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Editor's blog Thursday 26 May 2011: Text of Labour's proposed amendments to the Health Bill

After the ‘pause’ – Labour’s alternative on the Health and Social Care Bill

David Cameron‟s Health and Social Care Bill is fundamentally flawed and needs to be radically rethought. The Prime Minister has promised to listen to the chorus of criticism and to make substantial changes.


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If he is true to his word and the Government brings amendments to fundamentally rewrite the Bill, then the House of Commons must be given the time to scrutinise these changes properly, not see them rushed through in a few hours of debate at Report Stage.

That is why Labour has tabled a motion to have the entire Bill recommitted to Committee Stage, so that any changes proposed by the Government can be properly examined. (1) This is a piece of Parliamentary procedure that has not been used in 11 years. We hope the Government will accept the constitutional case and support us.

Despite his bluster and Mr Muscle act, Nick Clegg has not set tough enough tests for the changes the Prime Minister needs to make to his Bill. The Deputy Prime Minister‟s concern is saving his party rather than safeguarding our NHS.

I have argued for some time that the Government must drop the Bill and make fundamental changes. However, to set out the sweep of the changes needed, and in anticipation of the Bill returning to the commons at Report Stage Labour has today tabled a series of amendments to make vital changes to the Bill and fix some of its key flaws. The House of Commons needs to be given the opportunity to debate and vote on these amendments.

Labour‟s amendments are set out on the following pages, along with explanations of each.

There are three major flaws in the Bill which need to be tackled:

Breaking up of the NHS
The Bill breaks a 63-year consensus that the Secretary of State should be responsible for delivery of the national health service, getting rid of duties that have been in legislation since 1946. It will be up to GP consortia, not the Secretary of State, to decide what constitutes the health service, and therefore what services you might be charged for. National patients‟ guarantees, and national standards of treatments overseen by NICE are being undermined. The Bill paves the way for a return to a postcode lottery, with greater variation, and polarisation in quality of and access to healthcare. The Bill must be changed to protect the 'N' in NHS. Nor will there be a cohesive and accountable local service. Local health systems, which depend on integration, will be broken up, fragmenting planning, commissioning and provider networks. Regional and local bodies responsible for needs assessment, prevention, planning, commissioning and coordinating all local services will be abolished, with nothing to replace them.

Ensuring patient and democratic accountability
The commissioning consortia currently lack any duty to be open and transparent, an impossible arrangement when they will be spending £80bn of public money. The consortia must also have proper democratic representation on their board, a voice for patients, and involve a wide range of clinicians, not just GPs.

Ref 1 - http://www.publications.parliament.uk/pa/cm/cmfbusi/c01.htm, motion no. 7.

This motion will be debated and voted on at the start of Report Stage of the Health and Social Care Bill.

Turning the NHS into a free market
The Bill turns the NHS into a market free for all, with economic regulation like that in the gas, water and electricity sectors. It moves the NHS away from a service built on the ethos of collaboration, with public accountability, to one based on full scale market competition. The Bill requires the new economic regulator, Monitor, to enforce the Competition Act. This Act is based on an EU treaty and is designed to prohibit cartels of builders or monopoly abuses by supermarkets and has never been applied to the NHS before. NHS hospitals will be treated like economic enterprises, and forced to abide by rules preventing anti-competitive behaviour. The ethos of the NHS, based on collaboration between providers, will be shattered.

Labour has being making these arguments since the autumn last year – in an opposition day debate in November 2010, in response to the publication of the Bill, and during the passage of the Bill through Parliament. Labour has tabled amendments to make these changes during committee stage, but they were rejected by the Government.

These same strong arguments that Labour has been making since the autumn have also been made in the last few months by the BMA, the Royal College of Nursing, patients‟ groups, GPs, health experts, peers on both sides of the House of Lords and finally by Liberal Democrat backbenchers.

John Healey MP, Shadow Secretary of State for Health, 26 May 2011

A: Breaking up of the NHS
The Role of the Secretary of State
1. Clause 1, page 2, line 4, leave out from first “in” to end of line 6 and insert –
“must provide or secure the provision of services in accordance with this Act.”.

