Health and Social Care Bill

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Mr. Hammond: I want briefly to support the point that the hon. Member for Isle of Wight has raised. It is important and shows up a fundamental flaw in the Government's thinking about the working of the system. I look forward to hearing what the Minister will tell us about wanting to appeal to human nature in rewarding the successful, to create incentives, while recognising that we are not engaged in a game in which we pat health authorities or trusts on the head. We are concerned with the ability of people who depend on services to obtain proper treatment when they need it. The people with the misfortune to live in red-light trust areas may well ask how the system will benefit them.

The traffic-light system is likely to devastate staff morale, recruitment and retention. Let us imagine how a trust or health authority that had been designated red, as a failing body, would fare in the competition for scarce staff. How would it encourage its staff to remain, when perhaps the neighbouring green-light trust, free to undertake all kinds of go-go programmes with its earned autonomy, wanted to poach them? The Minister and other hon. Members have talked about co-operation between NHS bodies, which is fine when one is sitting in a Committee Room in Westminster, but we should get real. Out there in the real world NHS bodies poach staff from each other every day. That is how they operate. I am sure that in principle they would like to co-operate, but they are competing for resources, including staff.

The most telling criticisms that I have heard of the traffic-light system concern its likely impact on the ability of those at the bottom of the pile to sell themselves as organisations for which to work, and to present themselves to their unfortunate public as organisations by which one would want to be treated. As long as patients have no choice we need to consider carefully what message we send to someone whose doctor says, ``You need major surgery. The good news is that I can get you into hospital in six months. The bad news is that the hospital you are going to has just been classified by the Government as red and failing, but you have no choice.'' We need to think carefully about the messages that we send and their impact on patients and staff.

Mr. Denham: The hon. Member for Isle of Wight is clearly concerned about the position of poorly performing trusts that might require extra money to turn them around. It is worth focusing again on the purpose of the clause and on the wide range of powers that, as we discussed previously, are available to enable the Secretary of State to make payments. Legally, I probably overstated the case earlier, because the Secretary of State is allowed to take a wide range of factors into account in making allocations to each health authority. He has a wide discretion and may consider a range of factors, so I suppose that he does not always have to explain every detail of what he has done, although in practice that is what happened with health authority allocations in November.

The discretion that I have explained means that it is open to the Secretary of State to pay more to a poorly performing health authority—or indeed, given the relevance of clause 3 of the Bill, to poorly performing trusts—if he believes that those additional amounts would help to improve unsatisfactory performance. The ability to make additional payments to a poorly performing trust already exists, without any of the provisions that we are considering. Clause 2 would effectively amend the performance legislation under the Health Act 1999, which enabled the Secretary of State to make additional payments on the basis of past performance. It now enables such payments to be made on the basis of performance in-year.

A performance system that could, in-year, trigger an extra payment for the worst trust, would probably be perverse. It would not send the desired signals. The Secretary of State's discretion to make additional payments to poorly performing health authorities or trusts is best exercised separately, and not, as would apparently be attempted under the amendment, as part of the overall performance regime. Sufficient powers exist and no new ones are needed, so the amendment is not required.

As to the wider points that were made, I am confident that the fears about what will happen to red-light trusts are misplaced. One of my reasons derives from a different area of policy, and my experience as the parent of children who were both at a primary school that failed its Ofsted inspection. My son is still there and my daughter has moved on to secondary school. The system identifies a failing school and requires a response. My children's school was quickly turned around under the leadership of a new head teacher and provides a good education. It has just undergone its Ofsted inspection and I believe and hope, from what I hear, that it will emerge well.

In the health service we have already obtained clear indications that the identification of trusts that are not doing well—together with the support that they receive from what will now be known as the modernisation agency, and in particular the waiting list team and the national patients access team—can turn poor performance around rapidly. For example, last summer several trusts were identified as performing poorly with respect to out-patients. Most of them, with external support, improved very quickly. We have increasingly good support mechanisms available to help turn failing organisations around. Just as having a ``failing school'' label from Ofsted does not damn a school for ever, but enables it to turn around, so a red-light trust, because of the support that it will receive, will be able to address its problems much more quickly than if its failings were not identified and it were offered no support.

12.45 pm

I realise that the debate is about Government policy, and not that of the Opposition, but everything that the hon. Member for Runnymede and Weybridge has said implies that central Government should have an approach characterised by disinterest, benign or otherwise, towards the variations in performance of health authorities and trusts. He implies that we should give up on any opportunity to support or intervene where patients are being failed. I agree that we cannot micro-manage the entire service from Whitehall, and that we should not attempt to do so. We will use the powers in the Bill to increase the autonomy of organisations that perform well. However, there must also be provisions for intervention and support for trusts that are failing. To reassure the hon. Member for Isle of Wight, the Secretary of State is already able to back up such support with additional resources if he judges that that is necessary and appropriate.

Dr. Brand: I am interested in that response. What would the reaction have been if the previous Government had introduced not just Ofsted and league tables for schools, but financial rewards for those schools that received a good Ofsted report? Failing schools or trusts that are having difficulties may receive additional funds on an informal basis. However, the message to the public is quite different. Success is seen to be rewarded with extra money, while failing trusts appear to be sent to the back of the class.

There are two issues here. One is of public perception, and what it will mean to work in a trust with a green, yellow or red light. The other is that of how much money will be available in the performance fund, which will be additional, and therefore, presumably, not accessible to the red-lighted brigade, and how much money will be available in the modernisation fund.

The Secretary of State says that he already has powers, and that he will have increased powers when clause 3 comes into effect. Why, if that is the case, must we have the divisive clause 2? It is right to reward successful trusts by giving them more autonomy in running their business. We should abandon performance indicators that simply measure activity, and should measure quality of outcome instead. However, we still have to work on that.

I can imagine every hospital having a traffic-light system, and if a hospital is on green, it will have a large green light beaconing out at people, rather like the cone outside St. Mary's hospital, which is beloved of very few. However, unless an amendment such as the one that we have proposed is inserted in clause 2, the rewards will not just be greater autonomy and a plaque on the wall. The financial element will reinforce differences.

If we have a performance fund, let it be a true performance fund, and be accessible to people who need help to perform better. That would allow us to look at things in year. If, for example, two or three consultants retire, that would be a disaster for a trust. It would not meet its performance targets, because locums are so difficult to get. It would not be its fault if it were to fail, yet it would be penalised through having additional moneys withdrawn.

I urge the Minister to think again. I shall not press the amendment, but the Government should consider how the provision will come across not only to those working in the national health service but to the patients and communities who will be affected by it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Hammond: I beg to move amendment No. 67, in page 3, line 5, at end insert—

    `(3CC) The Secretary of State shall within 28 days of notifying objectives or criteria to Health Authorities publish details of them as—

    (i) objectives to be met in performing their functions; and

    (ii) criteria relevant to the satisfactory performance of their functions

    together with details of the methods of measuring their performance against those objectives and criteria which he will use in assessing them for payments of further sums to them in accordance with subsection (3C) above.'.

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