Efford Bill detailed analysis

Compiled in response to points raised by Jenny4MP :

https://www.scribd.com/doc/246869185/Why-the-London-Socialist-Health-Association-isWrong-About-the-Efford-Bill
https://www.scribd.com/doc/247068753/Email-about-Efford-Bill-to-MP
NB. Main point of reference is the independent and well-regarded Parliament Library resource
National Health Service (Amended Duties and Powers) Bill [Bill 18 of 2014-15] The Second Reading of the National Health Service (Amended Duties and Powers) Bill will take place on
21 November 2014. It is a Private Members Bill introduced by Clive Efford, the Member having come sixth
in the Private Members Bill ballot.
Overview :
The Bill seeks to make changes to a number of provisions in the Health and Social Care Act 2012 and the
National Health Service Act 2006, including:
Re-establishing the Secretary of State for Healths statutory duty to provide a comprehensive health
service in England.
Amending or repealing a number of provisions relating to competition and procurement policy in the
NHS, in order to remove any obligations on NHS commissioners to put health services out to tender.
Substituting provisions that currently allow NHS foundation trusts to generate up to half of their income
from private sources with a new power for the Secretary of State to determine the appropriate limit on
private income, subject to certain safeguards.
Transferring the responsibility for approving mergers between NHS hospitals from Monitor and the
competition authorities to the Secretary of State. Repealing a number of Monitors duties and powers
relating to competition and procurement policy in the NHS, including the repeal of section 75, under
which NHS procurement and competition regulations are made and amending provisions relating to NHS
contracts, to allow the Secretary of State rather than Monitor to adjudicate in disputes about
procurement.
The Bill also includes measures intended to exempt the NHS from the proposed Transatlantic Trade and
Investment Partnership (TTIP) Treaty and other national or international agreements.
The Bill would scrap the rules that force market tendering of services and that are seeing millions of
pounds wasted on competition lawyers instead of patient care.
1. Section 75 regulations
These are the rules that many doctors say are forcing them to put services out to the market, even if they
do not want to, for fear of legal challenge.

Labour oppose these regulations because they risk fragmenting care and are seeing very large amounts of
money spent on tendering exercises rather than patient care and thus they have been addressed in the
Bill.

Freedom of Information requests by the Labour Party show NHS hospitals are now spending in
excess of 60 million per year just on tendering exercises / assessing tenders for bids. In addition to
this, Clinical Commissioning Groups will also be spending millions on putting services out to tender.
In a survey by Health Service Journal, two thirds of commissioners said they had experienced
increased commissioning costs as a result of the new regulations (Health Service Journal, 4 April
2014)
Last year, the Chief Executive of the NHS said Youve got competition lawyers all over the place,
causing enormous difficulty...We are getting, in my view, bogged down in a morass of competition
law which is causing...significant cost in the system (Sir David Nicholson, Financial Times, 5
November 2013).

The Bill scraps these rules and returns to a system based on collaboration and integration. The Bill would
also give contracting authorities the right to use NHS contracts to ensure they can avoid competition
law.
2. Competition framework
The Health & Social Care Act exposed the NHS to the full force of EU competition law. It also established
Monitor as an economic regulator to enforce competition in the NHS and allow an increasing number of
contracts to be awarded to the much more unregulated private sector, along with the Competition and
Markets Authority (CMA).
Labour brief that they oppose this framework because it is hindering important service improvements
simply on the grounds that they do not serve the interests of competition, and is seeing further large
amounts of money wasted on competition administration and competition lawyers. Evidence is offered :

Freedom of Information requests by the Labour Party show NHS hospitals are now spending in
excess of 20 million per year on navigating the Governments competition law requirements for NHS
reconfigurations and mergers & acquisitions
Monitors Annual Plan, shows that the organisation spent 4.9m on monitoring and enforcing
competition in 2013/14 and they estimate the cost of their competition work in 2014/15 will be
6.3m.