The current Bill removes the duty on the Secretary of State, which has existed since the 1946 Act which established the NHS, to be responsible for the provision of the health service.

Amendment 1 reinstates this previous language. Only by the Secretary of State being responsible for the provision of the health service, can the entire operation of the NHS be accountable to parliament, and to the public, through the Secretary of State.

There must be no ambiguity over the role of the Secretary of State.

Consortia powers to charge for services

2. Leave out Clause 9.

3. Clause 22, page 32, line 28, at end insert –
“(1A) The Secretary of State must publish guidance to commissioning consortia about its exercise of powers under subsection (1), to which each commissioning consortia must have regard.”

4. Clause 19, page 20, line 39, at end insert –
“(1A) The Secretary of State must publish guidance to the Board, to which the Board must have regard, about the exercise of its powers under subsection (1).”

The Bill opens up the possibility of GP deciding which services locally are free and which services can be subject to a charge.

Along with Clause 1, Clause 9 of the current Bill fundamentally changes the role of the Secretary of State in relation to the NHS. It is currently up to the Secretary of State to define what health services constitute the NHS, and therefore legally have to be provided free of charge. Clause 9 of the Bill leaves it up to consortia to make this decision instead, paving the way for consortia to decide what services they want to charge for.

Amendment 2 returns this power to the Secretary of State, while amendments 3 and 4 institute guidance from the Secretary of State that consortia must abide by in raising additional income under the Health and Medicines Act 1988.

5. Clause 234, page 213, line 40, leave out “may” and insert “must”.

The Bill abolishes the existing National Institute for Health and Clinical Excellence, and replaces it with the National Institute for Health and Care Excellence (NICE). Part of the change included the removal of the duty for commissioners (currently Primary Care Trusts (PCTs), Strategic Health Authorities (SHAs) and the Secretary of State) to abide by guidance from NICE with respect to drugs and medical procedures.

There ought to be national standards of drug and procedure authorisation, and no postcode lottery in the treatments available in different parts of the country. Treatments that NICE deems are not cost-effective should not be available in one consortia but not in others.

Amendment 5 would require that regulations be set out for consortia to abide by NICE guidance.

SHA role in education and training of the workforce
6. Clause 28, page 46, line 38, at end insert –
“(3) This section comes into force on a date to be specified by order by the Secretary of State.
(4) The time specified in subsection (3) must be after such time as the Secretary of State is satisfied that the workforce education and training functions of Strategic Health Authorities are being fulfilled by another body.”

There is a gaping hole in the current legislation, with no national or regional mechanism to ensure the training and education of the future workforce. The Bill abolishes SHAs without specifying who will fulfil their current role to manage and plan education and training. The Government have already conceded that this is a hole in the Bill, and claimed they intend to bring new primary legislation in 2012, after the conclusion of the workforce consultation, to fill this gap.

Amendment 6 would delay the abolition of SHAs until successor bodies had taken over their functions for education and training of the workforce.

National workforce terms and conditions
7. Schedule 2, page 256, line 14, after “determine”, insert –
“having due regard to the NHS pay scales agreed following recommendations by the NHS Pay Review Body and the Doctors and Dentists Pay Review Body, or any successor bodies,”.

8. Schedule 2, page 256, line 16, after “determine”, insert –
“having due regard to agreements made by the NHS Staff Council.”

The Bill undermines the national standards of pay and conditions for the NHS workforce, by transferring huge numbers of NHS staff to newly created GP consortia, where they are not under the same pay agreements as existing PCT and SHA staff. Amendments 6 and 7 seek to ensure that any staff employed by consortia are covered by the same national pay bargaining agreements, and terms and conditions as current NHS staff.

B: Ensuring patient and democratic accountability

Commissioning consortia
9. Clause 19, page 27, line 18, at end insert –
“(ea) that the constitution contains provision for an executive board of the consortium, which must –
(i) meet in public,
(ii) publish agendas and minutes of its meetings,
(iii) include appropriate representation of a range of clinicians among its membership,
(iv) include appropriate local democratic representation among its membership, and
(v) include appropriate patient representation among its membership
(eb) that the area specified by the constitution contains a sufficiently large population for the consortium to be able to commission health services for that population effectively.”

