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9.5 pm
Mr. John Gunnell (Morley and Leeds, South): I can hardly be accused of hostility to the idea of public-private partnership. Let me declare an interest that, for the other purposes of the debate, need not be mentioned: I am chairman of Yorkshire Fund Managers, a joint venture company owned by Yorkshire Enterprise in the public sector and York Trust in the private sector. I have chaired the company for the past six years. The money from the public sector that goes into investments through Yorkshire Fund Managers is far more than matched by money from the private sector. My point is that I am very used to dealing with public-private partnership. As a Leeds Member, let me add that the Leeds initiative has gained a good reputation through its work with the private sector. Partnerships of this kind often make it possible for many things to be done that could not be done in the public sector alone.
The Secretary of State said that people had asked about the fact that those holding his office could still decide at the last minute whether to meet health bodies' liabilities. Why has that question just come to the fore? Why was it not asked of the last Secretary of State, or of the right hon. and learned Member for Rushcliffe (Mr. Clarke)?I think that it has arisen now for two reasons. First, there has been a considerable increase in the number of potential PFIs in the health service. That has always been a possibility, but, as the Secretary of State made clear at Question Time today, he has been signing go-ahead agreements more and more frequently. As the right hon. Gentleman accepted, however, those agreements did not have the signature that would enable the contracts to be let and things to move ahead. Before that could happen, an assurance had to be given to the providers of the money. Haste was therefore necessary. Nevertheless, I do not think that those signatures can be forthcoming until there is a clear understanding of the safeguards that exist on either side.
Secondly, there is the concentration on health finances. Many health service trusts are in the sort of difficulty referred to by my hon. Friend the Member for Newham, North-East (Mr. Timms): they do not know how their ends will be met, and they find that they do not receive a very sympathetic hearing from the Secretary of State.
It would be apposite to illustrate that point from what is happening to health in Leeds. One of the three agreements that have been given the go-ahead bythe Secretary of State since the Budget involvesSt. James's hospital in Leeds. The St. James's and Seacroft University Hospitals NHS Trust is currently in deficit. The Government's attitude to that deficit is not especially sympathetic. My questions arise naturally from that. The Minister may say that there is much difference between capital and revenue but the same considerations arise when the Government's decisions on finance seem to increase, rather than decrease, deficits.
With all the other Leeds Members, I was invited to meet Leeds community health council to discuss that issue last Friday. The hon. Member for Leeds, North-West(Dr. Hampson) attended, with three Labour Members. According to the CHC, the St. James's trust faces a£6 million deficit this year. Not only that, but United Leeds Teaching Hospitals NHS Trust, which covers Leeds general infirmary, faces a £6 million deficit this year. The health authority has a £2 million deficit. Leeds is£14 million in deficit, according to the CHC.
Naturally, after such a meeting, one tries to check the figures. I found that the health authority was talking about a large deficit. It expected a deficit at Jimmy's of more than £1 million and a larger figure of £7 million at the Leeds general infirmary. The total figure was not so different from that of the CHC. It went further in talking about the deficits expected next year. Knowing the sums allocated by the Government for health in Leeds for the next year, it expected a deficit of nearly £5 million forSt. James's and about £10 million for the LGI. Those are serious deficits.
Everything comes back to the way in which the Government have allocated health resources. Their use of the formula, as was demonstrated by the York economists, has acted against cities. That decision has resulted in a massive transfer of funds from cities where there is real and pressing need to areas where the need is not so demonstrably large, though I believe that health service funds are needed everywhere.
The hospital trusts and the health service in Leeds are penalised by the way in which the Government have allocated funds. In response to that, the Conservative party and Ministers have not recognised that, for Leeds as a whole, an estimated £18 million shortfall has been caused by that decision. Instead, they say that Leeds is overspending by £3.1 million. There is a difference of some £21 million between the Government's thinking and that of people who work in the health service in Leeds about the funding that the city needs. Under those circumstances, it is not surprising that people would wish us to hesitate before underwriting the money that is to be allocated for such projects.
I am told that it is hoped that the St. James's project contract will be signed in April. In those circumstances, it would be the first scheme to go ahead. I recognise that some of the facilities will benefit some of my constituents, so I hope that the scheme goes ahead. I accept that it will benefit the public of Leeds as a whole, so I wish it well. One improvement that will help my constituents is that 166 of the 246 extra beds will be available in the public sector.
Let us consider some of the conditions that my hon. Friend the Member for Peckham (Ms Harman) says should apply to public-private partnerships. First, the health service must be run by the NHS; secondly,private finance must be in partnership with public finance; thirdly, the public sector must set the priorities in the public interest.
The St. James's scheme meets some of those conditions, but a number of important questions remain. What happened to the original scheme for the development at St. James's? I was a member of the Leeds health authority before coming to the House; I was also a member of the local council. The health authority asked me to approach the local authority because the city
council owned a great deal of land around the St. James's site. I played a minor part in the negotiations that eventually led to the transfer of 13.5 acres of land to the hospital trust.
The PFI uses that very land. The press release that accompanied the announcement about the transfer made it clear that the local authority played a key role throughout. It was right that the local authority should make that land available. However, I remember that when I was first asked to approach the city council the primary uses for the land were intended to be for a car park and a nurses' home. The car park project still exists, but can the Minister tell me what happened to the nurses' home?
I want the Minister to give me an assurance about the development. When the general public go to St. James's, the worst aspect for them is that it is almost impossible to park. It is sometimes an advantage to be a Member of Parliament as it enables me to park at St. James's hospital. That gives me an advantage when I want to nip in and see my constituents. The public complain bitterly about the car parking problem.
I want to be sure that if the private sector is involved in providing the car park, the parking charges will not be such that my constituents will not be able to afford to park when they visit their relatives. I am, of course, referring to those of my constituents who can manage to get to the hospital by private transport; large numbers of them cannot do so. We do not expect the parking to be free, but the charge should not be greater than they would pay in a small city council car park outside the hospital.
Mr. Deputy Speaker:
Order. I am having enormous difficulty relating car parking charges to the Bill, but perhaps it will all become clear in a moment.
Mr. Gunnell:
It is clear, Mr. Deputy Speaker, because the scheme will, rightly, go ahead--yet there are still questions to ask about the financing of it.
I shall rapidly move away from that subject and raise one or two other issues. I would like to be sure that safeguards are in place. I believe that the hon. Member for Worcester (Mr. Luff) got it wrong. He said that this is a Bill in which the risk is borne by the private sector, not by the public sector. It is obvious from what the Secretary of State for Health said that the public sector carries the risk. What will happen if something goes wrong with the private sector partners who are involved in this project? If the private sector partners go bust, will the Secretary of State bail them out as well?
If there is a hospital and part of it is private and part of it is public, what conditions will apply to the staff? Morale is already at a low ebb among staff in the health service, and I would not like to think that there would be two sets of staff with different sets of conditions of service--so that some are seen to have a more privileged position.
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