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Why the NHS Health and Social Care Bill doesn’t make sense to me
This post is inspired by brief discussions I’ve had with Sunny Hundal where Sunny asked me lots of questions I couldn’t answer!
Of course, Labour is clear that they oppose the NHS Health and Social Care Bill. What they had not been clear to me about is why they oppose it, though I am very grateful to Sunny Hundal for pointing me in the direction of the ‘Drop the Bill’ website which establishes five important alleged concerns of the Bill: postcode lottery, longer waiting times, privatisation, damaged doctor-patient relationship, and waste.
Labour and supporters bandy around the statement ‘It is privatising the NHS’. This is indeed a very good way of looking at it, as the fundamental thesis is that there will be a greater role for the private sector in the provision of health services for England. To ignore the existing contribution of the private sector in the NHS is complete nonsense, however. NHS budgets operate millions of pounds, and the private sector is clearly involved. Most people in the general public have heard of NHS procurement, or “NHS logistics”; many people, in both the private and public sector are somehow enmeshed in the NHS ‘supply chain’. In fact, at least with privatisation, according to the aspiration of Baronesss Thatcher, there is public ownership of the infrastructure. The worrying aspect here is that NHS entities can be bought by hedge funds or even foreign investors, as part of a multinational investment, and indeed Ed Miliband might be right after all – corporate entities might wish to sell bits off the NHS ‘for a quick buck’ in his much derided speech on corporate social responsibility last year. There is as such not illegal, but many will not agree with this sensitive corporate handling of key infrastructure assets.
A more mature intelligent debate is to consider why precisely the NHS Health and Social Care Bill does not make sense. It firmly places the NHS in private hands, and it is worth scrutinising carefully at this point what the legal entity of the NHS Trust is.
If it is a private limited company under law, it is under legal obligation to maximise shareholder dividend, and the question then becomes who exactly are the shareholders, and how will their profits from NHS patients be used? One assumes that NHS Trusts will be subject to all aspects of company law, such as insolvency law and competition law inter alia. How is competition going to work? And are entities going to offer products or services that are ‘profitable’? What about dementia, for example? I am worried about the fact that this could lead to major imbalances in service provision at both primary care level and in NHS Trusts. How is the Tory-led Government going to ensure that apples are not unfairly compared to bananas in this new free market of the NHS? This involves a complex understanding of how products and services are going to be costed in the new NHS; will they be simply the cost of providing the products or services, or will some corporate entities wish to undercut other suppliers by ‘penetration pricing'; or will some suppliers price themselves at a high price to denote high brand value, for example for ‘the best hip operation in town’? For that matter, how does the Bill deal with measuring benefits and outcomes for the patient, rather than the corporate supplier?
I believe strongly that we will almost have to invent a new entity in law to cover NHS trusts, if it is not the private limited company or charity under the Companies Act or Charities Act. I do not feel that such strategic change will succeed in management for one clear reason, anyway. In any such rushed strategic change, you must have follower support; so even if the LibDems in the lower and upper Houses act as the lubricant for the Conservative engine in allowing this Bill a clear path to Royal Assent, the implementation of the NHS Bill will almost certainly fail due to lack of support from many GPs, the Royal Colleges, many other health staff, and most importantly the patient. I also feel that, in management, it is going to impossible to implement such organisational structural and cultural change in such a hurry.
Calling the BMA a ‘trade union’ itself is not a trivial point. Trade Unions protect the rights of employees rather than shareholders (unless stakeholders are also shareholders), and therefore if the NHS Bill is enacted without key stakeholder support it will fail. This is because the members of this trade union are not involved in the strategic change process at all well, and feel it is being inflicted without their consent. They also will have much tacit implicit knowledge about the NHS, as well as codified principles, which will be harder to shift without specialist change managers.
However, there is no doubt that somebody does need to look at the management structure of the NHS, which is why I should rather Labour has a constructive input into the debate, on behalf of public sector workers, and if it decides it wishes for blanket obstruction, it should consider urgently an alternative, because it is currently the case there are parts of the NHS which are financial disaster zones. Furthermore, the NHS does not always work well; very many nurses work with poor pay and conditions, but stories about suboptimal care unfortunately do rumble on (especially in elderly care). Finally, there is a strong part of me that believes in a system where we all share risk in a National Health Service by paying a contribution – this is where reform of the tax system is vital, as the NHS is currently paid for out of income tax mainly to my knowledge. If private enterprises are allowed wholly to run the NHS, it could be that the business entities which go out of business are those where there are particular ‘hotspots’ of disease due to an unfortunate combination of nature and nurture, for example chronic obstructive airways disease in coal miners in Wales, or high incidence of cardiovascular disease in Bengali immigrants in Tower Hamlets. Health inequalities are a serious problem for medical care, and replacement of the NHS with increased private input for entities to run at a profit would be a serious threat to that.