The Bill will scrap the competition framework, remove the role of Monitor as an economic regulator
enforcing competition in the NHS, and remove the Competition and Markets Authority from any role in
the NHS.
3. Private Patient Income
The Health & Social Care Act allowed hospitals to raise up to half of their income from treating private
patients. As a consequence, hospitals expanding their private patient units, even as waiting lists lengthen
for NHS patients and treatments are rationed.
The Bill would set tougher controls on private patient income to ensure NHS patients always get put first.

4. Democratic accountability: the Secretary of States powers and duties

The Health & Social Care Act removed the Secretary of States duty to provide health services in England,
ending the historic political accountability for the NHS. Now ministers wont answer for the problems they
have created in the NHS.
The Bill would restore the Secretary of States historic duty to provide NHS services by restoring the
emphasis on promotion of preferred NHS and creating conditions where it will be financially very
uncomfortable for any commissioner choosing to step outside an NHS contract.
5. The Transatlantic Trade and Investment Partnership Treaty (TTIP)
The Bill also contains measures intended to exempt the NHS from the proposed Transatlantic Trade and
Investment Partnership (TTIP) Treaty and other national or international agreements. There have been
concerns that the TTIP deal being negotiated between the EU and US could make measures to open up
the NHS to competition irreversible, although this has been disputed by the Government.
The Bill will exempt the NHS from the Competition Act 1998 and establish sovereignty over decision
making with respect to the UKs relationship with TTIP.

The following paper is a response to the critique of the SocHealthLondon blog by Jenny4MP,
Green PPC for Calder Valley. Her comments are shown in green
1.

Duty
The Efford Bill does not restore the duty of the Sec of State to provide a comprehensive equitable
NHS that is free at the point of delivery and based on patients clinical needs.

Section 1 of the H&SC Act 2012 substituted section 1 of the NHS Act 2006, relating to the Secretary of
States duty to promote the health service. The original duty under the NHS Act 2006 was for the
Secretary of State to promote a comprehensive health service and to provide or secure the provision
of services in accordance with this Act. The current duty, inserted by the H&SC Act 2012, no longer refers
to a duty to provide, now stating that the duty is to promote a comprehensive health service and to
secure that services are provided in accordance with this Act; the 2012 version of the duty is set out
below:
During the passage of the Health and Social Care Bill there was some concern about the removal of the
word provide from the Secretary of States duties. As a result, the Government agreed to support
amendments proposed by the House of Lords Constitution Committee during the final stages of the
Health and Social Care Bill, to insert a new paragraph (para 1(3) above) clarifying that the Secretary of
State retains Ministerial accountability for the NHS.5
The wider debate about the decision to remove the word provide from section 1 of the 2006 Act can be found in pages 8-10 of
the Library Research Paper on the Health and Social Care Bill (RP 11/63, 30 August 2011).

Clause 1 of the Bill would substitute the Secretary of States current duty under section 1 of the NHS Act
2006 (as amended by section 1 of the H&SC Act 2012) with a new duty to promote a comprehensive
health service based on social solidarity. Clause 1(2) of the Bill would provide two new duties: that the
Secretary of State must, for the purpose of continuing the promotion in England of a comprehensive
health service:

ensure that the health service is a public service which delivers services of general economic interest and
operates on the basis of social solidarity (clause 1(2)(b)); and
ensure that arrangements between commissioners and providers of health services require effective cooperation between different providers under this Act and between providers of health services and
providers of community care services (clause 1(2)(c)).
Clause 5 would re-establish the Secretary of States powers to issue directions to NHS England, CCGs, NHS
trusts and Special Health Authorities.
HL Deb 8 February 2012 c298-307. A Library standard note (SN06252) set out the key amendments to the Secretary of States
duties during the House of Lords Committee and Report stages of the Health and Social Care Bill (see section 2.1, pages 6-8).

The BMA state that the Bills measures to reinstate and enhance the Secretary of States duties
to promote and to provide are helpful measures to secure confidence in the Secretary of States
ultimate responsibility and accountability for the NHS
2.

