The Baby and the Bath Water

The night before last, the Section 75 Regulations slipped through The Lords like a U-boat, silent and deep. A limpet mine attached to the hull by one Lord Hunt failed to go off, and the boat got through unscathed. The crew even found time to loose off a few tin fish at 38 Degrees, but, on the whole, anyone watching the surface of events would have seen nothing remarkable. Certainly the BBC saw nothing remarkable, and reported nothing. The recent Reynolds analogy, that if the Health and Social Care Act was an aeroplane, then the regulations were the engines that would enable it to fly, failed to take off, leaving no scope for engines on fire, or jumbo-jets falling out of the sky. The health service revolution said to be so large it can be seen from space is all but invisible on earth. There has been no bang, not even a whimper, just the night time passage, silent and deep, of some regulations through the Lords. Nothing has changed – except that the U-boat is now on the inside, torpedoes armed and periscope at the ready. The lumbering ships of the health service convoy still steam across the healthcare seas, unaware of the peril that now lurks in the deeps.

But what exactly is this peril? The Tin Hat Tories who rallied to defend the regulations had it that there was no peril, just the formalities of tidying up a few loose ends, the formal carrying forward of existing rules. Shirley Williams declared herself fed up with being called a turncoat and a traitor, and turned herself into an orange propeller for the regulations. Lord Warner, the Tin Hat in a Red Coat, grizzled about one or two peers needing to take their medicine. There was a general put about that, without the regulations, and so the helpful arbiter of Monitor, commissioning GPs would be even more likely to see themselves at risk of legal challenge, and so more prone to defensive tendering. Noble Lords stood to nail colours of all hues to the NHS mast, vouching it safe in their hands, a much-loved service free at the point of delivery. The regulations had as much to do with marketising the NHS as the dark side of the moon does with the sun. The peril lay not in the regulations, but in not allowing the regulations. The Tories carried the day: the motion to sink the regulations was defeated, 254 to 146.

All of which begs the question: why, if the regulations are so sensible and straightforward, are so many professional bodies against them? The answer lies not so much in what the regulations say, but in what they don’t say. At the heart lies the question of whether the regulations allow, encourage or enforce competitive behaviour. Few these days would disagree with allowing competition when all – and Dr No means all – are agreed it is a sensible thing to do, but that is a world away from a default position of enforced competition, based not so much on sensibility as on ideology propped up by numerology.

The key regulation is Regulation 5, which defines the circumstances, the only circumstances, in which commissioners are not required – the default position (Regulation 10) is that they are required – to use competition to procure services. This gives Regulation 5 a somewhat exalted status, because it alone is the get-out-of-jail clause when Monitor or indeed lawyers come knocking at the door, alleging anti-competitive behaviour. Commissioners, Regulation 5 says, can only not use competition when they are ‘satisfied’ that only one provider is ‘capable’ of providing the service. The onus is on commissioners to show that they have satisfied themselves there is only one capable provider; in all other cases, which in practice will mean the majority, they must put the contract out to competitive tender.

Does this mark the privatisation of the health service, as many claim it does? Of itself, of course not: the funding is still central, from taxation, and in many cases contracts will go to existing public sector providers. But, at the same time, the hand of the private sector is greatly strengthened, a sector guided not by principles of public service, but required, by law, to maximise profit for shareholders; and furthermore a sector at ease with, and skilled in, the ways of competitive bidding. Our national health service won’t end with a bang, or even a whimper. Instead, the process will be more like pulling the plug on a bath. At first, nothing changes. But look away a while, and then back again, and then you will see that the bathwater has gone, and the baby lies mewling, the long-term sick stranded. Look up from the bath, and on the wall behind you will see a dark stain: the stain of profit, and behind that, the even darker shadow of commercial insurance.