Editor's blog Wednesday 6 October 2010: Cameron live tweets, and the conundra of reform

I'll be tweeting from PM David Cameron's speech at www.twitter.com/HPIAndyCowper

Do pop in if you're free.

Dave West of Health Service Journalreports a DH presentation expressing significant concerns about "unresolved issues" relating to provider reform.

The slides included the question “How should [the national commissioning board] and Monitor manage risk of price competition driving down quality?” - the classic reason Simon Stevens always gave for the use of the national tariff outlawing competition on price.

The definition of "essential services", AKA "additional regulated services (also covered in this article by HSJ's Sally Gainsbury, who wins the prize for spotting the excellent three-letter acronym ARS) will be crucial.

It all sits around the absence of a realistic failure regime. One of the stated intentions (from DH insiders) of the current reforms is to allow services that have had repeated bale-out subsidies to fail and so close. It's a nice neo-liberal theory.

The problem is that in practice, as far as provision goes, many simply cannot safely be allowed to close.

This realisation has clearly struck. Hence these HSJ stories.

Dave West points out that "essential" could include all the FTs' "mandatory services", creating the significant problem of whether the economic and competition regulator - Monitor - has a fatal conflict of interest with its oversight and scrutiny responsibility regarding FTs. His article also quotes NHS management board papers positing whether "an 'additional risk pool' should be built up for Monitor 'to deploy pre-failure'."

This is interesting and worrying. If some senior civil servants think the purpose of reforms is to allow failing-but-subsidised organisations to finally fail and close, then creating this kind of bale-out find is an incomprehensible idea.

It also, as Sally Gainsbury notes, has implications for the potential of FTs to borrow  without limit. This proposal is one of the worst in a White Paper full of some fairly bad ideas. It represents effective denationalisation of publicly funded and backed assets.