{"id":25611,"date":"2013-04-04T13:26:01","date_gmt":"2013-04-04T12:26:01","guid":{"rendered":"https:\/\/blogs.bmj.com\/bmj\/?p=25611"},"modified":"2013-04-15T14:44:44","modified_gmt":"2013-04-15T13:44:44","slug":"david-lock-privatisation-regulations-mean-big-change","status":"publish","type":"post","link":"https:\/\/blogs.bmj.com\/bmj\/2013\/04\/04\/david-lock-privatisation-regulations-mean-big-change\/","title":{"rendered":"David Lock: “Privatisation regulations” mean big change"},"content":{"rendered":"

It is not every day that the Department of Health<\/a> produces a formal response to\u00a0two of my dry (and I accept potentially fairly boring) legal opinions.\u00a0 23 March\u00a0was a red letter day because it was the first time it has happened.\u00a0 The department produced a formal response to material I and my fellow barrister, Ligia Osepciu<\/a>, produced for the campaigning organisation 38 degrees<\/a> about the NHS (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013<\/a>, which I have referred to (neutrally) as “the privatisation regulations\u201d since the full name is a bit of a mouthful.<\/p>\n

Should I have felt honoured or did it mean that the Department of Health has “marked my card” and I will never be asked to give legal advice to them or any NHS body ever again?\u00a0 Only time will tell.\u00a0 However overall I was more than a little disappointed at the quality of the response.\u00a0 It does, however, show how sensitive ministers are about others commenting on how the privatisation regulations will change the NHS but overall it ducked the main issues and pretended that the regulations brought in little change, which is simply not correct.<\/p>\n

38 Degrees will have to give\u00a0its own response, and so will Ligia, but this is mine. There are a number of points that may be of interest to those following this story, and apologies for those who are bored to death by disputes between lawyers.\u00a0 However, here goes:<\/p>\n

The department\u2019s response is from\u00a0officials, not a proper legal opinion which responds to the legal arguments raised by 38 degrees.\u00a0 Officials have clearly sought legal advice and then published the parts which are helpful to them.\u00a0 It would be far better if they published all the advice they received, but that may be asking too much, and would show far more overlap with the legal advice than the documents suggests.<\/p>\n

Overall the response is flawed because it tries to pretend that the only thing changing in the NHS is the introduction of the privatisation regulations, and then tries to look at their effect\u00a0in isolation. The opinions for 38 degrees attempted to look at the effect of the regulations in the context of all the other changes that are going on in the NHS.\u00a0 One of those changes is the removal of NHS trusts as potential providers of NHS services.\u00a0 It is slightly disingenuous for the department to focus solely on the effect of the\u00a0regulations in isolation without taking account of their effect in the context all the other changes into account that ministers are making to the NHS at the same time.<\/p>\n

Paragraph\u00a09 of the response is illogical.\u00a0 It asks one question and then purports to answer an entirely different question.\u00a0 This policy problem is not about charging patients for NHS services, but about moving the provision of NHS services from NHS bodies to private sector providers. It undermines the quality of the argument to pretend that this is about something that it is not about.<\/p>\n

The department claims in para 14 that the NHS is presently working under “mandatory guidance.”\u00a0 That is wrong as a matter of law because it misunderstands the legal effect of “guidance.”\u00a0 There is a fundamental difference between guidance and a set of rules.\u00a0 An NHS body can depart from guidance if it has a good reason to do so.\u00a0 See R v Derbyshire Health Authority ex parte Fisher (1998)<\/a> 38 BMLR 76 per Dyson J at 80-1 and 89-90.\u00a0 No NHS body can depart from legally binding rules even if it has a good reason in the interests of patients to do so.\u00a0 That is, if I may say, the whole problem about putting existing flexible practice into a set of rules.<\/p>\n

The response \u2013 carefully read \u2013 does not really come to a different conclusion to the thrust of the legal advice to 38 Degrees.\u00a0 However this response substantially undermines the previous statements made by ministers that it should be for commissioners to decide whether and when to go out to tender for NHS services.\u00a0 The document accepts that the only test in law is the Regulation 5 “single provider” test (see paras 14 to 18).\u00a0\u00a0 That must mean that the department accepts that commissioners cannot decide not to go out to tender in cases where there is more than one potential provider, even if they consider that it is in the interests of NHS patients to place the contract with a single provider.\u00a0 The department does not seek to argue that the wider tests in Regulations 2 and 10 about co-operation between providers and the wider interests of the NHS should be read down in Regulation 5.\u00a0 That seems right but is a fairly significant concession.\u00a0 I thought that principle about whether NHS commissioners would have discretion to decide when to go out to tender was what this whole debate is all about.\u00a0 However, this document effectively concedes that point.\u00a0 It is worth contrasting the approach taken in this document to the approach taken by the then minister, Simon Burns, who said on 12th July 2012:<\/p>\n