EU Competition Law
Reference to public service which delivers services of general economic interest
rather than Non-economic Social Service of General Interest
- matters not because of the reference to social solidarity in clause 1(2)(b) is, in conjunction with
other measures in the Bill, the mechanism for exempting the NHS from EU competition law and will
override the category of general economic interest. see below*

3.

Social Solidarity
Part 1 Section 1 has a Duty on the Secretary of State to promote comprehensive health service
based on social solidarity.
Clause 1(2)(c) is intended to promote integration in health and social care services

Advocating cooperation and social solidarity is a legally meaningless piece of spin.

Completely inaccurate. It refers to an esteemed piece of EU legislation which is held to be near
sacrosanct and which qualifies the NHS as a public service and thus one which can be safeguarded from
trade agreements and the market. http://falseeconomy.org.uk/blog/health-bill-undermines-socialsolidarity-and-puts-nhs-at-mercy-of-eu-law
Part 2 of the Efford Bill gives the Sec of State massive powers without checks and balances, that allow
the Sec of State to make sure that any person who is concerned in commissioning or providing health
services for the purpose of the health service...does not engage in anti-competitive...behaviour..
The aspects of competition relate to different areas of function :

Collaboration and co-operation are inserted to overturn the focus on competition where
commissioning and service provision are concerned
Anti-competition law is referred to specifically in the interest of patients not providers. It has
been introduced to this Bill to rectify a recent misuse of said law which resulted in a cessation of a
much-needed rescue package for Poole and Bournemouth Hospitals which was bizarrely deemed
to be anti-competitive. I have close family who use these hospitals and one is much better than

the other as per Lewisham/Woolwich which have now merged in order to rescue the
shortcomings of the 2nd. Why would anyone wish to render these solutions impossible?
CCGs open services to competition out of fear of rules, HSJ, 4 April 2014 The survey asked CCG leaders if they had
invited, or were currently inviting, competition for services in cases where they would not have done so if not for
competition rules or concerns about the rules, 29.1 per cent said they had; two thirds said they had not, and the
remainder did not know. There were 103 respondents across 93 CCGs, 96 of whom were chairs or accountable officers.
The remainder were other governing body members. There are 211 CCGs in total.

4.Mergers
Given that NHS privatisation can proceed apace along the lines the New Labour government started,
more and more hospitals will go bust, as they are already. So the inclusion of measures for hospital
trust mergers in the Efford Bill is surely a sign of things to come. And not in a good way.
In the interests of patients can mean anything.
In the interests of patients means exactly that patient need trumps the market, trumps profit.
Patients interests is linked to clinical outcomes reliant upon quality, access and safety.
It also hooks into obligations in the NHS Constitution.
Clause 10 of the Bill would repeal provisions under the H&SC Act 2012 that gave Monitor a role in
referring mergers to the competition regulators. Clauses 12 and 13 specify that the Secretary of State
would have the discretion to approve significant mergers between NHS organisations.
In November 2011 the boards of the Royal Bournemouth and Christchurch Hospitals NHS Foundation
Trust (RBCH) and Poole Hospital NHS Foundation Trust (PH) announced their intention to merge. At that
time financial problems had left PH in breach of the terms of its authorisation with Monitor (in its role as
the regulator of Foundation Trusts) and the trusts argued the merger was necessary to ensure the
sustainability of services. In January 2013 the OFT announced it was referring the proposals to the
Competition Commission (CC) for investigation under the Enterprise Act 2002, after concluding the
merger would leave patients and commissioners with few realistic alternative providers....
The blocking of the merger of the two Dorset NHS foundation trusts led to concerns that the competition
regulators (the Competition Commission and the Office for Fair Trading were merged to form the
Competition and Markets Authority in April 2014) are taking a more active role in scrutinising mergers in
the NHS.31
The Bill would therefore also transfer responsibility for approving mergers between NHS providers, from
Monitor and the Competition and Markets Authority to the Secretary of State.
This measure firmly responds to concerns that mergers of NHS hospitals, intended to improve patient
care and increase efficiency, can be blocked on competition grounds.
5. Competition and the market:
The Bill would repeal or amend a number of provisions relating to competition policy in the H&SC Act
2012 and the NHS Act 2006, including the following measures to remove obligations on NHS
commissioners to use competitive tendering for health services:
insists on the role of competition in commissioning and providing NHS services it does not insist, it
recognises that co-operation and collaboration are key to patient interests

