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14 Nov 2002 : Column 175—continued

Mr. Gareth Thomas (Harrow, West): As someone rooted in the co-operative traditions to which my right hon. Friend refers, I warmly welcome the proposals for foundation hospitals, not least because they offer the prospect of replacing local quangos, which are too often not accountable to local people, with democratically elected boards. Will my right hon. Friend be sympathetic to those local communities that are unhappy with the way in which their local hospital is run when they come to him asking for their hospital to be made a foundation hospital?

Mr. Milburn: I sympathise with my hon. Friend's point. I am aware of the views he has expressed and the measures that he has tried to take forward in the House to bring co-operation and mutualisation out of the last century and into this one. We have an opportunity to do that now through the NHS foundation hospital model. I want to deal with my hon. Friend's question and that asked by my hon. Friend the Member for Doncaster, North (Mr. Hughes).

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We will start with the best performers; the first generation of foundation hospitals will be drawn from existing three-star trusts. Forty per cent. of the three-star trusts are in 25 per cent. of the most deprived areas in the country—places such as Bradford, Hackney, Liverpool or Sunderland. I do not know whether those hospitals will want to apply for foundation trust status, but I do know that, as more hospitals improve, more will become foundation trusts. As my right hon. Friend the Prime Minister has said, there will be no arbitrary cap on the number of foundation hospitals, so the charge that the policy is about creating a two-tier health service is simply not correct. This is not elitism; it is localism. It is not privatisation; it is a genuine form of public ownership. It is aimed at getting the best health care for the public by giving more control to the public.

Glenda Jackson (Hampstead and Highgate): I am particularly concerned about localism. My right hon. Friend has previously given examples of how, for example, working class areas do less well than middle class areas in obtaining access to national health services. How will everyone's vote be equal? In my constituency, there are huge disparities of wealth and for many people English is not their first language. How can we be assured that foundation hospitals will genuinely reflect local issues? That is central if we are to make a success of them.

Mr. Milburn: The ballot box will be the great equaliser. In the end, whether people obtain access to services is at least in part dependent on their background and, sadly, their class, but their ability to exercise the vote is dependent on their willingness to exercise it. Everyone will have an equal vote and an equal say, and they will be able to determine who serves as a hospital governor. For the first time we can ensure—within the framework of the standards we have set, and with a common NHS ethos and a common system of inspection—that hospitals genuinely serve the needs of the local community.

I know that many Members will have their doubts, but I fundamentally believe that we have an opportunity to construct a new model that is consistent with the values and principles of the national health service, while giving more control to those who need it: the staff on the front line, and the communities that they serve.

Mr. Peter Mandelson (Hartlepool): My right hon. Friend does indeed seem to be describing an entirely new and imaginative model for the entire public service. Would he characterise it as the end of old-style, centralised, Morrisonian nationalisation as we know it?

Mr. Milburn: I do not really want to intrude on family matters, but I think that it does mark a break from the past, in terms of structure but not of values. Values endure, and I believe that the values of the national health service are fundamentally right—although views differ in different parts of the House.

It is clear from what happens in other European countries that it is possible to have both diversity of provision and the right values for care. We can have a range of service providers, but the service that they give to public health care can be based on a common set of values. I think that that is right, not because diversity

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should be an end in itself but because alongside the national standards for the delivery of equity must be local services that meet local need. If we are honest, we will acknowledge that over the last few decades that has not been possible, and that we must change the structure and the organisation.

Mr. Goodman: If a foundation trust falls in the Government's rankings from three-star to two-star status, will it remain a foundation trust?

Mr. Milburn: As I have said, in due course we will present a prospectus that will deal with issues such as that. I can say, however, that if foundation hospitals are part of the NHS family and are delivering services to NHS patients, they must abide by the same disciplines as other NHS hospitals. That means that they will receive ratings, and will be subject to the same inspections as other parts of the NHS. [Interruption.] If the right hon. Member for Hitchin and Harpenden (Mr. Lilley) would stop chuntering and start listening, it might be helpful to all of us. If he wants to intervene, I will happily give way.

