Dear xxx

Thank you very much for your recent email with regard to the new regulations from the Department of Health – Statutory Instrument 257 under Section 75 of the Health and Social Care Act 2012.

I wish to assure you that we Liberal Democrats have absolutely no intention of allowing the Conservatives to smuggle any new privatisation into existence through the process of implementing the Health and Social Care Act.  We worked hard during the passage of the Health and Social Care Act to secure a commitment from Ministers that CCGs would not be forced to competitively tender services unless they believe it is in the interest of patients.

The regulations laid before Parliament by the Government seek to create a tendering process that balances the desire for CCGs to be able to make the decisions they think are in the best interests of the patients, with the need to ensure that, where tendering does take place, companies are not able to gain an unfair advantage over the competition. The regulations do already contain a number of safeguards.  For example, in making decisions on suppliers, CCGs must act in a way intended to improve quality of services, rather than simply cost.  CCGs must also consider how to provide services in an integrated way, meaning they do not have to fragment services if they don’t want to.

However, while I believe that the Government’s intention in the regulations is in line with the commitments made during the passage of the Health and Social Care Act, I also understand why many people are concerned that the regulations are not clear enough.  I also understand the concern that the regulations could lead to CCGs feeling they must tender all services or risk being investigated by Monitor. It is vital that the regulations provide the clarity that both CCGs and the public need about commissioning options available to CCGs.

That is why my Liberal Democrat colleagues in the House of Lords, led by Baroness Jolly, the Co-Chair of our Health Committee, have met with Health Minister Earl Howe, to discuss ways that the regulations may be improved.  Ministers have been very open to making changes and will work closely with Liberal Democrat Peers to make sure that the regulations not only meet the letter of the agreement made during the passage of the act but the spirit of this agreement as well.  I will continue to pay close attention to this work, as it develops and I am confident that, through this process, the final regulations used to govern CCGs will provide the new groups the tools they need to provide high quality, locally led, services while also protecting against unfair behaviour when tendering does take place.  I shall continue to work closely with my colleagues both in the Government and in the Party to erect firm barriers against any kind of abuse of the statutory orders that has triggered the outcry from the 38 degrees organisation.

I have also attached the more comprehensive briefing that has been provided to challenge the media hype that always surrounds policies for the NHS.

With best wishes

Yours sincerely

Tim Farron MP

NHS Regulations: CCG Tendering

Summary of the Issue

The Government recently tabled the National Health Service (Procurement, Patient Choice and Competition) Regulations 2013. These regulations set out the legal framework under which both the NHS Commissioning Board and Clinical Commissioning Groups (CCGs) tender services. There is strong concern that the regulations require these bodies to hold open competitive tendering process for all services they commission. This would go against commitments given by Ministers during the passage of the Health and Social Care Act that CCGs would not be required to competitively tender services on a compulsory basis.

Key points for response

  •  The National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 are intended to set out the legal process under which CCGs will be required to conduct competitive tendering process.  This is important as tendering is a complex area of law. Regulation is needed to fulfil the commitments given by Ministers while ensuring that providers don’t gain an unfair advantage over their competition or that anti-competitive behaviour doesn’t take place.
  •  It is vital the CCGs are able to act in the best interest of patients and the NHS.  While competitive tendering may be appropriate for various different types of services, it should not come at the expense of providing services the CCGs feel are in the best interest of patients.  It is important to remember that tendering does not just include health specific services, but may also include back office functions such as stationery where people would expect CCGs to look for the very best price.
  •  Liberal Democrats and others worked hard during the passage of the Health and Social Care Act to secure commitments from Ministers that CCGs would not be expected to competitively tender services unless they felt it was in the interests of patients.
  •  Without proper regulation of the tendering process, we would repeat the same scandal as the Labour’s NHS where private providers were given preferred status over NHS providers. This led to huge waste, including paying private providers £250 million for operations that were never even performed.
  •  The regulations do contain a number of safeguards to ensure that the CCGs do not automatically have to tender services.  These include requiring CCGs to consider the need for services to be provided in an integrated way, which may mean not tendering a contract where this would fragment service provision, and a caveat allowing anti-competitive behaviour by CCGs where this is ‘beneficial for people who use such services’.
  •  However, while we understand that the Government’s intentions in the regulations is to give effect to the commitment they made, we also understand why many people feel they are not clear enough and could led to CCGs feeling that they have to act in particular way.
  •  That is why Liberal Democrat Peers, led by Baroness Jolly , the Co-Chair of the Party’s Health Committee, have met with Earl Howe, the Health minister in the House of Lords, to discuss how the regulations might be improved in order to ensure they are clear on the expectations on CCGs.  This process is ongoing.
  •  Some letters have asked MP’s and Peers to highlight the importance of these regulations to the Secondary Legislation Scrutiny Committee.  This issue has already been raised by Lib Dem Peers with the Select Committee.  It is now important that the Committee is allowed to do its job and come to its own conclusion on the regulations.
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