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8.32 pm
Mr. Eric Martlew (Carlisle): I am glad to see the hon. Member for North-West Leicestershire (Mr. Ashby) in his place. It must have taken some courage for him to come to make a speech today, although I suspect it was not his best ever. When Conservatives read it in years to come, they may realise that they were wrong about the PFI.I am compelled to speak this evening because of the constituency problems created for my electors by the PFI and by measures such as this Bill.
There is no doubt that the Bill is about removing the risk from private companies, thereby allowing them to own our hospitals with no fear of being out of pocket. The original Treasury rules required schemes funded under the PFI to involve a genuine transfer of risk to the private sector so as to justify the rate of return that might be generated. The Bill gets rid of that risk, leaving just a higher rate of return.
The Bill has become necessary because the private finance initiative has fallen at the first hurdle. The banks have decided that they are not prepared to take the risk, while the Minister has decided that he cannot afford the political embarrassment of letting the PFI fall by the wayside.
The failure of the PFI is graphically illustrated in Carlisle. It is just one in a long list of broken Government promises about the development of our district general hospital, Cumberland infirmary. The redevelopment of that infirmary began in 1968 under a Labour Government, and the first phase was completed in 1974 under another Labour Government. Next, there were various false starts, but approval was finally given for phase 2 in 1988, under the old capital allocation rules. The scheme was worked up and a start date was sought, but in September 1992 the Carlisle hospitals, under pressure from the Government, decided to become a trust. When they looked at the figures, however, they decided that the trust would not be viable if it went ahead with the building scheme--so Government dogma got in the way and the scheme was abandoned.
The decision to abort the scheme was taken in the very week the tender was due to go out, so there was great anger in my constituency. The new trust promised to set about developing another scheme, and came up with one which, the trust claimed, would provide fewer beds but would achieve the same objective and bring in savings of nearly £2 million a year if the buildings went up on the same site. Much time and public money were expended; in fact, the chief executive has quoted a figure of £400,000 spent on fees to get the new scheme in place.
The trust's scheme was finalised in the summer of 1994. There followed another body blow: the Government stepped in and said that the scheme should be put through the PFI. The trust argued that it should go ahead under the old scheme, because that was ready. Alternatively, it should be fast-tracked. The Government, however, maintained that the PFI would not delay the scheme long--that it would take five or six months to get it through the system.
It took six months just to place the advertisement inthe Official Journal of the European Communities,a necessary part of the legal preparations. So six months were lost to bureaucracy.
Next, hundreds of companies applied. They were sifted down to 16, and a great deal of work went into producing a short-list of three by 9 May 1995. This was heralded as a great victory for the PFI. On 5 September, a short press release was issued by the Carlisle Hospitals NHS trust, saying that two of the companies had pulled out. That left a short-list of one; logic dictates that there is not much competition in such circumstances. The PF initiative should have been aborted, and the public money that the Government had once promised should have been provided to build the hospital.
The Government insisted that the disciplines of the market place meant that a short-list of one was acceptable. I understand that one of the subsidiaries of the shortlisted company is being investigated by the Ministry of Defence and the police for fraud. I refer to AMEC. Fears are growing that, because AMEC is the only bidder, costs will escalate and the millions of pounds that were to be saved by putting the facilities on one site will not materialise. There could even be extra costs. I want to know from the Minister whether, if extra costs are involved, the Government will meet them--or will they have to come out of patient care? That would be wholly unacceptable.
I understand that, although there has been no official announcement, AMEC wants to run the portering, the catering, security, car parking and laundry services. It is
also keenly interested--I bet it is--in running the medical records department. But the consultants in the hospital are opposed to that. There is a great deal of disquiet about the PFI among them, and they find themselves in a dilemma. They need the new hospital. They need the new facilities, but they do not want private sector involvement. One consultant said that it does not matter how good the surgeons are; if the laundry does not work and there are no sheets, one cannot do any operations. Another surgeon said:
Consultants are in that dilemma. To some extent, many of us who have been promised new hospitals are in a dilemma: we do not want PFI, but we do not want our hospital projects delayed.
During a recent takeover bid for AMEC by Kvaerner, a Norwegian company, I met, on 11 December last year, the managing directors of both companies. I was able to get a commitment from AMEC that if it did get the scheme and took over some of the services, it would recognise a trade union. I had great difficulty explaining PFI to the Norwegian managing director of Kvaerner. He said, "We have done some privatisation in Norway, but we haven't stooped to selling off the hospitals yet." As it happened, AMEC beat off Kvaerner, which, I understand, is trying to take over Trafalgar House, but that is a different story.
The plans under consideration are creating great concern, because one of the options is to reduce the number of beds in Carlisle to less than what many of us think is necessary to provide adequate cover, especially in times of emergency, of epidemics. In the winter, there are many cases of flu and of people going into hospital. This year, there are 556 beds in Carlisle at our three sites, but the demand was such that we had to open up another ward. I understand that the bed numbers for the single-site hospital--there will be no more beds--will be 100 fewer than that total. Although I appreciate the growth of day surgery--I recently benefited from day surgery, and I suspect that, with a hernia, I would not have been able to stand for as long--we are greatly afraid. We are worried that we will get the worst of both worlds--that we will get the finance for the new hospital but that it will be decided that we cannot close the old city general, which will mean that there will be two sites, and that one hospital will be the workshop. That would be most unsatisfactory and most uneconomic from all points of view.
