IN THE MATTER OF MY ADVICE CONCERNING THE APPLICATION OFPROCUREMENT AND COMPETITION LAW TO THE HEALTH AND SOCIALCARE BILLNOTE1.
I am asked to deal with various responses to my advice provided to 38 degrees onthe application of procurement and competition law to the NHS. I propose only todeal with responses which purport to be reiterative of my opinion and not thosewhich merely make a political point on the basis of my advice. I deal with each inturn.
“
The Department of Health response to the legal opinion published by 38 degrees
on the application of procurement and competition law”
2.
The response incorrectly attributes my opinion to Stephen Cragg who provides a
separate advice on the Secretary of State’s duties under the Bill. Unfortunately the
De
partment’s response also incor
rectly conflates the two opinions obtained by 38Degrees. It therefore mistakenly attributes to my advice the assertion that the Bill
does nothing to stop “cherry picking” by private companies and that it would be
impossible for the Secretary of State to direct that certain services remainavailable to the local community. Neither of those assertions are made in myadvice and they are not matters with which I deal.3.
My advice deals first with the applicability of procurement law, my conclusions inrelation to which the Department essentially agrees (save that they do not agreethat there will be potentially problematic administrative burdens arising from theregime); and deals secondly with the applicability of competition law.
4.
In relation to competition law
, the Department has asserted that “competition lawwould apply where it applies, with or without this Bill”.
5.
I note that the Department has not really sought to undermine the reasoning I haveapplied in order to reach my conclusions. Although the Department lists fourpoints which it believes support the contention that PCTs do not currently fall
within the definition of “undertaking” for the purposes of competition law, it has
wholly failed to address the likely position arising from the enactment of the Billor indeed, the general but crucial point that it is more likely that competition lawwill apply to the NHS with an increased involvement of the commercial sector asprimary care providers and through the extension of the Any Qualified Providerpolicy. Of course, whether or not competition law is applicable to the NHS, bothnow and after any reforms, is ultimately a matter for the Courts.
Guy Opperman MP: The falsehood of the 38 Degrees campaign on health
6.
Mr Opperman makes the point that since my advice concerning procurement lawwas that procurement law already applies to the NHS, nothing will change as aresult of the Bill. Although I did make the point that procurement law alreadyapplies to NHS purchasing, and will continue to apply, I also reached andcontinue to hold the considered view, based on my experience as a procurementpractitioner, that by far the greatest impacts of the application of procurement lawto the NHS which will emerge from the Bill are wholly practical in nature owingto the complexity and the regulatory and administrative burden involved incompliance. Given that there might be no or insufficient incumbent expertise inprocurement in the new consortia, there is a very real risk that the functioning of consortia is compromised, at least initially, by the sheer regulatory burdeninvolved, under threat of potentially draconian remedies available to unsuccessfulbidders through litigation.7.
In dealing with the applicability of competition law, Mr Opperman appears tosuggest that it was my assertion that domestic competition law derives from Tony
Blair’s government. That is incorrect. Domestic competition law has existed for
some considerable time but was reformed and brought into line with European
competition law by the Competition Act 1998. He goes on to suggest that myadvice is limited to the assertion that competition law introduced by thatlegislation already applies to the NHS and will continue to apply under the Bill.8.
My conclusions in relation to competition law were and remain essentially that itis likely that competition law already applies to the NHS particularly in view of recent non-legislative reforms (including, for example, the use of APMS contractsand the Any Qualified Provider policy extending the scope for commercialproviders to supply both primary and secondary care services) but that it is evenmore likely to apply post the reforms introduced by the Bill. The thrust of my
advice was not therefore that “nothing changes” but
that competition law is evenmore likely to apply in the NHS landscape which emerges from the Bill.Furthermore, I conclude that the impact of the application of competition law inpractical terms for the NHS is difficult to predict, even in relation to its currentoperation but I refer to a range of possible considerations which may haveconsequences for the NHS in competition law.
Mr Andrew Lansley: 6 September 2011 Hansard: Column 192
9.
The attribution to my advice of the conclusion that, as far as competition law isconcerned, nothing changes, was repeated by Mr Lansley in Parliament. Hestated:
“
38 Degrees also claims that the Bill opens up the NHS to competition law, but itsown legal advice
—
which it obviously did not like
—
made clear that there wouldbe no change between the present competition regime and that which wouldoperate if and when the Bill became law
”
.A similar assertion is made by Stephen Phillips MP QC in his letter to hisconstituents (31 August 2011) concerning, inter alia, my advice.10.
Although clearly the competition regime remains the same in that the content andsubstance of general competition law is not changed by the Bill, the opinion
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