Health and Social Care (Re-Committed) Bill

Memorandum submitted by Dr Lucy Reynolds (HSR 22)

I am an academic studying the implications for costs and for health outcomes of the 2010 Health and Social Care Bill.

I should like to make two brief comments to the Committee on the genesis and implications of competition in the healthcare reform, and also one on the proposed amendments to Clause 1 on the duty of the Secretary of State for Health in respect of his future duties concerning provision of health care.


The outsourcing of services through the market via commissioning is a way to privatise these services. If they are not thereafter provided by the public sector, then they have been privatised.

Commissioning is intrinsically competitive, and its use requires the government to regulate it according to EU competition law. This regulatory function was given to Monitor but following the amendments it now resides with the NHS Commissioning Board. If it is removed from there it will probably default back to the Director General of Fair Trading who enforces competition in the rest of the economy.

If the wish is to eliminate competition from the system and instead promote cooperation, then the commissioning itself must be removed from the reform. Otherwise any cooperation between organisations involved in health care provision can be interpreted as anti-competitive behaviour, which is illegal under EU competition law.

Removing competition would involve scrapping the present Bill because commissioning is central to this reform.


Competition (through the commissioning mechanism) in the reformed NHS will be on price not on quality, except where a tariff has been set. The majority of the NHS budget applies to services for which no tariffs exist. This includes the entire mental health and community care budgets.

While it is possible to argue (albeit on very dubious evidence) that competition at fixed price might elevate quality, it is absolutely clear that competition on price exerts downward pressure on quality.

A medical negligence barrister (QC John Whitting) has commented publicly on the likely effects of these reforms in reducing the quality of services and increasing medical errors:

He makes the point that not only will the number of accidents rise as cost pressure causes overwork and deskilling, but that the extra costs of compensating the victims could outweigh any savings in cost achieved through price competition.


The original wording of Section 1 of the reform was intended to denationalise the NHS. The proposed Kendall/Thornbury amendment (Clause  1,  page  2,  line  4,) does not entirely close this possibility.

"To provide" implies arranging service delivery through the public sector.

The Kendall/Thornbury suggestion to amend the clause to say "to provide or secure the provision of services" is much better than the original wording from Andrew Lansley ("to promote") but still could be held by a court to imply that this duty could be adequately discharged by making sure the private sector provides the services.

Safest would be just to remove this clause from the Bill as suggested by Simon Burns.

July 2011

Prepared 11th July 2011