That’s the sort of debate I wish for why I oppose the NHS Health and Social Care Bill. And what about Dilnot also?
This is a personal view of @legalaware, and does not represent the views of the BPP Legal Awareness Society, nor of BPP.
The LegalAware Training Contract Applicant Of The Year Award Competition 2011
It is with great It is with pleasure that @legalaware and @tc_applications announce the first ever “Training Contract Applicant Of The Year Award” for 2011. Modelled on the BBC Sports Personality of the Year Award #SPOTY, the winner will be:
Training Contract Applicant Of The Year
Next year, if there is a sufficient number of entries, prizes will also be awarded for:
Best International Student Entry
Best Legal Education Team
Best Newcomer
Anyone can in fact enter this competition. It’s only for fun – you could be a lawyer, law teacher, law student, legal recruiter, or none of the above.
Unlike most ‘marking matrices’ commonly used by corporate law firm HR specialists, each question will be marked on the following basis:
Spelling and grammar 5
Relevance 5
Humour 10
Interest 10
Each question will be double-marked. All competition entries should be through a valid e-mail address, although entries can be anonymous. If you work for a law firm, you must never give your real name or firm details. Answers should be emailed to correspondence@lasmeetings.org
There is a word limit of 100 words per question. You may decide that you wish to answer in much fewer words. In the event of a tie, a winner will be selected at random.
This year’s questions are as follows.
1. Describe an example of team in which you have taken part. What did you learn from this experience?
2. Describe an example of where you have demonstrated commercial awareness.
It’s important to realise that this is a spoof of online training contract application forms. Therefore the panel is looking for comical examples you’d never put in a real application!
The prize will be the prestigious award at a prestigious awards ceremony at a prestigious hotel in London, sometime in the future. The best answers will be published, with the permission of the contestant, in a blogpost in early 2012.
Deadline: January 3rd 2012.
Best of luck!
The final report of the Independent Commission on Banking from Sir John Vickers
Ahead of schedule, the final Report has just been published. This Final Report sets out the Commission’s recommendations on reforms to improve stability and competition in UK banking. The context of this Final Report is striking, as set out in the conclusion of the Executive Summary. “The fact that the economy is currently weak is no reason to be distracted from this goal. It is strongly in the national economic interest to have much sounder banks than before. Postponement of reform would be a mistake, as would failure to provide certainty about its path.”
The Final Report commences thus:
The recommendations in this report aim to create a more stable and competitive basis for UK banking in the longer term. That means much more than greater resilience against future financial crises and removing risks from banks to the public finances. It also means a banking system that is effective and efficient at providing the basic banking services of safeguarding retail deposits, operating secure payments systems, efficiently channelling savings to productive investments, and managing financial risk. To those ends there should be vigorous competition among banks to deliver the services required by well-informed customers.
The international reform agenda – notably the Basel process and European Union (EU) initiatives – is running concurrently, but needs to be supported and enhanced by national measures, according to the Committee. Sir John Vickers and colleagues believe that mcro-prudential regulation by the new Financial Policy Committee should help curb aggregate financial volatility in the UK.
They comment specifically that improved supervision by the new Prudential Regulation Authority should avoid some shortcomings of regulation exposed by the recent crisis. The Commission’s view is that the right policy approach for UK banking stability requires both (i) greater capital and other loss-absorbing capacity; and (ii) structural reform.
The Committee notes that governments in the UK and elsewhere prevented banks from failing in 2008 because the alternative of allowing them to go bankrupt was regarded as intolerable. Under Basel III, banks will be required to have equity capital of at least 7% of risk-weighted assets by 2019, while risk weights have also been tightened.