“\u2026it will be for commissioners to decide which services to tender\u2026to avoid any doubt\u2014it is not the government\u2019s intention that under clause 67 [now 75] that regulations would impose compulsory competitive tendering requirements on commissioners, or for Monitor to have powers to impose such requirements.”<\/p>\n

So it seems to be a case of \u201cThat was then, Minister, and this is now\u201d.\u00a0 The response document makes it clear that the department now accepts that the regulations mean that commissioners do not have a general discretion to decide which services should go out to tender.\u00a0 They accept that the only relevant test is in Regulation 5, and that is only whether there is a single provider and no other test applies.\u00a0 So the policy of \u201cit will be for commissioners to decide which services to tender\u201d is not government policy.<\/p>\n

The department raises a different defence to the main complaint about the lack of discretion for commissioners that everyone including the BMA<\/a>, the Royal College of General Practitioners<\/a>, and lots of other bodies makes about the privatisation regulations.\u00a0 The response suggests at paragraph 14 that the regulations do not make a difference because the NHS already works under “mandatory guidance.”\u00a0 Good try, but wrong.\u00a0 And if it was right why did the minister say something different to Parliament?\u00a0 The correct position is that the 2010 procurement guidance was not ever mandatory in the way that, for example, the guidance about following NICE Technology Assessment Guidance is mandatory.\u00a0 NHS guidance only becomes \u201cmandatory guidance\u201d under NHS law if it is backed up by directions made under section 8 of the NHS Act 2006<\/a>.\u00a0 There are directions requiring NHS bodies to follow NICE Technology Assessment Guidance<\/a>, not directions requiring NHS bodies to follow the 2010 procurement guidance.\u00a0 The department has tried this tactic in a case I had about two years ago and, before the case came to court, they threw in the towel.\u00a0 Hence this part of the response is just plain wrong because there are at present a range of providers in the NHS who can have contracts now without any formal competition under EU law within the Teckal exemption<\/a> (ie NHS trusts and possibly NHS foundation trusts if the Fenin exemption applies) or just because no organisation domiciled in an EU country outside the UK would be interested in the contract.\u00a0 Don\u2019t ask my why the last point is important, but it is under the obscure rules of the single market of the EU!<\/p>\n

This option is removed by the regulations. Secondly, procurement is at present governed by guidance, and so has the flexibility that a commissioner can depart from the guidance if he or she has a good reason. This won\u2019t be possible in future because these will be rules which every NHS commissioner has to follow.\u00a0 Lesson 1 in day 1 in law school for new NHS lawyers \u2013 regulations and guidance are not the same thing!
\nHowever it is very interesting that the department does not take a clear position on whether Teckal exemption would apply to contracts with NHS foundation trusts outside the regulations.\u00a0 This is an issue they have ducked and they obviously hope that no one notices.\u00a0 I wonder whether the department thinks the Teckal exemption applies to NHS foundation trusts?<\/p>\n

So overall \u2013 good try, chaps, but when looked at in detail completely unconvincing.\u00a0 I would give it 7 out of 10 for effort but maybe only 3 out of 10 for content.<\/p>\n

The remaining problem can be illustrated by considering sorting out a placement for an elderly lady who is eligible for NHS continuing healthcare and requires discharge from hospital.\u00a0 A “spot purchase” of a care home bed is a new contract and, under these new rules, no one should be placed unless the\u00a0clincial commissioning group<\/a> (CCG) has been through a tender process to get the best value for money arrangement.\u00a0 They delays that are inevitable while a tender process is arranged will cause massive bed blocking in hospitals.\u00a0 This is just one of the unforeseen outcomes of a set of regulations that have never been exposed to a proper period of consultation.<\/p>\n

David Lock <\/a><\/strong>is a barrister and QC, No5 chambers. He is a board member of of Brook Sexual Health, a member of the BMA Ethics Committee, and a honorary professor at University of Birmingham.<\/p>\n

Competing interests: I am a member of the Labour Party and chair the West Midlands Branch of the Labour Finance and Industry Group.\u00a0 I am due to become a non-executive board member of Heart of England NHS Foundation Trust which is due to start on 1 June 2013.\u00a0 My wife is a doctor who is employed by Worcestershire Partnership NHS Trust.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

It is not every day that the Department of Health produces a formal response to\u00a0two of my dry (and I accept potentially fairly boring) legal opinions.\u00a0 23 March\u00a0was a red […]<\/p>\n

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