Minister calls for OFT's merger role to be 'scrapped'

Mr Lamb made his initial remarks on the subject this week while discussing the Better Care Fund initiative at an event hosted by the King’s Fund.

Speaking exclusively to HSJ later, he clarified that his remarks did not represent a change in government policy, but were instead “relevant to the manifesto process” ahead of next year’s general election.

At the King’s Fund, Mr Lamb said: “I have a problem with OFT being involved in all these procurement issues. I think Chris [Ham, chief executive of the King’s Fund], has a bit of problem as well.  I think that’s got to change.

“In my view it should be scrapped in the future. That might happen at some future date… we’ve got to look at the barriers and address them and sort them out.”

However, after it was pointed out that the OFT does not oversee NHS contracting, tendering or procurement, the minister said: “I was talking about mergers and acquisitions and the whole issue of their role as a competition authority.”

He added: “I’m concerned about the cost and timescales involved in the Bournemouth and Poole saga.” The planned merger of Royal Bournemouth and Christchurch Hospitals and Poole Hospital foundation trusts was blocked last year by the Competition Commission after it was referred for review by the OFT.

Mr Lamb added he was concerned that the OFT could also pose a barrier to integrated care if it blocked mergers aimed at establishing integrated care organisations.

Bill Morgan, former special advisor to Andrew Lansley and founding partner of the consultancy Incisive Health, said: “The reason why foundation trusts and trusts are deemed to be under the Enterprise Act is because they’re providing services capable of being profit-making.

“Theoretically you could change the Enterprise Act to exclude specific enterprises such as NHS organisations, but the Enterprise Act reflects European law so you would need to have a negotiation with member states to allow you to do that. 

“The only other way you could get the OFT out of the NHS is to exclude all profit making companies from the NHS.” That would require the government buying out every NHS contract with a private firm, he said. “I certainly don’t think it’s likely under this government.

“For as long as you’ve got organisations, including NHS organisations, competing to deliver services to patients which can potentially deliver a profit, then the OFT has a role in the NHS under the Enterprise Act which is very hard to remove.”

Shadow health secretary Andy Burnham said: “It is simply not good enough for Norman Lamb to come along now and admit Labour was right all along about the NHS and competition law. The NHS is being suffocated by competition law and it wouldn’t be happening if he and his party had not voted for it.

“The damage is already done… His admission comes far too late for the NHS and we will make sure the Liberal Democrats are held to account for their betrayal of it at the next election.”