Now lawyers move in to make a killing off Lansley's NHS reforms

The Health Secretary's promise to prevent price competition in the NHS as part of the Government's health reforms is meaningless and could be challenged in the courts, senior lawyers have warned.

Under the reformed Health and Social Care Bill, being put through Parliament by Andrew Lansley, regulators will no longer have a duty to promote price competition between public and private health providers.

But yesterday lawyers suggested that the concession would have no practical effect as EU competition and procurement law will force trusts to consider the price and value of services when commissioning or face challenges in the courts.

This could lead to significant fines or the cancelling of contracts – with a knock-on effect on patient care – if challenged by companies that lose out on contracts. It will also, the advice suggests, cost the new GP consortiums, set up to replace primary care trusts, millions of pounds in lawyers' fees to ensure that their commissioning decisions are legally sustainable.

"The Government has simply failed to grapple with the frontline issues in procurement [and] has wholly underestimated the increasing rather than diminishing complexity in the area and has had no or perhaps little regard to the administrative and financial burdens arising from the regime," the legal opinion concludes.

"The fact, however, that the Government has amended the Bill to remove... the duty to promote competition as an end in itself is arguably futile since the very fact that domestic and European competition law applies to the NHS arguably itself results in the promotion of competition since that is its aim."

The opinion was commissioned by the campaign group 38 Degrees from lawyers at the Doughty Street and Monckton Chambers. It will be passed on to MPs debating the Bill, which is currently going through the House of Commons.

Its conclusions are likely to concern senior Liberal Democrats ahead of the party's conference next month – as the removal of the competition clause was trumpeted by the party as a key concession won from the Conservatives.

Any suggestion that it is meaningless will anger activists and lead to calls for further reform to the legislation.

The report also concludes that if the Bill becomes law the duty of the Government to provide a "national" health service will have been diluted and it will reduce what is currently the "unfettered power" of the Health Secretary to impose his or her will on the NHS.

The legal advice adds that in the "clear intention of the Bill to give consortia autonomy from the Secretary of State, there is a real risk of an increase in the 'postcode lottery' nature of the delivery of some services, depending on the decisions made by consortia in relation to these subsections. And the intention of the Bill is that there will be very little that the Secretary of State can do about this in practice."

Dr Clare Gerada, who chairs the Royal College of General Practitioners, said she was concerned by the lawyers' view. "Having seen these legal opinions, they raise serious concerns for GPs," she said. "As family doctors, we want to ensure any changes to the NHS safeguard its future and benefit patients."