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6.26 pm
Mr. Galbraith: On Second Reading, I was prepared to give the private finance initiative in the NHS a fair wind and some consideration, but having sat through most of the Bill's stages I am now convinced that it is wrong. What has emerged from my confusion--Conservative Members may be confused as well--is that this is being done for short-term financial reasons while building in long-term liabilities. We are converting capital expenditure to revenue that will be with us for a number of years, and future Governments and generations will have to pick up the tab.
The PFI has other consequences too. Having heard the Minister, I am convinced that what is involved is a distortion of service provision within the NHS. I return to the idea of the hospital in my area becoming obsolete. In order to remove risk from the private sector, long-term contracts will be awarded whether or not the facility is needed. To avoid its becoming a white elephant with unoccupied wards and beds, NHS facilities that may be better prepared and more suited to people's needs will have to be closed so that the hospital built with PFI money can be used. This represents a drift, once again, away from a more effective and efficient NHS towards the private sector--one of the major problems associated with the PFI.
It is also clear from what the Minister said that the PFI will not be involved only in building and leasing buildings. He mentioned maintenance and the provision
of services. After all, they are the only way in which money can be made in such ventures. The Skye bridge is a case in point; once it was built, it had to be run and charged for at rates higher than those charged by the ferry. The risks had to be removed from the private sector by locking into a long-term contract to enable it to recover its expenses. The Skye bridge was built only when the Government gave an undertaking that the profitable public sector ferry would cease to run, so as not to be in competition with the bridge. Within the national health service, public sectors will be closed to maintain the PFI project.
It serves no purpose for the Minister to maintain that clinical services will not be affected. It is clear that they will be an integral part of the PFI. Stonehaven is a classic example. We know that everything is up for grabs at Stonehaven. That is part of the Government's philosophy. That is the trend and that is the way in which the Government see the NHS continuing. The cat was let out of the bag by Duncan Nichol.
Mr. Bayley:
The position has been made clear by the Secretary of State. On 21 November 1995, he spoke to the Royal College of Physicians. During his address, he said:
The right hon. Gentleman is sanctioning precisely what my hon. Friend fears.
Mr. Galbraith:
I fully agree with my hon. Friend.
I mentioned Duncan Nichol, the former chief executive, who is responsible for the shambles within the NHS. He now works in the private sector with BUPA. In effect, he says, "It does not matter who provides the service. The issue is what charge is made when the service is delivered." The Government no longer talk about services being free at the time of need; they talk instead of services being free at the time of delivery--in other words, they are saying, "Although you need them you might not get them, except those that we decide to deliver."
The shift towards privatising clinical services and allowing individuals to have those services paid for by others will soon mean that individuals will have to take out private insurance. That will take us fully down the line of a privatised health service. That is part of the purpose behind the Bill. The Bill is not merely a short-term fix to overcome under-investment over the years by shifting moneys from capital to revenue. It is part of a long-term plan, the final aim of which is to have a fully privatised health service in terms of delivery and charges.
The Minister has argued that it will be much quicker under the PFI to have hospitals built. According to Douglas Watson, the head of structured finance at the Clydesdale bank, who wrote in the Scottish Business Insider of March 1995,
The myth that the Government peddle does not accord with reality.
Another myth is that the PFI will make projects cheaper. That is not so; costs will merely be deferred over a period of years, leaving others to pick up the tab. It is
known that the cost to a trust of establishing a PFI to build a hospital is probably increased by 3 to 5 per cent. The Edinburgh royal infirmary project is an example. Expenditure will be increased, because of the PFI, by between £4.2 million and £7 million. That extra expenditure would not have been incurred under the normal arrangements. In addition, there is the high return demanded by venture capital of between 8 and 10 per cent. These are the increased costs that are incurred by use of the PFI.
Mr. Simon Hughes
: Before us is a short Bill and a big subject. No one disagrees fundamentally with the principle that the national health service should not leave others singing for their money. At the same time, no one has subscribed in a democratic way to the principle that we should build capital projects within the NHS in a new way, which effectively means building by the private sector. That is why the Minister has run into a squall and some difficulty.
The Conservative party's manifesto did not refer to capital projects within the NHS being undertaken by the private sector. The Government never stated in a Queen's Speech that they intended to go to the private sector for the building of hospitals. Instead, they have proceeded by stealth. The health service has suddenly discovered, through the Government's actions, little by little, project by project, idea by idea, press release by press release, and guidance of slightly more than a year ago, that it will have to enter into a greater partnership with the private sector, as have other sectors.
The move may be a good idea. There is nothing theologically wrong with the private sector being used to provide buildings or services. However, the case has never been made, and authority has never been given to the Government. My colleagues and I--indeed, Parliament--have never agreed to move from a system whereby the public purse finances NHS buildings and services to one that admits private sector finance. Such a change in system has never come before us as a proposition, and consequently there has never been a majority vote in the House.
The change of system has never been subscribed to even by the Conservative party, let alone on a cross-party basis. We should not change the capital funding of the health service by means of spatchcocked, belated Bills that are put together to close loopholes, without addressing the issues head on.
There is objection because the NHS is less democratic now than at any time since its creation. The Secretary of State is accountable to Parliament, but, as we well
know--Ministers make no bones about it--when he answers detailed questions, he almost always says,"I don't know the answer, so ask the local trust." Alternatively, he will say, "I don't know the answer, so ask the local health authority." He may also say, "The figures are not kept centrally."
Trusts and health authorities are less democratic now than ever before. Members of trusts are appointed entirely by Secretaries of State. They meet in secret and make their decisions in secret. They cannot be part of a democratically elected health service. It is not that they want to be secret. I understand that the official policy of the National Association of Health Authorities and Trusts is that the authorities and trusts are happy to meet in public. It is not they who are blocking the system. Instead, the Government are refusing openness.
The management of the health service would have far more credibility if it were democratic, open and accountable. For as long as hospitals are managed, along with all other parts of the health service, behind closed doors by people appointed by the Secretary of State, who decide what they shall be paid in private, there will not be public confidence.
"Some Trusts have explored local arrangements for private sector provision of some clinical and clinical support services. That is a matter for local determination."
"putting together PFI projects is slow and time consuming and far from speeding things up, some projects may actually have been delayed by putting them out under the PFI."
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