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Queen's Recommendation having been signified--


That, for the purposes of any Act resulting from the Companies Bill [ Lords ], it is expedient to authorise--

(a) the payment out of money provided by Parliament of any sums required by a Government department for defraying expenses incurred under or in consequence of the Act, and

(b) the payment out of such money or out of the Consolidated Fund of any increase attributable to the Act in the sums so payable under any other enactment.--[ Mr. Garel-Jones. ]


Companies Bill [Lords]


That, for the purposes of any Act resulting from the Companies Bill [ Lords ], it is expedient to authorise--

(a) the charging of fees,

(b) the amendment of the definitions of "subsidiary" and "holding company" in enactments in which those expressions are defined by reference to the Companies Act 1985, and

(c) the payment of sums into the Consolidated Fund.--[ Mr. Garel-Jones. ]

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Children (Carrickfergus)

2.2 am

Mr. Roy Beggs (Antrim, East) : I beg to ask leave to present a petition containing signatures collected by my constituents in the historic town and borough of Carrickfergus in East Antrim. My petitioners are concerned that children and teenagers are at risk of becoming addicted to slot, fruit and gaming machines and that addiction to such machines might lead to serious damage to their education, disruptive behaviour in the home and in some cases to criminal activity in order to satisfy their addiction to gambling on machines. The petitioners believe that the Government could protect children, young teenagers and the families of those at risk by amending legislation.

I congratulate those who signed and those who collected the 3,558 signatures which are considered to be representative of the views of millions of responsible citizens throughout the United Kingdom. Wherefore your Petitioners pray that your Honourable House will do everything in its power to urge the Government to help protect children, young teenagers and the families of those at risk by urgently amending legislation so as to restrict the installation of these machines to licensed premises where adults only have access to them.

And your Petitioners as in duty bound will ever pray, etc. To lie upon the Table.

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Prince of Wales Hospital, Rhydlafar

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Garel-Jones.]

2.4 am

Mr. Rhodri Morgan (Cardiff, West) : I am grateful that Mr. Speaker has seen fit to let me raise the question of the closure of the St. Nicholas children's ward at the Prince of Wales orthopaedic hospital in Rhydlafar in my constituency. This Adjournment debate is taking place in the early hours of what is an historic morning--in more ways than one, perhaps. It is a rather late hour at which to discuss a matter of such concern and it gives a new meaning to the phrase "five o'clock shadow".

The matter is of great importance, not only to my constituents but to those who live in the surrounding counties of Mid Glamorgan and Gwent. If the closure goes ahead, it will mean that children requiring orthopaedic surgery will not receive the standard of treatment that they deserve this year and in the years ahead. In order to determine the exact reason for the announcement about the ward closure and to understand the absence, as yet, of a statement about alternative provision, we need to look at the background to this year's financial provision for the South Glamorgan health authority which controls the hospitals in the county, part of which I have the honour to represent.

This year late notification about funding for the present financial year was given to the county by the Welsh Office. The county received that notification only in February. The funding meant that the county had to make savings on its budget of £2.3 million, or 1.3 per cent., and had to find those savings in the short time between February and March. All the unit managers were asked desperately to suggest ways in which they might contribute to those savings. They saw an impending financial crisis, given the few weeks that they had to try to find the savings.

The general manager of the area health authority, Gordon Harrhy, was interviewed on Radio Wales, and was asked what he thought about the budget allocation received from the Welsh Office. He said, "It is very interesting to me. I have frequently listened to Government spokesmen saying that each year the Health Service receives an increase in real terms. I am the manager of the health authority and I know that I have less money in real terms and less to spend in 1989 than I had in 1988."

The process by which the recommendations for savings were brought before the authority for acceptance or rejection took only a few weeks. The relevant proposals were put before the authority at its monthly meeting in March and confirmed at the April meeting. The savings package included weekend closures at the University hospital, the closure of a rehabilitation ward also in my constituency at Rookwood, and certain other smaller miscellaneous savings. The one saving that brought the greatest calumny on the Government's head and on the head of the health authority was the proposal to close the children's ward at the Prince of Wales hospital, Rhydlafar. That hospital will always be known to the natives of Radyr, where I grew up, as the American hospital. It was the nearest hospital to the village of my childhood, and was built during the war for the American service men and gradually converted in the early 1950s into the primary orthopaedic hospital for

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south Wales and, with Oswestry, is one of the only two orthopaedic specialist hospitals serving the whole of Wales.

