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peter-pannier · 10 years ago

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"A patchwork quilt of local paternalisms”: the Labour Party's vision for the NHS?

Introduction

Tomorrow, Members of Parliament in the UK have the chance to vote on a Private Members Bill submitted by Labour MP Clive Efford. The full title of the ‘Efford Bill’ is the “National Health Service (Amended Duties and Powers) Bill”, and it provides not only an opportunity to challenge the government on their NHS policy but an insight into any future government where Labour are the majority or lead party.

As the fullest parliamentary response to the disastrous Health & Social Care Act 2012, this is a significant moment for NHS campaigners, and I urge anyone with an interest in healthcare in the UK, and/or public/private provision of healthcare in Europe, to read it (link is to the parliament.uk page containing a downloadable pdf of full Bill text).

It does contain technical language that is challenging to the non-specialist, but it is not too long and I believe anyone with healthy curiosity and well-developed internet-search skills should be able to comprehend it. If you have time, there are also some largely helpful notes produced by the Commons Library here (again, a link to the parliament.uk page containing a downloadable pdf). The Commons Library briefing paper notes among other things that a wide variety of groups are supporting the Bill, including the Labour Front Bench, the Royal College of Nursing and trade unions representing NHS staff - see press releases from Unison, Unite, GMB, and the TUC (latter is a direct PDF link). Others have offered qualified support (such as the BMA), while some have raised critical questions (such as the Green Party PPC for Calder Valley Jenny Shepherd). You can read a good review of the responses on the excellent OurNHS section of the Open Democracy website by Caroline Molloy here.

I agree with the position adopted by Allyson Pollock and campaigners working on the 'NHS Bill 2015' (twitter account) or NHS Reinstatement Bill (article including link to PDF of full bill). Their suggestion is to encourage MPs to vote in favour of the Efford Bill in the hope it will pass its Second Reading in the Commons and move on to ‘Committee Stage’ where critical questions can be explored in detail.

I also feel it is crucial to ask those critical questions as soon as possible (the campaign for an NHS Reinstatement Bill have done, arguing that 'major ammendments' are required). There is nothing to gain from sacrificing critical thought in order to support one’s chosen team or political party. As I have written elsewhere, now is not the time for NHS campaigners to make compromises.

There is one section of the Bill which I believe is receiving insufficient attention, which has particular relevance for me, and which I find deeply concerning. Hence this short blog. I make no apology for exploring only this section – please read the links above for fuller explorations.

Preferred Providers? The NHS, the EU, and #socent

Part 1 of the Bill is about “Amendments to Sections within Part 1 of the National Health Service Act 2006, as amended by the Health and Social Care Act 2012”. The 2012 Act has, after all, proven to be every bit as bad as campaigners feared.

Section 6 of Part 1 of the Efford Bill is about ‘NHS Contracts’, and substitutes Section 9 of the Health and Social Care Act. A minor terminological criticism should be raised immediately. As the Efford Bill itself states:

“(6) Whether or not an arrangement which constitutes an NHS contract would apart from this subsection be a contract in law, it must not be regarded for any purpose as giving rise to contractual rights or liabilities”.

In other words, an ‘NHS contract’ is not a contract. It really would have clarified things for everyone if the Efford bill had instead referred to, say, ‘NHS arrangements’ or 'NHS agreements'. Nonetheless, the intent of this clause should be welcomed: it forms part of the legal changes contained in the Efford Bill that reduce the role of competition in the NHS, reducing the threat of legal action by private providers demanding competitive tenders for health services. The following quote explains how this is possible:

“(15) Payments made for the purposes of this Act by a commissioner to a provider may be designated as being a grant made by the commissioner to the provider for the purposes of the European Directive 2014/24/EU of the European Parliament and the Council.”

The relevant section of European Directive 2014/24/EU (direct link to PDF of the Directive) essentially allows governments to avoid other EU procurement/competition law with regard to public services. Here’s the relevant quote from the EU directive:

“the mere financing, in particular through grants, of an activity, which is frequently linked to the obligation to reimburse the amounts received where they are not used for the purposes intended, does not usually fall within the scope of the public procurement rules. Similarly, situations where all operators fulfilling certain conditions are entitled to perform a given task, without any selectivity, such as customer choice and service voucher systems, should not be understood as being procurement but simple authorisation schemes (for instance licenses for medicines or medical services)”.

