Health and Social Care Bill

My Lords, the proposal that we have made in the Bill is for the Co-operation and Competition Panel to be part of new Monitor. If the noble Baroness's amendment runs a coach and horses through those new arrangements, they are clearly very seriously destabilised. Part 3 provides for a comprehensive system of regulation, covering all providers of NHS services and so protecting all patients whenever they use the NHS. The amendment would mean that patients using services supplied by the independent sector, social enterprises or charities would continue to be denied those protections. The protections would not, for example, apply to the 500,000 people in Hull and the East Riding of Yorkshire who receive NHS services from the City Health Care Partnership, a community interest company established under the previous Administration. The partnership offers a range of community-based treatments as well as early interventions to help minimise the need for acute care in hospital and promote healthy lifestyles. Monitor does not currently regulate the partnership, because it is a social enterprise. Part 3 will extend equivalent safeguards to protect patients' interests, irrespective of who provides their treatment. That is a huge step forward. For the first time, there would be regulation to protect patients from the risk that poor management decisions may put essential NHS facilities and continuity of services at risk. By contrast, the amendment would perpetuate the situation whereby such protection exists only where patients receive essential services from foundation trusts. This would not recognise the nature of our NHS as a comprehensive service delivered by a diverse range of providers. As well as providing for comprehensive regulation, Part 3 provides for effective regulation that will benefit patients by better enabling positive change. The noble Baroness mentioned the Nicholson challenge. Change in service delivery will play a vital role in achieving the Nicholson challenge of realising up to £20 billion of recurrent productivity improvements in the NHS, for example by providing older people and those with long-term conditions with more integrated care outside hospitals. Part 3 will enable such change by empowering clinical commissioners to decide how best to improve services and when, where or, indeed, if to use competition as a means to that end. The amendment would leave no provision for sector-specific rules of this kind. Let me explain what that would mean. It would mean that clinical commissioners would face continuing risk of legal challenge whenever they decided to secure services without competition. It takes little imagination to see how that would stifle enthusiasm for clinical commissioning and potentially prevent the sort of innovative, integrated solutions needed to meet the demands of caring for an ageing population. Part 3 would also enhance the NHS's ability to deliver positive change by improving the current pricing system. Improving the pricing system is important for three reasons: to strengthen incentives for improvement, to enable integration and to remove incentives for cherry-picking. Part 3 will establish a transparent, legally enforceable pricing system that rewards providers for treating NHS patients. Money will follow the patient, and providers will be paid a fair price for treating complex cases. Again, this is central to the Nicholson challenge. Reform of the tariff in a systematic way will encourage service redesign and better integration. The current system, under Department of Health control, has, I am afraid, often failed to achieve these aims. For example, although foundation trusts should have been paid for every NHS patient treated, that has not always been happening. There have been unacceptable levels of cross-subsidy, and prices for complex cases have sometimes been woefully inadequate. These and other problems have been highlighted by the royal colleges and are well documented, including in the recent report by PricewaterhouseCoopers. However these are also complex issues that will take time to solve, and as the noble Baroness, Lady Thornton, herself has said, it has taken time and is likely to take time. Therefore time is of the essence. The NHS cannot afford further delays. For all of these reasons, there is a clear, compelling and urgent case for moving forward with Part 3 of the Bill. I hope that I have been able to able reassure noble Lords exactly why it is that we need it. Let me return for a moment to the question that the noble Baroness is not asking us—how can Part 3 be improved? I should like to pay tribute to all noble Lords who have played such a constructive role in asking this particular question over the past six months: for example, my noble friend Lord Clement-Jones, who has helped us improve provisions relating to competition; the noble Baroness, Lady Murphy, who made proposals about the list of matters that Monitor must have regard to; my noble friends Lord Marks and Lady Williams for their focus on Monitor's accountability and the role of the Secretary of State; the noble Baroness, Lady Finlay, who has been a tireless advocate for greater provisions relating to integration; and the noble Lord, Lord Warner, with his improvements to the pre-failure regime. All of these amendments have improved the Bill, and it once again shows the range of expertise within your Lordships' House. Given the scrutiny that Part 3 has had and the improvements that have been made, these amendments are not only unnecessary but, I would also submit, deeply damaging. They would harm patients' interests, denying them the benefits and protections that a comprehensive, purposeful and effective system of regulation will bring. Key providers of essential NHS services would not be subject to sufficient regulation. To sum up, pricing would not be reformed to address the flaws in the current system. The OFT and the Competition Commission would have sole jurisdiction over competition law. There would be no sector-specific legislation to give commissioners legal clarity on securing services without competition. This would mean there was no sector-specific regime for complaints and the only way to challenge decisions would be through the courts, creating a veritable lawyer's charter, something I think we would all wish to avoid. These amendments are highly misguided and I urge the noble Baroness not to press them.