House of Lords, Second Reading, 11 October 2011

This briefing outlines UNISON’s concerns that the Health and Social Care Bill continues to represent a major threat to the future of our National Health Service. Despite the changes made as a result of the government.s listening exercise, the fundamental dangers of fragmentation, instability and inequity remain.

Recent research has shown that, rather than needing extensive legislative surgery, the NHS is in fact one of the most cost effective health systems in the developed world (Journal of the Royal Society of Medicine, Colin Pritchard and Mark S Wallace, “Comparing the USA, UK and 17 Western countries. efficiency and effectiveness in reducing mortality”, July 2011); the international Commonwealth Fund has shown that the NHS is the best of comparable health systems for both equity and efficiency; and British Social Attitudes surveys show that public satisfaction with the NHS recently reached an all-time high.(British Medical Journal, “Data briefing: How satisfied are we with the NHS?”, John Appleby, 21 March 2011) The service must always keep improving, but the laudable goals of increasing clinical involvement and empowering patients could be achieved without a massive top-down reorganisation that threatens to divert billions away from improving patient care. A Financial Times analysis of the government’s revised impact assessment finds that the cost of government plans is likely to exceed any claimed savings.( Financial Times, 27 September 2011, “Study says NHS reform cost may exceed savings”)

UNISON continues to believe that the government.s plans are fundamentally flawed and urges peers to oppose the Bill at Second Reading in the House of Lords for the following reasons (explained below):

  • 1. the Bill abolishes the private patient income cap, meaning NHS patients are likely to have to wait longer for treatment, endangering the principle that access is based on need rather than ability to pay;
  • 2. the Bill brings wholesale competition to the NHS with the regulator able to enforce competition law in the style of the utilities regulators – integration and cooperation are banished to the margins;
  • 3. the Bill, and accompanying policies such as Any Qualified Provider, will lead to a much greater role for private companies despite scandals in other sectors demonstrating the folly of such an approach;
  • 4. the Bill allows the Secretary of State to wash his hands of responsibility for the NHS, with implications for the maintenance of comprehensive, free and consistent NHS services;
  • 5. the Bill’s attempts to address transparency and involvement in the new system are too weak;
  • 6. the Bill fails to value NHS staff by undermining pay and bargaining structures, and providing too little on comprehensive education and training;
  • 7. the Bill includes an unnecessary overhaul for the regulation of social workers.

1. PRIVATE PATIENTS WILL BE ALLOWED TO JUMP THE QUEUE

Clause 162 of the Bill will abolish the private patient income cap, meaning that hospitals can treat any amount of private patients they like, even if this is to the detriment of NHS patients. There is currently a cap on private patient income – at the level it was when foundation trusts were established in 2003 and more recently set at 1.5% for mental health foundation trusts. The purpose of the cap is to stop hospitals from pushing NHS patients to the back of the queue.

As waiting lists continue to grow – as evidence suggests they already are – NHS patients will find themselves pushed to the back of an ever-lengthening queue by those that can afford to pay. NHS patients could also find that urgent surgery is cancelled if private patients expect to spend longer in NHS intensive care units than is clinically necessary. In the new cut-throat system, hospitals are likely to prioritise patients that bring in extra income over “free” NHS patients, particularly as hospitals will be under a huge amount of extra pressure to increase their income from whatever source possible as they struggle to make savings.

The Bill’s revised impact assessment continues to acknowledge that there is “a risk that private patients may be prioritised above NHS patients resulting in a growth in waiting lists and waiting times for NHS patients”. (Department of Health, Health and Social Care Bill 2011: Impact Assessments, September 2011, p64, B.155,) The NHS founding principle that access should be based on need not ability to pay is threatened.

Reassurances about the need for foundation trusts to reinvest their private patient income in NHS services have been completely inadequate. There is no existing evidence that foundation trusts currently use their private patient income to improve services for patients, so it is fanciful to suggest that they will do so in future. There is, however, evidence that a number of trusts, such as the Royal Marsden, Moorfields Eye Hospital and Papworth Hospital, are preparing to substantially increase their private patient work. (The Independent, “Royal Marsden seeks wealthy patients as budget cuts bite”, 9 September 2011; Daily Telegraph, “NHS trusts preparing to bid for more private patients”, 2 August 2010, )

Government plans to provide reassurance by making foundation trusts produce separate accounts for their private patient income and their NHS income are so far not included in the actual Bill. Putting this into the legislation itself may at least provide a level of transparency, if not a safeguard.

