Westminster blog

Andy Burnham’s policy that NHS organisations are now the health service’s “preferred provider” is proving something of a running sore.

Given the [still small] amount of care that the NHS already buys from the private and voluntary sector, and the way that has expanded over recent years, at least some competition and procurement lawyers believe that rowing back to a preferred provider approach may well breach EU competition law.

Mr Burnham may now have succeeded in preventing his own advisers – the Co-operation and Competition Panel – pronouncing on the issue.

But “preferred provider” also cuts across other government policies. Peter Kyle, deputy chief executive of Acevo, which represents voluntary organisations, points out that both Gordon Brown, the prime minister, and the Conservatives are encouraging NHS staff to formally quit the service and sell their services back through social enterprises.

The “preferred provider” approach, Mr Kyle points out, heavily limits the chances that if they do so, they will then be able to grow their businesses.

“Preferred provider” means that staff will “clearly think more than twice before they leave the safety of the statutory sector,” Mr Kyle says. As proof of that, Acevo claims that across London, some 17 expressions of interest by staff in forming a social enterprise promptly dropped to two after Mr Burnham made his original speech in September outlining the preferred provider approach.