After all the months of debate, does the health bill actually stack up in law?

After all the months of tortuous debate, does the health and social care bill stack up in law, asks Jos Bell?

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Just a few days after its passing, the head-on battle of risk between the health and social care bill protagonists is now lined up to either exploit or challenge the contrivances of the resulting Act.

The fact is, far from being a bright and shiny gold star piece of legislation, the new Act is already tarnished – it continually contradicts the roles of integration and competition, fails to safeguard against conflict of interest or protect the patient voice, which makes it a gallows-way catastrophe in the making for those caught up within it.

David-Cameron-smashing-up-the-NHSBut is there a chance some of the worst aspects of the bill (for patients and staff) can be minimised in law?

Whilst 99% of the focus has been on the world in Westminster, in rural Gloucestershire, a test case campaign to challenge the establishment of a social enterprise – namely Gloucestershire Care Services Community Interest Company – has been fought and won by 76 year old Michael Lloyd, working with ‘a cross party coalition of anti-cuts campaigners’.

They argued the local PCT had acted unlawfully in planning to hand over management of nine county hospitals and 3,000 community health staff in what would have been the biggest planned transfer (so far) to a social enterprise in the country.

In the end, NHS Gloucestershire chose to settle rather than meet the costs of the High Court, which rather indicates they expected to lose.

Unlike other ‘Stop the Bill’ campaigns, local news coverage has been regular and detailed. Perhaps the self-stated cross party element helped?

A High Court legal case certainly makes for more interesting copy than petitioning – albeit the local BBC has reported the outcome in terms of the cost to taxpayers in fighting the case (£137,000), rather than as a win for preserving the NHS and indeed an overall evidenced cost saving to the public.


See also:

Rotten to the core: The big Tory money that gave life to the Health and Social Care Act 27 Mar 2012

The bright red risks of Lansley’s horror bill: Lack of planning, hiked costs, threats galore 27 Mar 2012

‘Cash for Cameron’: Minister quizzed on whether health bill was bought 26 Mar 2012

Last Post for the NHS? 24 Mar 2012

Lib Dems must ask themselves: Do they really want to be the people that killed the NHS? 16 Mar 2012


As Caroline Molloy, from the SATC campaign group – incorporating Keep our Gloucester NHS Public – told Left Foot Forward:

“The South West is leading the charge to social enterprise – with 15,000 of 25,000 staff in the UK, likely to be affected by reduced terms and conditions, coming from the region.”

Crucially, NHS Gloucestershire had not put this work out to tender, nor explored in-house/NHS options which, campaigners say, would have made tendering unnecessary in the first place – which is the crucial point.

The PCT avoided going public until they felt they could present a fait accompli, shoddily developed at variance with an ethical social enterprise model, lacking in accountability and transparency – albeit, even one that presents a dubious model for the delivery of such provision.

This approach, they maintained, offered the best means of protecting the services in question from the private sector. However, far from safeguarding patients, it emerged in court the PCT failed to point out a raft of concurrent deficits which would result.

A KPMG options appraisal – stuffed down the back of a drawer – was subject to forced disclosure in court and demonstrated that only reduced staff terms and conditions upon the service leaving the NHS, would offer a key cost saving – although at the same time failing to disclose any cost gain would be significantly reduced by the new social enterprise VAT bill (notably also a multiple of the court costs), which would not have applied under the internal NHS model.

Far from empowering staff and benefiting patients, the approach taken has been likened to “a management buyout without the cash” by a senior member of the Co-operative movement.

The court proceedings also revealed it was apparently made clear to Gloucs’ existing acute trust they would be perceived as a competitor to the PCT, and would not be considered for this reason, which of course made no legal sense whatsoever.

Meanwhile, the local Conservative-led county council, with their own stake in the re-organisation as social care commissioners, sent out correspondence maintaining there was no preferred option, but which was afterwards dramatically contradicted by papers disclosed in court, revealing that the joint NHS body proposal was simply refused point blank without any transparency or quantifiable reason.

If, just as with the dismantling of the PCTs, all this smacks of jumping the gun in advance of the passing of legislation, we only have to cross reference the Lansley edict of July 2011, that £1 billion of NHS services would be opened up to competition.

Even before this point, the local Tories were said to be ‘darkly hinting’ they were “legally obliged to go to competitive tender”, falsely stating this huge change was “compulsory under pre-existing legislation” – clearly trying to avoid any political flack from the tsunamis of competitive chaos resulting from the health and social care bill, whilst waving Andrew Lansley’s ‘do it quick never mind the risk’ stick, the underbelly of which we highlighted last week on Left Foot Forward.

Campaigners have held firm in their belief the real agenda is that of undermining the NHS. Add to that the Shadow Community Interest Company Board being in receipt of what they refer to as “6 figure sums for seemingly nothing more than an additional tier of management which appears to have no clear remit”, then the phrase Nicholson Challenge efficiency savings offers nothing but a hollow ring.

Cross reference to the Hull example, where aside from the one-off transfer costs, when NHS Hull morphed into a social enterprise, they found the need to build an entire new wing to house the extra administrative staff – those who had been ‘cut loose’ from the NHS – because the new enterprises are required to have their own duplicate back office functions where previously they could draw on NHS central resources.

