PARLIAMENTARY DEBATE
Health and Care Bill (Twelfth sitting) - 23 September 2021 (Commons/Public Bill Committees)

The Committee consisted of the following Members:

Chair(s) Mr Peter Bone, Julie Elliott, † Steve McCabe, Mrs Sheryll Murray

Members† Argar, Edward (Minister for Health)
† Bhatti, Saqib (Meriden) (Con)
† Crosbie, Virginia (Ynys Môn) (Con)
† Davies, Gareth (Grantham and Stamford) (Con)
† Davies, Dr James (Vale of Clwyd) (Con)
† Double, Steve (St Austell and Newquay) (Con)
Foy, Mary Kelly (City of Durham) (Lab)
† Gideon, Jo (Stoke-on-Trent Central) (Con)
† Madders, Justin (Ellesmere Port and Neston) (Lab)
† Norris, Alex (Nottingham North) (Lab/Co-op)
† Owen, Sarah (Luton North) (Lab)
† Robinson, Mary (Cheadle) (Con)
† Skidmore, Chris (Kingswood) (Con)
† Smyth, Karin (Bristol South) (Lab)
Timpson, Edward (Eddisbury) (Con)
Whitford, Dr Philippa (Central Ayrshire) (SNP)
Williams, Hywel (Arfon) (PC)

ClerksHuw Yardley, Sarah Ioannou, Committee Clerks

† attended the Committee


Public Bill CommitteeThursday 23 September 2021
(Afternoon)

[Steve McCabe in the Chair]

Health and Care BillQuestion (this day) again proposed, That the clause stand part of the Bill.

I hope I can give the hon. Lady some reassurance that among those I have worked with and talked with in recent months are Matthew Taylor and Michael Barber, both of whom were a key part of that Prime Minister’s delivery strategy and approach. I listen very carefully to what they say, as of course I do to what the hon. Lady says. We may not be accepting amendment 100, but what I can say—I hope this will not necessarily prevent her from pressing it to a Division, but that it gives her some reassurance—is that I always reflect very carefully after these sessions on the particular points she makes, because she does know of what she speaks. I will continue to reflect very carefully on the points she makes in this context.
On clause 37, blunt or otherwise, we will continue to work closely with NHS England on the development of the payment scheme through existing accountability arrangements so that it aligns with the Government’s wider financial and incentivisation priorities for the NHS. I do not think that Secretary of State approval for small or minor changes to the scheme would be in line with the spirit of the Bill, in terms of operational freedom and flexibility for the NHS, but the power of direction under clause 37 does, I believe, provide a strong safeguard should it be needed. That is why I think it is the most appropriate mechanism. We may differ on what is the appropriate mechanism, but I hope we might agree that there needs to be some mechanism by which that power could be exercised and we would use clause 37. We may differ on that, but I think we have possibly come from the same position and are diverging only on the means.
The shadow Minister and the hon. Lady raised payment by results. The wider changes in the Bill, which we have discussed on a number of occasions, seek to facilitate a move to greater population health management. Therefore, as part of the payment scheme, we would expect greater incentives for commissioners and providers to focus on prevention and early intervention. I recognise that activity-based payment schemes such as payment by results do have value, as the hon. Lady suggests, including in reducing waiting times when used properly. Commissioners can still use payment by results should they wish to do so. The payment scheme simply gives local areas a greater degree of flexibility on how they want to use payment structures.
On consultation and engagement, I take the hon. Lady’s point but I think, reflecting her other points about how important this is, that the level of consultation and engagement suggested is inappropriate. She mentioned conferences and I wish her a lively conference, but hopefully an enjoyable one in tandem with that.
The hon. Lady mentioned the role of Parliament. We would not lay this before Parliament in that sense, but it would be published and of course MPs would be able to table questions, secure debates and potentially even table urgent questions on it should they so wish. The mechanism is there for that scrutiny.
I want to make a final point, if I may, on the macro point about waiting lists. The context is that we are now seeking to recover waiting list times and reduce waiting lists following the impact of the pandemic on elective and other procedures. As I said earlier, I hope to give the hon. Lady some reassurance in saying that as a historian I pay heed to the lessons of the past in tackling the issue. I am looking at what the former Prime Minister did to tackle waiting lists—a different context, but the principles are the same. I believe that quality should be key: that should always be the paramount consideration.
We believe that this mechanism, coupled with our elective recovery strategy, will deliver a reduction in waiting lists and waiting times, but I will continue to reflect very carefully, as the shadow Minister suggested I might, on amendment 100 and on the hon. Lady’s points. Although we cannot accept the amendments today, the underlying points she makes are valid and I will continue to reflect on them very carefully. On that basis, I commend the clauses and the schedule.