Mr. David Tredinnick (Bosworth) rose—

Mr. Milburn: I will have my dose of complementary therapy in a moment. First, let me deal with the question from the hon. Member for Wycombe (Mr. Goodman).

The expectation must be that as we are going to introduce the new arrangements in phases, and as the phases will begin with the best performers, foundation trusts will maintain—with greater freedom—a high level of performance.

Mr. Bob Blizzard (Waveney): Where foundation hospitals are operating in the way described by my right hon. Friend, fully accountable and responsive to local communities through the ballot box, will money from the Department of Health go to them directly rather than through local primary care trusts? Would that not make foundation hospitals more accountable to the community than PCTs?

Mr. Milburn: No. I think it right to have one form of commissioning. As I said earlier to the right hon. Member for Hitchin and Harpenden, we must ensure that all the growing resources for the NHS do not end up in the hospital sector. Hospitals will not be able to do what they need to do—reduce waiting times for treatment, improve the quality of care and so on—unless there are good services in the community, and in primary care as well. That is why we need strong local commissioning of services, which is the purpose of PCTs. They must be able to decide where resources should go in order to benefit the local community. Some will go to the hospital sector and some to the community sector; most, I expect, will go to the public sector, although some may go to the private sector. But alongside the providers must be commissioners of services.

Mr. Tom Levitt (High Peak): I am attracted by the model that my right hon. Friend has described, but what exactly does he mean by Xaccountable to local people"?

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There is no hospital trust in my constituency, and the four major hospitals that serve it are outside not just the constituency but the region. How might my local people be involved, at some time in the future, in this form of local democracy?

Mr. Milburn: I hope that when my hon. Friend sees the prospectus, he will agree that our proposals will achieve that.

Different trusts serve different populations, and not all trusts are the same. The Royal Marsden is a specialist cancer hospital. In a sense it does not really have a local community; its community is the community of patients whom it serves. They come from all parts of the country, because it is a tertiary centre. In my part of the country there is a very local trust that serves a distinct set of local communities. I do not know about my hon. Friend's area.

We must establish some principles for governance, but the governance structures must be flexible enough to take account of different needs and different local communities. That is why we will not lay down hard and fast rules, apart from saying one simple thing: if direct elections are to take place and if the mandate is to come from the local community, there must be an absolute majority of people from the local community serving on the stakeholder council, so that the public drive the changes that are necessary.

Rob Marris (Wolverhampton, South-West): When British Rail went through its botched privatisation we experienced fragmentation and then, following redundancies brought about by the privatised railway companies, a shortage of engine drivers in particular. Wages went through the roof. If we are to have local autonomy with regard to foundation hospitals, how will the Secretary of State avoid fragmentation and a consequent wage explosion when there is a shortage of health professionals?

Mr. Milburn: We will avoid fragmentation by means of the national framework of standards that we have established over recent years. Much of that framework, incidentally, was opposed by the Opposition. When my right hon. Friend the Member for Holborn and St. Pancras introduced legislation to create the National Institute for Clinical Excellence and the Commission for Health Improvement, and when we started to establish national service frameworks, both moves were opposed, because the Opposition genuinely want a free market in health care. We do not want that. We want national standards, and equity in the system.

My hon. Friend asked about wages in a constrained labour market. That applies to many, although not all, professions in the NHS, but even today there is an element of local pay bargaining. As I tried to convey earlier, we must have—and can have—a national framework, while respecting the fact that different local labour markets face different pressures. For instance, there is a problem at the John Radcliffe hospital, in the constituency of my right hon. Friend the Member for Oxford, East (Mr. Smith), the Secretary of State for Work and Pensions. That is largely because of local housing costs. It is different in my constituency.

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Unless we can enable employers to act, we will never be able to tackle the different recruitment and retention problems.

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