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    Speech delivered in the House of Commons – 28/01/2016

    Many Hon. Members have raised the seriousness of the financial challenge facing our health and care system. They are right to do so. Many Hon. Members have also been right to say that we need a big, honest national debate about what excellent care services look like and how we might pay for them.

    I’ve been the Shadow Secretary of State for Health now for just over 4 months. In that time, it has become blindingly obvious to me – if it wasn’t at the outset – that the NHS and care system in our country is on the verge of collapse. Huge hospital deficits, care home providers on the brink of failure, older people in hospital because they can’t get the support they need at home, more critically ill people than ever before waiting too long for ambulances and large chunks of the workforce so demoralised that they want to up sticks and head for the Southern hemisphere.

    For many people who use the NHS, this picture may sound unfamiliar. For the majority, it still provides excellent care – and it is important to recognise that and to thank the thousands of dedicated staff who ensure that happens. But for many others, the system fails them and the risk is that it starts to fail more and more people as time goes on.

    When I was asked to do this job, I knew that the NHS and care system was under pressure. I knew that demographic change and the march of technology – both in and of themselves, good things – were placing demands on a system designed for a different century. As a constituency MP, I had visited isolated older people, many feeling like prisoners in their own homes, surviving with the help of a meagre care package or the support of family and friends if they were lucky. As a councillor before that, I had seen the soaring demand for adult social care and the woefully inadequate budget to deal with it. Demand which is growing because of our ageing population – but also because of advances in medicine which enable babies who may not previously have survived at all, to not only survive into childhood but adulthood too.

    On a personal level, I knew that in my own family, my grandmother had spent the last few years of her life in and out of hospital on an almost weekly basis – driven as much by crises of loneliness as by a deterioration of her COPD.

    And I knew that my other nan was forced to sell her own home to pay for her own care when she developed vascular dementia, meaning that all but £23,000 of her £140,000 estate disappeared.

    All of these things I knew before I became the Shadow Secretary of State but it was only when I visited hospital after hospital, up and down the country, that my eyes were really opened. The image of frail, elderly people, perched alone on beds in emergency admissions units or in rehabilitation wards is THE abiding picture which stays with me following my first 4 months in this job. It made me feel uncomfortable. As a childless 40 year old woman, would that be me in 40 years’ time? Was it the best place to be? Was it the best we as a country could do? The image may have been uncomfortable, but the numbers say it all: 1 in 4 hospital beds occupied by people with dementia, half of all people admitted to hospital aged over 65, 300,000 people aged over 90 arriving at A&E by ambulance every year.

    When we get older – and it will come to all of us, hopefully – hospital will sometimes be necessary but it shouldn’t become the norm. I know that we have to address this problem. The system needs to be redesigned so it gets the right sort of support to people at the right time and in the right place to prevent problems from escalating. But we have to be honest and say that there is a price tag attached to this.

    Yes, there are still savings that can be made, ways to make the system more efficient and less wasteful but there are simple underlying pressure that can’t be wished away. Every day that goes by there are more and more, older people living with more and more complex, often multiple, conditions. Some say family members need to step up to care for elderly relatives. Others say that’s unrealistic. Every day that goes by, new drugs and treatments become available at not insignificant cost. It may be tempting to brush these uncomfortable truths under the carpet but we can’t and we would be failing generations to come were we to.

    So, that brings us to the proposal we are discussing today to establish an independent, nonpartisan commission to establish what a long term financial settlement for the NHS and social care might look like. I understand the superficial attraction of this idea. I’ve been stopped on the street and in the gym by people I’ve never met before saying “why can’t the politics be put to one side when it comes to the NHS?” I understand that sentiment. Politicians aren’t the most popular bunch of people out there and too often we are seen to be advancing our own party’s interests and not those of the public. But for me, I think the question of how we fund elderly care going forward is THE most deeply political question our country faces over the next decade.

    It’s political because it’s about who pays and who benefits.

    Whilst the NHS is a universal, taxpayer funded system, free at the point of use, social care provision is a mixed bag – those with money, pay for it themselves, those without rely upon councils to provide what support they can. It’s been a make do and mend approach to social care in recent times but our changing population means that it no longer an option.

    I spoke about my Nan earlier. A woman of limited means who experienced catastrophic care costs because she developed dementia. My family is not a rich family. We are not a poor family either. We are like many families up and down the country. When I was growing up my dad decided to take us on a two week holiday to Spain each year, instead of paying into a pension. He’s never bought a brand new car in his life but he never let his children go without either. The costs of care which fell upon my Nan and my family, fell randomly.

    Is it right that a woman of limited means who dies of dementia at 85 passes nothing meaningful onto her family when a wealthy man who dies of a heart attack at the age of 60 does? What about those who plan their financial futures having invested in expensive tax advice to avoid the costs of care? It is my view that these are deeply political questions.

    In order to adequately fund the NHS and care system in the future, the truth is that a political party needs to be elected to Government having stood on a manifesto that sets out honestly and clearly how we pay for elderly care and how we manage in a fair and transparent way the rising costs of new treatments, new drugs and new technology.

    No matter how well researched, well intentioned, well-reasoned the recommendations from an independent commission, someone at some point will have to take a tough decision.

    When I think about the cross-party work that has been done on this in the past, I think I can also be forgiven for being cautious. Take the discussions that took place between by predecessor, the Rt Hon Friend the Member for Leigh and the then Conservative and Liberal Democrat Opposition prior to the 2010 election. Just weeks out from the election, the Conservatives pulled the plug on those talks and accusations of “death taxes” were suddenly being hurled – so much for a grown up debate to answer the difficult questions. Take also the attempt at cross-party agreement in the last parliament which led to some of the Dilnot proposals on capping the costs of care. These proposals were in the Conservative Party’s manifesto, but were swiftly kicked into the long-grass just weeks after the election. I’m not sure that attempts to take the politics out of inherently political decisions have worked.

    Even if we take something which should be straightforward – a new runway for example – an independent commission hasn’t exactly led to consensus on how to proceed – just more delay. As the well-respected Nuffield Trust has said: “Experience shows that independent commissions into difficult issues can have little impact if their recommendations do not line up with political, local or financial circumstances.”

    How we pay for elderly care is one of the most difficult decisions facing our generation. The truth is it will require political leadership. A political party needs to own the solutions and be determined to make the case for them. I am not ashamed to say that I want the Labour Party to lead this debate. I want us to build on some of the excellent work that has already been done in this area, in particular that of Kate Barker and The King’s Fund. And I want us to spend time talking to people up and down the country about the kind of health and care service they want to see and to have a frank and honest discussion about what some of the different options to pay for that service might be.

    I must also be honest though and say that I think it was a profoundly political decision in the last parliament to cut the amount of money available to councils to pay for adult social care. I say gently to the Hon Member for North Norfolk that he stood at that dispatch box opposite and defended the cuts that his Government were making to social care – he dismissed many of warnings that my hon friend the Member for Leicester West was making when she was the Shadow Care Minister about delayed discharges, about cuts to home care, and reductions in other vital services like meals on wheels and home adaptations. So I don’t think it is either realistic or right to pretend we don’t have fundamental differences on this issue.

    Any attempt at finding consensus must begin with an acknowledgement of the damage done to social care over the last five years.

    The public are crying out for some honesty in this debate. They understand the pressures created by rising demand and new technologies and they want to be treated like adults. To suggest that this can be all neatly sewn up by an independent commission with the politics taken out of it sounds attractive but I worry it just won’t deliver. For the millions of people who depend on our NHS and social care system, we can’t afford to have yet another Parliament where we fail to grasp the nettle. I know this proposal is well intentioned but I fear it is not the answer.

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    It looks as if the era of markets and competition within the NHS has come to an end. The vanguards and devolution experiments are challenging the traditional boundaries. Many pages of planning guidance contains no mention of competition – Monitor is being morphed into something else entirely. Commissioning as has been tried through its various guises is adapting further in different ways in different places. Integrated providers and hybrids of commissioner/provider are now possible. New kinds of organisational bodies could be taking over the role as strategic commissioner of integrated services.

    So – much thought is being given to future structures.

    At one end of the debate is the proposal to fully reorganise the whole NHS back to its 1970’s. At the other end of the debate are those who see progress through evolution; through relationships and people with structures and even legislation being almost irrelevant. Also many fear another top down reorganisation which would be costly and damaging to relationships and so far has never worked.

    Going into the last election the Labour Party was in the latter camp – it believed that its policy objectives could be achieved by removing the market structures and making the existing organisations and structures work in a different way. This now appears to be what is actually happening in the real world NHS.

    All agree that there should no longer by a market or a purchaser provider split but the two camps differ on the role for planning and/or commissioning. Those in the reorganisation camp don’t really explain how services are to be planned or how the money will flow through the system, we have different systems in Wales and Scotland but both have some form of commissioning – both have some services which are either private, franchised or otherwise outside the core public service provisions – and of course social care is privatised and commissioned everywhere. Some services are better planned and provided across a larger population than the local and so decisions have to be made by someone about how costs are shared or allocated.

    In the evolution camp then there is the acceptance that the provisions of some services will remain in the non-public sector (at least for the medium term) and that GP services, pharmacy, dentistry have to be commissioned. So in the evolutionary model there is still a split between the planners and service management of the providers, although this does not mean there has to be separate organisations! Arguably in any system there is a split between commissioning and provision, the issue is how to manage the commissioning bit and ensure accountability.

    It is relatively simple to see how most primary care, community care, urgent care and social care services can be organised on a local basis. There could be either a separate health authority, or simply just the existing local authority, planning and providing all the necessary services – they are essentially local in character. So too are many services provided through a District General Hospital. It is a great pity the care system was not set up in this way in the first place but the wrong team won the argument about the role of local democratically elected local councils!!!

    But with more careful thought it’s clear that some emergency, hospital and mental health services do not fit into such a local pattern – specialised services certainly don’t. This was even recognised long ago when the major teaching hospitals were allowed a great deal of autonomy outside the main management structure.

    Funding for core services can be addressed through weighted capitation but for some services different models are necessary just as some developments and major projects require their own separate funding streams.

    Under the reorganisation model all the existing NHS Trusts and Foundation Trusts like Barts, Royal Marsden or Salford Royal could no longer continue as separate organisations. They would somehow have to be fitted into the local health authorities (one for each major local authority areas) or into a regional authority. Already in some places there are developments so that one body provides a wide range of social care alongside both acute and primary care services and also undertakes most of the commissioning responsibilities (from both CCG and local authority). So far those proposing the reorganisation approach have not provided any details about how the transition would be made or what the impact would be on the real organisations that would have to be broken up in some way.

    Under the alternative approach, the one favoured by the SHA, there would be no market based commissioning but there could still be separate organisations that provide services. This is the situation in non-market Wales where three major provider bodies were allowed to continue after the market was removed – this appears to work well enough.

    In the evolved model there would be some organisations that had their own separate identity, their own board and accountability through the commissioning relationships with one or more commissioning bodies. These bodies will still be part of the NHS and subject to direction by the secretary of state who would have the overall legal and political responsibility for the service. In the SHA version these bodies would be like Foundation Trusts having a two tier governance structure and non-executive directors.

    The weakness of the evolved model which retains separate provider bodies is that it is harder to ensure that it is exempt from any externally imposed competition rules. The Efford Bill set out how this could be done by restoring the role of the secretary of state, abolishing the market related parts of the current legislation and by restoring the NHS contracts. Most agree this is enough but it’s hard to ever be 100% sure. Equally it is also possible that any post reorganisation structure could be vulnerable to manipulation but also any incoming government committed to privatisation and markets could simply pass new laws for yet another reorganisation!!!

    So two big policy issues are. How does the money flow through the system? And. What role is there for hospitals and independent Trusts of some sort?

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    As news arrives from Cambridge of yet another privatisation inspired project going horribly and expensively wrong let’s hope people in Staffordshire, South Warwickshire, Southport and elsewhere are thinking long and hard.

    The Stafford Cancer contract saga is long running and is now so hopelessly flawed that it should simply be wound up. The use of a complicated procurement process which was supposed to be about a competitive dialogue between various qualified providers bringing new ideas has ended with a negotiation with the obvious NHS providers. The attempt to outsource commissioning has been unpicked.

    It matters because even if everything else is ignored (and it should not be) then the commissioners and providers of cancer services are to be locked into a complex legally enforceable contract for ten years. So for ten years as the rest of the NHS tries hard to evolve and develop collaboration through vanguards, devolution and other imaginative attempts to make services better the cancer services in Staffordshire and Stoke will be locked out; bound together by the guesses made now.

    It is fair to accept that when the saga began there were the best of intentions; you can accept that cancer services in the area were not as good as they should have been. What would have helped would have been some kind of root cause analysis of why this was the case. Still, work began quite purposefully on what better services should be like and some consultation and engagement took place.

    Embedded in the ideas being developed was to use a lead provider model, where some of the commissioning decisions are moved from the commissioner to a lead provider who takes on the role of integrating services. Nothing wrong with the idea although it shows a weak commissioner. Anyway the project got approval from NHS England. As was said at the time:-

    Five of Staffordshire’s Clinical Commissioning Groups (CCGs) are teaming up with Macmillan Cancer Support to transform the way people with cancer or those at the end of their lives are cared for and supported.

