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Editor’s blog Thursday 4 March 2010: DH intervenes to prevent CCP ruling over propriety of “NHS preferred provider” policy

It’s a good thing David Nicholson really meant it when he told PCTs to “look out to your communities, not up to Whitehall”.

Isn’t it?

You may have seen yesterday that I wrote about the delayed publication of the Co-operation and Competition Panel’s Stage One review of the complaint against NHS Great Weymouth and Waveney, brought by ACEVO and the NHS Partners Network (part of the NHS Confederation).

The CCP review was prompted by Health Secretary Andy Burnhoid’s speech to the Kings Fund last year, reversing a decade of policy with his declaration that the NHS is to be regarded as the “preferred provider”.

The inclusion of the letter from Boy Wonder Burnhoid to TUC supreme Brendan Barber accompanying Nicholson’s ‘Dear colleague’ letter explaining "preferred provider" to the NHS and Neu Labour’s desperatre need for trades unions cash is of course merely a coincidence.

It was in no way a blatant quid pro quo – or quite a few thousand quid pro quo.

So don’t go thinking the unions have bought off policy, will you?

Right diagnosis, wrong limb
Well, it seems that I got the diagnosis right “surely someone wouldn’t be trying to lean on them?”: just the wrong limb, as I was writing about the CCP. The DH told all the PCTs in East of England SHA to put their procurements of community services provision on hold.

The indefatigable Nick Timmins of the FT has the story here. It seems that while the CCP had, rightly, decided that the complainants’ case was a strong one, the DH circumvented the vexatious likelihood of getting on the sharp end of a ruling that the “preferred provider” policy was anti-competitive and probably illegal.

A primary care-led NHS: forever delayed
We are as far away as ever – probably further, after this over-ruling of PCTs – from a primary care-led NHS. And this matters hugely.

Why? Because although like Lord Voldemort, none dare speak their name, everyone you speak to in the NHS knows damn well that cuts are coming. Political assurances for both big parties to protect NHS funding are rhetoric; not reality.

And if you want to restrain spending in a sustainable way, you are talking about general practice and primary care doing your gatekeeping, rationing and community service provision.

So over-ruling them in this way, that limits their freedom to commission, is dim-witted.

PCTs are further derided by the increasingly comical Lord Warner, whose reponses to a very dodgy article in yesterday’s Grauniad bear repeating.

Warner told Civitas-and-Appleby-misinterpreting hack Randeep Ramesh that NHS management had shown "monumental incompetence" in spending "too much money given too quickly … "It was like giving a starving man foie gras and caviar. The NHS has not managed that largesse well".

Basic numeracy with Norman
Warner went on to stumble into the predictable productivity trap, saying, "between 1997 and 2007 NHS inputs – by that I mean cash – went up by 60%, but NHS outputs went down by 4%. Two-thirds of the money we put in just went into pay."

Sigh. OK, Norman, I’ll go through this slowly.

Point One: If you recruit a lot ‘more staff, working differently’ (although agreed, nowhere near differently enough), and pay your extant staff more so they stay in the NHS, labour costs will rise a lot and productivity will decline.

Point Two: the figures on productivity don’t capture much of the quality improvements that have occurred, including higher spending in NICE new drugs and PFI repayments (and what idiots burdened the NHS with that, eh?).

Point Three: as well as general funding catch-up from having spent an average of 3% of GDP less than comparable European economies on health in the 1990s, there was also a very big game of waiting list catch-up under way, remember?

Not the end of the “preferred provider” row
As a clever little ruse goes tp prevent the CCP ruling, Boy Wonder Burnhoid and Sir Nicholson of LookOutNotUp are being really quite stupid with this one.

The FT quotes Mike Parish (NHS Partners’ Network chair and chief executive of Care UK) as saying that it would still press the case if the "preferred provider” ruling leads to other uncontested contracts, which the Network thinks "run contrary to the principles of procurement law".

The NHS Partners Network look to have this one right. More to the point, Parish’s Care UK have just been acquired by private equity group Bridgepoint. Private equity groups are not known for being backwards in coming forwards to protect their chances of growth.

It’s a good thing Sir David Nicholson isn’t an inveterate centralist.

Isn’t it?