So, what parts of the health service does the Efford Bill exempt from EU procurement/competition law?

(1) In this Act, an NHS contract is an arrangement under which one health service body (“the commissioner“) arranges for the provision to it by another health service body (“the provider“) of goods or services which it reasonably requires for the purposes of its functions.

This earlier sentence explains what an NHS contract/arrangement is. It reveals that the Efford Bill does nothing to remove the purchaser/provider split (the removal of which was once Labour policy, and indeed practice between 1997-2000), and implies that under any future Labour(-led) government, the NHS will still be organised to at least some extent via a process of commissioning. At present this process is undertaken by Clinical Commissioning Groups (CCGs), until recently by Primary Care Trusts (PCTs). CCGs are increasingly reliant on support and advice from Commissioning Support Units (CSUs) and even more nefarious characters. At present this regularly involves competitive tenders, which have been widely criticised for a variety of reasons, including wasting the time of clinicians and the money of taxpayers. The Efford Bill attempts to reduce the role for competitive tendering, even as it retains the commissioning system (charitably, we can assume this is in order to avoid a further ‘top down re-organisation’).

At first, the Efford Bill defines a “health service body” fairly restrictively - see picture below. Essentially, Secretaries of State and Ministers, Departments of Health and Local Authorities, NHS Trusts and CCGs, plus a variety of specialist public (or quasi-public) bodies commissioning or providing NHS services. The list does not include private companies that provide public services such as Serco, Virgin or Care UK, nor CSUs or private consultancy firms such as KPMG or McKinsey.

However and crucially, it does not appear that bodies such as these are excluded from the provision of NHS services. The following paragraph of the Bill allows for any “arrangement for the provision of goods or services by a health service body with a person who is not a health service body” to “take effect as an NHS contract”. Charitably, this could refer to GPs – but if so why not spell this out in either the Bill or the guidance notes? To the sceptical eye, this appears to be a measure designed to allow any contract between, say, a CCG and Virgin, to be as protected from EU procurement law as a contract between a PCT and your local NHS Trust once was. Why would the Labour Party want to do that?

Why I am sceptical, and cautious about supporting the Efford Bill

At this point you may be inclined to take the charitable view, and approach people like myself describing themselves as sceptical in the same way I treat those who use that word with regard to climate science. Here’s why I’m sceptical:

Since November 2010 I’ve been involved in Stroud Against the Cuts, a local group containing members of a variety of political persuasions. At a meeting in 2011 a NHS worker mentioned that the NHS Trust she worked for would soon be becoming a ‘social enterprise’, taking management of local hospitals, health clinics and other services out of the public sector. At an anti-cuts protest in Gloucester in November 2010, placards from Unison denounced the move - and similar transfers across the South West.

As the Scottish group “Labour for Independence” explain:

“New Labour introduced the “Right to Request” in June 2008 and “Transforming Community Services” in July 2008. The National Audit Office June 2011 Report summarised these developments in Establishing Social Enterprises under the Right to Request Programme:

“It (Transforming Communities) required that PCTs should no longer deliver services and should separate their delivery arm from their commissioning function with delivery being provided under contract to the PCT by other bodies such as Social Enterprises or Foundation Trusts” (p5) “… for the ﬁrst time, that the health sector will be subject to competition law under planned changes in the legislation. The role of Monitor, which currently regulates Foundation Trusts, will change and it will become the regulator of the NHS, including having responsibility for applying competition law and acting against anti-competitive behaviour by providers or commissioners” (p27)

When NHS campaigners say that it was Labour who laid the groundwork for the recent rise of competition and privatisation in the NHS, this is a key part of what they are referring to. The transfer of Gloucestershire’s community health services took place before the passage of the Health & Social Care Act, under legislation and guidance issued by the Labour Party.

