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Select Committee on Health First Report



125. The Government is also applying the principles of Public Private Partnerships to primary care facilities though the introduction of Local Improvement Finance Trust (LIFT) schemes. The drive behind this initiative is the need to improve the current stock of primary care facilities. In its memorandum, the Department acknowledged that a large element of the current primary care estate was no longer suitable for the provision of modern healthcare.[204] This point was reinforced by the Secretary of State:

    "Primary care in too many parts of the country, particularly the poorest parts of the country, is appalling. 40 per cent of GP surgeries are purpose built, virtually the remainder are either adapted houses, residential buildings, or adapted shops, and we expect modern primary care to be carried out in those circumstances. 80 per cent of the accommodation is too cramped to meet modern requirements now."[205]

Furthermore, the Department pointed out that fewer than 5% of premises were co-located with a pharmacy, and that a similar number were co-located with social services.[206]

126. It is widely accepted that the current stock of GP premises is in disrepair. The NHS Alliance told us that traditional investment by GPs themselves had been poor, while the BMA contended that "the investment to replace the old NHS building stock and to catch up on the backlog of maintenance was sorely needed".[207] The CBI believed that LIFT represented a "critical initiative which should help stem the massive loss of inner city GPs 35 per cent of whom have been scheduled to retire between 1998 and 2005".[208]

127. The LIFT initiative was first announced in The NHS Plan when the Department committed itself to investing up to £1 billion in primary care facilities. This would be targeted at a substantial refurbishment or replacement of up to 3,000 family doctors' premises by 2004, and the creation of 500 one-stop primary care centres.[209] These new centres would draw together the many strands of primary care to include GPs, dentists, opticians, health visitors, pharmacists and social workers. Though the bulk of this investment would come from the private sector, the Department was also investing £195 million in the initiative.[210] Therefore, unlike PFI projects, the Department would hold a financial interest in the projects.

128. The Government put flesh on the bones of this announcement with the publication of the LIFT prospectus in July 2001.[211] The prospectus noted that while private money was not a new development in primary care - many primary care premises had traditionally been built and provided by the private sector - hitherto such investment had tended to be on a piecemeal basis.[212] This investment was not well targeted and as a result GPs faced significant disincentives to practising in inner city areas. The Department asserted that LIFT would counter these problems by "providing an integrated range of primary and intermediate care services; leasing premises to individual primary care service deliverers, such as GPs, on flexible terms that can respond and adapt to changing requirements over time; and management of the facilities provided, such as maintenance over the whole life of the assets, providing all energy and utility requirements".[213]

129. The Department explained that LIFT would operate at both national and local level. At the national level it had established a national joint venture company, Partnerships for Health, comprising Partnerships UK and the Department which had as its corporate objective the facilitating of the development of the LIFT initiative.[214] At local level, LIFT schemes would engage a range of private and public sector interests in a joint venture drawing together local health bodies, the national joint venture company and the private sector. The private sector partner would be identified through a competitive procurement exercise and then a joint venture would be established between local health economy bodies, the national joint venture company and the private sector partner.[215]

130. Mr David Goldstone, Chief Executive of Partnerships for Health, told us that the national joint venture had been set up to make LIFT work in practice. As a facilitator, Partnerships for Health's role was to encourage greater common thinking about those services and facilities that were required locally. It would also lend assistance to the contract process and was developing a suite of documentation intended to become a standard package to implement local projects.[216] One of the driving forces behind this was the experience of the first PFI Schemes. Mr Goldstone explained that such documentation would facilitate the recycling of knowledge and experience and that "setting up a focused organisation to deliver this is helping to ensure consistency of approach and recycling of lessons [learned]".[217]

131. Central to the LIFT initiative would be the targeting of Health Action Zones with high levels of unmet need.[218] While surgeries in more affluent areas are generally able to attract private investment, surgeries in more deprived areas tend to suffer. Therefore LIFT will specifically target those areas with the greatest need. The Secretary of State suggested LIFT would be a means of addressing health inequalities:

    "The existing way of providing primary care premises and providing primary care positions, GPs, has been to gravitate more and more resources crudely to the leafy suburbs and less to the inner cities. We know that the biggest health needs are in the latter rather than the former. The leafy suburbs do pretty well out of the existing arrangements, which are partly private sector led. What this is all about is trying to address the balance and making sure, again through innovative PPP arrangements, we get more resources and more capacity into those parts of the community which need the most."[219]

132. The NHS Alliance welcomed this targeting but was concerned that areas where there had been adequate investment by GPs would appear the most attractive areas to private investors in LIFT.[220] The Department's first six LIFT schemes - Barnsley, Camden and Islington, East London, Manchester Salford and Trafford, Newcastle and North Tyneside and Sandwell - do reflect inner city targeting.[221] However, these schemes are a long way from completion. When we took evidence from Partnerships for Health, we were told that the projects were still at the development stage. Much of the current work concerned the physical assets of the LIFT scheme, and we were told that it would be some time before permanent solutions were reached.[222]

133. LIFT is in its infancy, but we believe it does offer the potential to rejuvenate the current stock of primary care facilities in those areas of greatest need. We welcome, in principle, this initiative. However, we recommend that the Government carefully monitors LIFT to ensure that it is directed so as to ensure provision in areas of highest need and promote greater integration of primary healthcare provision.

