Health and Social Care Bill

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Mr. Hammond: I am delighted that the Government tabled the amendment, as the idea of health authorities prioritising pilot services in some unspecified way was alarming. By tabling the amendment, the Minister has saved me working out how to attack paragraph (c).

Will the Minister to acknowledge the fact that the process of designation causes concern in the same way as paragraph (c) does? Alarmingly, he proposes to interfere with commercial freedom by preventing certain businesses from setting up in an area. Although it is unnecessary to do so, it would be easy to paint a picture of circumstances in which it would be sensible to defer part II applications while the structure of a pilot was put in place. The Minister must recognise the danger of a health authority choosing as its preferred partner a large national pharmacy chain, capital-rich and perhaps proposing a complex deal involving all sorts of glamorous additional benefits to the health authority. The health authority would then be in a position effectively to trade off in a deal with the provider monopoly exclusivity in a particular area. The real concern is that if ``Shoes the Chemist'' makes a deal with the health authority, all potential entrants to an area will be blocked out.

11.15 am

I am sure that that is not what the Minister has in mind, but he will have to draft the regulations to ensure that health authorities do not abuse their powers—although I am aware that he has given himself the power to deal with abuses of the system. It would be helpful if he assured the Committee that health authorities would not be allowed to designate an area. He used the term ``breathing space''. In my experience of bureaucratic organisations, their idea of breathing space is a little longer than that of commercial organisations. One can well envisage a health authority breathing a sigh of relief and saying, ``We will designate our entire area, so that we can think about it for two or three years without having to process all the tiresome part II applications, and then see if we can come up with a pilot scheme''. I am sure that the Minister does not intend that to happen, but he must make sure that the power to designate cannot be used as a blocking mechanism or to create blight. We must bear in mind—and this is a familiar theme—that it will have an impact on the provision of services other than pharmaceutical services within the meaning of the Bill because it could prevent retail pharmacies from opening and therefore limit access to over-the-counter products.

Mr. Denham: The hon. Gentleman makes a fair point, although I am sure that he would not suggest that health authorities should be unable to take advantage of the opportunity of significant investment in the development of pharmaceutical services in a particular area if that was to the benefit of patients. However, he is quite right to stress that the power should be used carefully. Health authorities should not prolong designations any longer than necessary nor should they designate a location in the first place unless they are actively considering an LPS scheme. If the scheme came to nothing, we would expect them to cancel the designation.

It is difficult at present to be sure what the length of designation is likely to be. It will depend to an extent on the cycle in which we invite applications for LPS schemes, so central Government will have an influence on that if we proceed as we did with PMS in inviting several waves of applications. It is unlikely that the period from applications being formally invited to schemes coming into effect will be much more than a year and could well be less. If substantial capital investment is involved, the time scale might be different, but as the hon. Gentleman recognised, we have taken extensive powers to act if there is any evidence to suggest that health authorities deliberately—or otherwise—are misusing the power.

Mr. Hammond: I am grateful to the Minister for reassuring the Committee about the Government's intention. There is a slight contradiction between what he said about patients continuing to have the choice as to which pharmacy they take their scrip and the scenario that I outlined that implies that a health authority might effectively make a deal to give one provider predominance in an area. The Minister said that he was sure that I would not want to suggest that anything that produced beneficial investment should be blocked, but that is the argument of the budding monopolist, who would say, ``If you give me a monopoly, I can make a bigger investment.'' I ask the Minister to bear in mind when he makes the regulations that although investment is good in terms of absolute provision, choice is also a good thing.

Mr. Denham: I have said nothing to contradict what I said earlier. If there is an opportunity to get the best possible service—subject to all that I said earlier—it is reasonable that a health authority developing a LPS scheme would want to obtain the best possible service for patients rather than a second-best service.

Amendment agreed to.

Clause 31, as amended, ordered to stand part of the Bill.

Clause 32

Reviews of pilot schemes

Mr. Hammond: I beg to move amendment No. 277, in page 30, line 37, leave out `three' and insert `two'.

The Chairman: With this it will be convenient to take amendment No. 276, in page 31, line 4, at end add—

    `(5) The review referred to in this section must include a review of—

    (a) the impact of the pilot scheme on patient services, and

    (b) the cost effectiveness to the NHS of the pilot scheme, and

    (c) the impact of the pilot scheme on retail competition.

    (6) A report detailing the conclusions of every review under this section shall be published by the health authority concerned not less than three months after the completion of the review.'.

Mr. Hammond: Clause 32 provides for reviews of pilot schemes. That is progress indeed and has saved me the trouble of drafting an amendment requiring a review and the publication of its results. We are particularly sensitive, as the Minister will know from previous debates, to the speed with which NHS Direct was rolled out, without proper appraisal of its strengths and weaknesses. The review requirement is a good one. Does the Minister expect reviews to be conducted by outside bodies or by health authorities?

Amendments Nos. 277 and 276 would have quite different effects. Amendment No. 276 would extend the review to cover various areas, one of which we have already discussed—the impact of the pilot scheme on retail competition. It would also require an examination of the cost effectiveness to the NHS of the pilot scheme and its impact on patient services. As guardians of public services and the public purse we would all reasonably expect the review to cover those points. I hope that the Minister will agree in principle that that is necessary. Perhaps he will propose another way to achieve that objective.

Amendment No. 277 would reduce from three to two the number of years after which a review should take place. The review might take a little while to complete; amendment No. 276 proposes that a report should be published not less than three months later. If the review process did not start until three years into the scheme, publication might not happen until four years after the scheme got under way. It seems reasonable that the review should begin after the scheme had been in existence two years. That should provide enough data.

Dr. Brand: Are we to assume that the retail competition referred to in amendment No. 276 would be restricted to over-the-counter medicines, rather than the wider retail activities of some pharmacists, which should not be of concern to the Committee?

Mr. Hammond: No. It is important that we consider the impact of schemes on wider retail competition. If a scheme resulted in the closure of a corner pharmacy that had also been in the habit of providing, say, milk and bread for the local community—although that might be unusual—it would be relevant and would need to be taken into account, because it would affect the community. Many pharmacists provide items ancillary to their principle business, such as baby care products. For someone in an isolated area, the closing down of the only place that sells babies' nappies will be a material consideration.

Dr. Brand: I am grateful for, but surprised by, that intervention. I thought that markets would be able to cope with the supply of photographic equipment, sandwiches, clothes or suntan lotions and I do not think that that is a matter for the Department of Health or a local health authority. In view of the hon. Gentleman's clarification, I do not think that I can support amendment No. 276. Amendment No. 277 is probably not necessary.

Mr. Denham: It is important to point out that our approach in clause 32 of reviewing every pilot scheme at least once within three years of its commencement is modelled virtually word for word on the equivalent provisions on personal medical services in the National Health Service (Primary Care) Act 1997. I do not see a fundamental reason to depart from the precedent that has been set for other family health services. The clause leaves the procedure to be determined by the Secretary of State or the National Assembly for Wales, except that it requires the health authority and pilot scheme participants to be offered the opportunity to make their views known, as part of the review. That is clearly only a minimum requirement.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

The following Members attended the Committee:
Madel, Sir David (Chairman)
Bailey, Mr.
Bradshaw, Mr.
Brand, Dr.
Burns, Mr.
Burstow, Mr.
Denham, Mr.
Fitzsimons, Lorna
Foster, Mr. Michael Jabez
Hammond, Mr.
Hutton, Mr.
Jamieson, Mr.
Mountford, Kali
Naysmith, Dr.
Prosser, Mr.
Stewart, Mr. Ian
Swayne, Mr.
Young, Sir George

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