The Committee believes that structural separation should make it easier and less costly to resolve banks that get into trouble. They feel that one of the key benefits of separation is that it would make it easier for the authorities to require creditors of failing retail banks, failing wholesale/investment banks, or both, if necessary, to bear losses, instead of the taxpayer. Secondly they believe that structural separation should help insulate retail banking from external financial shocks, including by diminishing problems arising from globalisation in the banking sector. The Commission’s analysis of the costs and benefits of alternative structural reform options has concluded that the best policy approach is to require retail ring-fencing of UK banks, not total separation. They strikingly comment that:
The objective of such a ring-fence would be to isolate those banking activities where continuous provision of service is vital to the economy and to a bank’s customers. This would be in order to ensure, first, that such provision could not be threatened by activities that are incidental to it and, second, that such provision could be maintained in the event of the bank’s failure without government solvency support. This would require banks’ UK retail activities to be carried out in separate subsidiaries. The UK retail subsidiaries would be legally, economically and operationally separate from the rest of the banking groups to which they belonged. They would have distinct governance arrangements, and should have different cultures. The Commission believes that ring-fencing would achieve the principal stability benefits of full separation but at lower cost to the economy.
Governance
Since the development of the Combined Code in the City here in London, a huge amount of attention has been paid to effective corporate governance mechanisms such that the financial services industry and the general public can have complete faith in the banking sector. Effective ring-fencing also requires measures for independent governance to enforce the arm’s length relationship. The Commission’s view is that the board of the UK retail subsidiary should normally have a majority of independent directors, one of whom is the chair. For the sake of transparency, the Committee argues that subsidiary should make disclosures and reports as if it were an independently listed company.
The Final Report interestingly considers the effect of this structural reorganisation on corporate culture.
Though corporate culture cannot directly be regulated, the structural and governance arrangements proposed here should consolidate the foundations for long-term customer-oriented UK retail banking.
This tackles one fundamental issue in organisational change in management – that whilst you can radically alter the structure of a corporation, you may not be able to alter it fundamental make-up culturally, and its values and modus operandi continue as before. The combined effect of the Commission’s recommended reforms on structure and loss- absorbency can be explained in relation to the ‘too big to fail’ problem, i.e. that government is compelled to save big banks for fear of the consequences of not doing so.
UK competitiveness
The effect on the City as one of the leading global markets is discussed in great detail, unsurprisingly.
Vickers and colleagues do not wish to throw the baby out with the bathwater. They believe that these reforms, arguably the most substantial reforms in the banking industry in a lifetime, will ensure “the City’s international reputation as a place to do business.” UK competitiveness also features extremely prominently in the Commission’s remit, unsurprisingly. The Committee argue that recommendations in this Final Report will be positive for UK competitiveness overall by strengthening financial stability. The proportion of wholesale and investment banking activity in the City that would be directly affected by the proposed reforms would be relatively small, and the ability of UK banks to compete against foreign banks should be maintained by allowing, subject to important provisos, international regulatory standards to apply to their wholesale/investment banking activities. The proposed capital standards for ring-fenced banks, which have been calibrated partly with an eye to regulatory arbitrage possibilities, should not threaten competitiveness in retail banking either.
The consultation on the Interim Report has apparently indicated that a greatly improved switching system for personal and business current accounts could be introduced without undue cost. The Commission therefore recommends an early introduction of a redirection service for personal and SME current accounts which, among other things, transfers accounts within seven working days, provides seamless redirection for more than a year, and is free of risk and cost to customers. The threat of substitutes and barriers to entry have long been recognised by Prof Michael Porter from the Harvard Business School as being pivotal in analysing the competitive advantage of any entity in industry (although Porter’s original analysis emanated from American-based manufacturing industry.)
The relationship between competition and regulation
One of the reasons for long-standing problems of competition and consumer choice in banking and financial services more generally has been that competition has not been central to financial regulation. Sir John Vickers and his Committee for the first time considers this specific issue.
The current reform of the financial regulatory authorities, especially the creation of the FCA, presents an opportunity to change this, which in the Commission’s view should be seized. The issues of switching and transparency mentioned above are examples of where the FCA, with strong pro-competitive powers and duties, could make markets work much better for consumers. It could also do so by tackling barriers to the entry and growth of smaller banks.
The Interim Report also considered whether there was a case for the relevant authorities to refer any banking markets to the Competition Commission for independent investigation and possible use of its powers to implement remedies under competition law.
The final report instead conclude that such a reference is not recommended “before important current policy questions are resolved, but could well be called for depending how events turn out in the next few years.”
Conclusion
The final conclusion to the Executive Summary is extremely sobering: “Banks are at the heart of the financial system and hence of the market economy. The opportunity must be seized to establish a much more secure foundation for the UK banking system of the future.”
Quotations are provided from the Executive Summary of the Final Report of the Independent Commission on Banking published at 0615 on 12 September 2011.