10. Clause 22, page 31, line 12, leave out from “involved” to end of line 13, and insert –
“fully consulted –”

The Bill weakens the political accountability of the Secretary of State and blurs the responsibility for the provision of health care under the NHS, which is dealt with above. It also creates commissioning consortia as new bodies which are weak in terms of public governance.

Commissioning bodies are allocated tens of billions of pounds of public money. As the Bill currently stands they lack any kind of governance structure, including an executive board.

They have no democratic representation, no engagement of wider clinicians, no transparency, and no patient representation.

The power to determine how £80bn of public money is spent cannot be vested in a body which has no transparency or proper governance procedures specified.

Amendment 9 would require the NHS Commissioning Board, which has the power to authorise consortia, to determine whether the constitution of each consortium set up a board which was to meet in public, act transparently, and had sufficient democratic, clinical and patient representation. It would also require the Board to look at whether the consortium was large enough to commission properly, addressing fears that many consortia will be too small to commission effectively.

Amendment 10 increases the requirement on consortia to involve the public and patients in their decision making. Currently they are only required to provide the public information; the amendment would require consortia to consult fully with patients and the public.

Role for Health and Wellbeing Boards
11. Clause 22, page 34, leave out lines 41 and 42 and insert –
“(b) the consortium must provide information on its plan in response to the Health and Wellbeing board, and
(c) before submitting the plan to the National Commissioning Board, the Health and Wellbeing Board must obtain the consent of the Health and Wellbeing Board.”

The Bill creates Health and Wellbeing Boards but their only responsibility is to encourage joint working. Whilst they have a strategic role they have no powers to ensure the strategy is adhered to; it is not enough that the commissioners have to take the strategy into account.

The need for a population based Joint Strategic Needs Assessment and a Joint Wellbeing Strategy is well established and adds to the level of democratic accountability. Consortia under this Bill are devoid of any democratic representation, despite the Coalition Agreement pledge to have directly elected representatives of the boards of commissioning bodies. Health and Wellbeing Boards are more democratic bodies. If they are to be responsible for assessing the health needs of their population (the Joint Strategic Needs Assessment), and for writing a plan to deal with those needs (the Health and Wellbeing Strategy), they should have some say in how that plan is to be enacted. They should not be toothless talking shops.

Amendment 11 mandates that the relevant Health and Wellbeing Board have the power to sign off the consortium‟s commissioning plan.

GP Bonuses/ Conflicts of Interest
12. Clause 23, page 42, line 11, leave out from line 11 to line 3 on page 43.

13. Schedule 2, page 255, line 30, at end insert –
“(3) The constitution must make provision for dealing with any other personal and prejudicial interests of members or employees.”

14. Clause 22, page 31 line 5, at end insert –
“14OA Duty as to conflicts of interest
(1) Each commissioning consortium must exercise its functions so as to ensure that any conflicts of interest, and personal and prejudicial interests are dealt with.
(2) The Secretary of State must issue guidance on how conflicts of interest and personal and prejudicial interests should be dealt with by commissioning consortia as part of their decision making.”

15. Clause 22, page 36, line 10, at end insert –
“(c) section 14OA”

The Bill risks compromising the trust that patients have in their GPs by opening doctors up to serious conflicts of interest between their historic duty to advocate for their patients and their new incentives to reduce costs. Giving doctors a financial incentive will raise the worry that they might make cheaper commissioning and referral decisions, instead of the best medical decisions for their patients. GPs are being asked to take on a commissioning role, but they are also healthcare providers, and can be shareholders in private healthcare providers. The Bill has no meaningful safeguards to mitigate these potential conflicts of interest.

The Bill also has a clause creating a bonus payment for consortia who “commission well” without defining what this means. This is nothing like current bonuses to individual GPs for providing high-quality care, but could be a bonus to GPs for commissioning under-budget. This puts at risk the relationship between doctors and their patients, who might rightly worry that their doctor is making decisions with their consortium bottom line in mind, not just the best treatment. The bonus has been attacked by leading GPs. (2)

Amendment 12 deletes the language which establishes the GP bonus.