    The project will look at commissioning services in a new way – so that there would be one principal organisation responsible for the overall provision of cancer care and one for end of life care.

    Then it came to light that the commissioners were to use a competitive tendering approach to find the lead provider. What they were asking for is set out below as taken from the contract noticei. In the Financial Times it was reported that:-

    The NHS is embarking on its biggest and most wide-ranging outsourcing of services so far by inviting companies to bid for £1.2bn in contracts to provide frontline cancer treatment in district hospitals and care for the terminally ill.

    The deals could see the private sector delivering all cancer and end-of-life treatment for children and adults across Staffordshire and Stoke on Trent. This will involve diagnosis and treatment such as radiology, radiotherapy, breast screening, chemotherapy, nursing and surgery for patients in hospitals, hospices and at home.

    Two years later a lengthy process using FoI has now established that there is no proper record of how the decision to use competitive tendering was taken, no proper business case was prepared (even though this was a contact for over £600m), no options appraisal was carried out into the best method to use and there was no attempt by the CCGs involved to follow their arrangements to involve service users in decisions about how services are organised. The whole process was built on sand.

    Fast forward to today and we have the CCGs involved through the procurement/project process negotiating with the NHS providers of the services and carrying out due diligence. It is possible that by early next year the contract could be ready for signature.

    Hopefully before signing anything the CCGs will wake up and insist on a full (final) business case and publish it and get some independent expert assurance of what is in the case as would be required in any such major exercise involving £600m. Even then once the actual details of what the contract requires are established then there has to be a proper engagement with the service users taking more months.

    But why bother? The failure of the contract in Cambridge hangs over the Staffordshire experiment. There, after much negotiating a contract was finally agreed with just the NHS providers that were left and it failed within a matter of months.

    Come on Staffordshire give it up.

    i A two-stage, ten-year contract to transform the provision of cancer care in Staffordshire and Stoke. Stage 1 will be fee based, for up to two years, and requires a prime provider to manage all the services along existing cancer care pathways with a view to: managing and improving data quality and collection to establish detailed baseline information about activity and costs; understanding patient and payment flows; achieving a limited set of service outcomes focused on improving the patient’s experience of the service and ensuring equality of access and treatment. Achievement of the Stage 1 aims will trigger the commencement of Stage 2.
    In Stage 2 the provider will assume responsibility for the provision of cancer care, in expectation of streamlining the service model. Performance will be against ambitious clinical and service outcomes, with payment based on achieving stipulated outcomes. Service provision (Stages 1 and 2) will initially be for four tumour sites (bladder, lung, prostate, breast) with a requirement to provide services in respect of all tumour sites by contract year 5.

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    The National Health Service in England is being dismantled. But you wouldn’t know it from listening to the radio or reading the newspapers. As so often, you have to look beyond the headlines about pressures on funding and the junior doctors’ dispute to find out what’s really going on. In 1990, Kenneth Clarke introduced an internal market into the NHS, following on from the ‘options for radical reform’ set out by Oliver Letwin and John Redwood in 1988. It had three pillars: GP fund-holding (delegating budgets to individual GP practices); the replacement of health authorities by ‘NHS trusts’ (self-governing accounting centres with borrowing powers, and their own finance, human resources and PR departments) and the splitting of purchasers from providers (the planning and delivery of services was to be undertaken by separate bodies, with the money flowing between them). In its 1997 manifesto, New Labour promised to ‘end the Tory internal market’. It did get rid of GP fund-holding (only to reintroduce it later as Practice Based Commissioning), but otherwise took the Tories’ ideology even further by introducing, in 2003, the market-oriented ‘NHS foundation trusts’ and their regulator, Monitor, as well as scaling up the Private Finance Initiative. Clarke was able to say on the sixtieth birthday of the NHS in 2008 that ‘in the late 1980s I would have said it is politically impossible to do what we are now doing.’

    Then came Andrew Lansley’s Health and Social Care Act 2012. No longer does the government – or anybody else – have a legal duty to provide hospital services throughout England. The hundred or so NHS trusts were all prospectively abolished, and a plan set out to transform them (if not to close them down or sell them off) into foundation trusts. The 150 or so foundation trusts had their private patient income cap abolished and were permitted to receive 49 per cent of their income from non-NHS sources. About 113 private providers have since been licensed by Monitor, and tendering for services has been made virtually compulsory. ‘Public health’ has been carved out of the NHS, and shared between local and central government. Meanwhile, Lansley, having stood down as an MP before the election in May, has been given a peerage and hired as a consultant to Bain & Company, which, according to its website, ‘helps leading healthcare companies work on the full spectrum of strategy, operations, organisation and mergers and acquisitions’. The appointment at Bain was signed off in July 2015 by Baroness Browning, who chairs the Advisory Committee on Business Appointments – herself a consultant to Cumberlege, Eden and Partners, ‘a specialist consultancy to the health sector’ led by Baroness Cumberlege. You couldn’t make it up.

    We are now at a crucial time in the wrecking process. Under the 2012 Act, clinical commissioning groups (CCGs) buy services from providers, especially from NHS foundation trusts. But the trusts are no longer obliged to provide particular services. Since April 2013, their services have fallen essentially into two categories: Commissioner Requested Services (CRS), and the rest. Services designated as CRS are subject to ‘continuity of service’ restrictions on the trust’s ability to cut or alter them. Monitor has the power to make the trust provide CRS services for a specified period, but cannot stop them being cut once that period expires. Trusts also need to have Monitor’s consent before they sell off buildings and equipment used to provide CRS. Services that are not CRS are not subject to these restrictions. So the more services that are not designated as CRS, the more freedom an NHS foundation trust has to do what it likes – so long as 51 per cent of its income comes from NHS services.

    When the 2012 Act was implemented, the services that foundation trusts had to provide under the previous rules were automatically designated CRS for three years, until April 2016, in their new licences. But Monitor said then that the planning and purchasing responsibilities of CCGs include ‘designating a range of services that local commissioners believe should continue to be provided locally if any individual provider is at risk of failing financially. We call these Commissioner Requested Services.’ CCGs are supposed to imagine that the foundation trusts they contract with could financially fail and to use a four-stage Designation Framework to come up with a new list of CRS by April 2016 on the basis of that imagining. ‘We expect the number of services that are designated as Commissioner Requested Services to decrease as a result’ of CCGs doing that, Monitor says, because if a trust goes bust it is expected to provide fewer services than it would otherwise. In other words, services that were mandatory until April 2013, and which for three years afterwards will have had some protection from ‘continuity of service’ conditions, are expected to decrease. This is an instance of applying powers supposed to ensure continuity in order to bring about discontinuity.

    Halting the demise of the NHS in England won’t happen without a new law. The National Health Service Bill, scheduled to have its second reading in the House of Commons on 11 March next year, would prevent the specific sleight of hand I have described from going ahead, as well as reversing 25 years of marketisation. It was tabled in June by the Green MP Caroline Lucas, and is supported by Labour (including Jeremy Corbyn and John McDonnell), as well as by Lib Dem, SNP and Plaid Cymru MPs and the British Medical Association.

    The question now is whether Labour under Corbyn will end its support for the market in the NHS and get behind the bill. The shadow health minister, Heidi Alexander, is still finding her feet, but the signs are not good. Unlike McDonnell, she has not brought in new political advisers. She is being advised by those who advised Andy Burnham, and judging from a meeting I had with her very recently New Labour thinking on the NHS is for now still very much in place. Ross McKibbin, writing in the LRB of 8 October, expected Corbyn’s leadership to end in tears. If that turns out to be the case, one reason may well be that Corbyn just wasn’t able to translate the support he has in the party into parliamentary backing.

    First published in the London Review of Books.

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    No. Is it dying? Quite possibly.

    These questions are prompted by what is going on in the NHS right now and by the second annual lecture for NHS Providers, given by Sir David Nicholson last week.

    Having largely kept silent since leaving NHS England Sir David re-appeared to tell the government, point blank, that it simply has to find more money for the NHS. No doubt about that.

    He opened by saying that he would not be making any major policy pronouncements: ‘So I won’t be saying that the Department of Health should be abolished or that the purchaser–provider split should be put in the dustbin of history where it belongs.’ In questions, however, he was tempted further.

    Sir David lived with – indeed implemented – the purchaser–provider split for the better part of the last 25 years of his NHS career. One suspects he saw the intellectual attraction of it – that it is no bad thing if the NHS consciously decides what it wants to buy with its £100 billion budget, and then commissions it from whoever is best placed to provide it: competing publicly owned services, or the private and voluntary sectors. But one suspects his heart was never entirely in it. In answer to questions he noted, with a slightly wolfish smile, that ‘remarkably the system worked without it’ in the years before 1991, while adding that the danger without it is that the NHS becomes totally dominated by providers. Some ‘counter-weight’ is needed to prevent that.

    But, he said, if you look at many of the leading clinical commissioning groups, ‘they are really providers, that’s what they want to be’ and the world of vanguards is seeing commissioners and providers seeking to change the way services are provided through a model of co-operation that doesn’t really fit with the purchaser–provider divide. As we seek new ways for the money to flow in order to create the new models of care, it would be sensible ‘to put it [the split] to one side and not seek ideologically to try to get ourselves back to that. And I think it will disappear over time.’

    One suspects Sir David may be right – or that, at the very least, the purchaser–provider divide is starting to evolve radically. Take Devo Manc and any other areas that take on the whole health and social care budget. There may well still be contracts operating within such arrangements. But if the location of care is going to change significantly, the planning behind that is going to look a lot more like planning than purchaser/providing, particularly if the whole thing has to stay within budget.

    Equally, seeking to sort out long-troubled ‘whole health economies’ – Cumbria, Essex and parts of Devon – almost by definition means looking beyond the purchaser–provider divide, as does the attempt by the Care Quality Commission for a whole-system form of inspection and Jeremy Hunt’s idea for a single measure of ‘good’.

    There are other factors in play. Provider deficits – in both foundation and non-foundation trusts – are stretching the model to breaking point. This goes right back to the original argument between Gordon Brown and the Treasury, and Tony Blair and Alan Milburn, over the creation of foundation trusts. That dispute was partly politically motivated on Brown’s part. But the Treasury had a question to which no satisfactory answer has yet been found. What happens when a foundation trust goes bust? Who meets the bill? The answer, back then, was always, the Treasury, which is why it refused to allow foundation trusts full borrowing powers.

    The nearest parallels to foundation trusts are universities and housing associations. But, in the last analysis, a financially failed university can be closed and a housing association has assets and rental streams, so it can be taken over.

    In the NHS, these solutions appear not to apply. This is partly because – very broadly speaking – we are now left mainly with district general hospitals and larger organisations, having closed huge numbers of small hospitals between the 1970s and 1990s.

    District general hospitals may be being hollowed out from above by the concentration of specialist services and from below by the desire for care closer to people’s homes. But the need for a decent-sized health facility in large towns is not going away, and there appears to be no private market to successfully take financially failed ones over as Hinchingbrooke demonstrated. So the theory of the market – that financially failed organisations will close and or be taken over for pennies – appears unable to deliver for NHS hospitals.

    All this puts the theory of the purchaser–provider split under huge pressure. Not everywhere, but in many places. Add to all that the moves towards accountable care-type provider organisations, or provider networks that commission within themselves while being answerable to a more strategic commissioner, and a decidedly different form of commissioning is emerging. The core idea behind the purchaser–provider split – consciously decide what you want to provide and then acquire it from whoever is best placed to provide it – lives on. But the English singularity – lots of small commissioners all operating a purchaser–provider split – looks to be on its way out. A long slow exhalation rather than an overnight death. But dying.

    First published by the Kings Fund

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    Can the NHS handle the outsourcing of clinical services?

