ground with the Minister about the mistakes of the past. From the contribution of my hon. Friend the Member for Bristol South, I think we have found one positive aspect of section 75, which is that it brought her to this place. At last, there is something positive to say, because we do not mourn its passing. As she said, at the time, not a single ounce of support existed for those rules outside of the coalition Government, but we will not go over all the old ground again.

In his response, the Minister talked about the “any qualified provider” regime that was introduced in 2009. My understanding is that, had we been successful at the 2010 election, we would have moved to “a preferred provider”, but, of course, when we look at the commitments made in 2010, we can forget David Cameron’s promise not to reorganise the NHS. We will see whether the Minister’s promises in respect of that are as robust.

The Minister says that what matters is the best outcome for patients, and we absolutely agree with that. We think that the best outcome for patients will be stability and a regime in which the NHS is the preferred provider, because all the evidence points to better outcomes for patients.

I am grateful to the Minister for not characterising me as dogmatic, because I do not wish to be. I wish to be pragmatic. The idea of putting into the Bill some requirements about what we expect from the regulations is a perfectly reasonable position to take, but until we see those regulations, we cannot be sure about what they will include. By supporting the amendment, what we hope to include is a base position that injects a degree of transparency, which is what has been lacking over the past 18 months, and the Bill clearly fails to refer to any particular issues in that regard. Our view is that the purpose of this Bill should be to reinforce the NHS—to bolster it—by using a preferred provider, which is why we wish to put our amendment to a vote.

Question put, That the amendment be made.

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[Edward Argar]

I will be brief because we covered key aspects of clause 68 in debates on the amendments. The clause inserts proposed new section 12ZB into the NHS Act 2006. Section 12ZB allows the Secretary of State to make regulations setting out the regulatory framework for the procurement of healthcare services, to better meet the needs of the NHS.

Section 12ZB provides further information about the content of those regulations. They may contain provision in relation to the objectives of procurement, and they may contain provisions ensuring transparency, fairness and effective management of conflicts of interest, as well as provision for the purpose of verifying compliance with the regime. The new section also allows for NHS England to publish guidance about compliance with the new procurement requirements to which relevant authorities, as defined in the section, must have regard.

The NHS has sent us a clear message that the current regime for arranging healthcare services is not working. It is confusing, overly bureaucratic and does not fully support the integration and efficient arrangement of services and collaboration in the best interest of patients, which, of course, run through the Bill like a golden thread. Through the clause, we will develop a new provider selection regime for the NHS and public health—a bespoke NHS regime that will give the NHS and local government more discretion over how they arrange healthcare services. Informed by the consultation run by NHS England earlier this year, it will aim to enable collaboration and collective decision-making—recognising that competition is not the only way of driving service improvement. It will aim to reduce bureaucracy on commissioners and providers alike, and to remove the need for competitive tendering where it adds limited or no value.

We recognise that in many cases competition can be beneficial for procurement. Where a competitive tender is the best way for an NHS commissioning body to secure value and quality in its healthcare provision, it will be used. However, it will no longer be the default that contracts in the NHS are automatically put out to tender. All decisions about provider selection will continue to be made in an open and transparent way, considering key criteria and applying them to decision making, in the best interests of patients and the taxpayer. I commend the clause to the Committee.

[Justin Madders]

I will not repeat all my comments from earlier, to save the Committee’s time. I have two remaining specific questions, which I hope the Minister can address. The clause says that regulations “may” be produced. Can he state for the record that there will be regulations? Can he also give us some indication of when they are likely to be made and when they are likely to take effect?

[Edward Argar]

I can reassure the hon. Gentleman that “may” is the technical language used in drafting such legislation, but we intend that they will be made. I am afraid I will disappoint him on the second part of his question, because I would not presume to say exactly when; that will be down to the passage of this legislation and then the usual wait and the discussions through the usual channels on securing an appropriate slot for the regulations. I hope I have given the hon. Gentleman a modicum of reassurance.

Question put and agreed to.

Clause 68 accordingly ordered to stand part of the Bill.

Clause 69

Procurement and patient choice: consequential amendments etc

[Justin Madders]

I beg to move amendment 97, in clause 69, page 62, line 26, at end insert—

“(1A) In the National Health Service Act 2006, in section 272(6), after paragraph (za), insert the following paragraph—

‘(zaa) regulations under section 12ZB,’”.

