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Government's competition rowback 'doesn't address fundamentals'

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The government’s changes to controversial secondary legislation covering the contracting of NHS services have sparked disagreement over the effect of the new rules, according to LGC’s sister title Health Service Journal.

Health reporting HSJ and LGC logo

The regulations, published last month, sparked accusations the government had reneged on a commitment that commissioners would be in charge of when a service should be tendered, and that the rules did not match assurances given in Parliament.

Liberal Democrat MPs urged the legislation be withdrawn and Labour submitted a “fatal” motion, which if successful would have seen the rules thrown out, in the Lords. Last week health minister Lord Howe announced six changes to the regulations.

Section 10 of the regulations had said commissioners “must not engage in anti-competitive behaviour which is against the interests of people who use the NHS”.

The amended version said commissioners must not be anti-competitive “unless to do so is in the interests of people who use the NHS”. It makes specific reference to “integrated” services and “co-operation” between providers as examples of things that might be in the public interest.

But Gill Thomas, partner at law firm Mills and Reeve, said the amendments did not change the effect that services would have to be tendered unless there was only one possible provider.

She told LGC’s sister title Health Service Journal: “The fundamentals have not changed at all.

“The principle that a service must be tendered if there is more than one provider capable of providing it remains. So this does not address the concern around the flexibility of commissioners.

“It still puts the onus on commissioners to decide whether services are capable of being provided by only one provider and from a legal perspective often the only way to test this is to run a tender, which is not necessarily going to be a proportionate approach to commissioning.”

Procurement decisions taken by commissioners could still be challenged under EU law but no one has yet brought a legal challenge under those rules.

HSJ was told the amendments will probably make a challenge under EU legislation less likely.

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