Standing Committee E
Thursday 1 February 2001
[Sir David Madel in the Chair]
Reviews of pilot schemes
Amendment proposed [this day]: No. 277, in page 30, line 37, leave out 'three' and insert 'two'.[Mr. Hammond.]
Question again proposed, That the amendment be made.
The Chairman: I remind the Committee that with this we are taking 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.'.
The Minister of State, Department of Health (Mr. John Denham): Before lunch, I was about to set out our views on the review procedure that should be adopted. The clause leaves the procedure to be determined by the Secretary of State or the National Assembly, except that the health authority and the participants in the scheme should be able to make their views known. That is only a minimum requirement. We will need to develop our approach to the review in the light of experience. We shall want to learn continuously from experience, so that we can apply those lessons to later pilot schemes and, in due course, to the substantive arrangements for local pharmaceutical services when we are satisfied that the pilots have demonstrated that LPS works. We will build reviews of individual schemes into an overall programme of review and evaluation.
Amendment No. 276 illustrates some of the difficulties of trying to put all the review criteria in the Bill. It is interested in retail competition in the widest sense, but not in the effects that the pilots have on people's health, which is an intriguing factor. Cost-effectiveness has been mentioned, but not reductions in inequalities between different sections of the community. I am not saying that the hon. Member for Runnymede and Weybridge (Mr. Hammond) is not interested in such wider issues, but it is difficult in practice to put in the Bill a comprehensive list of all the factors that should be taken into account in the review. We might want to look at others, such as the effect on the recruitment, retention and motivation of pharmacists or the relationships between different parts of the national health service.
One issue that we would want to consider is the extent to which the pilot had achieved its stated aim as set out in the original LPS contract. That will be a good starting point in many reviews. The personal medical services legislation on which we based the measure did not set out the evaluation criteria, for the good reason that it was considered thenas we consider nowthat we need to build up our idea of what the review should contain in the light of experience.
As for whether reports should be published on all pilot schemes, there is no such requirement in connection with each and every PMS scheme and I am not persuaded that we need to treat pharmaceutical services differently. Of course, we shall want to learn lessons from pilots, make them widely available and disseminate them. In the case of personal medical services, we have commissioned a continuing evaluation of PMS pilots, which is published from time to time. It has informed our thinking on the third wave of PMS pilots. I am sure that there will be continuous feedback about LPS, but I do not believe that it would be a good idea to put into primary legislation a particular way of doing so or that a report should be published on every individual pilot.
Under amendment No. 276, the review would be undertaken within two years. I understand the hon. Gentleman's argument, but in reality it may take some time for a new pilot to build up to its full effectiveness. If we said that the review had to be completed within a couple of years, there may be only a year or a little longer on which to base it. The wording of the current clause, which is the same as that on personal medical services, is the probably the best route to take.
Mr. Philip Hammond (Runnymede and Weybridge): The Minister has outlined the case for not including the detailed requirements of the review in the Bill. I understand the logic of that, but there is not even a provision for the making of directions by the Secretary of State or the relevant authority on what the review should cover. It seems to be entirely at the discretion of the health authority.
Mr. Denham: In this case, the relevant authority is the Secretary of State. I do not know whether it makes the hon. Gentleman feel better to know that the Secretary of State would ultimately determine the procedure.
Mr. Hammond: It makes me feel better in the sense that the Secretary of State making regulations to guide the review clearly would not add anything. I would have preferred a provision in the Bill; the Minister will understand why we routinely plead for more detail in the Bill, but I accept that he has made a case for retaining the flexibility that exists in the PMS and PDS review mechanisms. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
NHS contracts and financial provisions
Question proposed, That the clause stand part of the Bill.
Mr. Hammond: Perhaps we are rushing through the Bill just a little too fast, Sir David.
The Chairman: The hon. Gentleman can always stop me.
Mr. Hammond: Thank you, Sir David. That requires me to have my wits about me.
In relation to clause 34, I should like to address the broader issue of NHS contracts versus conventional commercial contracts. Although we have now agreed that clause 33 stand part of the Billno amendments were tabled to it and no one objected to itthere is an issue to explore, which I touched on earlier, about the nature of the contracts that will be involved when a pilot scheme takes the form of an arrangement between a health authority and a private sector partner, typically a pharmacy chain or a supermarket chain.
In the normal course of events, the contracts would give the private partner the ability to make the necessary investment. The Minister acknowledged that there would be a problem if the termination provisions allowed for the contract to be terminated by a health authority on a whim or by direction of the relevant authority as no private sector partner would be able to raise the funding or be prepared to risk capital.
Clause 34(1) provides that a company or private body that wishes to enter into a pilot scheme may apply to be treated as a health service body. I understand the reason for the provisionthey would then be party to an NHS contract, which, as with so many double speak exercises in the health service, is not a contract, but simply an arrangement that exists so as long as it reflects the will of the Secretary of State. It is not a contract in the legal sense or in the sense in which any commercial entity would understand the term; nor would any banker or financier lend for investment in such a project.
I cannot imagine that the Minister is seeking to undermine his own scheme first by providing in clause 33 that contracts may be terminated at the will of the Secretary of State and, secondly, by suggesting in clause 34 that people who would usually expect to enter into normal, legal, binding contracts should for these purposes become health service bodies and enter into arrangements that are not contractual or binding. Those provisions seem to undermine the principle that the Minister has outlined in mapping out the possibility of a partnership between health authorities and private sector entities particularly in relation to developing services in areas where they do not exist or where they are under-provided and require investment. Will the Minister address what will happen in those circumstances?
If a pharmacist who is currently providing part II services enters into a pilot scheme using existing premises, facilities and assets and the pilot scheme can be terminated in accordance with clause 33, and there is a return-ticket provision allowing them to go back to providing part II services under the 1977 Act, I accept that there is no particular problem and that in those circumstances it may make perfect sense to allow private pharmacists to become NHS bodies for the duration of the LPS pilot. However, that will not bring in the new resources and the new capital to which the Minister referred. Can he reassure the Committee that, where it is appropriate, there will be an opportunity within the pilot schemes for proper contractual arrangements that are bankable and will allow capital to be invested, that there will be a mechanism for effectively contracting them out of the provisions of clause 33 in order to make them bankable and that in those cases it would not be necessary for pharmacists to become health service bodies in order to enter into NHS contracts, which are rather less attractive from a banker's point of view?
Sir George Young (North-West Hampshire): My eye was attracted to the explanatory notes on clause 34 as paragraph 156 deals with the issue that my hon. Friend has just raised. It states:
``NHS contracts are not normally enforceable in the Courts.''
It is some time since I was a Health Minister, and I may have been aware of that, but had temporarily forgotten it. The NHS is a major employer. Is it really the case that those contracts of employment are not enforceable in the courts? Is it really the case that the major contracts that the NHS enters into with the private sector are not normally enforceable in the courts and the whole thing rests on the good will of the Secretary of State?
The next sentence says:
Instead, any disputes can be put to the Secretary of State ... for resolution.''
Will the Minister shed some light on that rather astonishing statement that the whole legal principle on which the NHS is founded rests ultimately on the mood of the Secretary of State as to whether or not he finds for the appellant. I assumed that it was subject to the rule of law and that was where disputes were resolved, but that sentence has somewhat undermined my faith in that concept. Perhaps the Minister can now put my mind at rest?