The author of the listening exercise report, Prof Steve Field, has said that the abolition of the cap is an area that “we didn.t put as much in our report as perhaps we could have done.” He summarised the “gut feeling” from the listening exercise as “the private cap should stay because people felt that would provide the protection”. This was because “if you opened the cap it may be more likely to be under…EU law, and from competition and from Monitor”. (The Guardian, “NHS forum GP admits private patient doubts”, 29 June 2011 )

2. THE NHS WILL BE BASED ON COMPETITION NOT COOPERATION

An extraordinary 60 pages and nearly 100 clauses are devoted to setting up a full-blooded market system in Part 3 of the Bill. Contrary to the recommendations of the government’s “listening exercise”, Monitor will still become an economic regulator. It will retain its powers to enforce competition law in the way that regulators do in the privatised utilities and railways – completely inappropriate for the NHS. Instead of “promoting competition”, Monitor will “prevent anti-competitive behaviour” – which is likely to mean the same thing in practice.

In contrast, changes to ensure services are “provided in an integrated way” lack any definition and have no powers to back them up. There is also nothing to promote cooperation or collaboration, even though the Future Forum’s listening exercise report concluded that there should be. The balance between free market thinking and a more collaborative ethos is therefore extremely lop-sided.

Despite government claims that its plans will not subject the NHS to EU competition law, health minister Simon Burns has himself stated that “as NHS providers develop and begin to compete actively with other NHS providers and private and voluntary providers, UK and EU competition laws will increasingly become applicable”. ( House of Commons, written answers, 7 March 2011, Simon Burns MP response to Tom Blenkinsop MP ) Recent independent legal advice confirms that government changes increase the likelihood of NHS services being found by the courts to fall within the scope of UK and EU competition law. This raises the prospect of an increasingly litigious culture surrounding the health service, as private healthcare companies look to enforce competition law through the courts, costing the NHS valuable time and money.

The government has left amending its proposals for a commercial insolvency regime until the Report Stage of the Bill, meaning that MPs had insufficient time to scrutinise some very important aspects of the Bill. It is to be welcomed that the government has followed the advice of UNISON and others in moving away from a commercial insolvency regime for foundation trusts. However, UNISON agrees with the recent statements by NHS chief executive David Nicholson to the Mid Staffordshire inquiry that the government is wrong to block failing foundation trusts from returning to NHS control:

“I do think that the opportunity in a sense to renationalise a foundation trust should be part of the armoury of any government in these circumstances… I believe that from time to time it may be necessary for the state to take the direct management of an organisation.” (The Guardian, “NHS chief challenges Andrew Lansley’s foundation hospitals plan”, 28 September 2011 )

3. A MUCH LARGER ROLE FOR THE PRIVATE SECTOR IS ENVISAGED

The recent examples of appalling treatment of patients at the Winterbourne View private hospital and the Southern Cross debacle provide ample illustration of the dangers of opening up care services to a wider range of private providers. Yet government minister Earl Howe has continued to drum up enthusiasm from private companies, speaking of the “huge opportunities” that await them in the new NHS. And it emerged recently that the Department of Health had been in talks with German company Helios about the possibility of their taking over NHS hospitals (The Guardian, 5 September 2011, “German company involved in talks to take over NHS hospitals” )– despite Helios’ parent company (Fresenius Medical Care) being fined $82m for fraud in the US and being part of a pharmaceuticals cartel in South Africa.

The government response to the Future Forum report said that Clinical Commissioning Groups (CCGs) will be held responsible for their decisions, but “this does not in any way preclude NHS commissioners from using external agencies to provide commissioning support”.(Department of Health, Government response to the NHS Future Forum report, p21, paragraph 3.51) This means that many CCGs will simply bring in unaccountable companies such as KPMG and United Healthcare, who are already working with a number of emerging CCGs.

Similarly, the government claims to have blocked privatisation by outlawing any deliberate policies to change the mix of private and public sector delivery of services, but it is operating a policy of Any Qualified Provider that will inevitably bring in a greater number of private providers, even if this is not its explicit aim. (The Daily Telegraph, “The day they signed the death warrant for the NHS”, 25 July 2011 ) Other initiatives such as the Right to Provide, the Right to Challenge, and plans to create a “level playing field” will also disadvantage existing public providers. Moreover, the government has effectively put a legislative block on the NHS being the “preferred provider” of services in the future, ensuring a path to greater privatisation over time.

