To: seclegscrutiny@parliament.uk

The Lords Secondary Legislation Scrutiny Committee

Dear Sir,

Secondary legislation under Section 75 of the Health and Social Care Act 2012

I notice that the Lords’ Secondary Legislation Scrutiny Committee will be discussing the regulations laid by the Government under Section 75 of the new NHS Act 1 at their meeting on 5 March.

I write to request that the Committee send these regulations for reconsideration. The reason is that there is a significant disjunction between the public statements of ministers and the content of the regulations.

Ministers said:

• Andrew Lansley MP: “There is absolutely nothing in the Bill that promotes or permits the transfer of NHS activities to the private sector.” (13/3/12, Hansard )
• Andrew Lansley MP, 12.02.12, letter to Clinical Commissioning Groups: “I know many of you have read that you will be forced to fragment services, or put them out to tender. This is absolutely not the case. It is a fundamental principle of the Bill that you as commissioners, not the Secretary of State and not regulators – should decide when and how competition should be used to serve your patients interests..”
• Simon Burns MP: “…it will be for commissioners to decide which services to tender…to avoid any doubt—it is not the Government’s intention that under clause 67 [now section 75] that regulations would impose compulsory competitive tendering requirements on commissioners, or for Monitor to have powers to impose such requirements.” (12/7/11, Hansard, c442 )
• Lord Howe: “Clinicians will be free to commission services in the way they consider best. We intend to make it clear that commissioners will have a full range of options and that they will be under no legal obligation to create new markets….” (6/3/12, Hansard )
• Nick Clegg: “That’s why I have been absolutely clear: there will be no privatisation of the NHS. The NHS has always benefited from a mix of providers, from the private sector, charities and social enterprises, and that should continue… It’s not the same as turning this treasured public service into a competition-driven, dog-eat-dog market where the NHS is flogged off to the highest bidder.” 26/5/11

The regulations

The regulations break these promises by creating requirements for virtually all commissioning done by the National Commissioning Board (NCB) and Clinical Commissioning Groups (CCGs) to be carried out through competitive markets regardless of the will of local people. They contain legal powers for Monitor to enforce the privatisation spontaneously or at the request of private companies which lost bids.

They would also make it impossible to fulfil some of the key thrust of the Francis report recommendations.

According to David Lock QC, the regulations as a whole have the effect of closing down the current option of an in-house commissioning process, even if local people wish it. This option has been taken in a number of cases, including since the passage of the Act . Ministers have confirmed that at the present time such arrangements are legal and would not give rise to challenge under EU Procurement law .

Regulation 5 – awarding a contract without competition can, effectively, only be done in an ‘emergency’, a much narrower restriction than suggested in the parliamentary debate.

Regulation 10 makes whatever Monitor judges to be an “unnecessary” restriction of competition, illegal. It thus effectively closes down the current option of one state body (i.e. the NHS Commissioning Board or a Clinical Commissioning Group) merely making a new arrangement (not contract) with another – i.e. an NHS Trust.

Regulation 12 forces commissioners to use the market to meet waiting time considerations, in contravention of assurances offered to CCGs during the passage of the Act when they were told they would have discretion and could also consider quality issues. This regulation also ignores the summary of the DH’s own consultation which highlighted that waiting time considerations should not be used to override quality considerations.

Part 3 Regulations 13-17, covering Monitor’s powers

The sweeping (and time unlimited) statutory powers given to Monitor enable it to decide when the CCG has breached regulations (Regulation 14), to end any arrangements the CCG has come to and to impose their own (Regulation 15) – including the criteria governing selection of suppliers, and more fundamentally, the decision about whether to use competitive methods like tendering and AQP at all. Under these regulations Monitor will have sweeping statutory power to enforce (as yet unseen) guidance, whereas the current guidance is not legally binding.

In summary, therefore, there is a contradiction between the intention of the Act as expressed by ministers and the consequences of the regulations.

The regulations need to be reconsidered and rewritten.

Yours faithfully,