The section 75 competition regulations, which survived a Lords vote this week, will help voluntary organisations and the NHS, says Stephen Bubb

The voluntary sector in Britain is one of our great national assets. Charities in the UK turnover more than £30bn a year. People in Britain are more likely to be a member of a third sector organisation than anywhere else in the world. We are consistently one of the most generous nations when it comes to giving money; a third of the population volunteers at least once a month.

‘The competition regulations help and to weaken them would have been a step backwards not forwards

In health, this national asset manifests itself in a number of usually underestimated ways. Billions of pounds of health research is funded and conducted by charities. Charities can change the national debate in a game-changing way − think of their role in the ban on smoking in public places. They inform the way the NHS shapes its services. And they deliver a wide range of services themselves, from hospice care to mental health services to specialist support for the homeless.

On how we realise the full potential of this delivery function that debate has flared up once again. The Lords debated NHS procurement regulations on Wednesday, which survived a vote to annul them. The question is: do they help or hinder the charities who deliver health services?

My answer is unequivocally that they help, and that to weaken them would have been a step backwards not forwards.

No new obligation

Let us be clear on what these regulations do. They transfer to clinical commissioning groups the procurement requirements that applied to primary care trusts, and they provide for Monitor to manage competition in the NHS (as opposed to having a situation where the only means of redress for poor procurement practice is through the courts).

‘The competition does need to be properly managed and regulated, as proponents of it in the NHS have argued’

They do not place any new obligation on NHS commissioners to hold a competitive tender: the position is the same as under the previous rules. Similarly, the circumstances in which a commissioner can award a contract without a competition will be identical to the requirements of existing procurement law.

Under the regulations, it is up to commissioners to decide whether, where and when to introduce a market for services. Crucially for many smaller charities, the regulations continue to allow for the use of grants rather than contracts − again, the position is unchanged.

We need more of the services that the voluntary sector provides, not less − more community-based care, preventative care, person-centred integrated care. Turning the clock back, to make the NHS procurement rules less amenable to competition than they are now, is surely not the way to go. The regulations needed to be passed, rather than falling victim to another bout of political wrangling.

The resultant competition does need to be properly managed and regulated, as proponents of competition in the NHS have consistently argued.

Serious issues

Phil McCarvill of Marie Curie was right, in his blog for, to point to the problems that many voluntary organisations will face if NHS commissioners choose to draw up large contracts, each encompassing a wide range of services.

I suspect we will see a growing trend of NHS commissioners letting contracts along these lines. That is not a result of these regulations − it’s happening already as the result of a desire to achieve efficiencies and to integrate services. But it does throw up serious issues for many voluntary organisations who, as small or specialist providers, would only ever be able to provide part of these contracts.

‘We need to think more proactively about how to encourage partnerships between large NHS providers and voluntary organisations’

We need to address those issues. We need to ensure that where subcontracting happens in the NHS, subcontractors (such as specialist voluntary organisations) are treated fairly and are able to bring their full potential to the table, rather than repeating some of the poor practice we have seen in other public service areas, such as welfare-to-work.

We need to address these issues and we are starting to. Monitor’s “fair playing field” review argued there may be a case for the development of a code of conduct to manage subcontracting arrangements, and Association of Chief Executives of Voluntary Organisations will be meeting with the Department of Health to discuss this soon.

A new standard

We need an NHS equivalent to the “Merlin standard” of behaviour introduced by the Department for Work and Pensions to regulate subcontracting.

We also need to think more proactively about how to encourage partnership working between large NHS providers and voluntary organisations, as we are currently doing through a joint project with the Foundation Trust Network and the King’s Fund.

But we need to be clear that if commissioners put create larger contracts, as they are already starting to do, it is not because of the procurement regulations. The way to address the resulting issues is not to reverse the procurement rules and make it easier for commissioners to leave things as they are, no matter whether someone else could do it better.

We need the procurement regulations to progress, rather than going into reverse. We need to address new challenges, such as the likely greater use of subcontracting, that are heading our way irrespective of the regulations. And we need to seize on the enormous potential that the voluntary sector has to offer the NHS, as one of our great national assets.

Sir Stephen Bubb is CEO at the Association of Chief Executives of Voluntary Organisations