The government has made no acknowledgement of the destabilising effect that moving services out of the NHS can have on the local health economy. The government claims to have addressed the danger of private companies “cherry picking” the easiest and most profitable services to deliver. Such an undertaking is likely to be incredibly complex and hard to enforce, particularly as this is the logical way for profit-making enterprises to behave. So far the government has resisted moves to allow private providers to be paid less under tariff if they do not engage in workforce training.

4. THE SECRETARY OF STATE WILL NO LONGER HAVE FULL RESPONSIBILITY FOR THE NHS

It is particularly significant that on 30 September 2011, the House of Lords Constitution Committee reported that the Bill may weaken ministerial accountability and damage accountability:

“We are concerned that the Bill, if enacted in its current form, may risk diluting the Government’s constitutional responsibilities with regard to the NHS… [The] House will wish carefully to consider whether these changes pose an undue risk either that individual ministerial responsibility to Parliament will be diluted or that legal accountability to the courts will be fragmented. Moreover, it is not self-evident that the proposed changes are a necessary component of the Government’s reform package.”

While the government has added a new Clause 1 designed to provide assurances around the responsibility of the Secretary of State to promote a comprehensive health service, the wording of the 2006 National Health Service Act is still changed from the Secretary of State having to “provide or secure the provision of services” to having to “exercise the functions conferred by this Act so as to secure that services are provided in accordance with this Act”.

Moreover, the main thrust of Clause 10 of the Bill remains unamended: the NHS Act 2006 is changed so that it is the new CCGs not the Secretary of State that must arrange for the provision of health services. This means that CCGs will determine what actually constitutes the health service, potentially opening the door to some commissioners charging “top-up” payments for certain services they deem as being outside their definition of health services. Clause 11 says a CCG must arrange for the provision of services “as it considers appropriate” – giving them great leeway in how they exercise this.

Clause 4 on “promoting autonomy” remains in the Bill and grants greater freedoms to how bodies such as CCGs carry out their functions. There is still no direct duty of comprehensiveness on CCGs. Clause 6 retains the wording that the National Commissioning Board is responsible for arranging the provision of services.

This all serves to undermine the accountability of the NHS to Parliament, by putting the provision of health services increasingly at arm’s length. It opens the way for the comprehensive nature of NHS services to be eroded as CCGs could look to shed expensive or unprofitable services. It increases the likelihood of a postcode lottery of provision, with different CCGs providing different services.

Open rationing is already beginning to take place in PCTs for items such as knee operations and IVF treatment – this will only get worse when the profit motive becomes the driving force. Postcode variation could be increased by the proposed development of a new Right to Challenge, in which single issue groups may demand certain extra services or treatments in their area.

5. PROBITY, TRANSPARENCY, DEMOCRACY AND INVOLVEMENT ARE TOO WEAK

The government.s attempt to improve the openness and transparency of CCGs is too weak, including a get- out clause for those that want to avoid meeting in public: the wording of Schedule 2 says “except where the consortium considers that it would not be in the public interest to permit members of the public to attend a meeting or part of a meeting”. There is a similar problem with attempts to open the meetings of boards of directors of foundation trusts to the public: Clause 149 allows foundation trusts to exclude members of the public from a meeting “for special reasons” with no explanation about what these “special reasons” are, leaving this clause open to abuse.

There is no mention of a register of interests to ensure that those involved with a commissioning group who are also shareholders in other companies can be held to account. Both the General Medical Council and the Royal College of GPs have expressed anxiety about the conflicts of interest that GPs will face when their new roles as budget-holders and rationers of care are added to their professional duty to treat individual patients. A major concern is therefore that the Bill will undermine the trust that the public have in their GPs, because there will be a fear – whether justified or not – that a financial imperative lies behind the treatment decisions they make.

The Campaign for Freedom of Information has expressed concerns that government plans will “significantly curtail” FOI, because independent providers working on NHS contracts will not be covered by the Freedom of Information Act directly (although they would be required to assist a commissioner’s response to an FOI request).

At the very least, the government should ensure a minimum level of governance with CCGs and FTs subject to the Public Bodies (Admission to Meetings) Act 1960, which gives access to the public and press and which currently extends to PCTs and SHAs. This is certainly the opinion of lawyers on how the Bill could be improved. (Health Service Journal, “Health Bill: rules unclear on open board meetings”, 24 June 2011) All meetings should be public and all papers published.

