Draft Health Care Services (Provider Selection Regime) Regulations 2023

Margaret Greenwood Excerpts

Tuesday 28th November 2023 General Committees

[Margaret Greenwood (Wirral West) (Lab)]

I shall move on directly with my remarks, I think. Although I am not a member of this Committee, I have a long-standing interest in this area, and I am grateful for the opportunity to raise some of my concerns about the regulations. I would be grateful if the Minister could respond to my questions.

On direct award process C, it would seem that in the event that a contract is currently held by a private sector organisation, there may be very little chance of the service being brought back into the public sector. That may include situations where, while the service may be being delivered to an adequate standard, the fact that it is being done by a private company is drawing expertise in related areas away from the NHS. That may have an adverse impact on other related NHS services and particularly on our ability to deliver comprehensive services.

The Government say that they are not privatising the NHS, but the World Health Organisation defines privatisation as

“a process in which non-government actors become increasingly involved in the financing and/or provision of health care services”.

That has happened and is happening.

It is not clear from the regulations that the most suitable provider process could not lead to a situation where the contract for a service that is currently provided by an NHS provider is given to a private company. I would be grateful if the Minister gave a clear assurance that the most suitable provider process will not lead to the replacement of NHS providers by private or other independent sector organisations when their contracts are up for renewal. If he cannot give that assurance, the regulations are surely a matter of serious concern for NHS staff and their unions, and indeed, in relation to the very future of the NHS as a universal and comprehensive public service.

The most suitable provider process involves the awarding of a contract to providers because the relevant authority can identify the most suitable provider. I am concerned that the “most suitable provider” is a very wide and poorly defined notion. The term “suitable” is subjective and could be very much determined by which criteria the relevant authority chooses to give priority to. Given that ICBs are being required to make average efficiency savings of 5.8% this year, it is not difficult to imagine that a relevant authority may feel the need to prioritise the criterion of value above all else, and value is to do with the cost of what it is getting.

It is feasible that that may lead to a reduction in the quality of services provided over time and to a greater number of private sector organisations being awarded contracts, since they can cut costs by paying staff rates below those set out under “Agenda for Change”. With reference to the key criteria that relevant authorities must take into account when awarding contracts, will the Minister set out clearly that they do not expect them to select the criteria of value as the top priority and that all the other criteria must be considered as at least equal to it?

Although there is room in the process for providers that are aggrieved that they have not been given a contract to make written representations to the relevant authority, what opportunity will be given to the public and Members of this House to raise concerns on behalf of their constituents about decisions to award or not award a contract to a particular provider?

On the issue of data, the Royal College of Nursing has pointed out that some independent sector providers are not subject to the same requirements for data collection, reporting or publication as NHS providers. It states that procurement processes should be mindful of that and not make decisions that are likely to weaken access to provider reporting or opportunities for scrutiny. How does the statutory instrument address that?

The Royal College of Nursing also highlighted an area of concern in previous procurement regimes: that service contracts can be awarded to providers that have no expertise in delivering the type of healthcare provision for which they seek a contract. The RCN argued that procurement decision-making processes should include safeguards to ensure that providers can demonstrate sufficient expertise in delivering the required services and in managing clinical risk, and that concerns can be raised and independent scrutiny provided. Is the Minister satisfied that safeguards are in place to ensure that providers that are given contracts will have expertise in delivering the type of healthcare provision that the contract is for?

The regulations would not be necessary had the Conservative Government not introduced, back in 1991, the purchaser-provider split in the NHS, thus moving away from a publicly run and publicly owned national health service to an NHS that sits within a health marketplace, with all the additional costs, bureaucracy and inefficiencies to which that gives rise.

The regulations do not make the NHS the preferred provider. The Government have failed to deliver on that. They could have supported the very sensible amendment tabled by my hon. Friend the Member for Leeds East (Richard Burgon) during the passage of the Health and Care Act, which would have provided for a presumption in favour of contracts being awarded to NHS trusts and NHS foundation trusts, and made provision for meaningful public consultation where integrated care boards propose to award any contract for those services to any body other than an NHS trust or NHS foundation trust. That is the spirit that the draft regulations should embody but sadly do not.