    Executive Summary

    1. The NHS now contracts out the provision of health services to the private sector to the tune of over £20 billion a year, or a fifth of the total healthcare budget. Although a significant proportion of this is made up of contracts with Dentists, Pharmacies, Opticians and General Practitioners, the newest and biggest area of outsourcing is in relation to those services which the NHS, until very recently, used to provide directly: community health services and secondary care.
    2. Over the last four years there has been a 50% increase in the amount spent in the private sector on these services by local commissioning bodies and NHS trusts, from £6.6bn in 2009 to £10bn in 2014.
    3. This trend looks set to continue with the introduction of the Health and Social Care Act 2012 which places a requirement on Clinical Commissioning Groups (CCGs) to put services out to competitive tender.
    4. Administering, monitoring and enforcing these contracts is costly. We estimate that there are now some 53,000 contracts between the NHS and the private sector, including contracts for primary care services. These contracts, as well as the contracts with NHS providers, are arranged and administered by 25,000 staff working in CCGs, Commissioning Support Units (CSUs) and NHS England’s local area teams, at an annual cost of £1.5bn.
    5. The safety and quality of healthcare in England now depends increasingly on how effectively the NHS monitors and enforces this myriad of contracts with the private sector. But contracting for healthcare is highly problematic. Asymmetry of information makes it almost impossible for a commissioner of services to know whether a provider is delivering according to the terms of the contract, or is cutting corners or reducing quality in order to gain extra revenue.
    6. There have been a number of documented high-profile cases, such as Winterbourne View and Serco’s out-of-hours primary care contract in Cornwall, where the NHS has failed to manage contracts with private sector providers effectively. The Public Accounts Committee has identified significant weaknesses in central government’s general capacity to monitor and enforce contracts with large private companies and Monitor, the economic regulator of the healthcare market, has identified similar serious weaknesses in the capacity of local CCGs.
    7. However, little is known about how CCGs inspect and enforce contracts with the private sector. Using available official data, and data from 181CCGs which responded to a survey, we identified the following:
      • Out of the total of some 53,000 contracts which the NHS holds with private providers of care, the 211 CCGs currently hold over 15,000. Expenditure by CCGs on contracts with the private sector amounted to £9.3bn in 2013-14, 16% of their £65bn budget.
      • Given the complexity of monitoring contracts for healthcare, regular site visits to private providers of NHS services ought to take place. However, there is little record of the number of site inspections which CCGs carry out in relation to the contracts that they hold. Out of those which responded to our survey 109 (60%) did not record how many site inspections they undertook, or were unable to say how many they had done. Of even greater concern, 22 (12%) did not carry out any site inspections.
      • CCGs remain the contracting bodies, with statutory responsibilities, but most of them have contracted out their contract monitoring function to Commissioning Support Units or CSUs. CSUs, which between them employ some 8,500 staff, are at present technically part of NHS England, although the government intends them to become private companies by April 2016. Most CCGs also share contracts with other CCGs.
      • These complex arrangements are the reason why many CCGs said they were unable to answer questions about the number of contracts they hold or how many site visits have been undertaken.
      • In a 2013 study of CCGs Monitor found that they were reluctant to enforce the terms of contracts for fear of exacerbating the financial situation of providers. Our survey supports this finding. We found that only seven out of the 15,000 contracts had been terminated because of poor performance and only 134 contract query notices had been issued. Only 16 CCGs had imposed any form of financial sanction on private providers.
    8. The picture which emerges from these facts is of an NHS poorly equipped to ensure that healthcare services outsourced to for-profit providers will provide safe, high-quality care and good value for money. At the same time accountability for the handling of the £9.3bn which CCGs are now spending annually on non-NHS providers of NHS care is being thwarted by the outsourcing of the contract monitoring work for which CCGs are legally responsible to unaccountable Commissioning Support Units which are soon to be privatised.

    Recommendations

    If the outsourcing of NHS clinical services to the private sector is to continue, and if patients and the public are to be confident that standards are being met and that value for money is achieved, a number of measures need to be taken to address the issues raised in this report.

    1. NHS England should commission an independent audit of CCGs’ capacity to monitor and manage contracts with non-NHS providers before any further major contracts are arranged.
    2. NHS England should reconsider its plans to privatise the contract monitoring of NHS contracts. CCGs are the statutory bodies responsible for enforcing contracts between the NHS and the private sector, not CSUs, which remain unaccountable if anything goes wrong. This problem will be exacerbated if CSUs become private companies, as is intended, from April 2016. With nearly £10bn worth of contracts with the private sector already in place, it is vital that statutory bodies are genuinely responsible and accountable for ensuring that private providers deliver according to the terms of their contracts.
    3. To improve transparency CCGs should be required to publish regular performance data on the number and value of contracts they hold, how they know whether contracts are performing well, the number and type of staff they employ to monitor and enforce contracts, and the amount of any over-payments they may have made to providers due to error or fraud.

    The contracting NHS: key facts

    • 53,000 estimated number of contracts held between the NHS and the private sector for healthcare in England, including for primary care services.
    • £22.6bn total value of NHS contracts with the private sector, including primary care services.
    • 24% percentage of NHS England’s total budget of £95bn which is spent in the private sector, including for primary care services.
    • £9.3bn amount spent by CCGs on contracts with the private sector for NHS services in 2013-4.
    • 16% percentage of the total Clinical Commissioning Group budget of £65bn which is now spent on the private sector.
    • 15,000 estimated number of contracts between CCGs and the private sector.
    • 90 average number of contracts with the private sector held by each CCG.
    • 25,000 number of staff employed in CCGs, CSUs, and NHS Local Area Teams to commission, administer and enforce NHS contracts.
    • £1.3bn combined budget of CCGs and NHS England Local Area Teams for commissioning, administering and enforcing NHS contracts.
    • £700m amount spent by CCGS on CSUs to administer, monitor and enforce their contracts with NHS and private sector providers.

    The contracting landscape

    1. Until 1990 the NHS was a complex but unified organisation, comparable to a very large multinational company. Its services were planned and funded centrally; service delivery was organised through a system of regional and district branches of the central NHS management. Good performance was achieved through line management but relied implicitly on trust, which in turn rested on a service ethos grounded in a shared commitment to prioritising the wellbeing of patients.
    2. In 1990 the NHS and Community Care Act introduced the purchaser-provider split and an ‘internal market’ in which NHS acute hospitals, mental health and ambulance services became semi-independent ‘trusts’, operating under non-enforceable contracts with local ‘purchasers’. (Many NHS hospital trusts send patients for treatment in local private hospitals to avoid financial penalties for not treating them within 18 weeks of referral, as occurred in 2014 when Musgrove Park Hospital in Taunton sent patients for cataract surgery to the private operator Vanguard ) In addition, between 2004 and 2006 new contractual arrangements were introduced between the NHS and private providers of primary care services, dentistry, pharmacy, general practice and ophthalmic services.
    3. By 2013, when the Health and Social Care Act came into effect, the market had ceased to be purely internal; private providers were now able to compete to provide NHS clinical services, using legally enforceable contracts. Clinical Commissioning Groups (CCGs), which now took on the PCTs’ purchasing function, were required to put contracts out for competitive tender to the private sector.
    4. The Department of Health has acknowledged that it does not keep a central record of the total number of contracts which underpin this new NHS market.2 Looking at various data sources, including a Freedom of Information (FOI) survey we conducted of all 211CCGs, we estimate that there are now some 53,000 contracts between the NHS in England and private sector providers. This includes the contracts which are held by NHS England with dental practices, pharmacies, ophthalmic service providers and general practices, all of which are independent businesses, as well as the contracts with non-NHS providers held byCCGs.

      The number of contracts between the NHS and the private sector for the provision of healthcare services.

      Table 1 The number of contracts between the NHS and the private sector for the provision of healthcare services

    5. Hospitals and other providers may themselves also commission services; e.g. hospitals may have contracts with private laboratories to provide diagnostic services, or with other hospitals (including private hospitals) for the treatment of some of their patients, in effect subcontracting some of the work they are themselves under contract with CCGs to provide. However, we have been able to find no information on the number of these contracts.
    6. According to the Department of Health’s accounts for 2013-2014 the total expenditure on contracts for health care with the private sector amounts to £22bn, or almost a quarter of the £95bn allocated to NHS England to provide health care. The value ofCCG contracts with the private sector now amounts to £9.3 billion, or around 16% of the £65 billion allocated toCCGs. Unlike primary care services (dentistry, pharmacy, ophthalmic services, and general practice),CCG contracts with the private sector are for services – community health services and secondary care – which, until recently, the NHS provided directly.

       Expenditure on contracts with the private sector for the provision of NHS care in 2013-14

      Table 2 Expenditure on contracts with the private sector for the provision of NHS care in 2013-14

    7. As Figure 1 demonstrates,
      Growth in the expenditure of PCTs/CCGs and NHS Trusts on private sector provision 2002 – 20141

      Growth in the expenditure of PCTs/CCGs and NHS Trusts
      on private sector provision 2002 – 20141

      since the opening up of NHS services to the private sector, following the Blair and Brown government reforms, there has been a rapid increase in the number and value of services outsourced by local commissioning organisations to the private sector. For example in the last five years there was a 50% increase in the amount spent by PCTs/CCGs and NHS trusts on non-NHS providers, increasing the total spend from £6.6bn to £10bn. We expect that this trajectory will continue under the provisions of the Health and Social Care Act 2012.

    8. The nature of the companies with which the NHS contracts is relevant when considering the capacity of CCGs and the NHS to monitor the contracts, as it can affect the nature of the contractual relationship. Any private company must make a profit in order to survive, and the Companies Act requires company staff to prioritise the interest of shareholders. These incentives and pressures can impact on how the provider behaves: if profits can be increased (or losses reduced) by cutting the quality of services to patients, or by cutting corners, there is an incentive to do it, and this may be enhanced by pressure from managers who have corporate profit targets to meet.
    9. CCGs also hold contracts with NHS Trusts and other NHS bodies, but due to the fact that they have different governance and accountability arrangements and have inherited a public service ethos these contracts can often still be successfully managed through relational or trust-based contracting arrangements.
    10. The ownership structure of firms is also relevant. Competitive markets are inherently dynamic and firms of any kind, from large multinationals to small family businesses, may have problems which impact on patients. Firms owned by private equity (i.e. companies whose shares are not publicly traded), however, are a distinctive category because private equity companies rarely intend to retain ownership of other firms in the long term: they typically seek to realise a medium-term return on the other companies they own through high returns on debt or through restructuring and resale. The problems to which this can sometimes give rise were exemplified by Castlebeck Holdings, which was dismantled after the scandal at Winterbourne View:

      Castlebeck Care (Winterbourne View)

      Winterbourne View was a private hospital near Bristol for adult NHS patients with mental disabilities, built and operated by Castlebeck Care. In May 2011 a BBC reporter secretly filmed patients being grossly abused by the staff. The subsequent Serious Case Review reported that ‘the majority of staff at the hospital were unregulated support workers who are not subject to any code of conduct or minimum training standard. Over time Winterbourne View Hospital became a Support Worker-led hospital…’.

      Contract monitoring had been virtually non-existent, and regulation had not compensated for its failure. The Care Quality Commission (CQC) had ignored three warnings from whistleblowers and had carried out three inspections in the previous year which failed to find any evidence of abuse.

      A subsequent CQC inspection of 23 of Castlebeck’s other hospitals and homes identified several ‘company-wide themes’ including ‘lack of training for staff’; ‘inadequate staffing levels’; ‘poor care planning’; and ‘failure to notify relevant authorities of safeguarding incidents’. The Serious Case Review found that ‘even though the hospital was not meeting its contractual requirements in terms of the levels of supervision provided to individual patients, [the NHS] commissioners continued to place people there’.

      Behind these failures lay the fact that with an annual turnover of £55m Castlebeck was carrying £428m of debt on which it was paying interest of £38m a year, resulting in a trading loss of £19m in 2008 and £10m in 2009. This financial model reflected the purchase of Castlebeck in 2006 by a private equity company registered in Jersey. The surplus was going to the owners of the debt, leaving management struggling to cut costs.

    11. The nature of the businesses which contract with the NHS to provide healthcare services varies considerably. In the dental sector, the NHS mainly holds contracts with small or medium sized businesses, whilst NHS pharmacy contracts tend to be held with larger multiple chains such as Boots or Lloyds. This is also the case with NHS ophthalmic services, where chains such as Boots, Vision Express and Specsavers dominate. On the other hand the contracts with General Practices are mainly with small independent providers which also receive financial support from the NHS in relation to their premises and IT infrastructure; only a very small proportion currently belong to corporate chains.
    12. No comparable information is publicly available about the non-NHS providers of services toCCGs. In order to establish the nature of these we looked at those licensed by Monitor under the Health and Social Care Act to provide NHS Clinical Services toCCGs. In 2014 59% of these companies were for-profit providers and out of these 58% were backed by private equity.