Value for Money

134. One of the prerequisites of the Department's use of PPPs and the private sector is that it should provide good value for money. The LIFT prospectus did not make it clear how value for money for LIFT schemes would be defined. Unlike PFI projects, there appears not to be a public sector comparator. The NHS Alliance saw this as a weakness, arguing that a detailed assessment of the first wave of schemes should be undertaken to establish value for money before LIFT was rolled out nationally.[223] We questioned Mr Goldstone about how value for money would be assessed. He told us that a number of safeguards were in place to protect the public purse:[224]

  • there was a competitive process to determine the partner for the LIFT project and competition tended to yield good value for money
  • rent levels would still need to be approved by district valuers within the existing statutory red book scheme, thus ensuring that rent levels were reasonable
  • the fact that the public sector maintained a stake in the scheme ensured that Government had access to the accounts and a share of profits
  • the LIFT scheme had the ultimate sanction of severing links with the private sector partner if that partner persistently failed to honour the contract.

135. While such mechanisms offer a degree of control, we were unconvinced that they would necessarily be sufficient fully to protect the public purse. Our witnesses from the BMA and the NHS Alliance were also unconvinced. Dr Stanton from the BMA expressed "a degree of honest scepticism" that this would ensure value for money while the NHS Alliance suggested that an independent body should appraise LIFT schemes "in terms of value for money, in terms of whether the premises meet the specifications and the needs of the community, whether the service charges are exorbitant or whether the services actually service the properties as they need to".[225]

136. We were also surprised to learn that the first six schemes were not pilot schemes and that the programme did not provide for a pause whilst these were evaluated.[226] However, the Secretary of State made his position clear: "They are not pilots. In fact I have announced the second wave today of 12 further initiatives. We are just getting on and doing this".[227] Our surprise was shared by the BMA who believed that "common sense would suggest that it might have been better to see the outcome of the first six before rolling out others".[228] The NHS Alliance also thought that LIFT should be "piloted in defined areas to begin with and rolled out nationally only when there is clear evidence that it can provide value for money, quality and equity".[229] Mr Coates explained that the first six schemes would be assessed and that "a standard business case assessment will look at both the numbers and the quality so that ultimately the prime test will be what numbers come out and whether they are providing value for money for the taxpayer".[230]

137. We accept that the pre-LIFT mechanism would often have involved private sector schemes, however we believe that it would have been prudent to conclude the assessments of the first six schemes before rolling out LIFT nationally. We recommend that the Government undertakes a rapid assessment of the first schemes, both in terms of value for money and service provision, though we recognise the urgent need to refurbish the primary care estate.

138. We recommend that health authorities should be asked to prove that work has been carried out to show that LIFT schemes have been considered in the context of integrated strategic planning of healthcare assets. We recommend that the business planning process for LIFT and acute hospital PFI schemes should be required, at every stage, to take a whole systems approach, that is, to look at the potential for an integrated local approach.

204   Ev 7. Back

205   Q1087. Back

206   Ev 7. Back

207   Ev 186; Ev 188. Back

208   Ev 300. Back

209   NHS Plan, paras 4.11 and 4.12. Back

210   Ev 8. Back

211   Public Private Partnerships in the NHS: Modernising Primary Care in the NHS/ NHS Local Improvement Finance Trust (NHS LIFT)Back

212   Ev 7. Back

213   LIFT prospectus, p.20. Back

214   Ev 8. Partnerships UK is itself a PPP: it is 51 per cent owned by the private sector and 49 per cent by the Treasury and the Scottish Executive. Its corporate objective is to facilitate the development of PPPs. Back

215   Ev 8. Back

216   Q760. Back

217   Q778. Back

218   Ev 8. Back

219   Q1091. Back

220   Ev 186. Back

221   Ev 8. Back

222   Q772. Back

223   Ev 186. Back

224   Q787; Q789. Back

225   Q787. Back

226   Q784. Back

227   Q1078. Back

228   Q787. Back

229   Ev 186. Back

230   Q1088. Back

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Prepared 15 May 2002