There is no question but that the March decision was a bombshell. All the operating theatres were new and had been opened only last August at a cost of £750,000. They are next door to the children's ward and there is a proud plaque on the side of the new operating theatre which says that it was opened by Alun Jones, chairman of the health authority, in August 1988. The Welsh Office paid for that, as it had paid £3 million to £4 million for the upgrading programme for the Prince of Wales hospital after the reversal of a previous decision for the closure for the whole hospital. That closure had been announced by the previous Secretary of State for Wales, Nicholas Edwards as he then was, in 1982.

The savings that would be achieved amounted to £40,000, and the total savings required were £2.3 million. No more than 2 or 3 per cent. of the total savings would come from the closure of the children's ward. However, the authority decided to proceed, although it was faced with misleading medical and financial statistics. Those of us who have been involved in the campaign to reverse the decision have had no hesitation in saying that the health authority based its decision on the papers which were put before it at its March monthly meeting, which were the result of those statistics.

The authority was told that it would save £47,000. Omitted was the fact that the education authority paid £7,000 towards the cost of the school. It is the only school in the hospitals within south Glamorgan that covers the five to 16-year age group. It is possible for someone within that group to do his or her O-levels or GCSEs at the hospital. That is more likely to be of importance to children requiring orthopaedic surgery than those needing general medicine because they have tended in the past to spend extremely long periods in hospital. Even today, children needing orthopaedic surgery may spend six months in hospital, notwithstanding the wonderful technology for correcting length of limbs and club feet, for example. Patients still spend a much longer period in an orthopaedic hospital than they would for most forms of hospital treatment. As I have said, there is a school provision, which is paid for by the education authority.

It is important that there were misleading medical statistics. In effect, the authority said, "We are going to close the children's ward because it is under-used. It is occupied for only 47 per cent. of the time that it is available for use." It is a 12-bed ward. The medical staff at the hospital keep its records carefully. It found that, if midday bed occupancy was taken into account, there is 65 per cent. occupancy. The staff say, for sound medical reasons, that midday occupancy is much more relevant than night occupancy. Children who require orthopaedic treatment are not ill in the conventional sense. They are not suffering from an infection, a fever or any recognisable illness. If it is possible for them to go home to be with their family, or even to attend school, they should be sent home overnight, to return the following day for their treatment. The midday count is the relevant one. The difference between 47 per cent. and 65 per cent. is relevant, because 75 per cent. is for all practical intents and purposes the maximum bed occupancy for a children's ward.

What else was wrong with the way in which the health authority went about its decision making? Most people were appalled that it was willing to announce closure of a

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children's ward without being able to say with any confidence that there was an alternative for the provision of orthopaedic surgery for children. In other words, it claimed that there were several options. What were they? One option was a move to the Coronation ward of the Cardiff Royal infirmary. The infirmary is in the constituency of the Under-Secretary of State for Wales, the hon. Member for Cardiff, Central (Mr. Grist). I am pleased to see him in his place tonight because I can say of him, with confidence, that if he required orthopaedic surgery, he, like myself, would probably attend National Health Service hospitals in South Glamorgan.

The Coronation ward at the Royal infirmary is a general children's ward. It deals with pneumonia treatment, bladder infections or whatever. It is entirely unsuitable for cold orthopaedic surgery cases, which may require treatment for months but which are not suffering from infection. It would be wrong to mix them with pneumonia and bladder infection cases because they would be at risk of catching those infections during the lengthy period that they would be in the ward. At least the orthopaedic cases would have the same children's facilities, which is an attractive idea, but the ward would be unsuitable medically. Today, one of the senior staff of the health authority has told me that it was never on to opt for a move to the Coronation ward. I was told that it was never a practical solution. It seems that it was something written down in a moment of panic. The entire episode betokens strongly management by panic after a spot of government by panic following late notification of the budget.

The other alternatives relate to changes within the Prince of Wales hospital. One is conversion of the day ward used by outpatients for use as a children's ward as well. Another involves the conversion of an adult ward to provide a children's annex. Another option is touting for more business, as it was put, to draw more children in to the hospital and make greater use of the beds there.

The problem with converting the day ward is that outpatient treatment is a rapidly expanding aspect of hospital provision. The day ward does not offer enough room for adaptation, so that is a totally impracticable suggestion. I am reliably informed by the medical staff that day ward use is high and is increasing as many more people are treated on a day basis than used to be the case. They include patients for minor surgery to remove ganglia and trigger thumb, who do not need to stay overnight.

