Duties, incentives and behaviour – is the Health and Social Care Bill any clearer?

Blog post

Published: 06/10/2011

If the Government hoped it could draw the sting of opposition to its reform plans by pausing the legislation in early summer, it has been mistaken. As the Health and Social Care Bill is made ready for its second reading in the House of Lords, voices are still calling for the entire Bill to be scrapped. 

Critics argue that the reforms are too disruptive, unpopular and unnecessary. In particular, there is entrenched suspicion of the Government's intentions about the use of the private sector to deliver NHS services, despite the Government’s amendments to the Bill. 

Scrapping the entire Bill now would be a mistake, as we explain in our latest briefing on the Bill. It would only prolong uncertainty within the NHS at a time when organisations need to focus on delivering more efficient, higher quality services. 

Nevertheless, it is striking that the Government's amendments have failed to assuage concern, particularly about competition. On the face of it, the amendments seem to signal a dampening down of competition in the NHS: Monitor will no longer have a duty to 'promote' competition, but instead prevent anti-competitive behaviour alongside a parallel duty to foster integration of health services.

But concern hinges on the applicability of EU competition law to the NHS. The Department of Health states that nothing in the Bill alters the potential applicability of competition law to the NHS, which is probably limited but likely to evolve as new case law emerges. Andrew Lansley has also argued that part 3 of the Bill protects the NHS from the 'full force' of competition law.  

This ambiguity about competition law has not been helped by the parallel debate about the Secretary of State's legal duties to provide health services. The government argues that it needed to update the law to reflect the long-established reality that the Secretary of State does not directly provide any services, but instead delegates that power to primary care trusts (and in future to the NHS Commissioning Board - now NHS England - and clinical commissioning groups). The changes also aim to prevent political 'micromanagement' of the NHS, a long standing Tory policy goal. 

Critics see something else entirely – a law that enables the Secretary of State to divest him/herself of responsibility for providing a state-run NHS. It is only a short step to imagine a scenario where access by private companies to NHS funds is decided through the courts, with a government legally committed to not intervene. 

This may not be the government's intention, but it is a view that is gaining some traction, particularly within the NHS and will require further debate, both inside and outside parliament.

There is another dimension to this debate. The original White Paper contained a radical (if for many unpopular) logic within it – an autonomous NHS, where improvement would be driven by patient choice and competition, with light touch regulation. 

At the root of this is a model of behaviour from classical economic theory – a desire for market share and fear of failure that will drive public sector managers and clinicians to improve their performance. If the government is genuine about dampening down the potential of competition to drive improvement within the NHS, it needs to articulate an alternative vision of what will drive public sector professionals to innovate and improve services. 

A final reflection concerns the policy-making process surrounding this Bill. One of the reasons perhaps that there are so many conflicting interpretations of the Bill is precisely because much of the legislation has preceded the detail about policy and implementation. 

It was the Secretary of State's intention that speed was of the essence, mindful of lessons from the Blair era about the glacial pace of public sector reform.  But many people are wondering whether an alternative approach, taking more time to consult and build consensus first, might be a better route for reform.

Suggested citation

Thorlby R (2011) ‘Duties, incentives and behaviour – is the Health and Social Care Bill any clearer?’. Nuffield Trust comment, 6 October 2011. https://www.nuffieldtrust.org.uk/news-item/duties-incentives-and-behaviour-is-the-health-and-social-care-bill-any-clearer