The Liberal Democrat Challenge

Do the LibDems really support the reorganisation of our NHS into a regulated market?  Will they really vote through the most disruptive and far reaching changes to the NHS in its history?

The four most senior LibDem Ministers signed the Health and Social Care Bill.  They have voted consistently for a Bill based on the core principle that we can approach health care as a utility like gas, water, electricity or telecoms. They have defended the reorganisation from a managed system, politically and managerially accountable through a secretary of state, to a market system overseen by a powerful economic regulator.  No longer will our NHS provide us with health care, instead we can choose from a range of providers of all shapes, sizes and structures – except public ownership.

Despite the most recent changes to the Bill there can be no doubt the core, based on setting up the economic regulation necessary for the market, remains in place.  It may take a while to get to the end state of a genuine market but once the traditional structures of the NHS have been dismantled and the culture shifted to an economic outlook then the outcome is inevitable.

Most commentators and all three main political parties agree that patient choice and some elements of competition have a part to play within the NHS.  But no party has ever stood on an election platform committed to putting competition at the heart of the NHS and treating health care in the same way as the privatised utilities.  This was not in any manifesto and not in the Coalition Agreement.

In presenting the Bill the government played down the regulation aspect and claimed the bill was about patient choice clinical involvement and reducing bureaucracy.  But as many pointed out these accepted issues could be dealt with without the biggest top down reorganisation in the entire history of the NHS.  But in any event the explanatory notes accompanying the Bill were clear enough to those that chose to read them. As Health Minister Simon Burns’ set out in a Newsnight interview on 19 January 2011, It is going to be a genuine market. It is going to be genuine competition”.

Lest there is any doubt of the intention to continue with this policy, the government confirmed in June this year as part of its response to the “pause”:

these changes preserve the core tenet of the Bill: that properly regulated competition, when used appropriately, has the potential to improve the efficient, quality and responsiveness of public services, to the benefit of those that use them and the taxpayer.”

And this is just the same argument as set out cogently in 2005 by Andrew Lansley.

So let me start with the question of overall structure for public service reform. Public Service Reform is an omnibus term. We should understand it to embrace economic services as well as social services – telecoms, water, rail and postal services as well as health, education and policing.

The combination of the introduction of competition with a strong independent regulator delivered immense consumer value and economic benefits.

So the first guiding principle is this: maximise competition. There are, of course, potential benefits from privatisation in terms of access to capital, flexibility, and creating new markets; but private sector ownership is a secondary consideration to competition, which is the primary objective.”

And any remaining scepticism about the intention of the government can be dispelled when you track the history and recent remarks by the man appointed to head up the new powerful economic regulator David Bennett. In an interview with the Times Mr Bennett said

“I worked for a very long while in lots of different countries in the energy sectors, in power and gas, doing exactly this sort of thing. There’s lots of evidence of benefits being produced. It is too easy to say, ‘How can you compare buying electricity with buying healthcare services?’ Of course they are different. I would say … there are important similarities and that’s what convinces me that choice and competition will work in the NHS as it did in those other sectors. We did it in gas, we did it in power, we did it in telecoms, we’ve done it in rail, we’ve done it in water, so there’s actually 20 years of experience in taking monopolistic, monolithic markets and providers and exposing them to economic regulation.”

There are many on the Tory right who have long argued openly for market solutions and many claim that opening up health care to a genuine market and the entry of private sector providers will bring greater efficiency, innovation and more choice.  How many LibDems believe in this mantra?  Yet it is LibDem MPs and Peers who will have to take responsibility for the end of the NHS as we know it; it can’t be done without them.  They can claim that their influence within the coalition has changed the Bill but they must know that is only at the margins – Andrew Lansley has said so, and in the real world the changes are actually being made, the NHS is going backwards.

They may believe that there are balancing features to offset the market impact, but that is like being a little less pregnant.  The relatively weak role for health and wellbeing boards is the nearest the Bill comes to allowing any democratic influences into health care but it is clearly subordinate to the drive from the centre for genuine competition for most NHS services.  The regulator may no longer be required to “promote” competition but it does not have to – the whole thrust of policy does that, and the regulator steps in when that policy direction is challenged by any anti-competitive behaviour.

Greater involvement of clinicians in planning NHS services would be welcomed by all, but the Bill puts them within an overarching structure which has a policy of competition from the top, enforced through licencing and regulation, and increasingly through the courts.  Having created an economic system for our health care then the protection from the full force of competition law no longer applies.

The Bill cannot be amended to remove its core purpose, it can only be amended to reduce the impact that it will have.  And any LibDem who believes this Bill is not really about economics, markets and regulation simply has not read it.