Empty piggy banks all round?

The surprise factor in the Gloucestershire case comes from that fact QC David Lock and solicitors Leigh, Day & Co., who took on the litigation, succeeded on the point that as long as matters are kept within the NHS there is no contract on which EU procurement law ‘actually bites’, which suggests that where a PCT does not enter into tendering, said law is inapplicable.

Whilst in one way it states the obvious – this result at the High Court also begs the question: now the Bill is passed, exactly how far are our current NHS providers obliged to put existing services out to competitive tender?

We know hospitals now have up to 49% PPC – should they choose to implement it, but in terms of CCGs and primary care provision, what precisely is the maximum and what is the minimum?

Says Molloy:

“We know this is more a huge shove than a nudge, but with a fuzzy law, we have found this ideological force can be legally resisted.”

The Gloucestershire example seems to demonstrate there are more angles to take than even the government themselves had considered in their own search for profiteering loopholes.

This is yet another curious twist in the catalogue of contradictions which will be enmeshed in the Act. The PCT in Gloucestershire has now agreed to consult on a wider range of options – including entering into an arrangement with an NHS Trust and advertise for expressions of interest – however this does beg another question: what will they do if they receive a salami-slicing private sector bid?

Instead of hooking into the inevitable tendering cavalcade, can CCGs and rump PCTs simply mitigate the risk by retaining services with existing NHS provision?

The Zack Cooper research undertaken in a possibly dubious corner of the LSE – which the government repeatedly uses as ‘evidence’ for the introduction of free market competition – has been touted as valid on the paper-thin premise that, as former health secretary Frank Dobson said during the government’s four-hour/364-amendment guillotine debate on the day the bill so tragically passed into law:

“[Where] heart attack outcomes improved by 7% where competition was present, [the same findings could be translated into provision] across the board.”

Patently this is a nonsensical analogy which has been speedily shot down in flames by a raft of considerably more qualified experts. However we now have a law which is entangled with this high risk academic error. Reference to the US demonstrates the key funding issue is the long term extraction of profit, which in turn raises costs as patients find to their cost.

How straightforward will it be to resist the advances of a marauding private sector to bring forth the same outcome as the non-consulted social enterprise proposal? What would be the private sector response? What will be the response of commissioning bodies who are faced with legal action from both sides? Does this case indeed offer a way for commissioners to block EU Competition Law as long as services are retained within the NHS?

Will it really be possible, as Professor Allyson Pollock advises, to “stop all commercial contracts”, citing the danger of the government continuing to claim commercial confidentiality trumps the public’s right to know about contract decisions.

Clearly the Department of Health will use the Freedom of Information Act as it suits them (in this case Section 43) – even when it flies in the face of their own minister’s Liberal Democrat conference resolution. This is the world which our NHS now inhabits.

The Gloucester campaigners are certainly on alert to see whether there is a demonstrable commitment to co-operating with the rest of the NHS and “keep things in the NHS family”, with the stated assurance that if the PCT fails to demonstrate such commitment, then further legal and political challenges will result.

The High Court 4 Point Order which they obtained would form the basis of any such action; namely:

The PCT is legally obliged to:

1). Involve public;

2). Consider NHS options;

3). Invite ‘expressions of interest’ (in bidding) – crucially, not the same as ‘inviting bids’; before

4). Deciding what to do, which may or may not involve ‘inviting bids’, depending on whether NHS bodies come forward, which would mean they didn’t need to go to stage of open tender, i.e. inviting bids.

This is not a minor distinction, and to prejudge it breaches the order.

In the midst of this fast changing political and public service landscape – aside from the overall risk level, per se – the key question must be: after all the months of tortuous debate, does the bill stack up in law? Our arrogant, out-of-touch government, believing themselves to be above the law, have not perhaps taken much account of this.

However, those who have to enact the resultant legislation are largely not cut from the same self-serving cloth.

Now the Gloucestershire test case offers a point of reference for effective legal challenge. It will be interesting to see exactly who sees this emergency flare and explores its capacity to stage an effective rescue. It’s lifeboats time folks – let’s just make sure they are all used to the max.

Meanwhile, there is still time to complain to the BBC about their woeful lack of coverage on the health and social care bill. You may find reference to sections 3 (accuracy ), 4 (impartiality), 5 (audience expectations and mandatory referrals) of their own editorial guidelines to be a useful point of reference.


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54 Responses to “After all the months of debate, does the health bill actually stack up in law?”

  1. SocialistProductions

    "@carolinejmolloy:good in depth blog piece about campaign to keep NHS public, & the wider politics, please RT!"

  2. Monika Schwartz

    "@carolinejmolloy:good in depth blog piece about campaign to keep NHS public, & the wider politics, please RT!"

  3. declan booth

    Frm earlier 2day: After all the months of debate, does the health bill actually stack up in law? by @Jos21 #NHS

  4. Mike Wiltshire

    Frm earlier 2day: After all the months of debate, does the health bill actually stack up in law? by @Jos21 #NHS

  5. greg wait

    @LabourLordsUK >> NHS test case in the High Court – still time for a rescue?!!

Comments are closed.