      Figure 2 Provider companies licensed by Monitor in October 2014, by company type (n=97)

      Figure 2 Provider companies licensed by Monitor in October
      2014, by company type (n=97)

    13. In relation to each of the NHS’s 53,000 contracts, resources are needed in order to monitor and enforce them, otherwise there is no guarantee that the provider of the contract will deliver safe and effective care. The Health and Social Care Act placed the commissioning of NHS services, including contracts with NHS and private providers, in two parts of the new infrastructure – CCGs and NHS Local Area Teams.
    14. Under the new structure the resources spent on the work of commissioning and managing contracts, including managing contracts with NHS providers, are substantial. The 211 CCGs employ some 12,500 people, 20 and receive from central government around £25 per person whose healthcare they are responsible for to cover their running costs – a total of £1.3bn. For the 27 NHS Local Area Teams (which contract for NHS dentistry, pharmacy, ophthalmology and GP services) the available data suggest that there are around 3,440 employees, with a budget of £230 million.
    15. The remainder of this report focuses on the contracts that CCGs enter into with private providers. These follow a standard form drawn up by NHS England, but responsibility for the detailed provisions of each contract, and for ensuring that the terms of the contract are met, rests with CCGs.
    16. These contracts can be very complex. As Monitor notes: ‘health care commissioners often have to secure a huge number of different services from a single provider, meaning that negotiations between commissioners and providers can cover hundreds, sometimes thousands, of service lines’.According to the 181 CCGs which answered our survey, the average number of contracts held by each CCG with private sector providers was 90.
    17. These contracts are also of a qualitatively different nature from the nonenforceable contracts which existed in the NHS previously, and they lay heavier responsibilities on commissioners. They are negotiated privately between the parties and disputes can be litigated in the courts. The costs of negotiation and litigation may deter commissioners with limited budgets from undertaking effective enforcement of contracts.
    18. Such contracts are also confidential and not subject to the transparency requirements of the Freedom of Information Act. Commissioners’ rights to enter premises, inspect documents, interview patients, etc, are governed by the provisions of the contract itself. How far a contract confers such rights will affect the capacity of the commissioners to enforce it, and the absence of transparency makes third parties unable to tell whether a contract is in the public interest or whether it is performing well.
    19. Moreover, although individual CCGs are legally responsible for the contracts they make with NHS and non-NHS providers, their ability to hold providers directly to account is complicated by two factors.
    20. First, most CCGs contract out their contract management function to Clinical Support Units (CSUs). These bodies, of which in December 2014 there were 10, employ in total around 8,500 staff to undertake most of the contract management function for CCGs, and do so for up to 20 or more CCGs at a time.
    21. The exact legal and constitutional status of CSUs is unclear, which is a matter for concern given that they now play a central role in overseeing how large sums of public money are spent. They are in practice embryonic companies, initially consisting largely of staff who were previously employed by PCTs. At present they are ‘hosted’ by NHS England, but from April 2016 they are due to become fully private entities. CCGs currently pay them a total of around £700m a year for their services, or just over half the amount that CCGs receive from central government for their running costs. From February 2015 onwards CCGs which choose to outsource their commissioning work are required to put contracts for it out to tender when their current contracts expire. (See NHS England: Commissioning Support Lead Provider Framework Factsheet). NHS England has ruled two CSUs, which currently provide contract support for 47 CCGs, ineligible to compete to provide ‘end to end’ (i.e. comprehensive) services in future. They are expected to cease operation, while two other CSUs have announced plans to merge with a third in April 2015, leaving six remaining CSUs and three other private companies, to compete for all future end-to-end commissioning support contracts. One of the new companies is a consortium and another plans to use a ‘supply chain’ of additional companies to do some of work. In such cases the outsourcing of NHS clinical services will itself involve several levels of outsourcing. (See David Williams, ‘Jobs at risk as NHS England rejects two CSU bids’, HSJ 28 January 2015 and ‘Revealed: winners and losers of CCG support framework’, HSJ 5 February 2015).
    22. A second complication is that most CCGs collaborate with others in contracting for the provision of services for their respective populations. Typically, a single CCG will be the ‘lead’ commissioner with other CCGs joining in the contract as associate commissioners. The lead commissioner takes the lead in dealing with contractual performance issues on behalf of the associate commissioners.
    23. Both of these reasons may help to explain why 12 CCGs out of the 181 which responded to our survey were unable to tell us how many contracts they held with non-NHS providers.
    24. Health care is a complex good, meaning that it is very difficult to specify exactly what service is needed within a contract, making contracts for health care particularly difficult to monitor and enforce. Healthcare contracts also suffer from information asymmetry, whereby the commissioning body – in this case the CCG – will always know less about how well the contractor is performing than the contractor does. This makes it possible for contractors to ‘cheat’ or shirk on their contractual obligations and to provide false information about their performance.
    25. The incentive is intensified if the firm’s finances are under pressure, and in recent years some private providers of clinical services to the NHS have struggled to generate significant profits from contracts.
    26. These problems are not solely encountered by CCGs. In February 2014 the Public Accounts Committee (PAC) found that central government departments, with a total of £40bn in contracts with private sector providers, suffered acutely from asymmetry of information, and a severe imbalance of power and skills: The PAC found that there was ‘a longstanding problem of insufficient investment in staff with contract management skills.’
    27. The government’s Chief Procurement Officer told the Committee that ‘There has been an asymmetry between the suppliers and the officials. The suppliers sell deals, run deals and are earning big salaries. They have done it multiple times. Sometimes, they are up against officials who have none of those characteristics…’ The Committee concluded that ‘Government is clearly failing to manage performance across the board, and to achieve the best for citizens out of the contracts into which they have entered’.
    28. This raises the question whether 211 CCGs and ten CSUs, which are managing contracts with private providers worth £9.3bn, have the resources to do even as well as major government departments. In 2013 the economic regulator of the health service in England, Monitor, undertook a study of the effectiveness of local contracting within the NHS, interviewing CCGs and CSUs. The researchers found that the efficacy of local contracting was undermined by four factors.
    29. First, information asymmetry was a serious problem. They found that ‘providers have far better data than commissioners about the work they do and the costs of doing it, which they may be unwilling to share. Even where providers do share information, commissioners are not always able to have confidence in it because the quality of the information is sometimes poor’.
    30. Second, commissioners were ‘often at a disadvantage to providers in terms of both the scale of available resources (i.e. staff and time) and the skills and capabilities of those [in the] contracting teams. Both sides acknowledged that this can give providers the upper hand in contract negotiations’. Commissioners’ lack of contracting expertise increased the already high transaction costs of managing local contracts.
    31. Third, the threat of contract enforcement was not always credible. The report found that ‘Commissioners are sometimes reluctant to enforce contracts, particularly by imposing financial penalties, for fear of exacerbating providers’ existing problems’. Serco’s out-of-hours contract for Cornwall (Box 2) is an example of this.

    Serco’s out-of-hours contract for Cornwall

    From 2006 Serco had a contract to provide out-of-hours GP care services for the 500,000 residents of Cornwall. In June 2013 the Public Accounts Committee (PAC) reported that: ‘In early 2012 whistleblowers raised concerns that the out-of-hours service in Cornwall was short staffed and that the contractor, Serco, had lied about its performance by altering data… Evidence has confirmed that [this] was substantially true… Serco staff altered data on 252 occasions, resulting in Serco overstating the performance it reported to the primary care trust… Serco conceded that the contract manager had been paid a bonus which was linked to performance…’

    At one point a single doctor had been on duty for the entire county. The Committee found that ‘The primary care trust did not scrutinise Serco’s performance effectively. When these issues came to light, it did not penalise Serco, withhold payment or terminate the contract.’

    The former chair of the local Strategic Health Authority explained that ‘it has been our culture in the NHS not to levy fines and penalties, because… it often causes more problems by taking money away from places that are struggling.’ Commenting on this the Comptroller and Auditor General said that ‘dealing with a very large, powerful organisation that is all over the public sector is a bit different… when dealing with such an organisation, you probably need to be pretty robust in the way you defend your interests. You need to ensure that if you are entitled to anything or you have a point of leverage, you use it to the full.’

    1. Fourth, effective contract enforcement was also undermined by commissioners being dependent on providers: the report found that ‘lack of perceived or actual competition, reducing [the] provider’s appetite to perform to highest standards’, plus the knowledge on both sides ‘that the commissioner is reliant or critically reliant on the provider’, limited how effectively commissioners could enforce contracts.
    2. Many of these problems in monitoring and enforcing contracts with the private sector have manifested themselves in recent cases where failures in contract monitoring have led to patients being harmed, or put at risk of harm, or misleading information being provided to commissioners. It is significant that these cases have come to light as a result of a tragedy (Box 3), or whistleblowing, undercover reporting, or CQC inspections (Box 4), and not as a result of contract monitoring.

    Box 3: Contracting for Out of Hours Care:

    Take Care Now In 2008 a company called Take Care Now (TCN) had contracts to provide out-of-hours primary care for a total of 1.4 million patients in Suffolk, Cambridgeshire, Great Yarmouth and Waveney, South West Essex and Worcestershire. It had, however, great difficulty in recruiting and retaining staff and relied heavily on agency doctors from Europe. In February 2008 one of these gave a patient, David Gray, ten times the correct dose of dimorphine, which killed him.

    A subsequent investigation by the Care Quality Commission found that TCN was persistently understaffed; that previous ‘near misses’ and Serious Untoward Incidents had not been properly recorded or learned from; that there had been official warnings about the use of dimorphine by agency doctors from European countries where this drug was not used; and that in general the company had shown an inadequate appreciation of its responsibilities for patient safety.

    The CQC report also found that monitoring of the company’s contracts by the commissioning PCTs had been extremely weak:

    ‘The staff in the PCTs with responsibility for routine monitoring of the contracts for out-of-hours did not understand TCN’s reports on performance. They could not adequately explain the data or the basic activity figures… Before the start of this investigation, none of the PCTs robustly monitored staffing levels, skill mix or whether the shifts were filled, and most did not monitor them at all. The PCTs did not have a clear picture of problems in out-of-hours services. They were not generally aware of serious incidents. None of the PCTs had robust established arrangements to share information on poorly performing clinicians.’

    1.  These cases where private providers have failed to perform make it clear that the information asymmetry can only be truly overcome through site visits to providers. We therefore asked how many times CCGs visited the sites where NHS-funded services were being provided by non-NHS providers as part of the CCGs’ contract monitoring work. Whilst many CCGs told us that their contract monitoring involved meeting regularly with private providers of NHS services, we thought it would be useful to identify how often actual site visits took place. Interestingly, a large number of CCGs (109 out of the 181 which responded) were unable to answer because they didn’t record this information. Of those that did record how many site visits had been made between April 2013 and October 2014, 22 reported that they had not made any, while 39 had undertaken fewer than 10.

    Box 4: The Spire Wellesley

    In June 2013 an NHS patient at the private Spire Wellesley hospital in Southend received a ‘wrong site’ joint replacement implant. Wrong site surgery is a ‘never event’ – a ‘serious, largely preventable patient safety incident that should not occur if the available preventative measures have been implemented by healthcare providers’ – but it was only a year later, after two further wrong site implants had occurred, that a CQC inspector learned about the NHS patient’s case from hospital staff.

     The CQC inspector noted that approximately 37% of the Spire Wellesley’s patients were NHS patients, but that there were ‘marked differences between the NHS process and Spire Hospital’s adverse event /near miss reporting policy. The Spire policy… lacked detail of how a serious or never event should be reviewed to ensure practice changes and lessons are learnt to prevent a reoccurrence… only one member of staff had received appropriate training in investigation management… Whilst the clinical effectiveness committee discussed serious incidents this was rarely shared formally with junior staff in the clinical areas or the Resident Medical Officer.’

    Contract monitoring by the CCG had failed to ensure the safety of NHS patients treated at the hospital. In August 2014 the chair of the CCG’s Quality, Finance and Performance Committee asked why no contract report was available, ‘as despite issues with quality and safety at Spire Wellesley that have been raised by the CCG and CQC, we are still sending more patients there…’

    1. The former Chair of the Strategic Health Authority in the Serco case told the Public Accounts Committee that ‘it has been our culture in the NHS not to levy fines and penalties, because… it often causes more problems by taking money away from places that are struggling’ (see Box 2 above). This suggests a disincentive to use financial sanctions to enforce a contract even when a provider was seriously failing.
    2. We therefore also asked how many contracts with non-NHS providers had been terminated because of poor performance and how many sanctions had been applied. Of the 15,166 such contracts that were held by CCGs only seven had been terminated. In terms of financial sanctions imposed under contracts with non-NHS providers, 149 CCGs said that they had imposed none; sixteen had imposed financial sanctions totalling £3.8 million, although in relation to £1.9m of this no monies were permanently withheld, so it is unclear whether it amounted to a sanction. A hundred and thirty three CCGs had not issued any contract queries since 2013 in relation to the contracts that they held with nonNHS providers.
    3. Finally it should be noted that two CCGs said they could not provide us with information on the number of staff employed in contract monitoring, or the number of site visits undertaken, because it was commercially sensitive information belonging to the CSUs they were employing. One stated that ‘The CSU’s ability to apply for tender of future contracts would undoubtedly be harmed if the details you have asked for are disclosed and it would be significant: in our opinion this prejudicial effect outweighs the public’s right to know how public funds are spent’.
    4. If such information is deemed to be commercially sensitive after April 2016, when it is intended that all commissioning support will be provided by private companies (including CSUs, which will then also become private companies), it will not be possible to know how CCGs which use CSUs are exercising their responsibilities under the Health and Social Care Act 2012.

    Conclusion and recommendations

    1. The Health and Social Care Act 2012 marked the final step in the creation of an external market for NHS care, a market underpinned by a myriad of contracts, increasingly being held between the NHS and private providers of healthcare.
    2. All the contracts which underpin the NHS market, including contracts with NHS providers, require administration of one form or another, and there are now some 25,000 staff employed by the NHS in this endeavour. These staff are spread between Local Area Teams (3,400), which manage primary care, dental, ophthalmic and pharmacy contracts, and CCGs (12,500) and CSUs (8,500), which manage secondary care and community health contracts, at an estimated total annual cost of £1.5bn.
    3. However, there is a significant lack of information about how this resource is used in practice, and how effective it is. As both Monitor and the Public Accounts Committee have found, acquiring the expertise and the resources for contracting effectively with private providers is a serious problem. The data provided to us by CCGs provide evidence of the challenges that CCGs face, but also raise significant questions about the transparency of the contracting arrangements, and about who is exercising the powers granted to CCGs under the Health and Social Care Act.
    4. If the outsourcing of NHS clinical services to the private sector is to continue, and if patients and the public are to be confident that standards are being met and that value for money is achieved, a number of measures need to be taken to address the issues raised in this report.
    5. NHS England should commission an independent audit of CCGs’ capacity to monitor and manage contracts with non-NHS providers before any further major contracts are arranged.
    6. NHS England should re-consider its plans to privatise the contract monitoring of NHS contracts. CCGs are the statutory bodies responsible for enforcing contracts between the NHS and the private sector, not CSUs, which remain unaccountable if anything goes wrong. This problem will be exacerbated if CSUs become private companies, as is intended, from April 2016. With nearly £10bn worth of contracts with the private sector already in place, it is vital that statutory bodies are genuinely responsible and accountable for ensuring that private providers deliver according to the terms of their contracts.
    7. To increase transparency CCGs should be required to publish regular performance data on the number and value of contracts they hold, how they know whether contracts are performing well, the number and type of staff they employ to monitor and enforce contracts, and the amount of any overpayments they may have made to providers due to fraud or error.