However, in Gloucestershire there was a successful fight-back (youtube playlist of campaign videos). Elsewhere, consultations were conducted with workers on the question of moves from the NHS into a social enterprise and roundly rejected. In Gloucestershire there was no such consultation until it was forced upon NHS bosses by legal action (finding 96% of staff and 91% of the public respondents wanted services to stay in the NHS). The Gloucestershire legal action was not based on the lack of a consultation, however.

Instead, the court case, taken by then 76-year old Stroud- resident Michael Lloyd, supported by Leigh Day and Co solicitors and David Locke QC, focused on EU procurement law. I attended court to watch David Locke QC make his case, and gave press interviews when the case collapsed as NHS Gloucestershire reached an out of court settlement. As David Locke QC explained immediately after the case:

“the real lesson from the case is that there is almost certainly a stage for NHS bodies to consider before they decide if they want to undertake a tender process. PCTs are (almost certainly) entitled to conclude arrangements with an NHS trust to deliver services without a tender because such a process is arguably entirely outside EU procurement law. The Secretary of State controls both bodies and these arrangements do not give rise to legally binding contracts, and so there is no “contract” on which the procurement process can bite. There are accordingly strong arguments that it is perfectly lawful for a PCT to make an arrangement with a local NHS Trust for the delivery of NHS services without a tender, and without procurement obligations impacting on the process. This is the first step that the PCT agreed to explore as part of the settlement in the Lloyd case.”

Since the passage of the Health & Social Care Act 2012 the position has changed: the 2013 'section 75 regulations' push tendering, competition, privatisation. The Efford Bill appears to attempt to bring us back to a situation like that pre-2012, where commissioners and providers could conclude arrangements to deliver NHS services without a tender, outside EU procurement law – where such arrangements were with NHS bodies (as eventually happened in Gloucestershire).

My question is whether the Efford Bill alters that prior situation in order to extend this exemption to non-NHS bodies, such as so-called ‘social enterprises’, ‘mutuals’, or indeed other private companies.

It is worth returning to the Gloucestershire case, and again David Locke QC explains the situation concisely:

“Gloucestershire PCT decided to separate its community services from its commissioning function in accordance with Transforming Community Services policy which commenced under the last [Labour] government and was continued under the present [Coalition] government. The PCT Board's favoured model was the creation of a Community Interest Company (“CIC”) to take over the services. This proposal received, at best, a lukewarm reaction from the staff because it would mean that they ceased to be NHS employees. Nonetheless the PCT pressed ahead with the proposal and prepared to enter into a contract with the CIC to a value of approximately £80 million per year.

Mr Lloyd challenged the lawfulness of the decision to enter into a contract with a company outside the NHS without any competitive process. He wanted other NHS organisations to be given the opportunity of expressing an interest in the provision of the services so that the services would remain provided by NHS staff. He also pointed out that the decision to create the CIC would result in a substantial VAT liability, owing by the CIC to HMRC, of around £1 million per year which would denude the resources available to fund services. Finally he was concerned that staff joining the CIC would not be entitled to be members of the NHS pension scheme and that accordingly, in the competition for the best staff, the CIC would be in a significantly worse position. The essential issues in the case were whether an NHS organisation could enter into a contract with a CIC without a competitive process.”

As the above begins to hint, ‘Mutuals’ and ‘social enterprises’ delivering NHS services, despite sounding fluffy and attractive to those disinclined to support the state or centralisation, amount to privatisation and are bad news.

Labour's vision - no longer that of Aneurin Bevan

It is unclear whether Labour still value the ‘Right to Request’ (which saw managers, rather than staff, ‘requesting’ their organisation leave the public sector). Does the Labour Party still value the Transforming Community Services policy? Do they still think ‘social enterprises’, ‘mutuals’ and other private companies are effective ways to deliver public services in some instances? The Labour Party's railways policy provides a hint at an answer. A further hint is provided by the lack of noisy opposition to Francis Maude’s proposals to ‘mutualise’ hospitals (‘technically privatisation’ according to the man himself, and beginning to take effect now). But the clearest indication is given by Labour’s most prominent health ministers, Liz Kendall MP and Andy Burnham MP, and by chair of Labour’s policy review, Jon Cruddas. In October 2013 Civitas published a blog on these issues which reported:

