Michael White on NHS co-operation and competition

In September last year it was announced Labour peer Lord Carter of Coles was to be the panel’s first chair and director. Alan Johnson’s deputy Ben Bradshaw unveiled the move as a signal of the government’s “commitment to the market in healthcare”.

That actually translates as meaning the new panel would be policing complaints about a lack of competition between the NHS and private providers over NHS funded services, from clinical matters across the board to advertising and keeping the DH, the strategic health authorities and Monitor on their toes.

“Competition has played an important role in driving up quality and responsiveness of healthcare services and increasing value for money. We have designed a system for the NHS where competition works, through patients exercising their choice of provider and through open and fair competition to provide services. The [panel] will ensure providers operate on a level playing field, safeguarding the interests of patients and taxpayers,” Mr Bradshaw explained.

But scepticism persists; hence Nick Timmins’ Financial Times article, which caught my attention. Lord Carter himself admits that no one expects “tooth and claw competition next week”, but predicts that the law of unintended consequences is gradually kicking in and that his job is to provide clarity.

It is easy to blame Europe, as the health secretary showed on TV this week when he got into hot water for blaming “distorted” EU court rulings for the import of foreign workers, which is generating 1980s-style demos.

It is one angle we can ignore in the competition panel context. Pressure on primary care trusts to keep their provider divisions at arm’s length and make sure services are genuinely put out to fair tender is domestic, not imported. As Whitehall seeks to open up NHS services to choice, thereby withdrawing their historic protection, Europe’s competition and procurement laws will gradually apply more. But “not yet”, says panel-sceptic Tory health spokesman Andrew Lansley.

“It’s not on Europe’s radar yet,” confirms Labour’s Kevin Barron, chair of the Commons health committee. He is due to meet Lord Carter soon to hear what he is up to - still “a deep mystery”, he told me.

Over at Monitor, Bill Moyes sounds quite keen. Foundation trusts and PCTs can expect more penetrating questions, he says.

Moyes points out that Patrick Carter’s business CV is important here. Co-founder of Westminster Healthcare, a provider of social care which he later sold, the Essex schoolfriend of Jack Straw now has the wealth, time and experience to chair many policy reviews for Whitehall. They include criminal records, offender management, legal aid, Wembley Stadium and many others, including the 2006 NHS pathology review. He prodded Straw towards privately operated prisons. As someone commercially involved in the opening up of social care to private provision in the 1990s, Carter has “really thought about” how best to use competition to improve healthcare, Bill Moyes argues.

Andrew Lansley’s scepticism is not directed at Lord Carter, but at ministerial ambiguity towards competition (reflected in the Co-operation and Competition Panel’s ambiguous title?) and Carter’s consequent lack of powers.

Unlike regulators of energy, water, telecoms, the panel doesn’t have parallel powers independent of the Office of Fair Trading, he points out. It wasn’t set up by primary legislation and has no legal status or enforcement rights: “Carter lacks clout.”

Why so? Because health bureaucrats see the NHS as a system to be managed, not a real marketplace. Yes, healthcare needs to be regulated, but the idea of the panel urging SHAs to shake up non-competitive practices is doomed: SHAs are part of the problem, he adds.

I’d put it more optimistically. It’s a slow process, not a big bang. Carter sounds like a man to take seriously.