Schedule 10 agreed to.

Amendment 93 is well pitched. It is an important moment to raise this issue, which has come at other times in the proceedings. This is an area that people feel particularly strongly about, for obvious and good reasons. There is the perception that we are not getting this right at the moment and this amendment gives us the chance to do so. I hope that we hear some response from the Minister on how else it might be done.
Let me turn now to the evidence from Marie Curie. Its recent survey of carers during the pandemic found that: 76% said their loved ones did not get all the care and support they needed; 64% said they did not get the care and support they needed with pain management; and 61% said they did not get the care and support they needed with personal care. Clearly, things are challenging at the moment. Indeed, this has been a challenging period, and it will remain so for a significant period of time, as our case in Nottingham demonstrates. Within the next two decades, 100,000 more people will die each year. By 2040, the number of people needing palliative care is projected to be up by 42% because of our ageing population. Again, these are all figures from Marie Curie. It is a significantly growing issue.
In my four years in this place, I have championed the TUC’s Dying to Work campaign, which calls for employment rights to be frozen at the point of terminal diagnosis. This might not be quite the right vehicle for that, but it does enshrine, at the terrible point when a person receives that awful diagnosis, that at least a package of support kicks in for them. I am interested to hear from the Minister how, if not through this amendment, that might be done.

This clause could be called the “we told you so” clause. It could be, putting it more charitably, the “benefit of experience” clause. It could also be called the “baby with the bathwater” clause, because although the end of competitive tendering is to be welcomed, what is now lacking are the necessary safeguards to ensure that what follows is done to high standards and does not replace one flawed approach with another. That is important because as things stand the Bill just says that regulations may be made on procurement. That is just not good enough. I am referring to the need for us to be clearer and firm on this, because of a string of dodgy contracts issued during the pandemic under emergency powers.
I want to draw the Committee’s attention to a few of the key findings of the National Audit Office report on this matter to highlight that this is not just some flight of fancy, but a consistent characteristic of how the Government have operated during the past 18 months. The NAO found
They then compounded that error by failing to
Those are not minor issues; they are fundamentals that go to the heart of what we want to see from the Government. We want higher standards of probity; we want the Government to be free of accusations of cronyism; we want to ensure transparency; and we want to ensure value for money. I would like to think that all Members would support such aims, which is why they ought to support our amendments.
Amendment 99 sets a very clear baseline that no contract under this clause can be awarded to anyone
As so many said then and say now, there is no evidence that competition among providers of healthcare in the sense of a market has had any benefits. The requirements for a market function simply do not apply to healthcare. As was pointed out a decade ago, competition for services, as opposed to buying consumables such as tomato ketchup or cream pies, requires at least three things: an ability to specify in some kind of contractual way what exactly is being purchased; existing multiple providers of the service so described who are willing to sell it; and, crucially for healthcare, the service has to have high independence from other services, so that any failures have minimal impact.
There were some interesting contributions from witnesses in our evidence sessions on the benefits or otherwise of the 2012 regime. Saffron Cordery of NHS Providers said:
The attempt to drive a market into our NHS was perhaps the worst policy mistake of the current era, yet the warnings were all there. They were just brushed aside by a determined coalition Government. I am tempted to say that the Minister should listen to us this time, even if his predecessors did not a decade ago. The healthcare system with the highest level of market design is in the USA. It is also the worst-performing and the most expensive. The US may have some of the very best healthcare, but it is for a very, very tiny minority, and the price for that is paid by everyone else. Why would we want to emulate the worst?
We do not shed a tear for the end of this era. We welcome the new era of provider selection. The provider selection regime comes not from the Bill, but from an NHS England document that is mostly benign, but does give scope for improvement. We will, of course, need the Minister’s views, because the regime will be defined in regulations, and any guidance issued by NHS England will, as usual, require the Secretary of State’s approval.
The NHS provider selection regime proposal allowed for three scenarios, only one of which leads to a competitive procurement. One allows for the continuation of existing NHS arrangements, and the expectation is that that will be by far the most common route; we certainly hope that is the case. The second allows for a new or changed service to be placed with a provider, without any competitive tendering where there is only one possible viable supplier. The third scenario is the competitive tendering process. As ever, that is where the devil will be in the detail and where there is perhaps a requirement for the Minister to address some well-articulated fears.
Of interest is the proposal that the regime would be bespoke and would sit outside any formal Government procurement rules. Can the Minister confirm that my understanding of that is correct? If it is, perhaps we could call these the Argar accords. It is also contended that the NHS bespoke approach would make it impossible to include the NHS in any trade agreements; at least, that is what is claimed in the NHS document, which does not appear in this Bill. Again, if the Minister can confirm that, that would be welcome.
The old claim was that we could not protect our NHS because of the nasty EU being in the way. Now that we are no longer in the EU, we can have whatever procurement rules we want. If we want the NHS to be the preferred provider, that is fine. However, it is worth noting that Scotland rejected any suggestion that the EU was some kind of obstacle to a bespoke procurement regime a long time ago—the EU appeared to agree, or at least it did nothing to stop Scotland doing what it did. Like so many things that originated from the EU, the rules are quoted in support or against something only when that coincides with a Government position.
We hope that the brave new world that we are in means that the NHS can be protected from trade agreements and rules imposed from outside the country. It also needs to be protected from the Government themselves and the newly emerging fashion for cronyism and the awarding of contracts to friends and family, without proper process. If the NHS is going to award contracts for services funded from the NHS to non-NHS bodies, there will have to be a far more robust system than we the one have at the moment, not a weaker system. The best guarantee of that is enforceable rules, backed by full openness and transparency.
