Government announces 'humiliating u-turn' on competition regulations in NHS

In an eleventh hour reversal, ministers withdrew controversial regulations governing competition in the NHS in what Labour described as a “humiliating u-turn.”

Four weeks before major reform of the NHS is due to take effect, placing GPs in charge of over half the £100 billion budget, the rules on contracting with the private sector will now be re-written.

The climbdown, announced by Norman Lamb, the Liberal Democrat health minister, was hailed as a victory by campaigners who have opposed increased private involvement in the NHS.

Fears about privatisation have been at the centre of the dispute over the reforms throughout the passage of the Health and Social Care Act, which became law last year.

Regulations published three weeks ago governing how the Act should be implemented from April 1 were greeted with dismay. They run to just 12 pages but critics said they would open up many more services to competition from private companies and would lead to fragmentation of the service.

A petition against the measures by the lobby group 38 Degrees gathered more than 600,000 signatures and over 1,000 doctors wrote to The Daily Telegraph protesting that they made “virtually every part” of the NHS open to private firms. The Academy of Royal Medical Colleges warned at the weekend that the regulations could cause “dangerous” fragmentation of health services.

Mr Lamb admitted the wording of the regulations had “inadvertently created confusion”. He said that there would be no privatisation of the NHS and that competition should be a means to improving the NHS not an end in itself.

Mr Lamb told MPs he did not accept claims by the Government's critics of wholesale privatisation but agreed to rewrite key parts of the regulations “to remove any doubt.”

The changes would include assurances that the new GP-led Clinical Commissioning Groups, responsible for buying services for patients, would decide when and how competition should be sought, would not have to put all their services out to tender and could not be forced to do so by the NHS regulator, Monitor.

Mr Lamb added that the new rules should go no further than those inherited under Labour, which first opened up the NHS to competition during Tony Blair's 13 years in power.

Mr Lamb said: “The regulations must be fully in line with the assurances given to this house during the passage of the health and social care act,” he said.

But he did not explain how the flawed regulations came to be issued, stirring up a hornet's nest of protest, when feelings were still running high over the controversial Health and Social Care Act.

Liberal Democrats are angry that Nick Clegg was not consulted before the regulations were tabled by the Department of Health. Normally, such a measure would be circulated to the Cabinet's Home Affairs Committee, which Mr Clegg chairs. But senior Lib Dems believe this was “a cock-up, not a conspiracy.”

Andy Burnham, Labour's shadow health secretary, said that four weeks before GP-led Clinical Commissioning Groups were due to take charge of the NHS budget on April 1, coalition policy on competition was “in chaos”.

“David Cameron has been caught out trying to force competition and privatisation through the back door. We welcome this climb-down but these regulations should never have been tabled,” he said.

But Stephen Dorrell, the Conservative chairman of the Commons health select committee, which has been critical of the bill in the past, said that the government's clarification “demonstrates that the cloud of rhetoric that surrounded the passage of the health and social care act was so much hot air”.