    This report was produced by the CHPI research team with the assistance of Laura Stoll and Mubeen Bhutta and is reproduced with their kind permission.

    2 Comments

    The commercially confidential Memorandum of Information for the controversial £700 million tender for Cancer Care in Staffordshire has been leaked and published online on openDemocracy.org

    Cancer Not For Profit member and Labour PPC for Stafford, Kate Godfrey, has shared her contract concerns on The Guardian after discovering the contents revealed frightening new prospects for the NHS in Staffordshire.

    The campaign group have been calling on commissioners for greater transparency and more information about the implications of this contract. The subsequently leaked secret document, which must have come from a source close to the heart of the commissioning process, may indicate that not all is well within the ranks of the team at the heart of this project. Unite the Union’s West Midlands Regional Secretary, Gerard Coyne, is a supporter of the Cancer Not For Profit campaign, he said:

    ‘I stood on a platform with Cancer Not For Profit in Stafford in September last year calling on the CCGs for greater transparency around this much feared privatisation, now we know why they were being so secretive. The detail emerging from the MOI confirms our worst fears, that this contract is ripe for big business, with the new ‘prime provider’ able to ‘disinvest’ the services of current care providers. It allows them hire and fire contractors from hospices to hospitals to suit their own profit margins. 

    There are specific references to a contract designed for ‘VAT efficiencies’,an issue that doesn’t concern the NHS, so it can only be because the Government are sweetening the deal for private companies to legally defraud the tax payer. The Tories have been lining this up since they walked into Number 10, they’ve installed a system which forces NHS commissioners to abdicate responsibility because the Health and Social Care Act 2012 has made their job impossible, but if they let this massive cancer contract go the NHS will never get it back.’

    The campaign group Cancer Not For Profit have been asking why this massive experiment is even being considered and have been calling on the Programme Team to share the business case for this project. However, the document reveals that in fact the onus is on the bidders to create such a document and the commissioners did not even have a desired outcomes framework in place, an essential component which was in development apparently, they also neglect to outline how they envisage this great experiment is even to be achieved.

    Though there have been several ‘public awareness’ events held by the programme team Andrew Donald CO of Staffs and Surrounds and Cannock Chase CCGs feels formal public consultation is not required claiming that there’s not a significant enough change in providers to make it a legal requirement. Such a stance is questionable if the ‘prime provider’ is able to bring in sub contracts and disinvest others. The Transforming Cancer and End of Life Care Programme Team appear to have no idea what is going to happen to cancer and end of life care in Staffordshire, they just don’t want to be responsible for managing it any more.

    Tagged | 1 Comment

    We appear to be edging to a consensus that even with heroic “savings” our care system needs significantly more funding.  In an era of austerity and tax resistance that is hard but has to be discussed.  There are no magic solutions.

    But sadly we have had yet another rounds of claims that £10bn pa could be saved if the market was removed from the NHS.  Yet again the only basis for the claim is one line in a Health Committee report – in fact misquoting what was actually said. The claim is that the introduction of the internal market increased NHS administration costs from 5% to 14% of total expenditure; so removing the market will save 9% or around £10b.

    The source for the claims about 5% and 14% is the 4th Report of the Health Committee, Session 09/10 on Commissioning.  The following extracts are from the report.

    According to the official historian of the NHS, Dr Charles Webster, the service has traditionally scored highly on account of its low cost of administration, which until the 1980s amounted to about 5% of health-service expenditure.

    and

    An estimate of administrative costs made by a team at York University concluded that management and administration salary costs represent, as a very crude approximation, around 23% of NHS staff costs, and around 13.5% of overall NHS expenditure.

    Two things should immediately be pointed out.  The quote about 5% is from an excellent book, A Political History of the NHS by Charles Webster, but the passage in the book does not itself have any references to where the 5% came from or what it actually contained.  It is almost certain that in the era pre 1980 many tasks which might now be characterised as “administration” or “management” were only done as part of a wider job and so would not have been recorded in any way.

    And the York University Report – NHS Management and Administration Staffing and Expenditure in a National and International Context, from March 2005, time and again sets out that comparison of costs between countries and between periods in our own NHS are beset with many issues around classification.  So for example the 14% did not include any “estimate” of consultants and others time which might be classed as administration or management.

    In fact the report actually put its estimate of administration and management costs on an internationally comparable basis at between 17% and 21% (not the 14% as is often used).

    As the York report sets out:-

    There are no agreed definitions of ‘administration’ and ‘management’ in health care between (and sometimes even within) countries’ health care systems. Substantial ambiguity exists around any comparisons, particularly as definitions shift as groups of workers are recategorised. Consequently, all cross-national and cross-sectoral figures must be viewed with extreme caution.

    Even if we had reliable and comparable figures (and we don’t) then arguing the whole of any increase between the cost base in the 80’s and the costs base in 2003 (the base year for the York study) was due to the internal market and that this was wholly without any compensating gains is not justified.

    In a paper which uses the same base information (the 5% and 14%)  Colin Paton[1] suggested that only half of the increase was due to the internal market – although he gave no rationale for the 50% figure.

    A recent, thorough and rigorous analysis of the actual evidence about the impact of the setting up and running of the internal market is set out in Reforming Healthcare – What’s the evidence? – by Ian Greener and others in 2014[2]. The change was costly to implement and added significantly to management and administration costs, but the various papers referenced in What’s the evidence? do not suggest additional costs to anything like the scale of the £10bn claims.  No proper costs vs benefits study has ever been carried out.

    Even if the additional costs introduced by the changes 25 years ago could be quantified none of the claims about £10bn savings actually set out what costs could now be reduced.  Reducing management and administration costs by £10bn would be a reduction of over 50% and these costs account for around 25% of NHS jobs (depending again on what is included).  A 50% reduction equates to many tens of thousands of jobs.

    So far as can be ascertained given all the definitional issues we can see that the NHS since the 70’s has changed dramatically in terms of the role and significance of “management”.  The rise in the use of IT for collection and analysis of cost data occurred not because there was a market but because it was agreed that the health system needed to have some elements of management.  We did not need to know how long the queues were when they were not managed and we did not collect outcomes or activity data and nobody would have used the results.  Managererialism, not marketization, probably accounts for most of the rise in administration costs.

    There is one recent study which might give us a better idea about what might actually be saved from removing the internal market. Information about the costs of various types of health systems has recently helpfully been provided by a study by Himmelstein et al[3].  This looks only at the costs of management and administration within larger hospitals across various countries with varying degrees of “market”.  Of particular interest is that it treats Scotland and Wales separately from England in its analysis.

    Like the York report it needs to be read with some care but to summarise; the highest costs per capita (after numerous adjustments) are in those systems with complex payment systems.  Systems which have single payer and block funding have the lowest costs.  Systems like ours in England are in between.  For hospitals the best estimate for England is for administration and management to account for between 17% and 21% of total expenditure.  (Spookily but coincidentally similar to the York finding of a decade ago.)  The study suggest that a base level of around 12% is necessary for any system.

    In comparisons of relative expenditure England comes out slightly higher than Wales but Scotland is significantly lower.  The explanation though appears to be a technical one in that management of capital in Scotland is more centralised.  In fact there is not a lot of difference between the three nations.  What differences there are appear to be due to costs of administration not of management and to be due to numbers of people not wage levels.

    In terms of quality the most recent comparison across the UK from the Nuffield Trust[4] showed no great outcome differences between the various systems even though they had very different structures.

    But there are cost differences between systems which can be seen mostly to do with the costs of information used to drive the payments systems, which in England is DRG and activity based plus a bit of block funding. If we went back to very simple single payer funding with no competition for funding, no “commissioning” and a centralised management structure looking after major issues, shared services and capital it appears that there could be savings of the order of 1% to 2% in hospital costs.  (That assumes that much of the information used to drive payments systems will have to be used anyway.)

    In England there are also commissioning costs and system management and regulation costs.  Opinions vary about what we would have to do in terms of planning if there is no market and about how much system management and regulation would still be needed.  But we could envisage savings from the £1.2bn spent by CCGs plus spending on CSUs, and much of the regulatory infrastructure.  Maybe £2bn in all.  But much of what is actually done within these bits of the NHS still has to be done somewhere. We do need to know how much various things cost and how variable outcomes are and we do need someone designing pathways and we do need some kind of oversight. That can be done in many ways.

    Anyway nothing even at the wildest extremes of what might be possible gets to savings of even one quarter of the claimed £10bn.  Still the mythical £10bn is so firmly entrenched the facts are unlikely to be of much use.

    When the Health & Social Care Act is repealed and the competitive market is removed then there will be scope for savings but not of the order of £10bn.  Further savings could come from reducing the number of NHS organisations through consolidation, but merges and other transactions have a bad track record.  We can only “guesstimate” but this might over time be of the order of 1 – 2% of total English NHS expenditure, but there would be considerable transition costs to be met and neither change would be easy and consolidation would be contested!

    [1] Centre for Health and the Public Interest – At what cost? Paying the price for the market in the English NHS; Calum Paton

    [2] Reforming Healthcare – What’s the evidence? – Greener, Harrison, Hunter, Mannion and Powell – Policy Press Bristol – 2014

    [3] Health Affairs, 33, no.9 (2014):1586-1594 A Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far; David U. Himmelstein, Miraya Jun, Reinhard Busse, Karine Chevreul, Alexander Geissler, Patrick Jeurissen, Sarah Thomson, Marie-Amelie Vinet and Steffie Woolhandler

    [4] The four health systems of the UK: How do they compare? Professor Gwyn Bevan, Marina Karanikolos, Jo Exley, Ellen Nolte, Sheelah Connolly and Professor Nicholas Mays. The team was led by Professor Nicholas Mays of the London School of Hygiene and Tropical Medicine. Nuffield Trust, London, 2014.

    Tagged , | 1 Comment

    It is good to hear the Labour Party speak of repealing the Health and Social Care Act 2012 but so far they have not said that they will change section 2. That is the governance of Clinical Commissioning Groups. We have seen CCGs, General Practitioners whose skills and interests lie with treating patients reluctantly coming to terms with their responsibilities. We should be concerned as to their interests. It is no criticism of individuals that the structure makes the members of CCGs accountable only to GP members. They are only required to consult and inform the public and patients groups. This means that they can, and sometimes will, make decisions in the interests of their own collective income or professional convenience. The issue of personal interests is also blurred when GPs have an interest in private companies bidding for contracts. GPs do a fine job as GPs and have a valuable perspective on the hospital and community health services. However, it is the role of Managers, who often have a clinical background, to deliver all the service needs according to patients’ needs and Public Health assessment of need s. Hospital doctors have an intimate knowledge of the workings of the system. Pharmacists, physiotherapists, nurses and others have expertise to contribute. Voluntary and patients’ organisations see the stresses in the system.

    No one wants another massive reorganisation. All that is needed is to change the governance of CCGs. Let them be made up of nominees from the local councils who represent the communities they serve, voluntary and patients’ organisations, and professional representatives who should include a GP a hospital doctor and a nurse. The CCG staff can continue with their work but report to a broader based CCG.

    The other major issue is the finances of the NHS. The Government sets the total sum but also influences its distribution. A major change has been that the distribution formula for GP practices has been changed to remove deprivation factors. Now “deprivation” is the proxy for “need”. So funds are taken from the areas with high unemployment, ethnic minorities, high incidence of diabetes, heart disease and hypertension. The beneficiaries are more affluent areas where life expectancy is longest. Deprivation factors must be restored as soon as possible to the funding formula so that GP practices can employ more doctors and nurses where they are needed.

    Cllr Maggie Mansell

    Chair of Croydon Health & Wellbeing Board writing in a personal capacity.

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    The purchaser/provider split for healthcare was introduced early in the 1990’s, tied into the ideas around greater efficiency through competition between providers in some kind of market; good providers would thrive and bad ones would fail and be replaced. The split had an additional implication, it made performance management and policy development easier.  It was relatively easy to set targets for providers and then manage their performance against them; although difficult to do the same with commissioners.

    Commissioning has replaced purchasing but all the many efforts to make it work appear on the evidence to have failed.  The costs have not justified the gains.

    With social care the situation is far more developed with the local authorities acting as purchasers, contracting for the services and in-house (or public) provision virtually extinct.

    In England (In Wales and Scotland the systems are very different for healthcare) the optimal situation would be for each defined population to have one strategic planning (commissioning) body and one care provider (either a single body or an alliance of bodies working together). In due course the provider could then be merged into the commissioner to further reduce transaction costs and overheads.

    The separation of providers is obviously essential to creating a market. But if the market structures in health are removed and some public provision of social care is reintroduced should there still be a split?