Amendments 13 and 14 set up a system for dealing with conflicts of interest in GP consortia commissioning decisions.

Amendment 15 adds consortia performance with relation to managing conflicts of interest in the list of matters that the National Commissioning Board has to take into account when assessing consortia performance.

Ref 2 - Dr Laurence Buckman, head of the BMA’s GP committee, called the bonus “disgracefully unethical”. http://www.bbc.co.uk/news/health-12578300

C: Turning the NHS into a free market

The Creation of a Regulated Market
The amendment removes the Part of the Bill which creates a regulated market in the NHS.

16. Leave out Part 3 – Economic Regulation. [This will appear on the amendment paper as leaving out each of the individual clauses, 55-147.]

The whole of Part 3 and much of the rest of the Bill are concerned with how the NHS moves from being a managed system with powers devolved from the Secretary of State to a regulated market with a powerful economic regulator (new Monitor).

The Bill will fundamentally change the NHS: remodelling it along lines of utilities and guaranteeing UK and EU competition law will apply in full, transferring power from patients and commissioners into hands of Monitor, the new market regulator, and the courts. As the Minister of Health himself accepted during the committee “UK and EU competition laws will increasingly become applicable” as a result of the Bill. (3) The Competition Act has never been applied before to the NHS. (4)

Labour is in favour of managed competition in the NHS, but is opposed to the competitive free-for-all being proposed for the NHS.

Establishing an economic regulator to promote and enforce competition throughout the NHS will change the fundamental collaborative ethos of the NHS. Health is not like the gas or water utility industries and the same free market policy structure simply cannot be used. It is for this reason that Labour fundamentally opposes Part 3 (Economic Regulation) of the Bill.

Amendment 16 would delete this part of the Bill.

Altering the Scope and Duties of Monitor
17. Clause 55, page 75, leave out lines 1 and 2 and insert –
“by promoting collaboration and integration within health services in England”.

18. Leave out clauses 64, 65 and 106.

19. Clause 67, page 82, leave out lines 7 to 9 and insert –
“(c) do not act in a manner that would (or would be likely to) prevent collaboration or integration in the provision of health care services for those purposes.”

20. Clause 67, page 82, leave out line 16 and insert –
“(a) promote collaboration and integration within the provision of services, and”

Ref 3 Public Bill Committee, Health and Social Care Bill, 15 March 2011, column 718.

Ref 4 Written answer, 29 March 2011, column 309W. http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110329/text/110329w0005.htm#11032987000118

21. Clause 101, page 101, line 33, leave out “competition” and insert –
“collaboration or integration”.

22. Clause 101, page 102, leave out lines 15-18

Labour is opposed to Part 3, and thinks it should be dropped from the Bill. However, we recognise that this is unlikely to happen without the entire Bill being shelved, and that major changes therefore need to be made to the entirety of it to remove some of the most reckless and damaging aspects. Key to this is changing the primary duties behind the economic regulator – Monitor.

Currently Monitor has a duty to promote competition. This is the wrong basis on which to set up and drive the health service, which should instead be based on collaboration between providers and integration of services.

Monitor also is being given the powers to impose UK and EU competition law on the whole NHS. The consequence of this is to treat all NHS bodies like companies, and expose them to the same scrutiny and penalties for supposedly anti-competitive behaviour as private enterprises. This is wrong – hospitals should be able to talk to each other and collaborate to provide the best services for patients.

Amendment 17 removes Monitor‟s duty to promote competition, replacing it with a duty to promote collaboration and integration.

Amendment 18 takes away some of Monitor‟s power to enforce competition, by taking away its new powers under the Competition Act 1998, the Enterprise Act 2002, and its powers to enforce those competition rules on NHS services.

Amendments 19, 20 and 21 take away Monitor‟s regulatory and licensing powers in relation to competition, replacing them with powers in relation to cooperation and collaboration, in line with the change to Monitor‟s duties in amendment 17.

Amendment 22 removes Monitor‟s power to hand over access to NHS facilities and equipment to private providers.

