Freedom to Commission

In his recent letter to prospective CCGs Andrew Lansley gave certain assurances:-

  • You will have the freedom to commission services in ways that meet the best interests of your patients.
  • You will have the freedom to work with whoever you want to in commissioning health services
  • You will be free from top down interference.

The reality of what is in the Health and Social Care Bill as opposed to assertions by Ministers is set out briefly below.  Far from freeing up commissioning and reducing bureaucracy the Bill as it now stands does the opposite.  This is what is in the Bill – which is easy enough to verify – just read it.

Clause 19 of the Bill covers “Standing Rules” which are imposed on CCGs.  These cover the arrangements to determine what treatments and services are to be provided and to whom;  what is done and how it is done in relation to commissioning; and about standard terms and conditions which must be in commissioning contracts.

Clause 24 14Z6 sets out that the Board must publish guidance on how commissioning functions must be carried out – which is mandatory for CCGs.

Clause 24 14Z8 sets out how the Board may decide to provide “assistance” or “support” to a CCG on such terms as the Board considers appropriate.

Clause 24 14Z19 gives powers to the Board to give directions and even to dissolve CCGs.

These alone are sweeping powers and arguably go beyond the current Principles and Rules for Cooperation and Competition – which must be followed by commissioners.

It is also emerging that many requirements will be imposed on CCGs before they will be authorised; and that authorisation is now a “process” not a one off event.

But in Clause 73 we see the true impact of the market reforms.  Anyone who has any doubts about the Bill and freedoms for CCGs should at least read this clause and Clause 74 which sets out the powers to enforce what is in Clause 73.

Clause 73 sets out how regulations may impose on CCGs a whole raft of requirements around how they commission and how they procure services.  Clause 74 sets out how regulations may confer powers on Monitor (the new economic regulator) to investigate complaints over failure to comply with requirements and give enforcement powers, even including declaring any arrangement “ineffective”.

These clauses flatly contradict assurances in Andrew Lansley’s letter.

  • There is a power in Clause 73 (3) (a) to require competitive tendering and
  • Monitor has the power to force services to be put out to competition.

These are only the most serious issues which the letter raises, other parts of the Bill also set out many other areas where regulations can be made and directions may be given.  It is wholly unclear how all this will fit together.

As an example the letter states that CCGs will be free to make whatever arrangements they choose as regards commissioning support.  This may be theoretically true but the level of the management fee cap and the requirements being set out for authorisation make this a reality for only the very largest CCGs (and some property related issues are still not decided!).   The work already being done by the Board makes clear the expectation that in the medium term commissioning support will come from the private sector.  And since such support is not a clinical service it will be covered by the full rigour of EU Competition provisions.

A further example is the mention in the letter about clinical senates.  There is no information anywhere about the makeup, role, or funding for these bodies so any assurance is as best speculative.

There is common agreement that the emphasis on competition and the redefinition of the NHS are being just a collection of “services” means that inevitably there will be challenges to commissioning arrangements which bundle services together – such as a contract for a range of service with a local hospital.  The risk of having to unpick this type of arrangement in the interests of preventing anti-competitive behaviour must be taken into account by CCGs. Fragmentation appears inevitable.

It is also the common position of all the legal experts so far consulted that the Bill will bring in greater involvement of competition law, which is the intention.

The freedom claimed for CCGs is illusory.  The Bill sets out in Regulations and in guidance a structure even more complicated than that which currently exists.  As shown by reference to the Bill above there is top down interference of the same nature as at present; the Bill replaces one form of bureaucracy with another.  CCGs will only be free to operate within a very rigid framework that is set out and the regulator has teeth.  The much greater emphasis on competition inevitably means CCGs will have to use legal and other expertise in all areas of their commissioning to avoid the possibility of legal action under competition law.

Irwin Brown (not a lawyer but I have read the Bill properly!)