Exclusive: NHS England told the shadow health secretary it could not impose his proposed moratorium on letting health service contracts because of European procurement rules dating back to 2006, HSJ can reveal.

A letter to Andy Burnham from NHS England chief executive Simon Stevens, released under the Freedom of Information Act, suggests it is European regulations set down well before the current parliament that prevent a blanket ban on competitive tendering for NHS services.

The letter was sent in response to Mr Burnham’s request that NHS England suspend the signing of “any further contracts for NHS clinical services”, except where there was urgent clinical need, until after the 2015 general election.

Mr Burnham had argued that the current government introduced a “new competition policy” leading to “significant changes” to the provision of NHS services, and there should be a “proper debate about these changes before they proceed any further”.

Simon Stevens

Simon Stevens’ letter suggests EU regulations would still require the NHS to be involved in competitive procurement

But Mr Stevens wrote in reply: “We are, as appropriate, required to observe European procurement regulations, originally introduced in 2006, and related UK law.

“In everything we do we are also required to exercise our functions effectively, efficiently and economically. As a result we are advised that a blanket contracting ban would not be permissible.”

Mr Burnham has long pledged to scrap the “section 75” competition regulations introduced under the government’s Health Act 2012, and to make the NHS the “preferred provider” for NHS services. These moves, he has said, would protect health services from being taken over by private providers.    

However, Mr Steven’s letter appears to suggest that European Union regulations predating the act would still require the NHS to be involved in competitive procurement.

Labour does not view the EU procurement laws as a roadblock to its plans.

Debbie Abrahams, chair of the Parliamentary Labour Party’s health committee, told HSJ in May that it was the 2012 act which “exposed the NHS to the perils of EU competition law” because it changed the status of NHS trusts and foundation trusts.

Andy Burnham

Andy Burnham has pledged to scrap the section 75 regulations in the Health Act

She said: “The act has competition at the heart of it. One of the measures they used to facilitate this is the increase in the private patient income cap to 49 per cent.

“This and the other measures, including section 75 and establishing Monitor as the economic regulator, could be argued changed the status of the NHS in the eyes of the [European] Commission from pursuing social objectives to economic ones.”

A Labour spokesman said today that the party still believed it was “the Health Act that exposes trusts to forced tendering, not the EU regulations”.

He continued: “Trusts have only been forced into tendering over the last couple of years by the act despite the EU regulations being introduced back in 2006.” 

He added: “We still believe the lengthy contracts due to be signed in the remaining months of this parliament will tie the hands of the next government. Current ministers have no mandate to force tendering on the NHS and, unless it is a matter of urgent service provision, new contracts should be put on hold pending a full debate at the election.”