Our approach is straightforward and summarised in a few principles that need to be applied. We hope that this discussion and the amendments will assist the Minister and the Secretary of State in coming up with an eventual regime that works for the public and patients, and not for private interests.
We support the public NHS—an NHS where the services required are predominately provided by the NHS or other public bodies. We believe that any lack of capacity in the NHS to deliver should be addressed by investments, not by short-term cuts and contracts with private providers. There have been various pieces of analysis of the level of private provision in clinical services in the NHS, which some put at around 25%. A better analysis would be of value, and we ask the Minister to commit to undertaking some kind of impact assessment on the level of private provision two years, say, after this Bill becomes an Act—probably just in time for the next reorganisation.
Some think-tanks have urged caution, in that they would not like the NHS to be an monopoly supplier in a manner that curtailed innovation or the spread of best practice. That is a legitimate issue, and there needs to be some consideration, as with the introduction of the wonderful best-value regime 20 years ago, of how best to keep the service under review and to encourage innovation.
We dispute, as others did in 2011, that the private sector somehow has a magic that it brings to the table. Most of our private providers now get their income by supplying the NHS, using NHS staff and working to NHS standards—hopefully at NHS prices. That makes very little sense in terms of where the innovation and magic comes in. The only innovation would be an increase in private investors’ profits. So we do not think that is the route we should be going down in terms of provision. We would argue for an increase in NHS capacity, so that there is no need for reliance on the private sector.
Private providers should provide private health care. As we have seen in times of major need, they might also have to assist the NHS with additional capacity. I have sent the Minister many written questions about the private sector assistance provided during the pandemic, but I do not believe—he will correct me if I am wrong—we have ever got to the bottom of how many procedures were performed on NHS patients by the private sector in that time. As we know, very large contracts were handed out, and it is difficult to see exactly what has been received for them, so we do not know whether value for money was achieved and we cannot ascertain the average cost of each procedure. I am sure the Minister would like to be reassured that best value was achieved. Even if he is not interested in that, the Opposition certainly are. Will he update us on where the investigations are up to on that?
We suggest an approach rather like the preferred provider approach from 2010, where the NHS provides a service unless there is a good reason why that should not be the case. That appears to have caused no problems at all in Scotland or Wales, which went that way many years ago. However, all services should be reviewed so that poor service is not tolerated just because it is publicly provided. Good performance management and early intervention and support should still be the recourse when any public service is beginning to become unsatisfactory. The answer is not to find a private provider to take it over.
This is a simple enough idea. Core NHS services—clinical services and those associated with them—defined in clause 15 should be provided in every area by the NHS itself. They should not be outsourced or privatised. If a service is performing poorly, it should be supported and improved, not sold off to a for-profit alternative that promises the world and delivers very little.
It is important to note that new clause 12 does not provide for goods and services. The NHS does not have to do its own construction, but in-house maintenance and construction might be cheaper than paying someone £200 to change a lightbulb, as we have seen in some of the private finance initiative contracts. The NHS does not have to build its own servers or manufacture its own personal protective equipment, but Northumbria Healthcare NHS Foundation Trust used local businesses to produce PPE. The NHS does not produce drugs, but Colchester has its own production unit for some short-life products. However, we should not let those examples distract us from the core argument about what the NHS should do and what it might do.
Innovation, service redesign and new care pathways should come from within the NHS. The idea of putting out a tender for innovative solutions has failed totally on at least three procurements: cancer and end-of-life care in Staffordshire; the collapse of the £750 million Cambridgeshire older people’s services contract eight months into a five-year term, which was also the subject of a National Audit Office report; and, of course, Circle at Hinchingbrooke. That NHS hospital, which had struggled for many years, was run by Circle. It was claimed that that was a great step forward—up to the point when it all went wrong, Circle walked away and the NHS had to step back in. We have had numerous failure regimes that have tried to find ways to improve NHS performance, but none was based on the new logic of collaboration and competition across the patch.
We have also had competition for the whole market. We saw Virgin awarded a 10-year contract to deliver a whole range of community care services in a defined area, which turned supposed competition into another form of monopoly. That was the worst of all words, and that is where change is vital. If the NHS cannot outperform Virgin Care over any period of time—let alone 10 years—something is very wrong and needs fixing. That might be through investment, better management or more intelligent commissioning, but that must be the preferred approach.
We have also seen the wholesale outsourcing of services to the likes of Serco and Group 4 in areas such as ambulance patient transport and a lot of cleaning, catering and cooking. Again, the Health Service Journal has many stories about what goes wrong there, such as the Coperforma contract for an ambulance service based in a barn that failed to get its patients to critical appointments. We need to see an end to the dodgy subcontractors that undermine proper scrutiny and decent terms and conditions.
The preferred provider is therefore the right approach. It does not rule out alternative providers; it just says what our preferred solution is. That does not mean a free pass in all NHS trusts for all services—they should always be under appropriate performance management and review—but occasionally a provider may wish to exit from some service. Equally, commissioners who channel the money to the trusts have to monitor delivery against requirements and will flag up early any concerns.
Where a service cannot be provided by a public body because the capability or capacity is not there, or could not be available soon enough, there has to be an option to go beyond the NHS itself—it may also be that an existing NHS provider has been shown to be unable, despite support, to provide what is needed. That has always been the case and some services have been provided by the private sector, for well-established reasons.
We should give proper consideration here to the huge contribution made to the NHS by the many small, and a couple of larger, voluntary and social enterprise organisations. We would like to see in the new regime an explicit statement about the value of the third sector. There should be a specific process that allows not just for grant funding of the voluntary and social enterprise partnerships, below some sensible threshold, without any complex onerous requirements being applied.