Clause 9 would try to exempt NHS commissioners from legally enforceable procurement obligations in
relation to NHS contracts and would amend the procurement regulations, the Public Contracts
Regulations 2006, to specify that they do not apply to the procurement of NHS funded services.
Clause 11 would specify that the NHS is exempt from the Competition Act 1998, to try and prevent EU
competition law being applied to the NHS.

Sec of State who can then overrule the NHS as preferred bidder statedly, only if a non NHS bidder is
chosen, not the other way round!
in fact the opposite is true that this is one in the eye for Section 75. The EB gives the SoS the power to
undo the undoing of Section 75. See comments elsewhere for explanation - NO, it specifically refers
only to occasions when the other parties have decided upon a non-NHS provider.
Instead of setting up this authoritarian concentration of power in the hands of the SoSH, the authors of
the Efford Bill could have taken the NHS out of the competition law net, by committing to run the
service as a Non-economic Social Service of General Interest. A case of make your mind up do you
want the SoS Duty to be restored or not?
Section 1b (on rights for patients to choose treatments and healths services) protects the market in the
NHS - hence access for private cos - as a way to enhance choice based on neoliberal economic
theory. Privatising deprives the NHS of income to pay staff and overheads. Choice is not just a
neoliberal economic theory and it does not just relate to privatisation. It is possible for a patient to
choose between NHS provision and that is the whole point of this clause.
This is a massive and unfounded presumption. But that is exactly what it does say. The author is the
one who is making gigantic presumptive leaps....
Researchers at LSE have considered the impacts of hospital competition on performance, extending some
earlier analysis conducted by the same team.34 The study measured efficiency using hospitals average
length of stay (LOS) for patients undergoing elective surgery. Its results, published in February 2012,
confirmed earlier results that suggested competition between public providers prompted public hospitals
to improve their productivity. However, in contrast, the results suggested that competition from private
hospitals did not spur public providers to improve their performance and instead left incumbent public
providers with a more costly case mix of patients and led to increases in post-surgical LOS.
This commercial market is what attracts competition law compliance duties to allow companies to bid for
all NHS funding and to receive equal subsidies to those available to state-run hospitals. This Part 2 Section
6 of the Efford Bill also includes much Alice in Wonderland legal skullduggery, over when an NHS contract is
not an NHS contract. Particularly Section 6 subsections 5 & 19. Also Part 3 Section 1. The upshot is that
these bits of skullduggery would effectively exempt a range of contracts - particularly the 2016
privatisation of Commissioning Support Units - from EU competition law, allowing a privatised monopoly
CSU to be set up across the whole of the English NHS. There is a large difference between the Internal
and the External Market. This Bill addresses the external market which came in with Section 75 and the
H&SCA as far as a PMB is able. This is nothing to do with skullduggery the whole point is that it will
take the teeth out of Section 75 indeed expunge it. The comment that contracts will be exempt from EU
Competition Law is entirely the point that means that the NHS will be safeguarded as far as possible
until a full Repeal which could only be achieved by a party in government.

a monopoly private Commissioning Support Unit that would apply across the whole of the English NHS
... Whilst Hunt and friends would probably rub their hands in glee at the thought of a privatised monopoly
CSU, the party authoring this Bill would not nor would the Green Party MP Caroline Lucas, who is
supporting the Bill. Indeed it would not be possible under the Clause relating to protection of NHS as
preferred provider.
This gives the SoS the power to overrule the decision of an NHS commissioner to make an NHS
provider the preferred provider. It undoes the undoing of Section 75.
An NHS contract under the direction of a Secretary of State is not open to competition law at all.
The section where the SoS is to promote social solidarity sets the bar where the NHS services the
common interest which is recognised in EU Law wherein service for the common good are deemed to
be a public service, not a market.
A fifth of respondents to a Health Service Journal survey, carried out with PwC, said their groups decisions had been formally
challenged under controversial NHS competition regulations

6.