This amendment would require a draft of procurement regulations under new section 12ZB of the National Health Service Act (inserted by clause 68) to be laid before, and subject to approval by resolution of, each House of Parliament.

I will not detain the Committee long on this amendment. Following on neatly from our previous discussion, it requires that the regulations, which I am now assured will be produced, are subject to a resolution of approval by both Houses. I do enjoy spending time in Delegated Legislation Committees with the Minister, and I hope we will be able to do that again as a result of this amendment’s being accepted.

[Edward Argar]

I am, as ever, grateful to the hon. Gentleman. The amendment would require a draft of procurement regulations under new section 12ZB of the National Health Service Act to be laid before, and subject to approval by resolution of, each House of Parliament. As set out in our delegated powers memorandum, the powers created by clause 68 amend the NHS Act 2006. In line with the vast majority of regulations made under that Act, these powers will be subject to the negative procedure in section 272(4) of that Act.

As demonstrated by the passage of the Health and Social Care Act 2012, there is significant parliamentary interest, both in this House and the other place, in the rules for determining how healthcare services are arranged. However, it is vital that we strike the right balance between democratic scrutiny and operational flexibility. The negative procedure provides that balance, ensuring transparency and scrutiny, while also providing sufficient flexibility to ensure that the regulations continue to drive high-quality services and value for money.

We have consulted extensively on the proposals for these regulations to ensure that we are delivering the flexibility, transparency and integrated approach that the NHS has asked for. The engagement exercise undertaken in early 2019 collected views from across the health sector, and the proposals put forward by NHS England around procurement gained widespread support, with 79% of respondents agreeing or strongly agreeing with the proposals.

Earlier this year NHS England consulted on further detail of the proposed regime that should apply when healthcare services are arranged in future, following removal of the current requirements. NHS England received a range of responses from NHS national and representative bodies. In addition to written feedback, it met NHS colleagues and external stakeholders. We have been and continue to be as transparent as possible in our approach to these proposals. Therefore, I suggest that the hon. Gentleman amendment’s is unnecessary.

[Justin Madders]

In the light of the Minister’s comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Edward Argar]

I will be very brief. The clause will remove the specific healthcare procurement rules that currently apply to NHS commissioners when arranging clinical healthcare services. Specifically, it will repeal sections 75 to 78 and schedule 9 to the Health and Social Care Act 2012 and revoke the National Health Service (Procurement, Patient Choice and Competition) (No.2) Regulations 2013. It also makes other minor, consequential amendments in relation to these changes and the introduction of the power to make a new provider selection regime for procurement of healthcare services under clause 68.

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[Edward Argar]

I will try to be as brief as I can, while giving the Committee the information it wishes to have.

This package of measures is aimed at promoting collaboration in the NHS, reflecting a shift towards integration between commissioners, providers and other partners as a way of improving the healthcare people receive. Clause 70 allows for the removal of Monitor and the Competition and Markets Authority’s duties to co-operate in the exercise of their functions as concurrent competition regulators. Instead, they are replaced with a duty on NHS England to share regulatory information with, and provide assistance to, the CMA where the CMA requires it to exercise its functions.

Clause 71 removes the Competition and Markets Authority’s role in reviewing mergers solely involving NHS foundation trusts, NHS trusts or a combination of both. The CMA has led a number of investigations into NHS provider mergers or acquisitions in recent years. Although it has approved all but one merger, the investigations have been costly and time-consuming for the organisations involved.

We recognise the CMA’s important role in investigating alleged infringements of competition law and particular markets if it sees issues for consumers with reducing competition. However, as has been alluded to, the NHS is not a true market, and it has become clear that the CMA is not the right body to review NHS mergers. Instead, NHS England will continue to review all NHS provider mergers to ensure they have clear benefits for patients and the taxpayer. The CMA will retain its merger control powers in relation to the private healthcare and pharmaceutical industries, where competition plays a greater role. The NHS should be able to make decisions about provider mergers itself. Without this clause, NHS provider mergers will still be subject to costly, time-consuming investigations.