If a contract was to be awarded to a third sector organisation—again, below a sensible threshold—that could be done without full competitive tendering. When we get to larger-value contracts, we are then dealing with large third sector bodies and they cannot be exempted from proper scrutiny and should not be treated differently from a private organisation, except in so far as social value can be part of the assessment of the bid. Does the Minister accept that there is an argument for some special consideration and possible encouragement for the third sector?
More generally, if a proposed service has some features that require a provider other than the NHS, it is possible that only one provider can meet the requirements and so a competitive process is pointless. If this route is decided uon, the commissioner involved has to publish the evidence that justifies the decision. But again, no competitive tendering would be required or indeed helpful, so some other form of rigour, perhaps with some external scrutiny, ought to be included. So the third way is the one where tendering comes in.
In such cases, there has to be a rigorous regime, at least as good as the public contract regulations—not only to protect the NHS, but to protect bidders from any unfair award. A level playing field should apply to all. Can the Minster confirm for the record that no contract above a reasonable threshold that is to be funded from the NHS will be awarded to any non-NHS body without a proper open and transparent process, which must include publishing the proposal to do this and allowing for representations about the intention?
What we absolutely cannot have is anything like the suggestion being made by, among others, the British Medical Association: that contracts will be awarded without process, as we seen in the past 18 months. In this case, a full competitive tendering process should be used that is at least as robust and fair as the public contracts regulations. The only thing that needs to go beyond that is more clarity about openness and transparency. We start from the principle that everything is in the public domain; if a provider does not like that requirement, it is free not to bid for the contract.
On the actual tender evaluation process, the rigour of the public contract regulations is invaluable. The criteria for awards that used to be the most economically advantageous had a lot going for them, so long as the economic value had the wider context and social values intertwined. Does the Minister agree that more thought needs to go into the provider selection regime to allow for better decision making?
All aspects of provider selection, as well as provider performance management, should be open and transparent and not subject to any commercially confidential opt-outs. Well-established rules about what could be disclosed and when in any contracting are usually ignored by secretive NHS organisations, as we have found on various occasions in the past few years. It is also noted that the proposals in the Bill only refer to “clinical” services; we wish to see various scope extensions. Sara Gorton of Unison talked in her evidence about
That does leave us with the “any qualified provider” strand of procurement to consider, which has been applied to many out-of-hospital services. It is assumed that these are or could be in scope, but we hope the Minister will provide clarity when he responds. Will “any qualified provider” still apply and how does it fit into and sit alongside the new provider selection regime?
One major requirement from us is extending the scope further than the Bill to include those services such as cleaning, catering and portering, which are often referred to as soft facilities management and not classed as clinical, but which have a significant impact on patient experience. We often forget that without the porters, the cleaners and the caterers, none of the frontline patient experience is really possible. They are as much NHS heroes as the doctors, nurses and paramedics. Sadly, that is not always recognised. One of the less commendable NHS activities in recent years has been the attempt to outsource non-clinical services, usually for tax advantages. We support the one-team approach referred to by Unison, not the fragmentation and denigration of parts of the team. Will the Minister be positively inclined to include those services in regulations?
We should also be careful about packaging up services into a product that forces a tendering process because it is not clinical. Does the Minister agree that a service that includes any clinical elements must be regarded as in scope? As I understand it, there is a danger at the moment that a contract that was in fact 95% clinical could still be covered on the basis that only 5% of it was non-clinical. That certainly would not be in keeping with the spirit of what we think the Bill should try to achieve. If we cannot persuade the Minister to extend the scope to cover non-clinical services, there ought to be at least some protection for NHS staff.
We have seen numerous examples over the last decade of back office or other non-clinical services being outsourced. Trusts that do that sometimes refuse to disclose their business case and fail to honour the requirement for a level playing field by excluding the staff from making their own bids to deliver the services, and also by excluding solutions such as shared services. That is an abuse of the proper procurement process and is a loophole that should be closed, even if the basic problem is not addressed. Will the Minister agree that NHS procurements outside the scope of the bespoke provider selection regime ought to also be looked at? In any event, it begs the question of how services out of scope will be dealt with. It would be useful to hear from the Minister about what assessment he has made of how many services would be considered out of scope in the Bill.
Finally, the scope should be extended to cover any contracts procured by the Department itself. I do not want to add to the Minister’s workload. If he had accepted our arguments, that would have been achieved. The standards on procurement need to apply across the board. Because the Department’s recent record is poor, that needs tackling as well. I will not repeat the arguments about that, but does the Minister accept that a standard should apply to the Department, too? Can he tell us exactly what regime covers the Department and its procurement?
Our proposed new clause 12 makes it absolutely explicit that the NHS is the preferred provider. Amendment 96 also confirms that and sets what we consider to be an essential de minimis requirement for the process, as well as requiring NHS England and each ICB to report each year on the proportion of contracts issued to each different type of provider, together with a plan every three years on how they intend to reduce reliance on private providers and therefore increase NHS capacity. Finally, paragraph (d) of amendment 96 also requires ICBs to be totally transparent about the awarding of such contracts. We think those are the minimum requirements and essential ingredients moving forward.
I end with Dr Chaand Nagpaul’s evidence to the Committee on why this matter is important. He said:
He also said:
A little later, he added that
That is quite a long quote, but it is an important one because it encapsulates perfectly what we are trying to achieve with these amendments and the new clause.

