Never has a statutory instrument created such a furore as SI 2013(257) on NHS procurement – the regulations that effectively put the entire NHS up for tender. These obscure orders give effect to ministerial decisions and simply come into force within 40 days unless revoked (in either House) by "negative procedure" – an almost unheard of occurrence. This is the route the government has chosen to flesh out the NHS and Social Care Act, but if it was hoping to slip unnoticed through this legislative back door it has had a rude shock.
Spurred on by a 250,000 signature petition organised by the formidable 38 Degrees, politicians and professional groups have awoken to what is happening. Calls for withdrawal of the regulations have come from the BMA, RCGPs, RCN and the UK Faculty of Public Health – even the conservative Academy of Royal Colleges has joined in, as has the normally loyal NHS Alliance. The obscure Lords scrutiny committee has reeled under the weight of an unprecedented 2000-plus representations, and the crucial "prayer" for annulment will be laid by Labour in the Lords on 24 April.
Taking refuge in claims of "poor drafting" and "inadvertently created confusion", the coalition hastily redrafted the offending regulations. In this new version, assurances are given that CCGs will be free to determine their own procurement decisions, and the option of "integrated care" is belatedly rediscovered. The competition enforcing body, Monitor, is portrayed as an avuncular alternative to the judicial process, and everything being proposed is said to be there to simply ensure "patient interest".
There are many reasons why this simply won't wash:
• The regulations still give primacy to the "sole provider" exemption: the only relevant ground upon which CCGs can decline to go out to tender is where the service is only capable of being delivered by one provider – an impossibly high bar.
• UK and EU competition law trumps whatever is in the regulations: even if a commissioner decides (conceivably with Monitor's consent) that the sole provider test has been met to ensure "patient interes"' an aggrieved provider can still take, or threaten to take, judicial action.
• The concept of "patient interes"' is undefined in the regulations: the task of determining what it is will be left to Monitor whose working assumption is that the main determinant of such benefit is choice of provider enforced via competition law.
• The regulations stipulate that any tenders above £1,000 should be advertised, creating very substantial transaction costs that will have to be diverted from patient care.
• Competitive markets constitute the default setting of the system even though the evidence base for this is, at best, flimsy: the "burden of proof" lies on other approaches to demonstrate (against unclear criteria) why and how an alternative model could be preferable.
Not only do the regulations, even as amended, effectively articulate the role of competition in the NHS, they also invest it for the first time with a statutory basis. Previous procurement rules (which bear some similarity to the new regulations) have been seen as "guidance" - a voluntary code of principles. Regulation is different to guidance – it is in effect mandatory. Moreover the legal focus now will now be upon the subject of a proposed contract, not the broader strategic needs of a locality or the potential impact of salami-slicing the portfolio of an existing public sector provider. Nobody is any longer "running the system".
In the meantime, the traditional public sector structure of the NHS is also being chipped away at from other directions. While the procurement regulations concentrate upon healthcare commissioners, the Competition Commission is spreading its tentacles into NHS providers. For example, we now have the bizarre situation in Bournemouth and Poole whereby two NHS providers contemplating a merger to improve local services are being told they cannot communicate with each other.
More along these lines will follow from the Commission and from the Office of Fair Trading – an unprecedented intrusion into the NHS. In this they will be aided and abetted by Monitor which has just published its "fair playing field" review. In this it proposes a whole host of ways to open up the NHS to the private sector, such as underwriting access to NHS pension rights and longer term contracts which will be difficult to review or rescind. Commissioning support units and GPs themselves are identified as being next in line for scrutiny and exposure to market forces.
1 April has been identified as the day the NHS changed forever. There is truth in this, but in a sense the really important date is 24 April, for this will be when the ideological changes are planned to be approved. Annulling SI 2013(257) is currently the most important NHS battleground. Guardian
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