Health and Social Care Bill

Debate between Karl Turner and Paul Burstow

Tuesday 20th March 2012 Commons Chamber

[Paul Burstow]

I am responding to my hon. Friend and, if the hon. Gentleman does not mind, I am going to carry on doing so.

In addition, the Office of Fair Trading has published guidance that is consistent with the view that the Department has expressed on this matter. I will write to my hon. Friend with the detailed case law, so that I can quote the case reference for him.

Claims have also been made that part 3 does something else. Specifically, it has been suggested that it introduces competition and competition law into the NHS, as if that were the case for the first time. Part 3 does not do that, nor does anything else in the Bill. The NHS will, as a result of the Bill, be better insulated against the inappropriate application of competition law, particularly as it develops more integrated services, which are now embedded throughout this legislation. Without Part 3, the NHS would continue to be exposed to price competition and the preferential treatment of private providers introduced by the previous Labour Government. Indeed, Labour’s 2006 procurement regulations assume that public authorities will be securing services from a market—that will not always be appropriate in the NHS—and so, under the existing regulations from the 2006 legislation, commissioners are placed at greater risk of legal challenge whenever they decide to secure services without competition.

[Karl Turner (Kingston upon Hull East) (Lab)]

Will the Minister say whether Monitor will keep its role as an independent regulator of foundation trusts?

[Paul Burstow]

I am coming on to deal with a whole section of amendments that were made in the other House and which this Government have accepted, when I will address that very point. If the hon. Gentleman is patient, he will get an answer to his question.

--- Later in debate ---

[Paul Burstow]

I am grateful to my right hon. Friend for his questions. Let me start with the issue of Hinchingbrooke, which is an important one. It is worth remembering that the vast majority of the process that led to that franchise arrangement was completed under the Labour Government, not by the current Administration, and was part of the arrangements put in place by the Labour Health Act 2006 and Health and Social Care Act 2008. The Bill makes sure that in future there can be no scope for sweetheart deals to incentivise new entrants into the NHS, it ensures that there cannot be price competition of the sort that was allowed under the 2006 Act, and it ensures a protection for commissioners to decide when and if it is appropriate to use competition. That is not a protection that they enjoy under the 2006 or the 2008 Acts.

[Karl Turner]

Will the Minister give way?

[Paul Burstow]

I have answered the hon. Gentleman’s question. He should read Hansard later.

I was asked, finally, whether there is a cap of 49%. Let us go back to the deliberations in another place before Christmas, when the issue first came up. Our noble Friends were concerned to make sure that we put it beyond doubt that foundation trusts were protected from the full force of competition law and that those organisations would continue to have as their principal purpose their service of NHS patients. That is why we have further amendments, which I shall come to shortly, about how a 5% increase would trigger further consultations and votes by the governors.

--- Later in debate ---

[Paul Burstow]

No. I shall make some progress, if the hon. Lady does not mind.

In addition, Monitor could also, in exceptional circumstances, use the enduring powers that I was describing to direct a foundation trust to remove its directors or governors. In other words, a direct intervention power is preserved by the amendments and changes that we have made.

The Government’s ambition is that eventually foundation trusts should have more responsibility for their governance than they do under the current arrangements. This will depend, in particular, on strengthening the role of foundation trust governors in holding their boards to account. We have listened to the concerns about the pace of change. Hence, we have amended the Bill so that Monitor will also have, on a transitional basis, express powers to remove, suspend or replace directors or governors of a foundation trust directly, without the prospect of an appeal to the first-tier tribunal. We would expect Monitor to use these powers to address failure of governance, which puts the trust at risk of not meeting its licence conditions, such as the requirements that I have already described.

[Karl Turner]

Is it right that the only provision preventing privatisation is the requirement in clause 161 that foundation trusts must use the NHS more than they use private providers? Is that not, in effect, the 49% cap?

[Paul Burstow]

No, because the overarching duty is that the service remains free at the point of use. Also, there are protections—[Interruption.] The hon. Gentleman asks a question, but when I try to give him an answer, he shouts and screams at me. That does not help the debate. What I wanted to say was that when it comes to mergers and acquisitions, there are clear requirements to protect NHS assets from a transfer out of the NHS and out of the state sector. The powers that I was describing would be retained as long as Parliament considered necessary, and they could not be removed before 2016 at the earliest and would then be subject to criteria that Monitor determines, with the Secretary of State’s approval.