Lord Clement-Jones writes… Plugging the loopholes left by Labour

Widespread competition was introduced to the NHS by Labour’s 2006 National Health Service Act, but without the public debate that is now taking place. The 2006 Act opened up the NHS to the risk of EU competition law being applied in a way that leaves commissioners unable to choose the best way of delivering services. Labour’s legislation meant private providers were favoured over NHS hospitals and paid millions for work which they never did. Very simply, Labour’s 2006 Act does not put patients first.

In the Lords, myself and colleagues are working hard to plug the loopholes left in Labour’s 2006 Health Act, namely that:

  • out of hours work was handed over to the private sector
  • Labour rigged the market in favour of the private sector. For instance, Independent Sector Treatment Centres were paid around 11% more than the NHS price
  • There was no overall cap at all on private income for Foundation Trusts
  • There was no provision in the legislation to say all private income profit must be reinvested in NHS services
  • Labour deliberately went out of their way to encourage the involvement of the private sector. Labour’s PFI contracts for the NHS have left the Government a total liability of £65 billion.

To address the above issues Liberal Democrats have ensured that where competition is introduced it should be on quality not price.

In addition to this, following the listening exercise the Bill changed so that the health care regulator Monitor will now have a core duty to protect and promote patients’ interests and will no longer be required to promote competition as if it were an end in itself. We have also ruled out competition on price for all tariffed services and will also require commissioners to follow ‘best value’ principles when tendering for non-tariff services, rather than simply choosing the lowest price. This means that providers cannot ‘cherry-pick’ the profitable easy clinical cases.

Further to this, we will be trying to plug Labour’s loopholes at Report Stage of the Bill by pressing amendments:

  • to cut out Competition Commission involvement in reviewing Monitor and the effectiveness of competition in the NHS
  • to retain the regulation of Foundation Trusts beyond 2016
  • and ensure that under EU law NHS activities are where possible excluded from the rigour of EU competitition law, so that patients come first

At the end of the day we want to see competition based on quality where there is evidence that it works in the best interests of patients, but we wish to keep Foundation Trusts firmly within the NHS because that will ensure NHS patients receive the best care possible.

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This entry was posted in Op-eds.


  • Richard Dean 23rd Feb '12 - 12:47pm

    To avoid price being the dominant factor, would it not be simpler to specify that competitive bids are judged in two stages, addressing the following questions

    1. Does the bid provide what is wanted, to the required medical standards?
    2. Which bid is more attractive financially?

    This is an absolutely normal procedure, not perfect, but easy to make transparent. Step 1 is what you seem to be suggesting anyway. It rules out bidders who will not provide the product or service that health professionals require. Step 2 then ensures that best value for taxpayers’ money is obtained, and excess profits are not made. What is wrong with that?

    Step 1 helps to safeguard patients’ intereests – by putting medical professionals first and so, hpefully, allowing them to put patients first, Steps 2 then helps to safeguard taxpayers’s interests.

    If cherry-picking is possible, it means that some of the services currently provided by the NHS – the ones that might be cherry-picked – are presently over-priced internally, and the internal profits from this overpricing is being used to subsidize other services – those that won’t be cherry-picked..

    Who in the NHS is responsible for making the decisions about which service subsidizes which other service, and is this process transparent? Are the decisions secret? Examined explicitly or based on vagueness and inertia? Is it right that the decisions are made by medical professionals alone, without the public having an ability to comment? Is the process immune to pressure from pharma companies, for instance?

    I don’t know. I’m just asking. Apologies if I have completely misunderstood, but if I have, please remember that I am an ordinary member of the public, and it is the government’s job to make sure that ordinary members of the public are provided with sufficient information to make rational and accurate judgments about these sorts of issues. Thanks.

  • Top marks for discussing the health bill as though it had nothing to do with the current Government.

  • Helen Duffett 23rd Feb '12 - 1:39pm

    Thanks Joe, now corrected.

  • Forget the amendments drop this patchwork bill.

  • If this Bill merely plugged the loopholes there would not be the outcry. We can all agree Labour were inefficient indeed downright incompetent at times, this being one of many reasons people did not vote for them.

    But, this is selective in the use of ‘facts’, let’s look at the cap on private income. The coalition attempted to raise the this:

    From the BBC
    “A recent revision to the ongoing health bill will allow foundation hospitals to raise 49% of funds through non-NHS work if the bill gets through Parliament.”


    “This means that providers cannot ‘cherry-pick’ the profitable easy clinical cases.”.
    The NHS train the staff, mentors them in supernumery roles, provide the ICU / HDU care when things go wrong, the list while not endless is large. None of which the private provider has to support. Every minor operation in a private clinic is cherry picking the easy work. How many private Coronary By-Pass operations do you think take place ? And of the ones that do how many are in a private hospital with it’s own ICU ?

    Private providers will cherry pick operations, they exist to make money, businesses take calculated risks not kamikaze ones. They can be a part of the solution but let’s not try and con the public..

    I laughed out loud when Cameron claimed to have removed so much bureaucracy by getting rid of PCT’s and SHA’s. Most PCT staff remain, and remain publicly funded in the guise of social enterprises or have been transferred to Local Authorities without the means to support them.

    This Bill was not in the coalition agreement, it can only pass with Lib Dem support. It needs to be improved or killed off otherwise the price will be paid with dividends in 2015.