    Just on practical grounds removing the split appears to be problematic and possibly insoluble.  In England there are around 250 large public bodies (Trusts) providing acute, tertiary, mental health, community and ambulance care and thousands of providers of social care.  There are many private providers and many GP Practices. There are 210 Clinical Commissioning Groups plus the commissioning parts of NHS England, and 153 local authority commissioners of social care.

    If the alignment was to 153 public bodies which both planned and also provided all the services for a defined population the scale of organisational change would be huge and thousands of contracts with private providers would have to be bought out in some way with the capacity moved into the public sector.

    Aside from the huge cost and disruption of another massive reorganisation, there are arguments for keeping an explicit separation even in a publicly provided system:

    • There is always some separation of functions so it is better to make this obvious and transparent
    • Commission must be population based but provision often is not – eg specialist services
    • Commissioning requires long term views and should be taken by enduring bodies, providers may need to change organisational form
    • Without a split and powerful commissioners then decisions about allocation of resources and setting of priorities will be skewed by the vested interests of the large hospitals and consultants.
    • It is better for decisions about allocation and priorities to be taken by separate bodies which are fully democratically accountable – which may not be appropriate for provider functions.

    An alternative is to have a single local body which pools all the budgets for care, brings commissioning together on a locality population basis, but to leave the providers as separate bodies.

    Bringing services back into public ownership as contracts expire or are terminated, reducing the number of provider bodies and having provider bodies better aligned to localities and providing all care services (vertical integration) can all be encouraged and supported but progress would have to be slow and locally determined if destabilisation is to be prevented.

    In this new settlement the split between commissioning and providing is minimised and, although it remains, it no longer facilitates an internal market or choice based provider competition.  There would also be no legal or other inhibition preventing collaboration between commissioners and providers.

    So is the solution to find the best ways to manage a system where most providers are public bodies but where they are separate bodies?

    If we go down that route how does the money flow?  How does accountability work? What drives improvement?

    The Essex Problem

    The current landscape in Essex illustrates the problem.

    There is a County Council and two Unitary Authorities which deal with social care (and education, Public Health) and there are 12 District Councils dealing with Housing and Environmental Health.

    There are 5 CCGs and NHS England local outpost also does commissioning of primary care.

    Each of the 3 tier one local authorities has contracts with many providers of social care and there is some minor residual care functions provided in house.

    There are 5 acute trusts (3 of which are FTs) which deal with services for patients outside the County.  They provide some speciality services funded separately.

    There are 2 Mental Health Trusts (both FTs) and one provides services on contract for another entirely separate population.

    All the Trusts sub contract work to other providers through contracts.

    There are numerous providers of primary care and community care many in the private sector, and the usual spread of GP Practices of various kinds.

    The ambulance service is Regional.

    If you do not have any separation of providers (ie no commissioner provider split) then you have to resolve all this complexity so there is a single body which both plans and also provides all the required services for Essex.

    Even if that could be done it is obviously a huge reorganisation with all the legal complexities over staff and asset transfers and contract novations then is it actually worth the effort – what gain is made?

    So the inference is you wind up with some kind of internal market even though the vast majority of provision is through public bodies.

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    Samuel Townend and Simon Taylor

    One of the major and traditionally undervalued economic tools that government has available to it is the way that it spends public money. UK public procurement expenditure accounts for about £22bn a year, of which about £45bn is by government departments (the remainder being mainly health and local authorities). It affects roughly 20 per cent of UK gross domestic product.

    This purchasing power can be used to maximise value for money for taxpayers. It can also be used to promote industrial policy aims, such as stimulating underperforming parts of the economy and establishing sustainable markets, but also social aims such as improving labour practices and encouraging small and medium-sized enterprises (SMEs). The use of this power is guided and constrained by the public procurement rules, which are based on European Union (EU) law.

    This chapter takes stock of how the UK is doing at public procurement, looks at the causes for any shortcomings, proposes a reassessment of priorities in line with Labour values and makes some suggestions as to how best to use this valuable resource in a period of austerity. It concludes that a government procurement strategy is urgently needed to restore an efficient balance of economic purchas­ing, social progress and business growth.

    Is Europe to blame?

    Public procurement is fundamental to cross-border trade and investment. It is therefore regulated at EU level through a series of pro­curement directives including 2004/18/EC and 2004/17/EC. These set out detailed requirements as to the way in which contracts above certain thresholds are to be tendered by public bodies and certain utili­ties with monopoly rights. They include the manner of advertising (in the Official Journal of the European Union (OJEU)), the procedures to be followed, the basis on which bidders may be eliminated and evaluated, and rules on due process such as the debriefing of unsuc­cessful bidders and effective remedies. The EU rules are primarily aimed at ensuring the free movement of persons, goods, services and capital within the EU by outlawing discrimination between companies on grounds of nationality. They also use fair competition to drive value for money and transparency to prevent corruption.

    The pursuit of other policy aims, including the environmental and social agenda, is also sanctioned by the procurement rules, provided this does not conflict with the primary aim of EU free movement. Indeed, the EU Treaty (Treaty on the Functioning of the European Union (TFEU)) enshrines in its preamble the pursuit of social as well as economic progress as a fundamental objective, and much of the worker protection legislation in the UK is based on EU law. But there is tension between these various aims which has given rise to case law.

    EU procurement law is much maligned, often with apocryphal tales of Eurocrats determined to make life difficult for British busi­ness, while foreign governments cheat the system and favour their own national champions, which in turn steal British contracts and jobs. The truth is that British businesses do reasonably well out of European public procurement. Research prepared for the European Commission in 2011 showed that UK business won 17% of foreign contracts awarded across the EU (second only to Germany at 26%, with France at only 5%). That isn’t bad when you consider that foreign tenders are likely to be conducted in a foreign language and the British are not famed for their linguistic adaptability. In relation to UK procurement, only 3 per cent by value of UK public contracts were awarded to firms based in other member states (below the EU average of 3.5%, though higher than France at 1.5% and Germany at 1.7%). In any event, our membership of the EU is conditional on the procurement and other free movement rules.

    Furthermore, if we didn’t have the procurement rules we would need to invent them. This is because, if done properly, regulated public procurement safeguards public value for money through competition for contracts and ensures public sector accountability through trans­parent procedures. EU procurement regulation also enables British companies to access tender opportunities in a range of major trading nations under the General Procurement Agreement umbrella (includ­ing the United States, Canada, Hong Kong, Japan and Singapore).

    The EU rules are not perfect and a recently adopted directive introduces reforms that will, to a degree, create more streamlined and flexible procurement (for instance, more scope for negotiation, elec­tronic documents and more practical rules on dynamic purchasing systems). They will also confirm that procurement can be used stra­tegically to advance social aims and help smaller companies (Art. 46 on lots, Art. 67 on award criteria and Art. 70 on contract conditions), that authorities can exclude companies from tenders for a wide range of misconduct (including persistent deficient performance, collusion and fraud, Art. 57), take bidder past performance into account at selection stage (Art. 58) and that pre-tender engagement is permitted (Art. 40). In these and many other respects, the new provisions codify and (on the whole) clarify EU law. These are positive developments for which the UK negotiators at the Cabinet Office can take some credit.

    Taking stock of how the UK is doing at public procurement

    The real problem is not the EU procurement rules but the way in which public procurement is carried out in Britain. This was the view of the House of Commons Public Administration Select Commit­tee (PASC) in their July 2013 report on government procurement. Having heard extensive oral evidence and studied written reports from a wide range of sources, the Committee concluded that:

    • UK procurement is risk-averse, process-driven and inefficient: ‘It is intolerable that UK public procurement still takes 50 per cent longer than it does in France and Germany: the Cabinet Office does not seem to know why this is the case’ .
    • There is a failure to ensure proper consideration of social and eco­nomic objectives in procurement exercises.
    • There is no coherent procurement strategy: ‘The government has failed to set out a clear strategy for public procurement. There remains a lack of clarity about the government’s longer term policy for the consolidation of government and wider public sector procurement.’
    • There is a skills gap in government as to both procurement capa­bility and the commercial nous needed to manage contracts with
    • Aspirations to support SMEs are commended, but procurement favours large companies and SMEs do not win a fair proportion of public contracts.
    • There is insufficient leadership even to drive change in Whitehall, never mind the wider public sector. The Cabinet Office is com­mended for its reform initiatives but lacks the authority to make things happen. The UK Cabinet Office Minister, Francis Maude, acknowledges in his evidence the dispersed civil service reporting structures and its system of ‘silos’.

    The inefficiency and lack of capability and vision in government and the wider public sector mean that the fundamental aim of ensuring value for money in procurement spend is not being met. The PASC found that despite an overseas perception that Britain has a reputation for good procurement practice, the overriding impression was one of poor execution of the procurement rules.

    What goes wrong in practice?

    A significant cause of the problem, which is evident from the cases that find their way into the UK courts, is the failure by public bodies to plan tenders properly. Too often procurement project plans begin with the publication of an OJEU notice and only then proceed to the consideration and preparation of the other tender documents (first the Pre-Qualification Questionnaire (PQQ), then the Invitation to Tender (ITT), and so forth). This is often driven by political urgency but is the wrong way round and stores up all sorts of risks, delays and inef­ficiencies for later on in the process.

    Key decisions should be taken in advance of advertising the tender. These include:

    • The strategic aim of the tender (best value only, innovation, social or environmental aims, regeneration, market-making, etc.).
    • What is to be procured (the specification, duration, whether a framework, whether divided into smaller lots, how much risk transfer, etc.).
    • How it is to be procured (the process – e.g. e-auction or restricted procedure, timelines, e-portal technicalities and so on).
    • What types of bidders should qualify to bid (the pre-qualification of eligible and capable bidders with sufficient financial robustness to take on the risk transferred under the contract).
    • How the winner will be chosen (the objective, fit for purpose award criteria – what good looks like and how to assess it).

    All these decisions are interrelated and once you have started the process it is risky to change tack because that may unfairly prej­udice certain bidders (e.g. those who have already been eliminated or did not respond to the advert). But that is what often happens. The greatest flexibility for public bodies is at the planning stage and it is generally a good idea to engage with potential suppliers in the market at this stage in order to assess, for example, what they are capable of delivering. Procurement officers have traditionally shied away from doing this out of a concern that it may breach the rules. This concern is misplaced provided things are done fairly and openly.

    Poor execution is often the result of poor planning. Court pro­ceedings typically begin because the debrief provided to unsuccessful bidders reveals errors or concerns over fair play. Sometimes the scores have not been added up properly or there are obvious inconsistencies. The court disclosure process then typically makes the claim stron­ger by revealing, for example, that controversial evaluation or exclu­sion decisions are not supported by an adequate paper trail or that undisclosed methodologies were used. A costly settlement or lengthy proceedings then follow.

    The West Coast fiasco

    There are many high-profile examples where poor planning and poor .execution have led to procurement disasters, many of which end up in the courts. When the Department for Transport’s tender for the 15-year contract to run the West Coast Main Line franchise agreement hit the buffers in 2012 following a procurement challenge brought by the incumbent Virgin Rail, the cost to the public purse was conserva­tively estimated at £40m by the government. The Laidlaw report found fundamental flaws in the evaluation of bids, a lack of transparency, inadequate planning and insufficient governance. The government dodged ministerial responsibility by a swift Cabinet reshuffle and blamed human error by civil servants, but the problems ran deeper. They included a government franchising policy predicated on conferring a 15-year monopoly on the successful bidder, the failure to design a robust tender process to deal fairly with the complex variables (such as passenger growth projections and the capital needed to cover fran­chisee insolvency) that such a long-term contract entailed, insufficient resourcing due to government austerity cuts and inadequate oversight by senior civil servants and government ministers.

    Does government use procurement strategically?

    As for policy aims, some, such as the SME agenda, are now being pursued albeit belatedly. However, in spite of the fact that 6 out of 10 private sector jobs are created by SMEs, direct spend by government to SMEs is only about 10% (in years 2011-12).” The govern­ment correctly recognises that SMEs provide the engine for economic growth and innovation, as demonstrated by Germany’s economic success. It has therefore declared the ‘aspiration’ that 25 per cent by value of all government contracts are to be won by SMEs by 2015. Yet the PASC was rightly sceptical of the government’s ability to deliver on this target. In December 2013 the government announced various initiatives to encourage public bodies to make it easier for SMEs to bid for public contracts. The PASC also collected evidence of posi­tive initiatives, such as the ‘G-Cloud Framework’, on which around 75% of suppliers are SMEs. However, it seems doubtful that the public sector will come close to achieving the stated objective without a more fundamental government-led approach, which changes the way that procurements are devised and conducted throughout the public sector. A paradigm shift is needed, not tinkering at the edges. As for social policy, the Minister for the Cabinet Office made it clear in his evidence to PASC that he doesn’t think initiatives such as that pursued by the Department for Work and Pensions (DWP) to encourage contractors to take on apprentices (which have led to 2,000 new apprentices being hired) should interfere with the pursuit of value for money. That is despite the savings to the welfare budget that would result from the ensuing reduction in youth unemployment. In our view, a more positive approach is required (and one that clearly won’t be made by the present government).

    Does government manage its suppliers well?

