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Competition law: Lawyers warn that NHS breakup may breach EU competition rules

Government plans to create new 'commissioning support service' bodies may fall foul of EU competition law according to a leading healthcare law firm.

The controversial proposals for NHS reform will involve the scrapping of the 151 NHS primary care trusts which currently commission most healthcare services and between them manage a vast chunk of the NHS budget.

They will be replaced by GP-led consortia which will instead purchase healthcare services from the bottom up. The reasoning is that GPs are better placed in their role in primary care to assess local needs and demands.

The concern expressed by lawyers surrounds the establishment of 30 bodies which will be set up by the Government to assist the GP consortia in spending their budgets appropriately and efficiently.

These 'commissioning support service' organisations will be run by former NHS primary care trust staff, but will be outsourced to the private sector to manage. Companies including BUPA, Aetna and Capita are expected to bid for the right to run such organisations.

The government proposal is to create the bodies and run them for two to three years until they are freestanding and ready to participate in successful outsourcing.

This move has angered private healthcare consultancies, who would be prohibited from entering the market initially. They argue that the structure favours Whitehall cronies, who would be given vast sums of taxpayer money to develop their skills and commercial relationships whilst being sheltered from competition.

Roger Hymas is a healthcare commissioning consultant, who currently works with the NHS.

"There is a carve-up going on," he said.

"The Government is going to award these contracts to government employees, who will then go off and... privatise themselves," he added.

Capsticks are a healthcare law firm, who have been looking into the government proposals. Senior partner Peter Edwards claims that the plans could fall foul of competition law.

"State aid could come into play if NHS commissioning support services are given a three-year period to become business-ready, during which time they are funded by public contracts that have not been subject to competition and receive other state-funded support," he said.

Related links:

Read more on the story (Financial Times)

Overview of European Union competition law (FindLaw