Changing the system that allows hospitals to go bust

23. Clause 76, page 87, line 39, leave out “designation” and insert “non-designation”.

24. Clause 76, page 87, line 39, at end insert –
“(2) In the absence of an application for non-designation being granted by Monitor for a health care service for the purposes of the NHS, that health care service is to be considered designated.”

25. Clause 76, page 88, line 4, before “be” insert “not”.

26. Clause 77, page 89, line 21, leave out “designation” and insert “non-designation”.

27. Clause 77, page 89, line 25, leave out “designated” and insert “non-designated”.

28. Clause 77, page 89, line 36, leave out “not”.

29. Clause 113, page 111, leave out lines 42 to 45.

30. Clause 125, page 120, line 12, at end insert –
“(1A) The Secretary of State must make regulations which provide adequate provision for a scheme of early intervention procedures to be enacted prior to subsection (1) applying to NHS Foundation Trusts.
(1B) Regulations in subsection (1) must provide for provisions to apply only where Monitor decides it is necessary or expedient to so do”

31. Leave out Clauses 160 and 170.

The current role of Monitor, as distinct from its new role to be the economic regulator, is as the regulator of Foundation Trusts. It has the power to investigate and intervene in FTs which are in danger of failing financially. This role is being abolished by the Bill, and in its place is a "designation‟ regime. Commissioners can apply to have certain services „designated‟, after a lengthy consultation process, meaning that they will be maintained and protected in the event of financial failure. There is a considerable cost attached to designation though, so most services will not be designated. The result is that only designated services will be protected, while non-designated services will have no protection, be exposed to the full force of competition in the market, and would be at risk of closing, with no public consultation.

These amendments prevent the marketisation of all NHS provision in which all providers are effectively businesses which can fail or succeed within the market. Allowing failure and thus insolvency is contrary to the NHS ethos of cooperation, support and collaboration where organisations in trouble are managed back into financial surplus. Any changes to local services should also be subject to consultation with local residents, not forced upon communities by the operation of the market. Market failure of a service or even of a major provider would be slow and damaging for patients caught up in the demise.

Amendments 23 to 28 changes the assumption behind the designation of services. Instead of all services being considered as non-designated and a consultation process being required to designate every service, all services will be considered designated. Therefore a full public consultation process would be needed to take away a service‟s designation, and hence remove its protection. Every decision to non-designate would have to be publicly explained.

Amendment 29 removes the repeal of the legislation which allows Monitor to intervene in a Foundation Trust which is failing.

Amendment 30 requires the Secretary of State to set out regulations by which he can intervene in a Foundation Trust which is at risk of failing before it does so.

Amendment 31 removes the clause which stops the Secretary of State from giving financial assistance to a hospital which is in trouble; and removes the clause which stops Foundation Trusts from returning to being NHS Trusts.

Cherry Picking
32. Clause 19, page 16, line 18, at end insert –
“13CA Duty as to commissioning of services
In carrying out its duties in respect of the commissioning of services the Board must in the exercise of its functions have regard to the interdependency of services and the impact that the arrangements for the provision for one service may have on the financial and clinical sustainability of other services.”

33. Clause 22, page 30, line 6, at end insert –
“14 KA Duty as to commissioning of services
In carrying out its duties in respect of the commissioning of services each commissioning consortium must in the exercise of its functions have regard to the interdependency of services and the impact that the arrangements for the provision for one service may have on the financial and clinical sustainability of other services.”

34. Clause 115, page 113, line 6, at end insert –
“(8) A description for the purposes of subsection (6)(b) may be framed by reference to –
(a) the level of workforce training undertaken by the provider, and
(b) the extent to which the provision of its service leads to consequential costs for other providers.”

The Bill fails to prevent situations where non-NHS providers are able to undertake profitable work to the detriment of the wider NHS. The Bill establishes the presumption that all parts of all services could be opened up to competition, making it possible for non-NHS providers to compete for the full range of profitable services. It is impossible to construct a perfect tariff to reflect all aspects of cost and therefore it is always the case that some services, and the treating of some patients, will be underpriced, or overpriced. The amendments need to ensure providers were unable to select patients and that providers have to meet the full cost (for example the consequential cost of aftercare, rehabilitation or emergency care).