    The oral evidence on outcomes and supplier relationships provided to the Committee also makes for grim reading. The Chief Procurement Officer points to the fact that about half of central government spend is with a very small number of suppliers (between 50 and 100) – sup­pliers for whom government is likely to be their biggest customer. Yet their performance is typically worse than you might expect for their least-valued customer. One case was cited of a supplier with government contracts worth over £500111 per annum that was charg­ing government a supernormal profit well above that set out in its published accounts.

    It is fair to acknowledge efforts are now being made by the Cabinet Office towards management and supervision of the biggest contracts. A review led by the Chief Procurement Officer at the Cabinet Office investigated contracts worth fs.gbn held by Serco and 648 and found that Serco had been overcharging on its electronic monitoring con­tracts. On 19 December 2013, it was announced that Serco will repay £68.5m to the Ministry of Justice. The matter has also been referred to the Serious Fraud Office for investigation.

    We agree that these steps are well taken. But such contracts need to be properly managed and supervised as a matter of course, rather than exception, and more needs to be done to ensure that fraudulent companies are not given public contracts in the first place. The new EU directive makes it clear that the tools are available under EU law to exclude errant bidders. A coherent procurement strategy is required and it needs to carry sufficient weight to be effective, not only in central government but also in the wider public sector.

    Our proposals for reform

    Above all, a realistic but ambitious strategy is needed. Given the scale of the issues and the potential gains in getting this right, it is govern­ment that needs to act, and the current government is not doing enough. In their report to the PASC, Future Purchasing Inc. and the Henley Business School estimated that the positive initiatives of the Cabinet Office and the Government Procurement Service (recently renamed the Crown Commercial Service) currently touch only about 5 % of overall public procurement spend. They estimate that procurement-led efficiency savings could amount to £75bn over the whole public sector, which could be used to cut the deficit either directly or, as they advocate, be reinvested in growth initiatives through service delivery and infrastructure projects. As the TUC advocates in its written evi­dence that strategy should also support the quantity and quality of employment, assist economic inclusion and underpin a modern indus­trial strategy – all objectives which are consistent with EU law and have been for some time, but are largely neglected by this government. We consider that the pillars of that procurement strategy would include:

    • investment in skills and capability
    • structural change and leadership
    • joined-up public sector procurement
    • the pursuit of social and industrial aims, as well as value for money
    • a stronger SME agenda
    • increased focus on ensuring that fraudulent and underperforming companies do not win public tenders.

    Investment in skills and capability

    The strategy must involve investment aimed at establishing a new generation of extremely able procurement leaders throughout the public sector with responsibility for the planning and execution of tenders, as well as contract management. This will help ensure that ‘corporate knowledge’ within the civil service and wider public sector is retained by motivating and retaining a highly skilled workforce, reducing dependence on expensive short-term external consultants and recognising the value and significance of procurement as a public service function. The strategy would mark a departure from attempts to outsource responsibility for commissioning and procurement to private providers – such as the recent failed tender for a Ministry of Defence ‘government-owned, contractor-operated’ (GoCo) – and a move towards nurturing the necessary skills within the public sector.

    Structural change

    Urgent consideration of options is required. These could include establishing a ‘Crown Procurement Service’ with the remit and capa­bility of addressing all (or the vast majority of) public sector pro­curement. Alternatively, it could comprise a less monolithic but no less powerful structure with top-down support from a Minister for Procurement and each procurement leader’s deliverables reviewable by a Public Procurement Reform Board.

    The responsible procurement body should then show leadership, not only in guiding the public sector towards better procurement but also in interpreting the rules and negotiating with Brussels. By way of example, leadership is needed to take certain ‘public sector’ bodies such as higher educational bodies, registered providers of social housing and NHS foundation trusts that operate in regulated but increasingly competitive markets outside the scope of the pro­curement rules. Another example would be support for public sector alternatives or comparators to be used when assessing the value of private bids on major tenders.

    Joined-up public sector procurement

    Much of the more radical and progressive procurement comes from local authorities in areas such as shared service provision and joint buying. The strategy must embrace local authorities, NHS bodies, educational bodies and other public bodies subject to the rules. Local­ism in this context has been used by the government to dodge respon­sibility. Under the Localism Act 2011, local authorities are required to share the financial burden of any penalties for poor procurement imposed on the government by Brussels. Yet after years of austerity and with their budgets cut, local authorities often do not have the expertise or resources to procure properly. Government can’t com­pletely devolve its responsibility for efficient and lawful procurement – it is too difficult and too important to the economy. It needs to step in and help.

    As for the NHS, the government has restructured the sector and introduced binding sector-specific procurement rules, which add to the burden under general procurement law, and it expects clinical commissioning groups (CCGs) of GPs to make decisions as to when they are obliged to go out to tender and how to do it. It is not practi­cal or efficient for the Department of Health to cut CCGs loose, as the increasing number of disputes and challenges in the sector dem­onstrates. The same point applies to free schools or small housing associations. How can they be expected to run tenders without close support and guidance from government? The wider public sector is fending for itself over procurement in a variety of ways with differing degrees of success, but it is taxpayers’ money that is being spent and the government’s responsibility to ensure a coherent approach.

    A successful strategy must require the restructured government procurement function to be far more proactive in providing training, templates, guides, advice and set procedures, as well as resources to support procuring bodies in relation to all stages of the procurement process and contract management. This need not all be centralised. There could be regional and sectoral centres of procurement excel­lence, but a full programme of help and support is required and it needs to be coordinated.

    Social measures

    There is considerable scope for a future Labour government to use public procurement to promote social ends. EU Directive 2004/187 EC makes it clear at Recital 33 that contract performance conditions ‘may in particular be intended to favour on-site vocational training, the employment of people experiencing particular difficulty in achiev­ing integration, the fight against unemployment or the protection of the environment.’ It is lawful to impose on contractors a contractual condition that they must employ apprentices or the long-term unem­ployed provided it does not involve any direct or indirect discrimina­tion against foreign nationals or otherwise make it more difficult for non-national tenderers to compete. Although the award criteria used to select the winning tender must be contract-related, the case law also indicates that appropriate social criteria can be used. The ability to use social criteria is now confirmed by the new public procurement directive (Art. 67(2)).

    In spite of the ability to use procurement for social ends, public bodies too often shy away from doing so, either because they (like the cabinet minister) do not want anything to get in the way of best value in its narrowest sense or because they have taken an overly cautious view on their flexibility under EU law. There are notable exceptions to this. The DWP programme for introducing apprenticeships has been referred to earlier. Glasgow Housing Association (GHA) has also adopted a suite of contract and tender documents for a construction framework that introduces contractual conditions (KPIs) based on meeting training, recruitment and apprenticeship targets. The GHA applies selection and award criteria designed to evaluate contrac­tors’ ability to meet and perform such conditions. In our view, other public bodies should follow the lead set by bodies such as GHA and plan tenders in a way that can achieve economic as well as social aims to the benefit of the recipients or users of the services or works pro­cured as well as the wider community. A Labour government should endorse and promote strategic procurement of this kind.

    One positive result of such social measures in procurement is that they are likely to have local benefits. It is no coincidence that coun­tries with a more progressive social policy agenda, such as France and Germany, award more public contracts to national companies who are no doubt better able to meet social conditions in tenders than their foreign competitors. This is not cheating the system, but simply clev­erer application of the rules.

    The other means of using procurement to promote industrial development is to plan and specify tenders in a more strategic way. It is not difficult to see how this can be arranged. If, taking another example in the rail industry, there were a choice between a disag­gregated programme of smaller train rolling stock contracts (possi­bly tendered together as separate lots or in a framework, or tendered sequentially) and one very large one-off contract which would meet government needs for the foreseeable future, the two options may present different risks for a UK-based train design and manufacturing base and UK jobs. The small contract option may give rise to a more diverse, sustainable production market. The large contract option may (or may not) give rise to a short-term cost advantage, but limit the future market to fewer suppliers and result in a ‘winner takes all’ tender. The loser may need to close its factory gates (unless, that is, it can mount a successful procurement challenge).

    Sadly, such strategic considerations seem to have been absent when, in June 2013, the government awarded a £i.6bn contract to Siemens to build 1,140 carriages for the Thameslink rail line, leading Bombardier to shed about half its UK workers. The ensuing public outcry has, according to press reports, led the Department for Trans­port to incorporate socio-economic conditions in their £1bn tender for Crossrail rolling stock.

    So government and other public bodies can and should think through at the procurement planning stage how social ends can law­fully be protected or encouraged. It is fair to acknowledge that the Public Services (Social Value) Act 2012 now requires public bodies, prior to commencing a procurement, to consider how what is to be procured might improve the economic, social and environmental well-being of the relevant area. There is little evidence, however, that the Act has made any substantive difference.

    We think that a future Labour government needs to act strategi­cally to ensure that the opportunities in procurement to drive favour­able socio-economic outcomes are not missed. We propose:

    • Positive and active help from government encouraging the incor­poration of legitimate social aims and advice on how to do this lawfully and effectively.
    • The systematic inclusion of contract performance conditions requiring contractors to introduce apprenticeships and address other socio-economic concerns, with social criteria being intro­duced where appropriate and contract-related.

    Promoting SMEs

    SMEs are the engine of innovation, growth and job creation, and strong economies are built on a strong SME sector. In our view, government can and must do more to secure greater participation by SMEs in public contracts.

    The way in which tenders and selection criteria are structured will have a direct impact on the ability of SMEs to qualify for and win public contracts. SMEs are having a difficult time with the banks unwilling to lend and the tendency of the public sector to procure ever larger contracts. We think that public bodies can do a great deal to foster local business by simply making it easier for SMEs to compete for public contracts. We noted earlier that the government is now taking steps to smooth the procurement processes for low-value contracts. However, nothing in the proposed measures encourages authorities themselves to procure with smaller contracts to effect real change. If contracts can be broken down into more accessible lots this will attract SMEs and no doubt result in a more diverse and inno­vative tender competition. If training days and other help and guid­ance are offered to SMEs to help them put their best foot forward, as well as simplifying the process, this will both encourage participation and improve their performance. Mechanisms such as frameworks and dynamic purchasing systems (which are to be made more flexible under the new directive) must be used to make procurement more nimble and responsive to the SME market. We therefore propose that a concerted public sector effort takes place to increase SME partici­pation in public tenders, with effective leadership from government.

    Eligibility issues – excluding fraudulent companies

    Most public procurement involves two distinct stages – pre-qualification and award. The pre-qualification stage is when the con­tracting authority determines whether the potential bidder is eligible and suitable. The authority may reject bidders who lack the finan­cial robustness or technical capability to perform the contract. The authority must reject bidders where it has actual knowledge that the company, or its director(s), or other person with ‘powers of representation, decision or control’, has been convicted of a number of serious listed offences including bribery, fraud, conspiracy to defraud, cheating HMRC, theft, fraudulent trading, money launder­ing and drug trafficking. The UK practice is to ‘box tick’ and accept self-certification. The government should be able to demonstrate how it ensures that companies found guilty of fraud, companies whose directors have been found guilty of fraud and unrepentant companies with a demonstrable record of grave misconduct do not win public contracts.

    We think that a future Labour government should put in place more robust measures to ensure that self-certifications provided by bidders in public tenders are collected centrally, substantiated by evidence and regularly verified so as to ensure that they are correct. Similar steps are provided for in the new EU directive.

    There is a second tier of elimination factors that may be treated by a public authority as rendering a company ineligible. These include bankruptcy, a failure to pay taxes and where the company has com­mitted an act of ‘grave misconduct’ in the course of its business or profession. Under the new directive the list has been extended to encompass a number of examples of unacceptable behaviour, includ­ing anti-competitive conduct and serious misrepresentation to the ten­dering authority.

    The ongoing investigations of Serco and G4S illustrate the con­sequences if the integrity of government suppliers is not tested. We think the government ought to provide a strategic lead in rooting out contractors who are guilty of fraud or other unacceptable miscon­duct, using available legal tools to ensure that they are excluded from tenders where appropriate.

    The Welsh government has introduced a policy on blacklisting in the construction industry, which is a good example of how govern­ment intervention can help give effect to these rules. Blacklisting is the specific activity by which construction companies draw up lists of active trade unionists or whistleblowers on health and safety issues and use the list to block their employment opportunities. This is an unlawful practice. The practice was investigated by the Information Commissioner in 2009, who identified over 40 construction compa­nies that had used the lists. The issue arose whether the blacklisting amounted to grave misconduct and whether public bodies could or should exclude the companies involved from public tenders.

    The Welsh government issued a Policy Advice Note in September 2013 confirming that blacklisting could amount to grave misconduct but that exclusion from tenders must be proportionate and considered on a case-by-case basis. Exclusion must be justified by evidence and should not be used as a punishment, but rather as a means of putting right past misconduct. By way of example, companies should not be excluded if they can show that they have taken steps to ‘self-clean’ through clarification of their actions, repair of the damage caused (for instance, compensation of victims) and personnel and structural mea­sures to avoid recurrence.

    At selection stage, there is scope to vet contractor capability against prior performance on similar contracts. Measures to encour­age this practice in Whitehall have been introduced by the Office of Government Commerce but a public sector wide approach is needed.

