National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013

Lord Davies of Stamford Excerpts

Wednesday 24th April 2013 Lords Chamber

[Baroness Williams of Crosby]

In this particular set of regulations we are giving statutory underpinning to Monitor in a way that will mean, as it did previously, a much greater opportunity to deal with most objections on the spot and not have them carry on into the courts at great expense to the taxpayer and to patients. If we turn it down tonight it will leave us without that structure altogether and we will go back to where we were.

In conclusion, while I have very strong sympathy with the view of the noble Lord, Lord Owen, that the National Health Service of the 1980s was a more true state service than anything today, I am afraid we cannot go back; we are where we are. The best thing we can possibly do is to make patients’ interests the very centre of what the NHS is all about and to recognise that this new route is the way we are going. It could, however, be very exciting and it would lead to a very much more accountable NHS than we have had in recent years.

[Lord Davies of Stamford]

We have had a very thorough and memorable debate on this important subject, and that is not a bad thing. It is striking that the House should be so full on this occasion, because the NHS is very close to all our hearts and to the hearts of the whole of this country. We had a very powerful speech by the noble Lord, Lord Owen, and against that we have had attempts by a spokesman on behalf of the coalition, and by the noble Lord, Lord Walton, to whom we always listen with great respect on these occasions, trying to reassure us that things are not quite as alarming as they appear to be—not quite as alarming as the BMA, which the noble Lord, Lord Walton, once presided over in a very distinguished fashion, appears to think.

Before we accept those blandishments and reassurances, we need at least four very specific assurances from the Government tonight. One is on the matter very well raised by my noble friend Lord Hunt. Clause 5 is extremely weak in providing any protection against the absoluteness of the requirement for CCGs to go out to tender. It simply says that they do not have to do so if in fact there is no other party able to provide the relevant service. As the noble Lord, Lord Hunt, very clearly said—and he is absolutely right—in a large urban area such as London or the West Midlands, there will always, or almost always, be somebody else who is technically capable of delivering the service, so that is extremely weak protection. I am not very reassured by what the noble Lord, Lord Walton, said on that subject. It is no use saying “We’ve got guidance”. We are now passing the law, and guidance cannot override the law. What is more, when we have changed the law you can be absolutely certain that an awful lot of lawyers and some very aggressive companies will be waiting to use this law to try to force open a business opportunity.

[Lord Mackay of Clashfern]

Can the noble Lord say what sort of clause he proposes instead of Clause 5 that would be consistent with the European legislation and the regulations made here under the previous Government in implementing it?

[Lord Davies of Stamford]

I am in favour of scrapping all these regulations completely and simply voting them down tonight. That is my simple answer. I put the onus on to the noble Lord—if he can come up with a suggestion which reassures me, so much the better.

My second concern is over the future of networks. I was lobbied over the weekend by one or two doctors in Lincolnshire and I undertook to speak about this matter. One of them served as a junior doctor in Newcastle under the noble Lord, Lord Walton, and was full of affectionate and very admiring memories of the way in which he ran his department. Nevertheless, those doctors are deeply concerned—as are so many across the country—about the impact on networks. We have all read the handouts and papers from the BMA on this subject. I notice from the way in which the regulations are drafted that the protections regarding networks and integration in Regulations 2 and 3(4) in no way override the requirement in Regulation 5 to go for tendering. That is not a sufficient protection. They simply say that there is one criterion, and that is not good enough. If the Government want us to take these regulations seriously, I expect them to provide some specific reassurances on that.

My third concern is this. We all know that the ratio of fixed to variable costs in healthcare is extremely high. To use a technical term, the operational gearing of healthcare, particularly in the secondary sector, is very high. That means that if you take out any particular activity from a general hospital, the existing overheads will then fall on a reduced range of activities and therefore a reduced range of revenues. So you will make unviable—or are likely to make both financially and possibly technically unviable—other services which are being delivered in that particular hospital.

Under these new regulations, will it be possible for a CCG to take the view that it does not want to tender either service, which, if it took it away from the existing provider, would make that provider unviable not merely for that service but for the whole range of services currently being provided? In other words, will it be possible for a CCG to take the view that it is not in the interests of the patient in that particular area to run down or destroy a local hospital or a local unit? Will the regulations provide any protection for a CCG which, in the public interest, decides not to tender out for that particular purpose?

My final concern is one on which, again, I should like a specific reassurance from the Government—it can be in a yes or no form. We live in an international digital age. We know that medical services, even remote surgery, can be provided not merely here but anywhere around the world. If electromagnetic waves travel at speed c, that merely means that you have something like a 20th of a second delay if you are operating from India. A 20th of a second may not be crucial to that operation in terms of security.

Therefore, we may well face the possibility of tendering out services all around the world. It may be that a CCG will quite legitimately decide that the Massachusetts General Hospital is the best place to go for a particular type of surgery. That is fine but, again, if a CCG decides—or, more likely, if the national Commissioning Board decides—that it is in the interests of this country to keep a capability here, will it be protected in taking that decision against Monitor or against the competition laws which will then operate?

An even better example, perhaps, than remote surgery is imaging. Whether it is computerised thermography, ultrasound or magnetic resonance, these things can be read anywhere around the world in real time 24 hours a day, seven days a week. It may well be that very good offers will come in from India to provide this particular service. In those circumstances, if we went for those offers in a particular region—perhaps in the whole country—we would not have any radiologists left at all. They would all have gone somewhere else in the world. Will the national Commissioning Board and the CCGs be protected if, in the interests of keeping what they regard as an essential capability in this country, they decide that it is not appropriate to tender out a service or to accept a tender, however financially and technically attractive that tender might be?

[Baroness Hollins]

My Lords, I begin my comments by reminding the House that I am the current president of the BMA and a psychiatrist. The matter we are discussing this evening has been one of the most controversial aspects of implementation of the Health and Social Care Act. We are in a rather unusual situation, debating regulations that have already been subject to revision, following widespread concern about their intent and the strength or otherwise of ministerial assurances. This is remarkable. However, the opportunity has been afforded to us tonight to rehearse the issues once again and to ascertain why there is continued unease about these regulations. It is worrying that these concerns have not abated, despite repeated assurances from the Government during the passage of a Bill that we spent so many hours debating and further assurances received since the regulations were laid earlier this year.

The regulations are intended to ensure good procurement practice, as required by the 2006 EU directive and subsequent case law. They are substantially the same as those that were in place prior to the 2012 Act, which had the status of declaratory guidance and should have been enforceable in the courts. Will the Minister tell us how many legal challenges have been made since 2006 and how many organisations have deferred court action pending Monitor’s new powers? Will he also confirm that in future Monitor will provide regular reports on the scale of legal challenges and on their outcomes? The new regulations have the effect of binding the new clinical commissioning groups into the existing legal framework. This reminds us that the NHS of 2006 was a rather different organisation from today’s NHS, which is evolving rapidly after the radical changes of the Health and Social Care Act 2012.