Health and Social Care Bill

[back to previous text]

Mr. Hammond: I apologise for the fact that, in our attempts to avoid accusations of technical deficiency, it has been necessary to table so many amendments so that we can have consistency throughout clause 1 and make our point.

The Minister will have the benefit of a more detailed briefing than I do, but I shall set the scene. Clauses 1, 17 and 18 seek to change the methodology for distributing the general practice medical work force in England and Wales. Perhaps I can characterise the proposed change as moving from a planned approach to the use of a financial mechanism to send the required signals. One might characterise that as a market-led approach to the distribution of the medical work force. Perhaps an eyebrow or two raised when the Government adopted the idea.

On the face of it, the idea has some attractiveness, and we share the Government's objective of improving access to general practitioner services in under-doctored areas. It is clear that there are parts of the country—not only regions, but quite small areas—that are noticeably under-doctored and suffer from poor provision of primary health care services. It is not so much the Government's intentions that are at stake and that the amendments intend to address, but the methodology that the Government have adopted to achieve them.

On Second Reading, the Secretary of State and the Minister in his winding-up speech emphasised their view that the overall effect of the Bill would be to decentralise power. A recurring theme that the Committee will hear from me—and I suspect from my right hon. and hon. Friends—is that although some of the clauses may superficially appear to devolve power and authority, a careful reading of the powers of direction and the discretion of the Secretary of State confirms the idea that the ultimate power is being focused into his hands.

That residual power—the fact that the Secretary of State may issue directions—is important. Whether or not he issues directions sends a powerful signal. It means that bodies charged with carrying out activity know that he has the power to direct how they behave and act if they do not do his bidding. We must look all the time behind the superficial structures of the Bill, and at where the real power will lie after the Bill is enacted.

Dr. Peter Brand (Isle of Wight): I am listening to the argument with great interest. Does the hon. Gentleman agree that, if we were to abolish the commissioner-provider split, which the Bill would enable the Government to do, it would be much better to be honest and up-front about it? It would save a great deal of money and return us to a directly run national health service.

Mr. Hammond: I am not sure whether I entirely agree with the hon. Gentleman. Our concern is that power is not only being centralised but, by the nature of the Secretary of State's role, politicised. We have concentrated in the persona of the Secretary of State the ultimate power to direct all sorts of bodies and to decide how things are done, in a way in which we do not think will be helpful when trying to run an organisation that employs 1 million people. It is the largest productive enterprise in the country, producing one of our most valuable commodities and accounting for nearly 6 per cent. of this country's gross domestic product.

On Second Reading, I asked the Secretary of State whether he could think of an effective, productive enterprise on such a scale. His rather feeble attempt at a response was the Chinese army. If he believes that the Chinese army is an effective, productive enterprise, I am afraid that the national health service has bigger problems that most of us thought.

Clause 1 allows the Secretary of State to take into account in an unspecified way the historical part II expenditure of a health authority when making allocations of money to it. The explanatory notes to the Bill suggest that the purpose of the clause is to enhance fairness by balancing out part II expenditure with other health authority expenditure. Implicit in the explanatory notes is the suggestion that an authority with historically high part II spending might find its allocations of finance in other areas reduced so that more money could be allocated to areas with historically low part II spending, part II spending being essentially demand driven.

3 pm

Our anxiety is that the clause does not require that the Secretary of State's power be used in that way. It states quite explicitly that

    the Secretary of State may take into account

the authority's general part II expenditure

    in whatever way he thinks appropriate,

and, implicitly, for whatever purpose he thinks appropriate. It is therefore not obvious that the effect of the Bill will be always to have in place a mechanism designed to transfer resources from areas that are overspending to those that are underspending.

Another anxiety is at the back of my mind. Expenditure will not in itself be a good measure of excess provision or underprovision. I hope that this does not sound like special pleading on behalf of my constituency or health authority area, but it will be readily apparent to any member of the Committee who considers the matter for a moment that some of the costs involved in meeting part II services will be considerably higher in areas where property prices, wages and salaries are higher than in other areas.

One of the part II expenditure items is the cost of providing premises for primary health services for general practice. It will of course cost more to provide primary health care premises in Guildford than in Sunderland. That is not an exhaustive argument, as I readily accept that in some areas, such as inner-city London, primary services are inadequate and premises costs are high. However, if the Secretary of State simply took the view that an area that has high spending on part II services needed to be penalised through a reduction in other areas, in order to persuade health authorities to adjust the level of provision of part II services, that would seriously and negatively affect the provision of general medical, dental and ophthalmic services in high-cost areas.

We need to be assured that the honourable purpose that ostensibly lies behind the clause will be implemented and that it will not be used as a way of redistributing funds on an unaccountable basis from areas that the Government do not favour to areas that the Government do favour. I do not want to insult hon. Members by putting it too bluntly, but I want to ensure that the clause does not become a charter for shovelling money into marginal constituencies in the run-up to a general election.

The amendments were framed to achieve that objective. They would provide a clear sign that the Secretary of State's behaviour should be consistent and applied to health authorities in general rather than one health authority in particular. The Minister may say that that is the Secretary of State's intention, but it is not what the Bill suggests. It implies that the Secretary of State would have the ability to take into account one authority's general part II expenditure in a certain way, yet in relation to another authority, he would not have to take part II expenditure into account, or he could take it into account in a different way.

In this country, we tend towards the principle that public money is allocated according to formulae. Unfortunately, that principle has been eroded by the extensive use of ring-fenced grants. Those formulae may not be perfect; they may be seriously flawed, but they have the advantage of being transparent, objective and not readily vulnerable to political manipulation. My concern is that the Bill introduces a mechanism that allows the Secretary of State to change the distribution of financial resources if he believes that something should be taken into account in another way that he thinks appropriate. If he is allowed to do that on a different basis for each health authority, a dangerous precedent will be created.

I do not suggest that the present Secretary of State would abuse his position, but a future Secretary of State in another Government would have that ability. During our proceedings, we must consider carefully the way in which power is not only accruing to the Secretary of State through the little provisions about directions and discretion, but can be used arbitrarily. I hesitate to use that word, because I know that Ministers do not behave arbitrarily, by definition. However, it would be inappropriate for the Bill to allow Ministers to treat different authorities in different ways. If the Government's agenda is genuinely one of fairness, I cannot foresee that they can object to the transparency and accountability provided through this group of amendments, when they are read together with the amendments that we will consider later today.

Dr. Brand: First, may I apologise, Mr. Maxton, for my discourtesy in leaving the Room after I have spoken? I have a previous engagement. May I also say how pleased I am that you are in the Chair?

The amendments are interesting, although I was not sure of their purpose, so I am grateful for the explanation given by the hon. Member for Runnymede and Weybridge. I would welcome a move away from rigid, but transparent formulae, because there is nothing worse than a transparent formula that is also a brick wall behind which Ministers can shelter even when the formula is patently wrong. I do not want to make a special plea but, as the representative of the only island constituency in England, I can say that there is no such thing as an island factor in any of the Government resource distribution formulae. That is clearly nonsense.

It is difficult to have a rigid formula in practice, which is where so many resource allocations have gone wrong. In the health service, services in different places are delivered in completely different ways. The amount of primary care work done in some districts is much greater than in others, so it is right to have some way of reflecting that activity. The point on premises costs is well taken. One hopes that whatever mechanism is adopted will take that into account.

My real concern is that the clauses—not the amendments—represent further cash limiting. We experienced that when prescribing budgets were rolled into primary care group budgets and now the total pot of available money will probably be capped. That is a matter of great concern on which I welcome the Minister's response.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 18 January 2001