EOA Response to DH Fairness Consultation

The EOA has responded to the consultation managed by Monitor on behalf of the Department of Health "Fair Playing Field – for the benefit of patients".

 

The discussion paper consults on the creation of a fair and transparent commissioning structure for NHS services before the functions are transferred to the new independent body Monitor and the NHS Commissioning Board, who become responsible for a number of policy areas, including commissioning, from April 2014.

Views are sought on whether there are matters that mean not all NHS-funded health care providers operate on an equal footing and if so, whether something can be done that would address these issues and result in significant benefits for patients.

The review commenced in June 2012 with an initial call for evidence. This request was general, asking for submissions relating to any areas where stakeholders felt some provider groups were not operating on a fair playing field. Since then over 100 stakeholders including patient groups, providers, commissioners, regulators and policy makers have made submissions and shared their views with officials.

On the basis of the evidence received, a long-list of issues that may affect the ability of providers to operate on an equal footing has been developed.  The current consultation seeks to establish where the focus of efforts should be on the issues arising, based on where further analysis can shed most light and which issues are having the greatest impact on providers.

We agree with Monitor’s assessment of the key areas where it feels inequalities exist, although our overall view is that the inter-relationships between the identified issues are under-emphasised.

Access to capital can be hugely affected by the ability to demonstrate a healthy balance sheet, which in turn can be problematic if use and ownership of buildings and equipment is artificially restricted in the way it currently is for many organisations in the health economy.

Inequalities in the application of corporation tax mean that the market has within it a bias towards one type of provider and will continue to as long as NHS providers do not pay Corporation Tax on profits but social enterprises providers do. Similarly, VAT costs to social enterprises represent a significant proportion of their turnover.

We know from our members that providers that have emerged through the Right to Request process do not own either the land building or equipment assets they use to provide their service. Their property portfolios include a range of occupancy models including tenancy of freehold buildings and long leasehold buildings, sub tenancy of LIFT buildings and short term leases for non NHS owned properties. In overall terms we would emphasise that the agreement and management of so many leases is lengthy, time consuming and expensive and literally takes money away from front line services. And new proposals on the management of NHS property will prevent some providers from carrying out non NHS contract work on property leased from the NHS.

Looking at specific issues around tendering and commissioning we highlight the fact that the over-emphasis of financial conditions within contracts, often disproportionate to the size of the contracts, continues, behaviour that favours some types of service providers over social enterprise and employee owned providers.

There is a strong business case for enforcing a ‘ban’ on the stipulation that a provider in these markets has to satisfy some of the more stringent financial robustness tests that regularly feature in tendering situations.  If implemented such a ‘ban’ would force more of a focus on service delivery and the transformation of service quality.

Finally, as with other parts of the public sector in which public service spin outs are implicated, the creation of a fair and level playing field on pensions remains a major concern.

 

The current consultation closes at 5pm on 6 December 2012. You can download the EOA response below.

 

NEXT STEPS

In November and December, workshops will be held to take a more detailed look at those areas before turning to policy recommendations at the start of 2013.

Two events will be held in December, one in Manchester on 12 December and one in London on 13 December, to listen to people's views about issues affecting the ability of providers to operate in the NHS and update people on the review's direction and findings so far. To register attendance at one of these events, please click here.

The Secretary of State is due to respond to the review's findings in Parliament by 27 March 2013.