However, children could not share the same ward. They would play around and would receive their drug treatment while adults in the same ward would be receiving totally different drugs, needing peace and quiet as they recover for a couple of hours after undergoing surgery before returning home. It would hardly be ideal for such patients to share a ward with children staying in the hospital for months and who want to play on go-karts or computers as a diversion in the long months of their stay.

Converting an adult ward to include a children's annex is also totally impracticable without capital works, which would take away much of the £47,000 savings. The hospital's senior medical staff are on record as saying as much. The Minister may have read the remarks of Hans Weisl, the most distinguished orthopaedics surgeon, who wrote an open letter to the health authority that was published yesterday. He commented that such an option just is not on without major works. The senior medical staff all agree on that point and have pressed the health

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authority to forget that idea. It would cancel out most of the savings, leaving perhaps £10,000. What kind of contribution is that to the intended savings of £2.3 million?

It is appalling that the health authority should decide to close a children's ward without being confident that any of the alternatives it suggested, and loosely dangled before the health authority's decision- makers when they had to put up their hands to vote, are practical alternatives that the orthopaedic staff concerned are prepared to countenance as suitable, and without requiring expenditure that would negate the savings that originated that madcap closure.

Since the announcement of a campaign to rescind the closure decision, the health authority has reacted like a scalded cat. Its chairman, Alun Jones, sent a nonsensical letter to all the medical staff involved. It includes the following arrant nonsense : "I must emphasise that wherever these services are relocated the current provision for children will be maintained and there is no intention whatsoever that children's facilities should be mixed with adult facilities on the ward."

That cannot be done. It is not achievable. That comment suggests that the authority intends a move to the Coronation ward at Cardiff Royal infirmary, which I was told today is not on--and never was. The authority must get into its head the principle that the medical staff have already emphasised- -that children requiring orthopaedic treatment cannot be mixed with children receiving treatment for infectious diseases, or with adults receiving orthopaedic treatment. There is no way that Mr. Jones can make good the promise in his letter dated 26 April to the medical staff.

The health authority's other reaction was to send senior medical staff to the Prince of Wales to pore over the figures that the nursing sisters there thoroughly researched to try to disprove their bed occupancy figure of 65 per cent., taking into account midday occupancy. Senior nursing staff have spent until after 7 o'clock every night trying to double check and find fault with the figures, so far with no result. There are always two or three more children in the ward during the day than at night.

The staff who have led the anti-closure campaign have been browbeaten by senior medical staff from the health authority who told them quite incorrectly that no child is sent home at weekends for the good of that child, and that if it ever happens it is only five or six times in a year. That is not true. The sisters in charge of the ward have been told that it is only ever closed at weekends when there are no cases, but they know that it occasionally is closed at weekends as an economy measure and not because there are no cases. In the few minutes that remain, I turn to the Yates report. The Minister will be well aware that the Welsh Office paid for John Yates, a distinguished consulting health economist, to prepare a report to assist the Welsh Office to attack the lengthy waiting lists in adult orthopaedic surgery. That report has now been prepared. Its contents are known. It recommends that the number of orthopaedic surgeons operating in South Glamorgan should be increased from six to eight, an increase of 25 per cent. That will obviously increase the throughput of adult work and will attack the 2,000-strong waiting list for adult orthopaedic work. That in turn will have a major impact on the way in which the Prince of Wales orthopaedic

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hospital is used. It is the height of irresponsibility for the health authority, knowing that the Welsh Office- commissioned report is about to be published, but before the report can be published, before the public can judge what it says, before they can act on it or consider its implications on the use of orthopaedic facilities for children and adults, to go ahead and announce the closure of the children's ward.

I hope that the Minister will step in. If the children's ward is closed, where will the children go? If the Welsh Office does not know the answer, if the South Glamorgan health authority does not know the answer, at least they should ensure that the South Glamorgan health authority suspends the closure until the Yates report is published and acted on and its implications for the treatment of children requiring orthopaedic surgery are fully worked out. After all, the children deserve the best, and they have nowhere else to go but to that ward.

