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NHS spend on independent service providers up 10%

UK News | March 05, 2013


Selina McKee

NHS spend on independent service providers up 10%

The amount of cash spent by the National Health Service in England on services provided by the independent sector - including private companies and voluntary organisations - grew by more than 10% in 2011/2012.

According to data from Laing and Buisson, primary care trusts (PCTs) across England hiked up their spend on services commissioned from independent healthcare providers by 10.7%, compared to a 3.5% rise in total healthcare spending from both NHS and non-NHS providers.

The report, NHS Financial Information 2013, estimates the amount spent on independent services to be £5.9 billion, equating to around 6.5% of the £90.7 billion total healthcare spend during the period.

A key driver of the increase was strong growth - of over a third - in spending on independent community health services (£1.5 billion), following the end of direct provision by PCTs during the year, as well as strong growth in general and acute health service spending, which rose by nearly a fifth to be £1.6 billion, the report notes.

On the downside, PCT spending on primary care services supplied by the independent sector dropped by 26% to £84 million, spending on learning difficulties fell down 12%, and that for mental healthcare remained static. 

Forced market?

The report comes hot on the heels of a scathing letter from the Academy of Medical Royal Colleges to health minister Lord Howe, outlining concerns that revisions to the Health and Social Care Act would mean that clinical commissioning groups (CCGs) are forced to put out to tender all services when they take over the purse strings next month, rather than just those they feel would benefit from the process.

The letter, which was leaked to The Observer, accused ministers of going back on promises to the profession by attempting to expand the private provision of services by stealth via quiet amendments to the Act.

"The proposed changes to section 75 appear to be contrary to previous reassurances from the government that CCGs will have the freedom to choose when and whether to use competition," the NHS Alliance commented. 

"Forcing providers down costly and unhelpful procurement routes will only serve to disengage them with the health service, and potentially remove valued and trusted services from local areas – regardless of local opinion," it warned.

Not indended

However, in a statement, Lord Howe insisted that "this is neither the intention nor the practical effect of the regulations".

"I am absolutely clear that the regulations do not force commissioners to create new markets….commissioners would not be obliged to advertise or competitively tender where no market exists and there is only one provider capable of delivering their requirements," he stressed.

The health minister also pointed out that the regulations "enshrine the principle that it is commissioners - rather than Monitor - who are best placed to determine requirements for improving services and to decide which provider or providers are best able to deliver those requirements".

To further cement the clarifications set out in his letter, Lord Howe also noted that he is committed to exploring the nature of the concerns and how best to address them, which presumably might include a change in the wording of the policy amendments.


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