Free at point of need :

The services provided as part of the health service in England must be free of charge except in so far as
the making and recovery of charges is expressly provided for by or under any enactment, whenever
passed there has always been a proportion of private provision, so this cannot simply be taken out.
Labour have stated that they will take out the Coalitions 49% and reduce it to a similar level as
previously. There is clearly absolutely no intention to increase the private allocation as it has been shown
to be detrimental to the health of English patients as well as countries which are more notorious in their
health systems such as the US.

7.

Private cap :

This removes the 49% cap on the amount of income a hospital Trust or foundation Trust can earn from
private patients. It therefore allows for the possibility of earning far more income from private
patients.
No. This Bill is designed to do the exact opposite.
The H&SC Act 2012 increased the private income cap for NHS foundation trust hospitals so that they
could generate up to 49% of their income from private sources.
Clause 7 and 8 of the Bill would substitute the 2012 Act provisions with a new power for the Secretary of
State to determine the cap on private income, subject to certain safeguards < ie. protecting the interests
of NHS patients
The Bill inserts two safeguards, which the BMA had previously called for during the passage of the Health
and Social Care Bill, that NHS services and patients:
- - should not be adversely affected by Foundation Trusts treating private patients;
- should benefit from the Foundation Trust treating private patients (for example, by private
income being re-invested into improving NHS service).
The Bill also for the first time extends these legislative provisions to NHS Trusts to safeguard access for
NHS patients who are increasingly being elbowed out by the higher 49% private allocation
The FTNs response to the Bill says they would be very concerned to see the non-NHS income facility
removed, made variable or decreased - however the priority of the Bill is access for NHS patients to
appropriate care.

Figures from the Department of Health, deposited in the Library in response to a PQ (DEP2011-1580) showed that in 2011 the
majority of NHS foundation trusts had private income caps of between 0.1% and 2%; only 3 FTs had caps set above 10%: The
Royal Marsden NHS Foundation Trust (30.7%), the Royal Brompton and Harefield NHS Foundation Trust (14.4%), and Moorfields
Eye Hospital NHS Foundation Trust (13.7%).

8.

Monitor:

EB gives the SoS the power to overrule NHS commissioning decisions to buy NHS services from an NHS
preferred provider...... As already outlined, the SoS power only extends to intervening to ensure the NHS
is preferred provider, not the other way round.
Clive Efford MP
This Bill cuts the heart out of the HSCA. It doesnt replace Monitor because of the cost of upheaval, but
changes the standards and emphasis onto patient care - not the market.
The Efford Bill Part 3 Section 10 gives Monitors competition-enforcing role to the Ofce of Fair
Trading. It doesnt abolish the role, just transfers it but then the author states - The EB gives the
SoS the power to overrule NHS commissioning decisions to buy NHS services from an NHS preferred
provider.... A clear case of makeyourmindup time...
Clause 6 would amend provisions relating to NHS contracts, to allow the Secretary of State rather than
Monitor to adjudicate in disputes about procurement;
Clause 10 would repeal a number of Monitors duties and powers relating to competition and
procurement policy in the NHS, including the repeal of section 75, under which NHS procurement and
competition regulations are made.
The Bill essentially takes a passive aggressive stance against any commissioner who has an inclination
towards selecting a private provider over an NHS contract. No commissioner of health services acting
sensibly will opt for a non NHS contract because as soon as they step outside that force field, market
forces and competition law will apply, with the result that they will have to spend large amounts of their
budget on a. managing the process b. defending their decision
The Bill inculcates a state scheme in preference to the open market on the premise this is best for
patients. Under the overall premise that we want a health service, not a health market, the Efford Bill sets
up an environment where co- operation and collaboration between providers, in the best interest of
patients, is the only way forward. It fosters an arrangement where legal agreements must be employed
by the SoS, making it impossible for them to do a Hunt where he says not me chum its the local folks
who take the rap.
The Secretary of State will and can intervene where absolutely necessary in the interests of patients and
of the NHS.