    We propose that:

    • Government act to provide leadership to ensure that grave miscon­duct is investigated and taken into account at the pre-qualification stage on government contracts. This would act as a real deterrent to unacceptable corporate activity and ensure that public money is directed towards companies with better governance.
    • Government should provide guidance as to how public procurers are to assess companies that are under investigation for fraudu­lent activity or other grave misconduct. Some form of suspension pending the outcome of investigations may be appropriate.
    • There should be an effective, coherent and transparent approach to the enforcement by public bodies of the eligibility rules.
    • Contractor past performance should be fully assessed by all public sector bodies at selection stage.

    Conclusion

    British public procurement is in need of improvement. That much is clear from the PASC findings if it wasn’t evident before that. We can’t blame Brussels, and the government must take responsibility. The potential gains in terms of cost efficiency and socio-economic benefits far outweigh the investment of time and money needed to sort out the problems. It will require a shift in thinking from short to medium term, greater confidence from public procurers and, above all, strategic leadership from policy makers. If this government won’t act, the next Labour government should embrace the task.

    Summary of principal recommendations

    • To invest in and nurture a new generation of able procure­ment leaders within and throughout the public sector and reduce the dependency on expensive, short-term, external consultants.
    • To provide top-down leadership and support for all public sector procurement instead of leaving local public sector bodies to fend for themselves.
    • To foster strategic public procurement, including the use of contract performance conditions and award criteria designed to meet social needs.
    • To promote SMEs by facilitating access to public contracts, including breaking down contracts into more accessible lots and the use of dynamic purchasing and other flexible procurement.
    • To strengthen the ability of public procurers to exclude fraudulent suppliers from public tenders and ensure that past performance is fully assessed by all public sector bodies.

    This article first appeared in Law Reform 2015, published by the Society of Labour Lawyers, and is reproduced by kind permission of the authors.

     

     

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    This is taken from Jos Bell’s blog on the SHA London website.

    The Clive Efford Bill is a Private Members Bill. It has limited reach – but that having been said, it is small and mighty, for it tackles some of the most contentious areas of the Health & Social Care Bill.

    Private members bills are essentially a lottery. Members chuck in a topic and then a proportion are chosen – not by topic, but by names being drawn like rabbits out of hats. Thus they are not a planned part of the legislatory calendar.

    Some are seeing the Efford Bill as a means of subterfuge to bring the private sector in even further – it has even been accused of being a Trojan horse. Although it is not entirely perfectly formed, ( and let’s face it, Bills and Acts are not exactly written in the most accessible way!) the Bill really is more sympathetic to the Bevan ideal than these observers would indicate.

    EU Competition Law is not naturally something which is discussed over the water cooler and yet many are professing to be instant experts in the field. Therein lies a problem. Indeed I put a couple of my own concerns forward and was sign-posted to key points in this independently produced document – which has clarified what is admittedly a complex scenario

    Reference to the excellent and factually accurate Parliamentary Library document, which is produced independently of any party political influence or interference, demonstrates that these worries are in conflict with the intention of the Bill

    There seem to be 3 primary concerns –

    1. Duty

    The matter of Duty is causing some crossed wires. At first glance the Bill appears only to offer the SoS a means to promote the NHS – something which was lost after the H&SCA was passed. However – as is pointed pointed out in the library document, the H&SCA did actually retain a clause where the SoS has a duty to provide. So this does not need to be re-iterated in the Efford Bill to ensure that the Sos has full duty restored. That is duly achieved with the re-introduction of ‘promote’.

    Section 1 of the H&SC Act 2012 substituted section 1 of the NHS Act 2006, relating to the Secretary of State’s duty to promote the health service. The original duty under the NHS Act 2006 was for the Secretary of State to “promote a comprehensive health service” and “to provide or secure the provision of services in accordance with this Act.” The current duty, inserted by the H&SC Act 2012, no longer refers to a duty to provide, now stating that the duty is to “promote a comprehensive health service” and “to secure that services are provided in accordance with this Act; the 2012 version of the duty is set out below:

    During the passage of the Health and Social Care Bill there was some concern about the removal of the word “provide” from the Secretary of State’s duties. As a result, the Government agreed to support amendments proposed by the House of Lords Constitution Committee during the final stages of the Health and Social Care Bill, to insert a new paragraph (para 1(3) above) clarifying that the Secretary of State retains Ministerial accountability for the NHS.

    The wider debate about the decision to remove the word “provide” from section 1 of the 2006 Act can be found in pages 8-10 of the Library Research Paper on the Health and Social Care Bill (RP 11/63, 30 August 2011).

    Clause 1 of the Bill would substitute the Secretary of State’s current duty under section 1 of the NHS Act 2006 (as amended by section 1 of the H&SC Act 2012) with a new duty “to promote a comprehensive health service based on social solidarity”. Clause 1(2) of the Bill would provide two new duties: that the Secretary of State must, for the purpose of continuing the promotion in England of a comprehensive health service:

    “ensure that the health service is a public service which delivers services of general economic interest and operates on the basis of social solidarity” (clause 1(2)(b)); and  “ensure that arrangements between commissioners and providers of health services require effective co-operation between different providers under this Act and between providers of health services and providers of community care services” (clause 1(2)(c)).

    2. Competition

    The references to competition are intended to work 3 ways :

    Clauses relating to commissioning put the emphasis on patient interest and of collaboration and co-operation. Likewise the private cap must operate only in terms of the benefit of NHS patients. Come the day of a full blown bill to overturn the H&SCA I am told that this would be addressed in more detail.

    Clause 10 of the Bill would repeal provisions under the H&SC Act 2012 that gave Monitor a role in referring mergers to the competition regulators. Clauses 12 and 13 specify that the Secretary of State would have the discretion to approve significant mergers between NHS organisations

    This addresses the chaos that has resulted from the local Trading Standards blocking what would have been a useful and productive merger of two Dorset hospitals under the anti-competitiveness ruling.

    The SoS also has the power of veto to discourage/prevent CCGs from handing over increasingly large chunks of services to the private sector. The NHS as preferred provider would operate in such a way as to leave those CCGs who pursue models outside of an NHS contract to be subject to EU competition law, wasting large elements of their budget on unnecessary tendering and legal defence of their decisions.

    Most importantly, the re-empowered SoS cannot intervene to encourage private contracts, which seems to be a main concern. Once again, with a larger Bill a wider range of disincentives and penalties could be introduced.

    ‘Reference to ‘public service which delivers services of general economic interest” rather than ‘Non-economic Social Service of General Interest’ – matters not in this context because of the reference to social solidarity in clause 1(2)(b) is, in conjunction with other measures in the Bill, the mechanism for exempting the NHS from EU competition law and will override the category of general economic interest. – see below*

    Hooking the NHS under the banner of social solidarity, overrides what seems to be the most burning issue of a perceived failure to take out the economic aspect of the service delivery. The EU regards social solidarity as being near-sacrosanct and this piece from False Economy usefully demonstrates the matter and shows the significance of the Efford Bill in re-instating that premise.

    This impacts on all areas of the function of the Bill.

    3. TTIP

    Clause 11 would specify that the NHS is exempt from the Competition Act 1998, to try and prevent EU competition law being applied to the NHS.

    The burning issue of TTIP is unsurprisingly causing confusion. The key things here are :

    The final 2 clauses in the Bill firmly place UK sovereignty at the core where the NHS is concerned. This is important because the EU Parliament has agreed that this is something which is recognised with respect to key areas of national function.

    It is also important to note – as is detailed in the blog piece I wrote following our TTIP event in July , that the EU Commissioners, following lobbying by Andy Burnham when he visited Brussels, have recognised that the NHS is a special case and worthy of protection. If TTIP does come to the vote by EU members – and present there is some doubt about its survival , then the status of the NHS will be part of the proposals.

    Thus both sovereignty and EU recognition should provide a dovetail of protection.

    This, from a point of Opposition is all we can do.

    As well as having the strong backing of the Labour Front Bench, the Royal College of Nursing and the major trade unions representing NHS staff2, the Bill also has the qualified support of the British Medical Association (BMA). The BMA and the organisation representing NHS foundation trusts and NHS trusts (The Foundation Trust Network) have particular concerns that the Bill will undermine the operational independence of the NHS.3 . Caroline Lucas MP, has also stated her intention to support the Bill on the premise that it is a good start to overturning Sections 1 & 3 of the H&SCA.

    Even if this is not the Bill of your Dreams, it is most certainly not a Trojan Horse. A full blown Repeal Bill is impossible unless the right party is leading the government reins. The main thing to remember, is that with only 6 months to go in the #battlefortheNHS we need to keep our eye on the ball of election victory. Surely the last thing we want is a Tory/UKIP coalition….

    Post script after the event……

    Having returned and recovered from only 2 hours sleep during the course of the 24 hr vigil and debates – and huge congratulations to those who managed to stay awake all night with only the odd rug to keep out the chill and the damp – I can confirm the following :

    • An overnight Vigil under the floodlit walls of Westminster Abbey is an extraordinary and very special experience
    • The evening had a wonderful start with a candlelit rally attended by a number of MPs dedicated to a healthy long term future for our NHS. Newly installed MP and long term NHS worker, Liz McInnes, was joined by Bill Driver and sponsors Clive Efford, Andy Slaughter & Grahame Morris. Ian Lavery, Huw Irranca-Davis and David Anderson also spoke. Dr Onkar Sahota, Diana Johnson and Virendra Sharma joined in along with representatives from various unions under the banner of event organiser TULO, and other like minded organisations, including KONP and 50:50. Louise Irvine spoke for the NHA/SLHC.
    • The event also dovetailed with the launch of the People’s Vote for the NHS. The following morning two familiar figures popped by – Liz Kendall took in the Vigil on her morning run and Andy Burnham made it over before 8 am en route from taking Question Time by the scruff of it’s sorry neck in Birmingham the evening before.
    • Once inside the Chamber it was clear that the Tories and Lib Dems would be no shows. The task for defending the Coalition’s increasingly atrocious NHS record was left in the incapable hands of Doc Dan Poulter, Sir Tony Baldry and David Winnick ( a useful place to take a refreshing snooze). Colonel Bob Stewart and Angie Bray were also in attendance – the first to say that it was the private sector which had saved his life following army injuries, the second to erroneously trot out the nonsense that Ealing and Charing X Hospital A&Es are to be retained. Given the evidence, she should look to her majority…as Andy Slaughter angrily reminded her, in a rather entertaining cross-Chamber shouting match! Philip Davies was a derisory addition. The only two Lib Dems present, in the shape of Julian Huppert and John Pugh (who voted with Labour) only served to highlight the wide chasm within what looks to be a fast disappearing party.
    • Clive Efford presented the Bill in a memorable speech full of passion and integrity – explaining the status of GPs being a reason why the contentious economic interest criteria had to be retained, but reiterating the overall protection afforded by the social solidarity umbrella,
    • The most extraordinary turn was that of latterday Tory-right-right Mark Reckless, installed for UKIP just minutes before, trying and failing to sit next to Efford in a blatant attempt to hijack the TV screen. Efford was rapidly rescued by a ‘cordon sanitaire’ of friendly fire courtesy of genuine Bill supporters. Reckless then almost brought the House to a standstill by declaring that the Parties opposite ( namely the near-absent Coalition) had done dastardly things to the NHS and he was all for supporting the Bill and had even signed 5 Rochester NHS pledges ( which he cannot surely have read) and like Clive Efford, intoned the Levellers! Stunned faces surrounded him – and little wonder, for the truth of UKIP’s underbelly is all about the big business sell-off. Carswell was nowhere in earshot but poised to vote with the Opposition. Clearly they have decided to say anything at all to get elected – or perhaps he was just suffering from the same level of sleep deprivation as the Vigillers.
    • We then had the joy of seeing Dennis Beast of Bolsover Skinner leap to his feet and in surely one of the most perfect put downs in his illustrious oratory, crowned Reckless the King of the Policy Swingers. He also nailed the immigration argument in one.
    • The government drones filibustered the hours away, until even Eleanor Laing felt she had to chastise – but with Andy Burnham in fine form and numerous determined interventions from the Opposition benches, the debate contrasted Labour heart and soul with cynical Coalition couldn’t-careless-ness.
    • To raucous cheers from the Strangers Gallery, echoing the Opposition benches, the final vote saw a resounding Opposition win at 241-18

    Afterwards there was a Rally held by the Save Lewisham Hospital Campaign where there was a bit of a set-to between a somewhat weary Clive Efford and an irascible Peter Roderick – the latter having just snarled down the back of my neck in the Strangers during the vote, when I explained that I had been told that the Parliamentary Library holds the source of the rationale that a responsibility ‘to provide’ had been retained within the Health & Social Care Act, while duty to promote had been expunged and thus needed to be revived in the Bill. He didn’t seem to like that very much, which was a bit of a shame. Some speakers also seemed to be intent on nothing less than a 100% nationalised NHS – which has never been the case and would seem to be a very tall financial and legislative order! Clearly a decent conversation needs to be had .

    Looking at a couple of obvious factors, the Efford Bill is very unlikely to become legislation –

    • Due to timeline to pre-election purdah in March
    • Because the government would play the numbers game if it ever came to it

    However there is still a very good opportunity to hold the government to account in their duty to bring together a Bill Committee. Look out for a petition somewhere near you….

    In the meantime you can also contribute to the consultation of the Pollock Re-instatement Bill – which both shares aspects of the Efford Bill and contains rather a lot of emphasis on what would be another giant top down re-structuring. Surely there is another way?

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