2.22 am

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist) : The hon. Member for Cardiff, West (Mr. Morgan) has raised asome length--and I do not object to that--his opposition to South Glamorgan health authority's proposal to relocate the children's ward at the Prince of Wales hospital, Rhydlafar. I welcome the opportunity to explain to him why, at this stage in the proceedings, his comments would have been better addressed to the health authority itself. The Prince of Wales hospital was constructed during world war two as an American army hospital. In the early 1950s, it was converted to an orthopaedic hospital to serve the general population and the first orthopaedic patients were admitted in April 1953. Since that time, the hospital has earned a reputation for excellence of clinical practice and commitment by all staff to excellent standards of care. The hospital is exclusively orthopaedic, although it shares common services with the adjacent blood transfusion centre. It attracts patients principally from south and mid-Glamorgan, Gwent and part of Powys.

I understand that the proposal to relocate the children's ward, which currently houses 12 beds, was one of a number of measures proposed as cash- releasing cost improvements in the health authority's budget strategy. The strategy was accepted in principle by the authority at its meeting on 15 March this year. The authority's officers are at present considering options--in consultation with Cardiff and Vale of Glamorgan community health councils--for re-provision of the service for children. I understand that the options include re-provision of a smaller ward, which the authority would regard as more suited to the actual utilisation of the existing ward in 1988. Such a ward might be provided by using another ward, or part of another ward, at Rhydlafar or by using the children's ward at Cardiff Royal infirmary. I understand that these options are not exhaustive and the way forward is to be discussed at a joint meeting of members and officers of the authority and community health council representatives later this month. Comments on the options should therefore be given to the health authority at this stage.

The matter is not one which is before my right hon. Friend the Secretary of State for Wales at this stage--indeed, it may not come before him. The guidance to health authorities on the procedure for consultation on the

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closure and change of use of health buildings is contained in a document known as Health Service planning paper 5, which is not statutory but which sets out the procedures which my right hon. Friend would expect to be followed. It adds to the statutory right of CHCs to be consulted on substantial variations in service, which is set out in the CHC regulations 1985.

Planning paper 5 states that proposals for partial closure or change of use which amount to

"any substantial variation in the provision"

of the Health Service within the meaning of regulation 19(1) of the Community Health Councils Regulations 1985 should be discussed with a range of bodies including community health councils, local authorities--through the joint consultative committees--family practitioner committees, appropriate local advisory committees, joint staff consultative committees and any other recognised staff organisation not represented on the committees. The document envisages that in most cases it should be possible for local agreement to be reached on restricted consultation but, if not, the formal consultation procedure should be embarked upon.

The formal consultation procedure can be summarised as follows. The health authority should first prepare a consultation document giving reasons for the proposals. This document should include the implications for patients, an indication of any options which have been considered and the arguments put forward in favour of them. The possibility of using redundant facilities for other purposes and manpower implications should be considered.

A three-month period of consultation is the next stage, with comments invited from the bodies that I have already mentioned, together with any other body or person which the health authority considers should be consulted. The health authority should then reconsider the proposals in the light of the comments received. Should an agreed decision be reached which accords with guidelines from the Welsh Office, the health authority may proceed with the proposals subject to a one-month period during which individuals or organisations may appeal to my right hon. Friend, the Secretary of State against the solution agreed at local level. If the result is either irresoluble disagreement or a locally agreed solution which differs substantially from the original proposals, the authority is required to refer the matter, with its recommendations and an outline of the alternative arrangements, to my right hon. Friend. Following referral, a period of one month should be allowed and publicly announced in which individuals or organisations may make representations on the proposals that have been put forward. Clearly, at this stage, before the health authority has decided upon its favoured option, it would be wrong to speculate on whether restricted or formal consultation would be appropriate. Equally, given that there is a possibility that the matter may be put before my right hon. Friend, it would not be proper for me to comment on the merits of any of the proposals.

I make no apology for the requirement on the health authority to release cash through cost improvements. The Secretary of State's first priority for the National Health Service in Wales is that it should seek to maximise the patient care which it provides from the human, physical and financial resources available to it.

As the growth in demand for services continues, the realisation of increasing cash savings through cost

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improvement programmes will play a crucial part in the funding of discretionary developments. Indeed, cost improvements may represent a major source of moneys for developments for some health authorities. Cash-releasing cost improvements are measures aimed at improving the use of resources by reducing the cost of running a service while achieving the same or higher levels of service output and quality. They should arise from clearly identified and planned management action. They are not synonymous with the total cash savings made by authorities in any one year as such savings may also accrue from unplanned or "windfall" savings measures, or result from planned changes in the quantity of service provided. Nor are they synonymous with the total improvements in efficiency which an authority might achieve as these will include gains made by treating additional patients within the same resources, or for a less than commensurate increase in resources.

