Report (5th Day)

Part of Health and Social Care Bill – in the House of Lords at 7:22 pm on 6th March 2012.

Alert me about debates like this

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health 7:22 pm, 6th March 2012

My Lords, as I said earlier, retaining Clause 77 would have several substantial benefits. The OFT already has jurisdiction to review foundation trust mergers under the Enterprise Act. The problem, as I said, is that there is legal uncertainty as to when that applies in individual cases. That creates the risk of double jeopardy for foundation trusts, as their mergers are also reviewed by the Co-operation and Competition Panel. There is also a problem of unnecessary duplication of specialist skills between the Co-operation and Competition Panel and the OFT which, incidentally, brings with it a cost to the UK taxpayer.

Retaining Clause 77 would avoid that duplication and eliminate the current legal uncertainty and risk of double jeopardy for foundation trusts. That would encompass mergers between two or more foundation trusts and acquisitions by a foundation trust of another foundation trust or a private business, such as UCLH's acquisition of the London Heart Hospital under the previous Administration.

However, it is important for me to make it clear that the Bill would prevent any takeover of a foundation trust by a private company, contrary to what some commentators outside this House have suggested. Secondly, the OFT has a proven track record for light-touch, proportionate regulation of mergers and ensuring good value for public money. By contrast, under the system we inherited from the previous Government, the Co-operation and Competition Panel has reviewed several mergers of community services at considerable cost and delay to the NHS that would have been permitted automatically under the OFT's materiality thresholds.

Finally, the approach provides better value for public money by avoiding duplication of specialist resources between the OFT and Monitor. Mergers are a specialist area. Given the variable frequency of mergers in the NHS, it would be a far better use of resources to consolidate the responsibility and expertise within the OFT, where they could also be put to good work for the benefit of the wider economy, rather than resourcing another public body at the taxpayer's expense.

I reassure the House that the paramount consideration for the OFT in reviewing foundation trust mergers would be the impact on patients' interests. This would include, as a matter of necessity, considering the interests of patients in securing sustainable access to a comprehensive health service.

As part of any merger investigation, the OFT and the Competition Commission would engage with Monitor in order better to understand the services involved. In particular, the OFT would obtain Monitor's view on how a merger would benefit patients. These views would then be considered in the analysis, along with representations from other stakeholders, including local health and well-being boards, and other evidence. However, I sympathise with concerns to ensure Monitor's involvement in advising the OFT and with the desire that this should be included in the Bill.

Amendment 184, proposed by my noble friend Lord Clement-Jones, would ensure that evidence gathered in reviewing a merger involving a foundation trust would always include expert advice from a healthcare regulator with an overriding duty to protect and promote patients' interests. I thank my noble friend for what I think is an elegant solution and I hope that it will allay any concerns that remain in the House in this area. I am pleased to tell him that I plan to support Amendment 184, as and when he comes to move it. I hope that, in the light of those reassurances, the noble Lord, Lord Beecham, will feel able not to move his amendment.

Amendment 181 agreed.

Amendments 182 and 183

Moved by Earl Howe

182: Clause 77, page 98, line 37, leave out "have ceased" and insert "cease"

183: Clause 77, page 98, line 40, leave out "have ceased" and insert "cease"

Amendments 182 and 183 agreed.

Amendment 184

Moved by Lord Clement-Jones

184: Clause 77, page 98, line 40, at end insert-

"(3A) Where the Office of Fair Trading decides to carry out an investigation under Part 3 of the Enterprise Act 2002 of a matter involving an NHS foundation trust, it must as soon as reasonably practicable notify Monitor.

(3B) As soon as reasonably practicable after receiving a notification under subsection (3A), Monitor must provide the Office of Fair Trading with advice on-

(a) the effect of the matter under investigation on benefits (in the form of those within section 30(1)(a) of the Enterprise Act 2002 (relevant customer benefits)) for people who use health care services provided for the purpose of the NHS, and

(b) such other matters relating to the matter under investigation as Monitor considers appropriate."

Amendment 184 agreed.

Amendment 184A not moved.

Clause 78 : Reviews by the Competition Commission

Amendment 185

Moved by Earl Howe

185: Clause 78, page 99, line 5, leave out paragraph (a) and insert-

"(a) the effectiveness of competition in the provision of health care services for the purposes of the NHS in promoting the interests of people who use such services,"