Building on the experience of the last few years, the Bill will clarify the central role of collaboration in driving performance and quality in the system. As part of that, under clause 72, we are looking to remove Monitor’s role as a concurrent competition regulator. However, although we are removing Monitor’s competition regulation functions, it is right that NHS England should continue to share regulatory information with and provide assistance to the CMA so that the CMA can carry out its functions. The clause will ensure that the CMA has the information and assistance it needs to do that in respect of its competition functions to prevent anti-competitive behaviour in the wider sector. That will ensure that the CMA can continue to make sure that the healthcare sector works for consumers, patients and the taxpayer.

The clause removes Monitor’s competition functions, which it exercises concurrently with the CMA. It also inserts schedule 12, which makes consequential amendments in relation to the removal of Monitor’s competition functions. The Health and Social Care Act 2012 allowed Monitor to exercise some of the functions that the CMA holds under the Competition Act 1998 and the Enterprise Act 2002, but solely in relation to the provision of healthcare services in England. Those included powers to take action on anti-competitive agreements and conduct in the sector and powers in relation to mergers in the sector.

The Bill will enhance collaboration between different NHS commissioners, providers and local authorities. We therefore expect that NHS England’s primary role, following its merger with Monitor, will be to support commissioners and providers to deliver safe, effective and efficient care, rather than to act as an economic or competition regulator.

While competition will continue to play an important role, including through patient choice and the new provider selection regime, it is right that the duties and role of the merged NHS England give greater weight to fostering collaboration and integration rather than enforcing competition, and that competition regulation is left to the CMA. The concurrent competition duties and functions of Monitor should therefore be removed. Schedule 12, inserted by clause 72, makes the necessary consequential amendments to take account of the removal of Monitor’s competition functions. The clause allows NHS England to work collaboratively with organisations to deliver the best possible services to patients.

Finally, clause 73 removes the CMA’s role in reviewing contested licence conditions. The licence conditions have not changed substantially since they were first agreed in 2013. However, NHS England and NHS Improvement’s oversight of the NHS has changed significantly. Their primary role is to support the delivery of safe, efficient and effective care. The merged NHS England, as provided for under this Bill, should be able to set its own licence conditions for providers and regulate providers of NHS services without needing to refer matters to an external competition regulator such as the CMA.

NHS England will remain under duties to consult with local organisations on revised licence conditions. That, alongside the removal of the CMA’s review functions, ensures that any decisions remain in the interests of the NHS as a whole. In addition, NHS England’s accountability arrangements to the Secretary of State and Parliament offer a further safeguard against disproportionate changes to licence conditions. Sufficient safeguards, such as those that I have mentioned, ensure that providers have input into any proposed changes, without the need for oversight from a third party.

We therefore believe that these measures deliver the changes that the NHS has been asking for to help it deliver the long-term plan and recover from the pandemic. I therefore commend them to the Committee.

[Justin Madders]

I will not detain the Committee long, but perhaps we need a minute to pause, because, as my hon. Friend the Member for Bristol South said on Tuesday, this marks the end of an era. Monitor is gone, competition is no more, and procurement is gone—I think—and become bespoke, to be determined in more detail in the regulations. Perhaps even more stark is the fact that ICBs now have providers on the board, having jettisoned the GPs, and that NHS England is now both an actual commissioner and a systems manager for both commissioners and providers. It feels like we are going back to the future.

As the Minister said, these clauses end the role of the Competition and Markets Authority. This is the final nail; it is perhaps the final recognition that the wild promises made about the 2012 Act have failed to achieve what they said they would. The expectations that Lansley set out back then have failed to produce any desirable results. I do not know whether Government Members wish to shed a tear at this point for the end of these measures, but, for Opposition Members, health is not a commodity; it is a right. Health is not a product, and the NHS is not—and never can be—a market.

As we see the end of the ideological attempt to create a market, Opposition Members cheer the bidding into history of this failed experiment, which should never have occurred. Turning to the actual substance of the clauses, as the Minister set out, they do what is necessary to achieve that aim.

Question put and agreed to. 

Clause 70 accordingly ordered to stand part of the Bill. 

Clauses 71 and 72 ordered to stand part of the Bill.

Schedule 12 agreed to.

Clause 73 ordered to stand part of the Bill.

Clause 74

Special Health Authorities: removal of 3 year limit

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clauses 75 and 76 stand part.

[Edward Argar]

Clauses 74, 75 and 76 repeal the three-year time limit on special health authorities, restate the requirements for special health authorities and NHS trusts to keep proper accounts and records, and repeal the powers of the Secretary of State to make a property or staff transfer scheme.