Without the NHS as the preferred provider, I am concerned that existing levels of privatisation will be locked in and that privatisation may increase. I hope that, as a result of the regulations, the award of contracts will promote and strengthen the position of the NHS, so that we can continue to enjoy the expertise of professionals who are able and employed to deliver a comprehensive and universal national health service. I ask the Minister for his assurances on the points that I have raised.

[Andrew Stephenson]

I thank hon. Members for their contributions and I will try to address as many of the points as possible in the time allowed.

I thank the shadow Minister, the hon. Member for Birmingham, Edgbaston, for her support for the regulations. She talked about greater accountability and transparency, which are vital to the process. We feel that they are ingrained in the regulations, but if there is anything more that we can do to ensure that that is the outcome of the process, we are keen to work with her on that.

I have been assured by my officials that good progress is being made in putting together the independent panel, but I am keen to see it in place in good time for the commencement of the regulations. The shadow Minister asked about service user involvement in the procurement process. As she may know, commissioners must follow NHSE guidance on people and communities, which guides how commissioners must involve patients and the public in commissioning healthcare services. That advice is available online if Members want to see more details.

We probably disagree about some of the controversy around the procurement of PPE during the covid pandemic. Let me be clear that the draft regulations apply only to the arrangement of healthcare services that are delivered to patients. That does not include the procurement of goods or other services, which will continue to be procured under the wider rules in the Procurement Act 2023 from October next year.

At the same time, let me reassure hon. Members that every effort was made to quality-assure the products that the Government procured during the pandemic. Estimates of demand relied on a reasonable worst-case scenario in a very fast-moving situation, and of course the reasonable worst-case scenario was that we would need to purchase significant amounts of PPE. Despite the enormous challenge, we conducted due diligence on more than 19,000 companies, and only around 2,600 companies made it through that initial process. All offers, regardless of the route through which they were identified, underwent rigorous assessment, and, importantly, the source of the offer did not affect the way that the offer was treated. To protect patients and staff, the Government spent £12 billion on PPE for the covid response, which was a time when we needed to act fast to protect the public. Of that, only 3%, or £673 million-worth, was not fit for use.

Moving forward, we have established a contract dissolution team to maximise the value obtained from PPE contracts. The team is reviewing contracts that did not perform, either wholly or in part, to find ways to allow the PPE to be used, replaced or refunded. Our current trajectory should see the Department recovering significant amounts of money.

I turn to the contribution of the hon. Member for Wirral West and her concern about the so-called privatisation of the NHS. I recognise that that issue comes up in debates time and again. To discuss the point properly, we must recognise that the independent sector includes a broad range of organisations, all of which have an important role to play in the day-to-day delivery of NHS services. It includes the work of charities, social enterprises and cutting-edge independent diagnostic centres, each of which has its own role to play in the NHS to ensure that patients receive the best possible care—I was pleased that the shadow Minister acknowledged that.

[Margaret Greenwood]

I thank the Minister for making that point. He is talking about charities, but he must recognise that where a private provider is delivering NHS services, the money has to go to shareholders. That money could be spent on patient care. He can talk about charities, but that is not what I am talking about, as he knows. He is probably going to get on to this now, but can he give a clear assurance that the most suitable provider process will not lead to the replacement of NHS providers by private or other independent sector organisations when the contracts come up for renewal?

[Andrew Stephenson]

The most suitable provider process is designed with the NHS to give the right level of flexibility for the NHS. Commissioners can choose how to balance the key criteria, so value is used alongside the other criteria set out in the process. I know the hon. Lady has come to many debates over the years and said that the Government are privatising the NHS. In 2013-14, 6.1% of total health spending was spent on the purchase of healthcare from the independent sector. In 2021-22, the figure was 5.9%, so the idea that we are privatising the NHS is just nonsense. I want to ensure that that is on the record.