Amendment proposed: 99, in clause 68, page 61, line 35, at end insert—
Amendment proposed: 96, in clause 68, page 62, line 1, at end insert—
Question proposed, That the clause stand part of the Bill.

The NHS has told us that it is wasting precious resources on unnecessary tendering processes. It has told us of the frustration about the time and bureaucracy involved in procuring services or infrastructure. Therefore, we believe it is crucial to replace those processes with a new, more flexible system, to ensure that competitive tendering takes places only where it is in the best interests of patients and the taxpayer. Without this clause, the existing procurement processes would continue to apply to the NHS.
Question put and agreed to.
Clause 69 accordingly ordered to stand part of the Bill.
Question proposed, That the clause stand part of the Bill.

Of course, if those people stay in hospital, they get some sort of support and care, and throughout the winter, families will not support the discharge of their loved ones. That is a difficult place to be. I have seen, as we all have, situations in which the safest thing for a person to do is to remain in hospital, even if they do not need acute care. However, that is no place for anyone to be if they do not need such care, and we would not want to get to that place. If the Minister does not accept the amendment, he would be wise to use the recess, before the Bill goes to the other place, to put in greater provisions in this area. If we all accept that moving out of hospital is a good thing, many more safeguards must be put in place to support families who find themselves becoming carers overnight, as well as people who have nobody to care for them.

Question proposed, That the clause stand part of the Bill.

Adjourned till Tuesday 19 October at twenty-five minutes past Nine o’clock.
Written evidence reported to the HouseHCB82 SeeAbility
HCB83 Ealing Reclaim Social Care Action Group (ERSCAG)