Together, along with the provisions in the Bill to merge NHS England and NHS Improvement and the powers we will discuss in part 3 of the Bill in a few weeks’ time, these technical changes will help ensure that we have flexibility in the arm’s length body landscape to support the delivery of a world-class healthcare system.

Clause 74 repeals legislative provisions that currently impose a three-year time limit on any newly established special health authority. When the three-year time limit was initially imposed under the Health and Social Care Act 2012, it was envisaged that any future special health authority would have time-limited functions and therefore be temporary in nature. This has not proved to be the case.

The NHS Counter Fraud Authority is the only special health authority created since the time limit was introduced. The Government consider it unnecessary for the NHS Counter Fraud Authority, or any other special health authorities that are established in future, to undergo the process of extending their lifespan every three years. As well as repealing the time limit, the clause sets out changes to the statutory instrument used to create the NHS Counter Fraud Authority, to reflect the fact that there is no longer an abolition date.

Clause 75 simply tidies up provisions in the current legislation in respect of requirements to keep accounts. It restates the requirements for special health authorities and NHS trusts to keep proper accounts and records. It also restates a number of requirements in relation to the auditing and publication of accounts. This clause does not create any change in existing arrangements.

Finally, clause 76 abolishes powers taken in the Health and Social Care Act 2012 to transfer property, rights and liabilities from bodies abolished or modified by that Act. Those powers are now spent, so we are removing the clause to ensure neatness of the statute book, especially as a number of bodies in the 2012 Act are being abolished by this Bill. However, we have retained the ability to make transfer schemes in respect of previously transferred property and rights.

The Bill allows property, rights and liabilities that have been transferred previously under section 300(1), to subsequently be transferred to a Minister of the Crown, NHS England, an integrated care board, an NHS trust or foundation trust, or a qualifying company. That will ensure clarity that rights, property and liabilities are properly allocated and maintained, and not lost to the NHS.

These technical changes will support the wider intentions of the Bill to have a flexible and responsive national architecture for managing the healthcare system. I therefore propose that these clauses stand part of the Bill.

[Justin Madders]

I will not detain the Committee for long. We are enjoying the Minister’s conversion as regards the folly of the 2012 Act, this being another example of things not turning out as originally envisaged. As he said, these clauses are necessary and we will not oppose them.

Question put and agreed to.

Clause 74 accordingly ordered to stand part of the Bill.

Clauses 75 and 76 ordered to stand part of the Bill.

Clause 77

Abolition of Local Education and Training Boards

Question proposed, That the clause stand part of the Bill.

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[Justin Madders]

I have a couple of questions for the Minister. We would more accurately describe this as a reflection of the reality on the ground, and how local education and training boards have not really been the vehicle for change that they might have been. Their original rationale was to

“build a system that is responsive to the needs of employers, the public and the service at local level.”

It seems odd that this is happening, given that the thrust of the rest of the Bill is to increase local autonomy, but I understand that the regional people boards will be taking up the majority of the slack. It raises the question of how exactly the undoubted variation in recruitment and training needs within ICBs and regions will be addressed, and how ICBs will interact. I would like to hear from the Minister about that. There is also a concern from the British Medical Association that this could mean the loss of dedicated local support systems for GP trainees, and there is some need for clarity on how that function will be met.

[Edward Argar]

The shadow Minister is right in surmising that once LETBs are abolished, their functions will be discharged by HEE directly in the manner he has set out. On his specific questions, HEE will continue to have responsibility for workforce planning and will engage with regional people boards, integrated care boards and the regional directorates of NHS England to carry out this function. Those responsibilities will be set out in a report that we will publish describing the system for assessing and meeting the workforce needs of the health service in England, as debated in relation to clause 33—to which we may yet return, either on the Floor of the House or in the other place.

We are not removing local or regional workforce planning from the statute, as the hon. Gentleman suggested; HEE will continue to have responsibility for that workforce planning. The LETBs were sub-committees of HEE and reported to the HEE board in any case, so clause 77 just removes some of the rigidity in respect of how HEE had to operate. As is the theme throughout this legislation, this clause seeks to give a greater degree of flexibility and permissiveness to allow the system to adapt to changing needs. On that basis, I ask that it stand part of the Bill.

Question put and agreed to.

Clause 77 accordingly ordered to stand part of the Bill.

Clause 78

Hospital patients with care and support needs: repeals etc