Comment: NHS reforms will squeeze out the voluntary sector

By Scott Sinclair

Competition was perhaps the most contentious issue of the NHS reforms during the passage of the Health and Social Care Act and remains so now that reforms have 'gone live'.

The government has always maintained that competition will be a tool that clinical commissioning groups (CCGs) can use where appropriate and in the interests of patient care. Ministers assured both the Lords and the Commons that this was the case. And yet, campaigners have accused the government of using the Section 75 regulations, which govern how and when commissioners can use competition, as a means of 'privatising the NHS by the backdoor'.

We do not agree with this view.

Regardless of which provider delivers the service, care on the NHS remains free at the point of need. We also believe that the government genuinely does want a mixed economy in healthcare and sees an increased role in particular for the voluntary sector.

However, the regulations as they are currently worded do not reflect this intent. We are deeply concerned that they will have the opposite effect of forcing voluntary sector providers out of the market, and that this, crucially, will have a knock-on and detrimental effect on patients.

The regulations before parliament are actually the second version issued by the government. When they were first laid, there was immediate outcry from the sector, and the government withdrew the regulations to be rewritten.

At the time, the secondary legislation committee noted that it received 2,000 submissions to the committee, "all of which indicated a widespread belief that these regulations go beyond what was promised during the passage of the Act: in particular, that they require CCGs to undertake competitive tendering for the procurement of services rather than the more generalised duty not to be anti-competitive that was expected".

In our view, the subsequent re-written regulations, which will be the focus of the debate in the House of Lords on April 24th, are little better.

Our key contention is with section 5 of the regulations, which states that commissioners can avoid using competitive tendering only where they are certain that there is only one 'capable' provider of the service. We want CCGs to be able to work with a preferred single provider, where that is in the interest of patients.

In the impact assessment accompanying the regulations, the Department of Health takes a very broad and generous view of the term 'capable'. They say that one provider might be the only capable provider because they are the most innovative, or have the best record of clinical safety, or are able to set up and deliver the service faster than other providers.

This is an unusual definition of 'capable'. We think that, in practice, it will be interpreted as it is more commonly understood: a capable provider will be one who can deliver the service within the budget set by the commissioner.

It is hard in this circumstance to imagine any NHS service where there will ever be only one capable provider.

This will mean that CCGs will not have sufficient cover or confidence under the regulations as currently worded to work with a single provider where that is in the patient interests. Other providers would feel comfortable and perhaps even confident to challenge the decision to work with a single provider on the grounds that they, too, are capable of providing the service.

This could lead to a situation in which competitive tendering becomes mandatory for almost every contract. Already, there are 211 clinical commissioning groups each with an estimated 60-600 contracts. Under the new rules this could increase dramatically, placing extreme administrative and financial burden on CCGs.

In these circumstances, we think that CCGs will opt to bundle contracts to reduce their administrative and financial burdens. This is what currently happens in local government, where competitive tendering is mandatory. In the work programme, bundling of contracts has seen small providers essentially squeezed out of the market.

We are already seeing this happen to some extent in the health service. Cambridgeshire and Peterborough CCG, for example, currently have called for expressions of interest for a £1 billion contract where all services related to older people have been bundled together.

Our concern is that this will lead to voluntary sector and smaller providers being forced out of the market. The vast majority of charitable providers are specialist, but do what we do extremely well. We are also governed by and tied to our charitable objectives.

These objectives make it impossible for us to bid for bundled contracts that go beyond our specialism. These types of contracts tend to favour larger private sector privates who can absorb the cost of bidding for large contracts.

This is bad news for the voluntary sector, yes, but more importantly it is bad news for patients.

Charitable providers offer patients unique and specialised services that other providers would struggle to deliver in the same manner. At Marie Curie, we match all the funding we receive from the NHS with funds we raise charitably, and deliver this benefit to our patients and their families in our hospices and through our in-home nursing service.  We also add value to local communities through opportunities to volunteer.

Over 218 independent hospices across the UK do the same – working constantly to raise charitable funds to invest into patient care and to drive innovation in the way in which they care for terminally ill people and their families. To bid for large bundled contracts is beyond their scope and also their mission.

If the voluntary sector is squeezed out of the market, this is a real loss for patients and their families, and the NHS would struggle to cover the added value that we provide.

We have briefed the Lords and asked them to consider the issues that we have raised. Ideally, we would like the government to re-write the regulations again and ensure, this time, that they clearly state that CCGs will be able to work with a single preferred provider, where this is directly in the patient's interest.

We also think that the amount of confusion and disagreement generated by these regulations shows that they do not work as the government intends them to, and do not provide confidence to CCGs about how to use competition appropriately.

As the secondary legislation scrutiny committee has said of these regulations: "While it is open to the government to impose on the health sector provisions that may not be popular, it cannot be good or effective policy-making to seek their immediate implementation when they are so widely misunderstood."

Scott Sinclair is the policy & public affairs manager for Marie Curie Cancer Care. He previously worked for the Department of Health and the Department for Constitutional Affairs.

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