Policy paper

Health and Care Bill: competition

Updated 10 March 2022

This was published under the 2019 to 2022 Johnson Conservative government

The Health and Social Care Committee said:

We warmly welcome, in principle, NHS England and NHS Improvement’s proposals to promote collaboration. We believe collaboration, rather than competition, as an organising principle, is a better way for the NHS and the wider health and care system to respond to today’s challenges.

This fact sheet explains how the government plans to remove the Competition and Markets Authority and NHS Improvement (as Monitor’s) formal roles in enforcing competition between NHS providers.

Background

There is a growing consensus within the NHS that collaboration across NHS organisations is increasingly important to ensure the NHS continues to deliver high quality care and long-term sustainability.

While competition can drive service improvement and should continue to do so where it can add value, the current legislation contains a range of competition rules and powers that can be inflexible, and a barrier to successful integration in the NHS.

For example, the Competition and Markets Authority (CMA) has specific powers to review mergers involving foundation trusts (FTs). It has become clear that the CMA is not the right body to review NHS mergers, and we believe the NHS should be able to make decisions about provider mergers themselves. NHS Improvement also has duties to promote competition in the NHS, and to co-operate with the CMA. To reflect NHS Improvement’s merger with NHS England, the new NHS England’s primary role will be to support improvement in the quality of care and use of NHS resources, rather than regulate competition within the NHS.

In addition to this, NHS Improvement uses licence conditions to regulate providers of NHS services. When NHS Improvement propose changes to the licence conditions, the CMA has powers to review those changes if a sufficient number of providers object. We think the NHS should be able to make its own decisions on the provider licence.

What the Bill will do

The Bill will deliver a number of changes to:

• remove the CMA function to review mergers involving NHS foundation trusts. The CMA’s jurisdiction in relation to transactions involving non-NHS bodies would be unchanged, and the CMA will continue to enforce competition in the private healthcare market.  NHS England will review all mergers between NHS Foundation Trusts, to ensure they are in the best interest of their populations.  
• remove NHS Improvement’s specific competition functions and its general duty to prevent anti-competitive behaviour to support NHS England’s role as an improvement agency, rather than an economic and competition regulator  

• remove the need for NHS Improvement to refer contested license conditions or to the CMA

• introduce new powers for NHS England to provide information and assistance to the CMA, where this is required for the CMA to carry out their functions

How these provisions will help to reduce bureaucracy

These changes will enable the NHS to make sensible decisions about provider mergers and changing licence conditions without the involvement of external bodies. They will allow the system to adapt, evolve and integrate, without the need for complex and bureaucratic workarounds.