  • Andrew Suffield 23rd Feb '12 - 4:05pm

    If this Bill merely plugged the loopholes there would not be the outcry.

    Of course there would. Post-2006, we have an NHS that involves a mix of public and private organisations. If the loopholes were plugged, we’d still have an NHS that involves a mix of public and private organisations. That is exactly what Labour have been crying out about – the fact that anybody might profit from the glorious revolutionary health service.

  • Richard Dean 23rd Feb '12 - 4:34pm

    Steve Way,

    I have personal experience that may encourage you, though not in this country, in Trinidad and Tobago, a former colony of a million souls who murder each other at 2 per day. I was taken ill there, sound-scanned at a private clinic, and recommended heart surgery. I checked with my NHS doctor by email who confirmed the diagnosis within 24 hours. I was offered a heart bypass or stents, chose stents, got the op, fantastic technology, conscious during most of it, all in a week, at a private hospital run, I think, by the doctors. They later gave me the video of the op on a cd. Total cost was 15,000 pounds paid mostly by the job insurance. Wass it excessive? I have no idea.

    What I experienced was a private hospital that does indeed take on the complicated operations and do them very well. They also take uninsured people – the general public – who are paid for by the state. The medical certificates on the wall are from the UK and US, and look like the surgeons themselves paid for their training, though perhaps with support from the government. The staff don’t look harassed or depressed. Would the present NHS bill, or the NHS Act 2006 which it amends, allow this kind of development in the UK, and do you think it would be a good thing?

  • Tony Dawson 23rd Feb '12 - 5:24pm

    This posting makes some good points regarding Labour’s history of selling off/selling out the NHS ( like many other things they sold off). It is, however, a distraction from the ridiculous mess which is Lansley’s Bill.

  • Competition introduced by Labour was in order to bridge the gaps and get through waiting lists, in my recollection and not competition for it’s own sake.It was very limited in amount , unlike the present cap.
    I am no expert in competition law, but Polly Toynbee, writing some time ago, in the Guardian, said that competition law did not come into play, so far in the NHS, but would come into it now,, under your Bill.
    It is disingenuous, in my opinion, to try to blame Labour for your party’s present woes, re this Bill.You have done this all by yourselves, without any help from Labour.You did not need to support this Bill and it was not in the coalition agreement.
    There are many decent Liberal Democrats, who are unhappy with this Bill and I really fear that we are in danger of losing a third party, in this country and a voice that has previously spoken up for freedoms.
    I think that many are in total denial about the disastrous effect, electorally, supporting this Bill, will have on your future electoral prospects.
    The people and majority of professional staff do not want it and it was a poor day for democracy when your party chose to support the Government in trying to conceal the risks inherent in the legislation.

  • I meant to add that though I am not a supporter of PFI, I think that people need to be honest about this.
    When polled, people want better schools and hospitals, but many do not want to pay more taxes and hypocritical as this may be, it seems to be a fact of life, as evidenced in various polls.
    The Conservatives had left a terrible legacy, in terms of starving public services and considerable financial outlay was required.

  • Patrick Smith 23rd Feb '12 - 8:56pm

    I would envisage that the L/D Spring Conference will provide an opportunity to fully debate and recile to any major latent outstanding concerns in the implementation of the NHS Reform Bill.

    I understand what Lord Clement-Jones has stressed that `quality’ must take precedence over `price’ in commissioning and that is clearly predicated in his overwhelming concern that money must follow patient care and choice and in all things and matters that patient welfare must be the first and last consideration.

    My own concerns are to do with Local Health Boards that should replace the bureacracy of PCT meetings where `grass-roots’ and hands -on local health community advocates are asked,at present, to take a back seat,or do not have a set, under the current undemocratic process.

    The current NHS PCT driven bureaucratic system stifles,if not, prefers to not countenance the local quality marking of delivery of local health care by the patients themselves and their ambassadors.I sat on my Community Care Council 1992-2000 and it did an excellent job as the `peoples` watch-dog’.

    The Royal College of Nursing is a seminal organisation as nursing and the recruitment of quality nurses with a life-long hands-on commitment, is desperatly required, in the NHS,especially in A and E`s.Its representives ought to be welcome at Downing St.

  • David from Ealing 23rd Feb '12 - 9:56pm

    I agree with Tony Dawson. Labour did some terrible things, but we need to oppose this Bill, not bother about the past.

  • The need to remove the potential OFT/CC role is crucial to ensuring the NHS can continue to co-operate and integrate services where commissioners and providers want to do this. The proposed Bill would see the OFT/CC process adding about a year and very significant legal costs to any attempt to reconfigure services or organisational form (i.e. merger), This is on top of the already existing lengthy process, that sees change moving very slowly.

    The extra cost and delay is bad enough but the uncertainity of a review on a single question (what impact does this have on competition?) will have two results. At best a huge distraction and delay from improving patient care, but in reality it will mean NHS services being frozen in their current state, as change becomes too complex and risky to take.

    The opportunity for greater safety (24/7 services say across several Trusts) or savings from rationalising services, or shifting care into the community will all be put on ice. So rather self defeating for health policy objectives. All this because competition is seen as a panacea. Lets hope the competition section of the bill is dropped or changed to the integration section, so we can have a greater chance of a responsive health service.

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