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Key dangers in the Health and Social Care bill

How the bill opens the NHS up to privatisation and closes its democratic structures down.

In this post, Richard Blogger outlines some of the key problems and threats in Andrew Lansley's bill.

Ministerial responsibility

Clause 1 has had a lot of attention.

This changes the Secretary of State for Health’s responsibility for the NHS from the 2006 wording of “must provide or secure the provision of services” to “secure that services are provided”.

The change from the active to passive is significant because it shows that Lansley no longer wants to be involved in the NHS. This derogation of responsibility infects the whole bill, with responsibilities being handed over to either the new unelected, unaccountable super-quango, the NHS Commissioning Board, or to the new Clinical Commissioning Groups.

The CCGs will get the Secretary of State’s power (clause 12) to decide which services the NHS will pay for (and consequently, which services the NHS will not pay for).

They will also have the power to impose charges (clause 25 adds a new clause, 14ZE, into the 2006 Act). If you object to any of this you will not be able to complain to your MP because CCGs are autonomous and not accountable to the Secretary of State. Clause 4 mandates that all the organisations in the NHS are similarly “autonomous”.

In simple terms, commissioning is the purchasing of healthcare on behalf of patients.

The bill abolishes Primary Care Trusts and Strategic Health Authorities (clauses 32 and 33) and gives the responsibilities they had for commissioning to the NHSCB, and local CCGs (clauses 24 and 25). Roughly a quarter of the commissioning that PCTs carry out locally will now be carried out by the NHSCB, which means that local decisionmaking has been moved to a national body.

The majority of hospital and community health services will be commissioned by CCGs.

The Future Forum says that CCGs should have a statutory duty to do this and not delegate it, but a report leaked last year says that the government expects all the CCGs to delegate the work to private companies called Commissioning Support Organisations and that the remaining NHS commissioners should form commercial companies which will be privatised by 2016.

These companies will be designing how care is delivered but there will be no democratic control over them. There is no mention of CSOs in the bill.

Foundation Trusts
NHS Trusts will be abolished in 2014 (clause 178), so all hospital and mental health trusts will have to become Foundation Trusts. One criteria of becoming an FT is financial governance and up to 20 FTs either have such large PFI repayments, or are in such debt, that they will not achieve FT status by the deadline.

Since there is no alternative to being an FT, this means these hospitals will have the option of being taken over by an existing FT, a management privatisation deal like at Hinchingbrooke, or closure.

FTs are autonomous, which means that the government has no responsibility for capital funding, so FTs are expected to fund new building through bank loans (clause 162(2) and 162(8)). The bill removes the so-called “asset lock” (clause 162(7)) so that if an FT defaults on its loans a bank could repossess part of the hospital.

Perhaps the most contentious clause covering FTs is the repeal of the so-called private patient income cap (clause 164(1)) that restricted FT private income to the proportion of the private income in 2003. The bill says that FT income from treating NHS patients must be more than the income from private sources (clause 163(1)).

This is what people are referring to when they talk about FTs being able to generate 49% of their income from private patients. However, it’s not 49% - it is one penny less than 50%.

Any Qualified Provider
Clause 1 gives a clue about the provision of NHS services: it removes the responsibility of the Secretary of State for the provision of services: NHS hospitals will be no different to any other providers.

Part 3 of the bill (clauses 82 to 114) creates the licensing regime that treats private hospitals the same as NHS hospitals and says that any licensed provider (including FTs) will be paid the same rate for NHS care. The unelected, unaccountable quango, Monitor, issues and revokes licences to provide care paid by the NHS.

The introduction of more private providers through AQP may make the NHS liable to EU competition law. However - until there is a court case, we don’t know for sure. We do know that the bill says (clause 78) that the Competition Commission will review the competitiveness of all NHS providers before 2019 and the NHSCB will impose their recommendations.

This will mean yet another reorganisation sometime after 2019, as large FTs, deemed anti-competitive, are broken up. The bill also says that the Commission must review the NHS every seven years. So rather than stopping “top-down re-organisations” as promised in the Coalition Agreement, the bill promises competition-driven re-organisations every seven years.

At the moment Monitor regulates FTs: it issues warnings when an FT has financial issues, or fails to achieve its NHS targets.

Under the bill, Monitor will be given sweeping powers. It will have the power to licence providers and to revoke their licence. It will also have the power to set the price that providers are paid (Part 3, clauses 115 to 126). This is intended to standardise the price of all services across England for all providers. Providers and commissioners (the CCGs) can complain against the price and the ultimate arbiter in such a case is the Competitions Commission who can veto a price change proposed by Monitor.

The government believes in competition and private provision.

The problem is that mitigating against issues like Southern Cross (where a failing private provider put 30,000 patients at risk) has produced a huge bureaucratic mess of regulation in the bill that pleases no one. Recent amendments mean that Monitor must enable services to be provided “in an integrated way” (clause 61(4)), but at the same time it has to prevent “anti-competitive behaviour” (clause 61(3)).

This confliction of interest has resulted in the Chief Executive of Monitor commenting that the organisation may have to have two separate boards. Yet another mess.

Public Health
Public health services will be moved to local authorities (clause 11). There are some people who say public health is as much about local authority responsibilities like housing as it is about medicine and so are pleased with this.

However, there are others who say that it will marginalise public health professionals and their work. One thing is clear, the government is fragmenting services like vaccination, health promotion and ill-health prevention by spreading the responsibilities between the NHSCB and local authorities rather than putting them in one body.

After the hand-picked Future Forum expressed concerns over collaboration the government agreed to the creation of Clinical Senates and to the continuance of existing Clinical Networks.

These two join the new Health and Wellbeing Boards, created to oversee the provision of healthcare and to promote integration (clauses 193 to 198).

The government says that the new NHS will have less bureaucracy, but with these new bodies, and the NHSCB and the CSOs, there are actually more layers of bureaucracy than the relatively simple structure of SHAs and PCTs we had before. The bill says that it increases the “democratic legitimacy” of the NHS, but it creates not one single new elected post, and the creation of the unelected, unaccountable super-quangos, the NHSCB and Monitor, mean that critical decision making is moved further from patients, and removes democratic control over these decisions.


Details of demonstration against the bill outside parliament today

Richard Blogger writes about the NHS and social policy at NHS Vault.


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