Furthermore, there are concerns about patient and public involvement in the new system. When services are changed, patients and the public should be fully consulted rather than this right being undermined by the Bill, with Clause 23 calling merely for the “involving” of individuals. In terms of HealthWatch, those working with the current patient involvement bodies, LINks, have labelled government plans “confusing, vague and insulting”. (The Guardian, “Andrew Lansley condemned over HealthWatch scheme”, 4 August 2011 ) The Bill leaves both local HealthWatch and the national sub-committee of the Care Quality Commission too lacking in power or resources to protect patient interests adequately. There is also a need for greater democracy: both HealthWatch England and local HealthWatch should draw their membership from elections rather than appointments.

Similar concerns exist with the new Health and Wellbeing Boards, established by Clause 191. As currently worded, the Boards need only consist of “at least one” councillor rather than a majority of democratically elected members. The make-up of the Boards includes a role for directors of children.s services but not for representatives from education, which is an oversight given the idea of the Board is to join up services across areas; UNISON backs the demands of the National Children.s Bureau for the Boards to have a stronger role in integrating health, social care and health-related services for children and young people. (National Children.s Bureau, NCB briefing for re-commitment of the Health and Social Care Bill, 28 June 2011) The Boards also lack the input of trade union representatives, which would be a way of ensuring that the staff voice is heard.

6. NHS STAFF WILL BE UNDERMINED

Staff in the NHS are already in the midst of a pay freeze and their pensions are threatened with the triple whammy of paying more, working longer and receiving less in retirement. On top of this, despite revising down the figures used in its latest impact assessment, the government still anticipates nearly 13,000 redundancies as a result of its planned reorganisation. This represents a personal tragedy for those affected and also a colossal waste of talent and resources at a time the NHS can ill afford it; even with the revised figures, the government still predicts redundancy costs alone running to £810m. (Department of Health, Health and Social Care Bill 2011: Coordinating Document for the Impact Assessments and Equality Analysis, September 2011, p19 )

The government has completely failed to acknowledge the need to retain national workforce structures for terms and conditions, pay and bargaining. The Bill would allow new commissioning groups greater leeway to break away from the Agenda for Change pay system. Not only does this rob health staff of certainty about their pay and conditions, but the potential for local pay negotiations also creates a massive extra administrative burden for local negotiators, and undermining Agenda for Change may lead to an increase in equal pay litigation for the NHS – something which the existing system is designed to avoid.

The Future Forum report at the end of the listening exercise stated the need for a world class healthcare education system, but the government has so far not carried out its promise to act on this recommendation. The Future Forum also recommended that the workforce functions of Strategic Health Authorities should be safeguarded and transferred to a new organisation. The government has so far done nothing to achieve this.

7. THERE IS AN UNNECESSARY OVERHAUL IN THE REGULATION OF SOCIAL WORKERS

The Bill heralds a significant change for social workers who are currently registered with the General Social Care Council (GSCC) but in future will have to register with the new Health & Care Professions Council. This means that the right of appeal will be to the High Court rather than the current Care Standards Tribunal. This is a detrimental change which is causing great disquiet among social workers because permissible grounds for appeal are much narrower and less responsive to the complexities of social work cases. Pursuing an appeal will become more expensive and risky. UNISON is very concerned that the new system will reduce access to justice as parties have to instruct barristers or solicitors with higher rights, and social workers pursuing appeals run the risk of having costs awarded against them. The current Care Standards Tribunal system has proved itself to be accessible, efficient and cost-effective in ensuring fair outcomes for social workers.

UNISON is therefore calling for the current appeal arrangements to be retained. Social workers are also concerned that the change means a more than doubling of the annual registration fee. UNISON is calling for subsidy of the fees, for them to be phased in, and for a pro-rata fee rate for part-time staff. The changes only apply to social workers in England registered or eligible to register with the GSCC. This is potentially very problematic as Scotland, Northern Ireland and Wales will continue to operate the old Codes of Practice and with the lower fee level. There are many questions about portability of registration when social workers move around the UK. UNISON wants to ensure that in addressing these, there are not unreasonable barriers to social workers. mobility.

For further information or to arrange a meeting please contact:

.Guy Collis, UNISON Policy Officer: phone 020 7121 5503 or email g.collis@unison.co.uk

Steve Barwick, Connect: phone 020 7222 3533 or email steve@connectpa.co.uk

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