Mike Farrar, chief executive, will make the comments as his organisation publishes a submission on plans to transform Monitor into an economic regulator.

He will suggest that the regulator should “nip in the bud” growing fears that it is building an onerous regulatory regime.  He will warn that a disproportionate approach could ossify healthcare provision in stead of driving much-needed change.

The comments on Monitor reflect broader concern about the current potential for unnecessary burdens to fall on the healthcare system. 

Mr Farrar recently warned the Care Quality Commission against “a simplistic race for more and more inspection” as the outcome of Mid Staffordshire public inquiry approaches.  He has also urged the NHS Commissioning Board to avoid being seen as “unaccountable to the public and overbearing to the NHS." 

Mr Farrar praises Monitor for engaging with the healthcare sector and for seeking views on its emerging thinking.  This has come ahead of the formal consultation that would be necessary after the Health and Social Care Bill gets approval.

But he urges Monitor to address the potential high costs of the licensing regime and a lack of clarity about monitoring, as well as to help ensure commissioners use their powers to protect services in an appropriate and proportionate way.

Mr Farrar says:

“The NHS must now be on high alert for excessive new burdens as the proposed new NHS architecture takes shape.  Ministers have shamefully undervalued managers and put an axe to the resources needed to manage the service properly, yet they then create a system that potentially introduces more and more bureaucracy. New organisations and processes set up by the Bill need to serve patients interests but they must be careful to add value, particularly when pressure on resources is so severe.”

On Monitor, he says:

“We are convinced that a specialist sector regulator can be right for the NHS in theory, but the jury is out on whether it will be so in practice. Monitor needs to nip in the bud serious concern that the potential benefits will not materialise and that the costs will be disproportionate. It has to add value and not detract from it.

“The current proposals look onerous.  They could lead to an unnecessarily burdensome, over-bearing regime, particularly for smaller providers.  A clumsy and heavy system of economic regulation could ossify healthcare provision instead of triggering innovation and redesign of services.  There is a real risk of smothering innovation rather than nurturing it.

“The NHS faces its greatest ever financial challenge.  Major change is needed to the way we deliver care. Providers and commissioners will need to be flexible and fleet of foot to keep in the black and deliver high quality care to patients. They need help, not hindrance.”

On licensing, Mr Farrar says:

“The biggest issue on the license is the cost of complying with conditions designed to ensure the continuity of mandatory services where a provider runs into financial trouble. 

“Funding the extra licensing fees, compliance costs and administrative requirements will prove difficult for many providers. We particularly question the plans for all providers to have a risk rating from a credit rating agency as the costs could be high.

“The idea that only a small number of licensees will become financially distressed looks extremely optimistic.  We believe many providers and commissioners will experience financial pressures so it is critical to get this right.”

On commissioning, Mr Farrar says:

“Monitor’s regime applies mainly to providers so we need stronger recognition of the important role of commissioners in making this all work.  Commissioners will need help to use their powers to protect services in an appropriate and proportionate way.

“They need Monitor and the NHS Commissioning Board to work together to provide support and advice.  By that I don’t mean rules handed down from on high; I mean practical help.  A helping hand, not a heavy hand, should be the starting principle.”

On monitoring of compliance, Mr Farrar says:

“We need to understand how Monitor will identify breaches and what enforcement action might consist of.  We urge the regulator to work closely with CQC on joint approaches.  We don’t want duplication and unnecessary expense.”

Notes to Editors