Continued problems over Google Adwords
Interflora initiated litigation proceedings last year after M&S purchased its rival’s name as a Google AdWord, which meant that when an internet user typed ‘Interflora’ into the search engine an advert for M&S Flowers appeared.
According to the Advocate General of the European Court of Justice (ECJ), Niilo Jääskinen, Marks & Spencer’s (M&S) use of Google AdWords infringed florist network Interflora’s trademark. An ECJ ruling on the case will be made in a few months’ time, and if the decision is in favour of Interflora there could be huge ramifications for the whole of the online advertising sector.
The Advocate General considers that use of a rival trademark as a Google AdWord constitutes trade mark infringement where the consumer is unable to determine whether or not the advert is for the brand they originally searched for. Even though the ECJ ruled last year that Google was not liable for trademark infringement by selling AdWords to rival companies, the search engine firm could feel the impact of any decision made in favour of Interflora in other ways. Last year, the European Court of Justice found that Google didn’t infringe on other companies’ rights by allowing competitors to bid on trademarked keywords. The court, however, left it to individual countries to decide on the matter and possibly apply stricter rules. Both Google and the LVMH (Moët Hennessy Louis Vuitton) luxury-good company, two of the parties involved, have declared victory in the case.
The AdWord service is a major source of revenue for the California-based corporation Google. It is possible, with this opinion, that Google’s customers may well reconsider how extensively they want to use a competitor’s mark as an AdWord.
An introduction to the GoogleAdwords as trademarks is given in the Intellectual Property video of ‘Legal Aware’.
Prize competition – spot the mistakes in a blog post
Walaa Idris, in her popular blog, posted an article as advice for the blogger Darren Bridgeman.
Bad spelling and grammar are evident in all our blog posts. Walaa offered this really helpful advice:
My advice, as someone who knows how you feel, because I felt embarrassed whenever I misspelled words and made such obvious mistakes, but I found although some who correct me do it for their own self satisfaction, most truly care and just want to help me. Even though I continue to correct and pay extra attention to every word I type, still, I make many mistakes. Somehow I feel like the Ambassador of all the poor English speakers and writers and as such feel it is my duty to ask you to reconsider – so please rethink your decision.
Here is the text of a mythical blog post. There are at least 14 errors in it, identified in Simon Heffer’s “Strictly English” as common grammatical errors in the English language. It may be purchased from Amazon here.
Blog post by Troubleblogger
This week has been an extraordinary week in British politics. For example, one blogger has alleged that a Tory MP has left his wife for a woman, while she is fighting malignant melanoma.
Yesterday, there was a very interesting debate in the House of Commons on student finance. The excellent discussion demonstrated the problems of making policy in a Coalition government. The difficulties is probably compounded by the fact that Vince Cable is using data which is probably out-of-date. The thing is that none of the options for the future of student finance are credible.
Some of the options proposed to Lord Brown are inforgettable. To be fair, I would of thought that some of the options proposed would have seemed impressive to the Institute of Fiscal Studies. However, raising tuition fees is now a distinct possibility following the Browne Report. The problem is that Clegg said that he would not never go there.
In terms of feedback, the Labour Party must be feeling good. The concertos of criticism from Liberal Democrat voters were not nice to listen to. In a sense, it was if Miliband was trying to collapse a house of cards. Some commentators just got personal. For example, yesterday, some people, working for the Times especially, called Vince Cable ‘an ugly monster’, but this is perhaps tad unfair. I wonder what Andy Marr would have made of that?
It is difficult to know who came out of worst – Clegg or Cable. Some think it’s better if Cable had quitted his cabinet post, given his beliefs. Commentators wrote on Cable giving his speech whilst being transmitted on Sky.
There’ll be a debate on it: I don’t know if I’ll go. Under the circumstances, it should be interesting, don’t you think?
You can download the text of the blog post Blog poste.
Have a go at spotting the mistakes in them. Feel free to email your entries to Dr Shibley Rahman, management@lawandmedicine.co.uk
The winning entry will get a copy of this book, Iain Dale’s Guide to Political Blogging in the UK. with no expenses spared!
Alternatively, you can, again, buy it off Amazon UK.
Dr Shibley Rahman
Queen’s Scholar, BA (1st.), MA, MB, BChir, PhD, MRCP(UK), LLB(Hons.), FRSA
Director of Law and Medicine Limited
Member of the Fabian Society and Associate of the Institute of Directors