Labour promises to shield voluntary sector from preferred provider plans

The party’s 10 year plan for health and care, released this morning, confirms its intention to repeal the Health Act 2012 at the start of the next parliament, and to replace the NHS’s competition framework with an “NHS preferred provider” framework.

This, it says, would include scrapping the roles of Monitor and the Competition and Markets Authority as “economic regulators enforcing competition within the NHS” and the “Section 75 regulations” that placed competition rules on a statutory footing.

However, the plan said it would talso draw “a clear distinction between not-for-profit and for-profit providers” of NHS services “by giving the voluntary sector organisations the benefit of longer and more stable arrangements”.

The policy seems designed to assuage the concerns that charities and other not-for-profit providers might have about an NHS preferred provider framework. When Andy Burnham was health secretary in early 2010, his preferred provider policy was challenged by the Association of Chief Executives of Voluntary Organisations.

Not-for-profit providers currently have a share of the NHS community services market that is only slightly smaller than that of private sector players. According to a recent report from healthcare market analysts Laing and Buisson, the not-for-profit sector, including social enterprise “spin outs” from the NHS, provided £1.26bn of the £9.7bn community services market in 2012-13 – a 13 per cent share of the total.

By comparison, for-profit providers had a £1.77bn share, or 18 per cent of the total.

The report predicted that these shares could rise to over 15 per cent and over 20 per cent respectively, over the next two to three years.

On competition, Labour’s 10 year plan states: “To make the necessary changes and improvements to patient care over the next ten years the NHS will need the freedom to collaborate, to integrate, to merge across organisational divides and boundaries without having to run wasteful tenders making integration harder to achieve or having the competition authorities blocking their plans.”

Among the other policies it lists to address competition concerns are plans to place “tougher controls on trusts’ ability to earn private patient income” in order to “ensure NHS patients always get put first, and ensure proper safeguards on conflicts of interest”.

It also promises to extend Freedom of Information Act provisions to independent sector providers of NHS services – a policy that was recommended two years ago in Monitor’s fair playing field review.