“At a Progress event on public services in April, Labour’s Shadow Care Minister Liz Kendall spoke positively about mutuals and social enterprises in the NHS, describing them as “where Labour came from” in reference to the Labour movement’s early civil society origins. Shadow Secretary Andy Burnham once argued that while he supported the establishment of the theoretically cooperative-run Foundation Trusts, “too many trusts paid lip service to true community involvement”, a sentiment [Liberal Democrat Care Minister Norman] Lamb has perhaps echoed by mooting fully mutualised FTs. Moreover, in a speech yesterday to Civitas, Labour policy review chair Jon Cruddas pledged to “devolve power to encourage and free local and combined authorities to innovate [and] reform public services”.

In his September 2014 Labour Conference speech, Andy Burnham said “the NHS won’t be able to do it all”. What did he mean? In March 2014 Burnham gave a keynote speech to the Association of Chief Executives of Voluntary Organisations (ACEVO), saying: ‘The demands of the 21st century mean that the NHS will not succeed if it tries to go it alone. … In the voluntary sector, it has a partner that shares its people-not-profits ethos.’

Back in 2010, the Chief Executive of ACEVO blogged proudly that his organisation had:

“achieved a neutering of Burnham's "preferred provider" policy. Guidance for commissioners published today makes clear that competition has won the day over discrimination against third sector providers.”

Do you remember Sir Stephen Bubb? You should do. From March 2011 to June 2011 Bubb was seconded to the Department of Health, as part of the team leading Andrew Lansley's National Health Service (NHS) "listening exercise". ACEVO will shortly publish their Manifesto for the next election, with Sir Bubb seemingly pleased with Labour’s current “preferred provider” policy. I’m sure he is a very busy lobbyist at the moment.

Insufficiently scary? Try this from Frank Field (via Labour Uncut):

“Welfare and health bills will increase. Taxpayers are rightly wary of government taking even more of their earnings and spending the results as it wishes. Hence the need for a new tax contract… establishing a NHS mutual. The mutual would … introduce what is clearly lacking at the moment, namely, a clear link between services provided and level of contributions required"

Jonathan Todd, Deputy Editor of Labour Uncut, seems enthusiastic:

"Could Field facilitate a grand bargain between Balls and Burnham? Could Burnham have his health and social care integration if Balls’ demand for affordability is secured by Field’s NHS mutualisation?

Such a grand bargain on this policy specific is illustrative of that which might be made more generally. It achieves the bigness and boldness of health and social care integration, while retaining the fiscal credibility prized by those who wish to “shrink the offer”.

I'm frankly baffled by this. The contributory principle is a pretty stupid way of looking at a social security/welfare system that should be universal, but when you attempt to introduce it to the NHS it makes no sense whatsoever. How does an unborn foetus "contribute financially" to support the midwives that will bring it into the world? Will a 5-year-old who breaks his arm learning to ride a bike be denied an NHS plaster cast because they haven't built up enough National Insurance payments?

By now I hope you're wondering what Clive Efford MP thinks of the contributory principle. Wonder no more:

.@KarenBuckMP says "people coming to live in the UK must contribute before they can access to Jobseekers' benefits" http://t.co/VRX2AKxwrQ

— Clive Efford (@CliveEfford)

November 19, 2014

All this, of course, is a long way from Bevan, who wrote of the mutual societies and voluntary organisations that existed before the NHS in In Place of Fear: “Without rational planning … we are left with a patchwork quilt of local paternalisms”

Extra Extra

There is much much more to say about the Efford Bill. One additional issue left untouched is the pressure for all NHS Trusts to become Foundation Trusts (not to mention the existence of these quas-private organisations) and the failure to specify a lower than 49% cap on the income such Trusts can earn from private. Another issue to explore is the question over the extent to which allowing non-NHS contracts to continue would entail the application of EU procurement law. Another blog, another day.

#nhs #backthebill #ournhs #saveournhs #savethenhs #Labour #ukpolitics #NHSbill2015 #privatisation #socent

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