Under the Bill, the operation of competition law and any willing provider it is inevitable that private companies will identify and bid for service which they can undertake profitably and they will always attempt to reduce risk by limitation on the patients and conditions they include. The financial impact is then felt in the wider NHS which is left with the complex and expensive patients and also picking up the additional costs if patients dealt with by non NHS providers then need NHS care as a result. Removal of certain services from an NHS setting, for example diagnostics, can also destabilise the remaining NHS services, as they may no longer be clinically safe.

Furthermore, non-NHS providers are not currently required to engage in the training, education and development of the workforce, but are able to hire trained professionals without having to incur the cost of training them.

Amendments 32 and 33 require both the NHS Commissioning Board and commissioning consortia to take account of the destabilising effect (both financially and clinically) that moving services out of the NHS can have.

Amendment 34 allows for private providers to be paid less for their services if they do not engage in workforce training.

Cap on Private Patient Income for Foundation Trusts
35. Leave out Clause 162

This amendment prevents another step towards a full market in which all providers would be entirely outside any NHS management; in effect privatised and fully open to competition law.

At present, the Private Patient Income (PPI) Cap is an enforced limit on the amount of income FTs can derive from the treating of private patients. The cap is set at the percentage of income an FT derived from private charges in the base year, the financial year 2002-03, the year before the first FTs were introduced.

The effect of removing the cap would be to allow, and even encourage, FTs to generate as much revenue as possible from private patients, possibly to the detriment of those being treated on the NHS. In an environment where many FTs may be struggling financially as a result of funding cuts and the cost of reorganisation, and where the penalty for failure is becoming subject to commercial insolvency, it is inevitable that FTs will seek to increase revenue from private patients to fill any funding shortfall. Ultimately, this will lead to direct competition between FTs, and to NHS patients being pushed to the back of the queue by privately paying patients.

If the cap is removed and FTs are allowed to openly compete for private patient revenue then they will appear more like entities involved in economic activity than providers of public service. This will mean that they will become classed as „undertakings‟ and fall under the jurisdiction of EU and UK Competition law.

FTs must remain as essentially providers of services to NHS patients. Labour promised to review the operation of the cap, and we would consider an alternative solution. But Labour would never have abolished the cap entirely, as the Bill seeks to do.

Amendment 35 would stop the abolition of the Private Patient Income cap.

Slowing down process of NHS Trusts to FTs
36. Leave out clauses 176 and 177.

The Bill specifies that by 1 April 2014 all NHS trusts will have to be Foundation Trusts. Those current NHS Trusts which cannot attain Foundation status will be broken up, merged or sold off. There will also be no path back to a NHS Trust status should an FT fail; again it would be broken up or sold off. The amendment slows this process down, and leaves open the possibility that not all Trusts will have to gain Foundation status.

Labour said that we wanted to move all NHS Trusts to Foundation status. However this process is being pushed through too fast, with little regard for the very real effect that is being created in NHS Trusts. The push to FT status has already resulted in the efficiencies being required of FTs increasing from 4% per year to 6.5% per year.

Amendment 36 would delete this artificial deadline, allow NHS Trusts to become Foundation Trusts at their own pace, and leave the possibility of Foundation Trusts returning to NHS Trust status if they get into financial difficulty.

Transfers of NHS estate to private companies
37. Clause 125, page 120, line 34, at end insert –
“(6) Regulations under this section must ensure that where transfers of property or liabilities occur, they can only be transferred to another NHS Body”
38. Clause 129, page 124, line 26, leave out “licence holder” and insert “NHS Body”.
39. Schedule 23, page 402, line 15, leave out lines 15 to 17
40. Schedule 23, page 402, line 34, leave out from line 34 to end of line 1 on page 403.

The Bill allows for assets to be transfer when an NHS provider fails. The amendment prevents this from being done for the benefit of outside interests.

These are NHS assets paid for out of taxation and should be kept in the public sector or the benefits should go to the public sector.

Amendments 37 to 40 remove the possibility that NHS assets could be moved out of the public sector.