NHS procurement rules enforce competition

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Andrew_Lansley 3 resized New regulations for NHS procurement laid before Parliament will force CCGs to put virtually all services out to competitive tender.

The new rules, which will become law by default unless actively opposed, undo changes to the primary legislation agreed during the ‘listening exercise’.

Monitor will have powers to impose competitive tendering on any NHS contract where commissioners have maintained an existing contract or made a decision based on clinical rather than business criteria.

In February 2012, Health Secretary Andrew Lansley told the developing CCGs: “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. The healthcare regulator, Monitor, would not have the power to force you to put services out to competition.”

The new regulations make it clear that CCGs are legally obliged to put all services out to tender, and Monitor has the power to enforce that.

Similarly, Health Minister Earl Howe reassured the Lords in 2012: “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, particularly where competition would not be effective in driving high standards and value for patients.” This also appears to have been untrue.

Labour Lord Philip Hunt commented on the new legislation: “Whatever was said in Parliament, it seems that the Department of Health and Monitor have just carried on as if nothing has changed. By hook or by crook, a market is being introduced.

“There is very little international evidence that a market in healthcare leads to better or more cost-effective service, in fact most suggests the opposite,” he added. “Post-Francis report, the key consideration should be quality of care.”