One forgets that when we are talking about delays in hospital provision we are talking about patient care, and, sometimes, unnecessary deaths; unfortunately, that is what happens in Carlisle. I do not believe in shroud waving, as it has no effect in this place, but the reality is that we have a problem in Carlisle with our maternity service, which is on the other side of the city from where the paediatricians are based. A report investigated the high number of perinatal mortalities in east Cumbria. On a regional basis, between 1988 and 1992, we should have had 55 deaths; we had 75.
In the northern region, my area is not one of particular deprivation, so the number of deaths should have been below the regional average, but that did not happen.One of the reasons given for that is that the paediatricians could not get across the city in time to treat sick babies.
It was estimated, not by me but by the director in charge of community services in east Cumbria, that every year there are one or two unnecessary deaths of babies in Carlisle because of that. It has not been mentioned often enough today, but the delay in the provision of facilities costs lives, and PFI in my constituency has delayed our scheme by at least two years.
Mr. Bob Dunn (Dartford):
I listened with great interest to the hon. Member for Carlisle (Mr. Martlew), who speaks with real experience, having been chairman of his local health authority in previous years. I understand the frustrations that he voiced about the future of the hospital in his constituency. At times, I have done the same in the House for my constituency of Dartford. Indeed, my hon. Friend the Member for Gravesham (Mr. Arnold) made a speech earlier--I was not able to hear it--and gave an account of the progress that we intend to make, and will make, in the provision of a new district general hospital in Dartford in the early part of next year.
Unlike the hon. Member for Carlisle, I prefer to look down the telescope the other way round. Whereas he looks from the big end down to the small, I look from the small end down to the big. A pessimist says that the bottle is half empty. An optimist says that the bottle is half full. Although we might have cause to unite, in the context of the Bill, on some manifestations of health service provision in the past few years, we must differ, in that the hon. Gentleman came to bury his health trust, whereas I come here to praise mine.
In the context of PFI, my hon. Friend the Minister will remember an Adjournment debate of 11 January this year, which I inspired, applied for and successfully obtained, on hospital provision in north-west Kent. My hon. Friend was able to tell the House on that occasion that my local health trust treated about 164,000 patients in 1994-95 and that it is expected that it will treat a further 10 per cent. in the present year. In addition, it achieved an impressive 5-star ranking in 1994-95 in the context of NHS performance tables.
As to where we see the PFI going, I can give an account of the delays, tribulations and frustrations in Dartford and Gravesham over the years, but I see the PFI as a real way forward--not a delaying or blocking mechanism or an impediment to provision but, rather, opening up and clearing the way. The window of opportunity, which we hear so often as a cliche, is real in the sense that my constituents can now look forward--if the process continues at the speed, and with the rigour and robustness we have seen hitherto--to the new district hospital being started in the early part of 1997.
The hon. Member for Carlisle gave an historical and chronological account of events in Carlisle. I shall do the same for Dartford, but not at great length. In June 1995, my local trust was granted approval to test the scheme, to provide a new general hospital under the PFI process. It advertised the scheme quite quickly in the Official Journal of the European Communities. On 5 September, following a pre-qualification exercise, four consortia, representing some big household names, were selected, and, of course, the process goes on. An important element in the short Adjournment debate on 11 January was that my hon. Friend the Minister was able to say:
My hon. Friend the Minister went on:
This important legislation rounds off the process for those from the private sector who wish to enter into partnership with the health trust in the construction of hospital facilities and the provision of care services so essential in modern society. It will show them that there is a guarantee, support, an attitude of mind within Government, so that when and if existing health boards and trusts are wound up, there will be a commitment to fund the liabilities from the NHS side. This is important in the concept of partnership.
We have heard something tonight, and we will need to hear a little more, about where the Opposition stand in their support for the PFI. The hon. Member for Peckham (Ms Harman) tried but failed. She told the House that the Labour party supported the PFI but then proceeded to give reasons why she did not.
We have on public record the statement made by the Leader of the official Opposition on 4 October 1994 in a speech to his party conference. He said:
A little later, the right hon. Member for Derby, South (Mrs. Beckett), a former deputy leader of the Labour party, disagreed and said:
The present deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), speaking at a London conference on 31 May 1995, said:
That is true. As shadow transport spokesman, he made that point during many debates. At that speech in London, he went on to say:
Exactly so. The Opposition must decide what they stand for and give tonight an outright declaration of their support for the PFI as we have determined it in the context of the NHS.
"You can't expect a private company who has so much at stake in the hospital not to try to put profit before patient care".
"The overall process is as short and efficient as it can be, consistent with ensuring that value for money and the requirements of public accountability are achieved. If all goes to plan, building work should begin during the first half of 1997--that is the present supposition."
"I can assure my hon. Friend the Member for Dartford that the project has the full support of all concerned--at authority level, regional level, NHS executive level and Government level. I can assure him also that the evaluation will be carried out as speedily as possible in Whitehall, so there will be no delays at our end."--[Official Report, 11 January 1996; Vol. 269, c. 388-89.]
"We would get public and private finance working together in transport, in housing, in capital projects, in health and education."
"Market testing represents creeping privatisation. As does the Private Finance Initiative."
"I have long been associated with arguing for public-private partnerships".
"I made the case for private sector involvement in public investment."
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