EU competition law and the NHS

Paul Corrigan is right  to point out the obvious, which is that European Union Procurement Law applies to our NHS and has always applied.  This is something LibDems and many GPs involved in commissioning just don’t understand – they should have read Hansard properly and not just the bits covering Lord Howe giving assurances.

It also appears to have come as a surprise to these same people that an Act which set out to establish competition as a mechanism to turn healthcare into a regulated market leads to regulations which favour competition.  We told you so.

Many expected that assurances given during the passage of the Bill would be delivered through Regulations; how naïve they were.  The Regulations simply spell out what commissioners will have to do in order to comply with the Act and EU Law.  The revised version will no doubt do the same.

Paul Corrigan is in favour of more competition since he states – “Most of the money that passes through the hands of commissioners, and is given to organisations to provide care, is given to the same providers as it has been in previous years – for providing the same activity.”  He has a point, but a full blown EU tendering exercise for every service in every locality may not be the best answer.

However in his analysis Paul is not entirely right in his assertion that – “The only reason EU competition law has not of itself demanded more bite over the NHS is because no one has yet taken a commissioner to court and fought a case to demonstrate how a law that already exists will be applied. This could happen any day, with any commissioner.”

The last bit is wrong since it is clear that arrangements made between PCTs (as commissioners) and NHS Trusts (not Foundation Trusts) through NHS Contracts (which are not really contracts as they are not enforceable in law) would be outside the scope of procurement law due to the Teckal exemption.  This applies when a public body enters into an arrangement with part of its organisation or a public body under its control which in effect is part of the same organisation[1].  Anyway the Regulations close that down, and NHS trusts will soon be gone.

Since 2004 it has been possible for a challenge to have been made to the contract between a PCT and a Foundation Trust since it is likely that possible exemptions would not apply. We don’t’ know as it has never happened, mainly because the whole policy background and attitude of Ministers and Officials was hostile; and forcing a tendering exercise does not mean you win the business.  Now the whole background has changed and any challenge would be through a competition friendly Monitor.

Many would like to get rid of the whole commissioner/provider split but if we have commissioning then we want the commissioners to be able to decide what is best not just for some narrow set of patients but also the wider NHS.  Actually what we want is to go back to the idea of our NHS as a managed system – some form of single organisation which grants some if its component parts some earned autonomy.

To get what we want has nothing to do with Section 75, you have to get rid of the Act (or at least all of Part 3 and some other key pro competition bits).  But even that is not enough there has to be a legal recognition that some parts of our NHS can make arrangements with other parts of the NHS without interference; back to “NHS Contracts”, and restoring the idea that Foundation Trusts are actually part of the NHS not outside it.

So Paul is wrong we do not have to leave the EU we just have to go back to the idea of the NHS as an integrated organisation or a managed system and not a market, and that we can do.

In its policy review the Labour Party is addressing these issues with the confidence that if there is the political will and a broad consensus around what we should do – then there will be ways to do it.

[1] A leading example was where a local authority changed the nature of its arrangements with its Arms Length Management Organisation without any tendering exercise – since the ALMO had some autonomy but was ultimately under the control of the authority.