DH accused of 'backroom deal' over preferred provider case

The unusual step has put an end to a high profile cooperation and competition panel investigation that was likely to question the government’s decision to make the NHS a “preferred provider”, ahead of the independent sector.

The decision is sending out a dreadful message to service providers in all sectors – the DH is not on your side

An organisation representing voluntary organisations has alleged a “backroom deal within the Department of Health”.

The panel had been investigating complaints from the Association of Chief Executives of Voluntary Organisations and NHS Confederation Partners Network about NHS Great Yarmouth and Waveney. The PCT had banned non-NHS providers from bidding to take over community services, in light of health secretary Andy Burnham’s “preferred provider” policy.

The panel had decided to take its investigation to a second stage but yesterday announced that, in light of the DH decision to stop East of England procurements, would not be doing so.

A statement from ACEVO said the reason for the case being dropped was “the result of a backroom deal within the Department of Health”.

It said: “ACEVO has good reason to believe the panel was confident it had sufficient evidence to take the complaint to the next and final level of investigations.”

ACEVO chief executive Stephen Bubb said: “The decision is sending out a dreadful message to service providers in all sectors – the DH is not on your side.

“They have effectively gagged their own panel. A panel that bends in this way is clearly powerless. They knew they were going to lose so they just pulled the plug.”

The competition panel said in a statement that it had “decided to take no further action in relation to the conduct complaint”. It added: “This decision follows the CCP receiving notification from the DH that NHS Great Yarmouth and Waveney must cease its current procurement for community services.”

A letter from DH director general of commissioning and system management Gary Belfield to the panel dated 3 March said: “I am writing to confirm the outcome of my discussions with colleagues in NHS East of England regarding the need for primary care trusts in the region to suspend procurements for community services following publication of new guidance in February.

“The implication of this guidance is that PCT boards are required to review their plans for future provision of community services and secure DH “approval in principle” on direction of travel for their preferred option, against published criteria, by 31 March.”

The February guidance incorporated the “preferred provider” policy, and appears to limit many PCTs to transferring their community services to acute or mental health trusts, instead of the independent sector.