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Andy Burnham (as he moves from being uncomfortable in Government to being comfortable in opposition) and Circle’s takeover of Hinchingbrooke.

Filed Under (Hospitals, NHS Providers, Private Health Care, Private Sector, Secretary of State) by Paul on 14-11-2011

Last Thursday I blogged about a report which examined different approaches to losing weight, and received some interesting comments which I will talk about later in the week.

But by chance this post was published on the day that the agreement between the Government and Circle at Hinchingbrooke was finally signed and some people want to know my thoughts about this.

This takeover was the outcome of a very long tender process – started under the previous Government. The current Labour spokesperson, Andy Burnham, was Secretary of State for Health during some of this period.

It is significant that both Secretaries of State – the Conservative Andrew Lansley and Labour’s Andy Burnham – could not think of any other way of continuing to develop services in Hinchingbrooke than by a takeover. Given the politics of the NHS at the moment and in 2009 neither Secretary of State would have chosen to have a takeover of an NHS hospital by a private hospital if they had any alternative, but they could not come up with one, so Andy Burnham agreed to it being put out to tender and Andrew Lansley has now signed off the outcome.

Now Andy Burnham says that current Government policy differs from the one that he was following because he wanted there to be a public sector takeover and not a private sector one.

So apparently he is in favour of public sector takeovers but not private ones.

That in itself is an interesting process which I will comment on later in the week but the problem in taking this line is that when the bidding opened under Andy Burnham’s Labour predecessor he allowed both private and public sector bidders to apply. If Andy Burnham had wanted a public sector outcome he could have made sure, while he was Secretary of State, that he would only allow public sector providers to bid for Hinchinbrooke. He didn’t.

In fact it was whilst he was in charge of the process that the final public sector bidder – Cambridge Hospital FT – dropped out in February 2010. .

This means that Andy Burnham spent his last few months as Secretary of State with a takeover process for Hinchingbrooke that could only result in a private sector takeover.

And he did not stop the process.

So whilst he was Secretary of State he could countenance a takeover of Hinchingbrooke by the private sector but not whilst he is opposition spokesperson.

One of the reasons for this change of position is the difference between making pronouncements about policy and being responsible for making policy happen.

Whilst you can say all sorts of things in opposition, in Government – if you are Secretary of State – you have to operate within the law.

If he had run a formal takeover process for Hinchingbrooke and invited bids from public sector providers but excluded those from the private sector he would have almost certainly been operating outside the law.

And that was something he knew a bit about.

In his last few months as Secretary of State he was becoming fully acquainted with the law.

Famously, from mid-September 2009 when Andy Burnham was Secretary of State, he announced a personal preference that NHS providers would be ‘preferred’ against those from the independent and voluntary sectors as the providers of services for NHS patients.

3 months later, in January 2010, the Association of Chief Executives in Voluntary Organisations (ACEVO) felt that their members – as third sector providers of NHS services – were not preferred providers. Because of this, the possibility of their gaining contracts to provide services to NHS patients would have been prejudiced by the Secretary of State’s personal preference.  As a consequence they took a case to the Co-operation and Competition panel to ask if Andy Burnham was breaking competition law by not allowing their members a level playing field on which to bid for NHS work.

Three months later blog readers may remember my post on 29 March 2010,

“Blog readers will have been following the twists and turns of the Secretary of State’s attempt to change the policy of the NHS to enforce his personal preference for the NHS as preferred provider.

Last week Society Guardian reported the end of the line as follows:

The Health Secretary, Andy Burnham, has lost his political battle to protect the NHS against competition from the private and voluntary sector. He had declared his intention to make the NHS a “preferred provider” of health services: some primary care trusts took this to mean independent healthcare firms and social enterprises should be excluded from bidding for contracts. Burnham’s ambition was seen by some as a sop to Labour’s trade union funders, and an attempt to re-establish the party’s anti-NHS privatisation credentials. Complaints were made to the NHS competition commission, and there were reports of disputes in cabinet over the issue. Today, the NHS published its revised guidance, which appears to blow Burnham’s ambitions out of the water. Stephen Bubb, chief executive of Acevo, which represents charities that provide public services, said:

“This guidance is the final nail in the coffin for the ‘preferred provider’ policy, which has been well and truly neutered. The Department of Health has today explicitly told NHS commissioners that they must not prefer providers from any one sector, and should instead be non-discriminatory and seek to remove barriers to third sector participation.”