9.

TTIP and other trade agreements

Trade and competition law expert John Hilary, explained this in the British Medical Journal - The European
Commission has conrmed that health services are on the table, and a leaked copy of the EUs
liberalisation offer has revealed its full ambition. Not only hospital services but medical (including
midwifery and physiotherapy) and dental services are to be opened up to competition under TTIP.
Individual EU member states may enter reservations to protect specic sectors, but the only one
entered by the UK government is for ambulance services

The ISDS provisions are highly controversial because of concerns that they will undermine the power of
national governments to act in the interest of their citizens. In particular, some commentators have
claimed that, as a result of ISDS proposals in the TTIP, measures to open up the NHS to competition could
be made irreversible if the provisions required US companies to be compensated in the event of a change
of policy.
http://www.bmj.com/content/349/bmj.g6552b Only categorising the NHS as a non-economic nonmarketised public service with no commercial involvement AND repealing section 75 of 2012 HSCA, would
exempt NHS from TTIP. No as we have seen the protection of social solidarity has been invoked
The market liberalisation introduced by the 2012 Health and Social Care Act ensures it will be effectively
impossible to take the NHS back into public hands if the EU-US deal goes through. Both the UK
government and the European Commission have conrmed that TTIPs provisions to protect investors
would grant US corporations the power to sue any future administration over such a move.
The Bill ensures the TTIP Treaty cannot impose procurement or competition obligations on the NHS. By no
means does it simply leave this with Trading Standards. Rather it sits the entirety under the aegis of the
Sovereignty of Parliament. Any TTIP related measure will have to go through Parliament and gain
approval instead of EU competition law taking hold, made possible by Clause... ( see above ). With
respect to other treaties such as Ceta, 2c1a explains that the Secretary of State has the power of veto.
If it is established that a service is organized under principles of social solidarity then this is one factor that could be used to argue
that an organisation is an undertaking engaged in a social rather than an economic activity and therefore EU competition law
could be held not to apply. However, this is a complex area and a more detailed discussion of EU competition law and health
policy, including an account of relevant case law can be found in chapter 8 of Health Systems Governance in Europe: The Role of
European Union Law and Policy (Edited by Mossialos E, et al., Cambridge University Press, 2010).

Most clauses in the Bill apply to England only although the section on international agreements would
apply across the UK.
Its not limited at all, its radical, and not in a good way. It simultaneously removes and restores the
subjection of the NHS to EU Competition law, and jiggles with Alice in Wonderland denitions of when an
NHS contract is not an NHS contract, in order to make it possible to apply/remove EU competition law
to the NHS according to an agenda that would see the NHS rmly within the remit of TTIP, and under a
monopoly private Commissioning Support Unit that would apply across the whole of the English NHS .
As we have seen these three wishes have not been granted...

Supporters
As well as having the strong backing of the Labour Front Bench, the Royal College of Nursing and the
major trade unions representing NHS staff2, the Bill also has the qualified support of the British Medical
Association (BMA). The BMA and the organisation representing NHS foundation trusts and NHS trusts
(The Foundation Trust Network) have particular concerns that the Bill will undermine the operational
independence of the NHS.3 . Caroline Lucas MP, has also stated her intention to support the Bill on the
premise that it is a good start to overturning Sections 1 & 3 of the H&SCA.

References and source:

Commons Library Standard Note Published 17 November 2014 |
Standard notes SN07026 Authors: Tom Powell
Standard Note:
Last updated:
Author:
Section

SN07026
17 November
2014
Thomas Powell
Social Policy
Jos Bell Nov 18th