First Committee Meeting of the Health and Social Care Bill - Quote

Q 73 Liz Kendall: This is a question for Dr Meldrum. In the evidence that you provided for this session, there is quite a lot about your concerns about introducing competition, including on price. There are two quotes in particular that I want to ask you to expand on. In the first, you say that it could make it impossible for commissioners and providers to operate in the best interests of their patient population and in the confidence that they will not be exposed to frequent and potentially costly challenge. The second point that you raise is that FTs will become private entities rather than NHS entities, and as such will be subject to the same rules and regulations that apply to other private companies, including UK and EU competition law. Have you received any legal advice about how the Bill subjects the NHS to the competition law of this country and of the EU?

Dr Meldrum: We have, obviously, taken legal advice. On the first point about price competition, we hear the rhetoric that the Government do not want price competition—and quite rightly so, because all the evidence shows that that tends to lead to a downward spiral in quality. Yet it seems absolutely obvious that if a maximum price can be stipulated, you can go below that. It would seem to us to be much better to say that a price should be set.
There may be circumstances in which a consortium, because of local circumstances, will have to argue that it needs a price above that level. That would be a constant
price, and there would not then be competition there. Or there might be circumstances in which the price could be below the level. That would be consortium-wide, and you would have people tendering on not price, but quality.
In terms of taking legal advice, it is quite difficult to get legal advice about the things that might or might not happen to bodies when we do not quite know what they are going to look like, but the legal advice that we have is that the more the body looks like, behaves like and is governed like a private enterprise body, the more it will be open to the Europe-wide competition laws.

As somebody said, if a foundation trust looks like a duck and quacks like a duck, it will be a duck, and it will be treated as a private duck. If we want to avoid that sort of destabilisation and interminable challenge, and the uncertainty that it would give those in consortia, I think that there is a very good argument for making sure that NHS bodies such as foundation trusts are clearly distinct from private enterprise bodies.

Q 74 Liz Kendall: May I confirm this? You think that the Bill raises at least the possibility that foundation trusts could be treated as private companies under EU competition law?

Dr Meldrum: There are certain measures to allow them to compete, in a way, with private bodies—giving them greater autonomy, getting rid of the private income cap and various other things—that would, by their very nature, mean that you would be moving them much further in that direction. Therefore, the uncertainty about how they would be treated is that much greater—even to the extent that many lawyers might say that they should be treated as private bodies.

(The Committee sitting can be found here.)