Cash-releasing savings are important and need to be clearly identified because they provide authorities with a margin of flexibility to meet in- year pressures that may arise, and because they release funds which can be used to develop new services. Progress has been made, but the National Health Service has a continuing responsibility to pursue every opportunity for improving the efficiency with which it manages the resources at its disposal. There is a need to extend the scope of cost-improvement programmes and district health authorities are expected to include all their activities and occupational groups in the search for savings. In addition, the Welsh Office has emphasised the role of the search for cash- releasing cost improvements as part of the annual National Health Service planning process. Authorities have been told to bear in mind the following points in planning, monitoring and reporting on cash releasing cost improvements. First, cash-releasing cost-improvement measures should not result in a reduction in the quantity or standard of service provided. It is particularly important that, where they relate to patient services, means should be specified to ensure that this does not happen. Service rationalisations pursued as cash-releasing cost improvements should not be service reductions.

Secondly, cash-releasing cost improvements should be sustained. In practice this means that they should normally produce recurrent savings. Non- recurrent savings arising, for example, from the unplanned freezing of posts or other vacancy control procedures should not be classified as cost improvements. Revenue savings which arise as a result of slippage or deferment of capital schemes or reductions in service levels are not legitimate cost improvements. Health authorities should still pursue vigorously all opportunities for further supplementing funds from the disposal of surplus on redundant capital assets.

My right hon. Friend and I expect all authorities in Wales to plan on the basis of achieving cash-releasing cost improvements and additional income of the same order as is planned by authorities in England. This means that, for 1989-90, Welsh DHAs will be required to plan to obtain recurring cash- releasing cost improvements of at least 1.1 per cent. of their 1989-90 recurring revenue allocations and additional recurrent income generation equivalent to at least 0.2 per cent. of those allocations.

I want to emphasise that our aim is to achieve greater efficiency. We are not talking about reductions in either the

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quantity or standard of service provided, and district health authorities are specifically charged to ensure that that does not happen. Nor are we talking about inadequate resources for South Glamorgan health authority, which has received an increase in recurrent revenue resources of some £38.9 million after allowing for inflation between 1978-79 and 1989-90.

I should like to take this opportunity to emphasise that the proposal to relocate the children's ward is separate from the longer-term proposals for the hospital contained in South Glamorgan's draft strategic plan which is before my right hon. Friend at the moment.

Under Health Service planning procedures introduced in 1982, district health authorities are required to produce formal strategic plans and submit these to the Welsh Office for approval every five years. The purpose of strategic plans is to provide a framework of agreed long-term objectives within which short-term operational planning can be undertaken. Strategic plans set out objectives and priorities for the management and development of the full range of health services for the following 10 years or so. They also outline the significant steps necessary to achieve them.

South Glamorgan health authority's original strategic plan had significant weakness and was not approved. Basically, the plan envisaged a continuation of the status quo notwithstanding the proliferation and poor physical condition of its estate. The authority's "revised" strategic plan was produced in October 1987 in the light of an independent consultants' review which was funded by the Welsh Office. On 23 October 1988, after extended public consultation, the health authority submitted the final draft plan to the Department for approval.

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The plan proposes a major reorganisation of hospital services within the district with acute provision centred on three district general hospitals, namely the University hospital, Llandough and a new Cardiff Royal infirmary, to replace the existing hospital. Supporting localised provision would be made in four neighbourhood hospitals, each of 85 beds. Their locations have not been finalised but they would be in the north, south, east and west of the district. Three specialist hospitals complete the picture--Whitchurch, Velindre and Ely. The proposals involve a number of consequential closures, each of which would be subject to a separate formal consultation process. One of these is the Prince of Wales hospital, Rhydlafar, which is proposed for closure in year seven of the plan. The plan envisages its replacement by beds at the proposed new Cardiff Royal infirmary. This proposal, together with the others contained in the strategic plan and the representations received, is currently the subject of detailed examination, and my right hon. Friend's decision will be announced at the earliest opportunity.

In conclusion, the health authority is at a relatively early stage of consideration of the options for the relocation of the service currently provided at the children's ward at Rhydlafar. It would therefore be premature to comment on either the merits of the proposals or the precise form that consultation will take. However, the authority will be meeting the Cardiff and Vale of Glamorgan community health councils later this month. Any comments should at this stage be addressed directly to the health authority or to one of the CHCs.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes to Three o'clock.

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