Here’s an extract from Acevo’s briefing:

“The revised principles and rules for co-operation and competition contain no references to preferred provider. Principle 2 of 10 is that ‘commissioning and procurement must be transparent and non-discriminatory’. The PCT Procurement Guide makes clear that ‘the commissioning process, including any form of procurement, should be non-discriminatory and transparent at all times, including neither favouring nor excluding any particular provider’ ; ‘the procurement process should not give an advantage to any sector (public, private, third sector/social enterprise)’; and PCTs are required to ‘give all providers fair and equal opportunity to bid’. It also includes a new annex on provider engagement, and states that ‘the NHS will continue to remove potential barriers to the participation of non-NHS providers’”.

For those of us who believe that NHS Commissioners should feel free to commission the best care for their patients, this is a really good outcome.”

It is important to remember these 6 months of politics for a number of reasons.

I am not ‘having a go’ at Andy Burnham for being inconsistent. He wanted to rig the rules against private and third sector innovatory health care in 2009/10 and I suspect he wants to rig the rules against them now.

The difference is that when he tried to do this as Secretary of State he was clearly acting illegally. Once the third sector had asked for the law to be applied to Andy Burnham’s personal preference, it was clear that he would not be able to act on that preference within the law.

So when he was Secretary of State he was in the uncomfortable position of personally wanting to do something that the law prevented him from doing.

Now he is in opposition he is in the more comfortable position of being able to say something should happen knowing that, because he is not in Government, what he wants to happen  cannot – and because he is in opposition his words cannot break the law.

If he were to become Secretary of State again and try to enforce his personal preference, he would have the same legal problem.

This story underlines another important political point.

Critics of the current Government’s reforms have said that their Health and Social Care Bill is responsible for introducing competition law to the NHS. Yet in 2010 the Cooperation and Competition Panel recognised that the rigged market that the then Secretary of State wanted, would have been illegal.

Competition law will be applied to the NHS whenever someone feels that the market is completely rigged against them. It does not need an Act of Parliament to make that happen. In fact to stop that from happening a Government would have to try and construct a law which exempts health care from the concept of a fair market.

Until then it is possible to have a policy of the NHS as preferred provider but just not possible for that policy to have legal force.

That’s why it works well in opposition but badly in Government.


4 Responses to “Andy Burnham (as he moves from being uncomfortable in Government to being comfortable in opposition) and Circle’s takeover of Hinchingbrooke.”

  1. This clear and excellent blogpost demonstrates the problems for New Labour, and highlights the preparatory work that they did for the new changes whilst they were in Government.

    Mr Burnham has not (as you clearly evidence) had a Damascene conversion – he is merely behaving like a politician, high on rhetoric and low on honesty and integrity.

    I despair of our political classes at the moment.

  2. Thanks goodness Andy Burnham is articulating what thousands of NHS staff is saying about the risks of this deal. With shareholders to satisfy, we are all wondering what services or standards Circle think are dispensable.

    The private sector tried and failed in the same way at a Birmingham hospital a few years ago – with the taxpayer footing the bill, as usual.

    Cynics will always carp, but the values of the NHS are worth fighting for.

  3. “when the bidding opened under Andy Burnham’s Labour predecessor he allowed both private and public sector bidders to apply.”

    Yur use of the word “allowed” is misleading, wrong even, and proved to be so by the rest of your article. He was ‘obliged’ by law, both UK and European, the latter of which you make no mention.

  4. Andy Burnham could have decided that the NHS was his preferred provider legally had he and his predecessors not decided to open up the NHS to competition. European law specifically exempts health care from competition law where the state decides to provide tha healthcare itself. However, once the state decides to ‘buy’ rather than ‘make’ health services, then competition law kicks in.An NHS Trust is owned by the state so Andy Burnham could have decided to transfer the management to another NHS Trust – except that of course FTs have been given autonomy and so Addenbrookes could not be forced to merge with Hinchingbooke. And they were not prepared to take on the liability without a significant dowry.

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