Monitor’s chair has set out a passionate case for increasing competition, choice and local autonomy in order to improve productivity and patient care.

Speaking at the CASS business school in London last night, David Bennett said he saw his role as continuing work carried out in his previous job as head of policy at Number 10 under the Labour government.

This work had been to “promote patient choice, to promote improvements in productivity, to allow hospitals to make their own decisions, and above all to promote better outcomes for people”.

He said his former job had taught him that defending the core values of the NHS involved “raising productivity”.

He cited evidence that he said showed competition would make the NHS more efficient. For example, a Bristol University study had shown greater competition resulted in better management and improved clinical outcomes, he said.

The starting point in health should “often not be competition per se but choice”, in order to provide patients with the “powerful tool” to decide who chooses their care, Mr Bennett said.

There were no plans to introduce “US-style competition” into the NHS, he assured the audience, while distancing himself from parallels between planned economic regulation in the NHS and the regulation of utilities firms.

He said: “This is a very different landscape to utilities, and the interface between the regulator and providers in the sector is, therefore, likely to be very different from the somewhat adversarial relationships that have sometimes existed between one incumbent monopoly and the economic regulator in other sectors.”

Private sector involvement in the NHS was only around 5 per cent of NHS spend and is “likely to grow, even under current proposals, only slowly,” he said.

However, he added that competition was sometimes inappropriate, saying Monitor will have to use benchmarking data to regulate rural and remote hospitals “ensuring that they deliver care to an equivalent quality and cost effectiveness as urban hospitals”.

Monitor will seek to achieve a “healthy combination of competition and collaboration”, he said. Where there was a net benefit to patients through greater integration of care, Monitor would seek to promote it.

His comments follow calls to insert a clause into the Health and Social Care Bill forcing Monitor to promote collaboration as well as competition.

Mr Bennett also repeated previous warnings that, in levelling the playing field between the independent sector and NHS, Monitor would need to consider the “distortions” working against NHS providers. For example, the fact they tend to treat more complex cases and have responsibility for training clinical staff.

He stressed he was speaking in a personal capacity and was not seeking to pre-empt the pause to the bill.