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11 Dec 2002 : Column 266—continued

Ms Meg Munn (Sheffield, Heeley): May I, too, welcome the speedy production of the report? As my right hon. Friend knows, my constituent, Natalie Perkins, died in that terrorist atrocity, along with her young cousin, Laura France, the constituent of my right hon. Friend the Member for Sheffield, Central (Mr. Caborn). I especially welcome the fact that today a system has been set up to communicate the contents of the report to the families. Will my right hon. Friend the Foreign Secretary again confirm his willingness to meet relatives, should they wish to discuss in detail concerns arising from the incident?

Mr. Straw: Yes is the answer to my hon. Friend. She raised her constituents' concern during the exchanges on 21 October. I am glad that we have put the special arrangements in place. I have written to the next of kin of all the British citizens who were killed in Bali. I have already seen a number of the relatives and if my hon. Friend would like to bring her constituent to see me, I shall be happy to oblige.

Mr. Douglas Hogg (Sleaford and North Hykeham): Bearing in mind that the security services of those countries most at risk are not necessarily the most reliable sources of information or the easiest to work with, may I ask to what extent and how often our security services or the Ministers responsible for them check their assessment of the risk in such countries with their counterparts in friendly countries, such as the United States, or other friendly countries in the region, for example, in this case, the Governments of Singapore, Australia and Malaysia?

Mr. Straw: As the right hon. and learned Gentleman will know from his previous ministerial experience, there are substantial standing arrangements for the exchange of intelligence, especially between some countries—the United States, Canada, Australia, New Zealand and the UK being five of them—and there are liaisons with quite a number of intelligence services in other countries. The right hon. and learned Gentleman is right to say—it is a timeless verity—that the quality of intelligence and security services varies across the world. Countries where law enforcement is lacking may also—although not always—have security services that are below the quality required. That has to be taken into account. There is a continuous process of exchange of information and a large proportion of the intelligence that we see—albeit not every item—has been shared with our intelligence partners.

Mr. Harry Barnes (North-East Derbyshire): At one time, travellers used travel agencies to purchase package holidays, so they were likely to receive advice about any problems in their destination. However, as travellers

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now increasingly make use of the internet, are there arrangements to ensure that the information that they pull down is linked to the Foreign Office advice for overseas travel?

Mr. Straw: Our travel advice is itself available on the FCO website. That is how the overwhelming majority of travellers access it. There is substantial and significant contact between our consular department, the Association of British Travel Agents and tour operators. They work together to improve the availability of advice, but I shall follow up my hon. Friend's specific point and write to him on the matter.

Mr. Michael Weir (Angus): On behalf on the Scottish National party and Plaid Cymru, I join other hon. Members in sending condolences to the relatives of those affected by this terrible atrocity.

Following on from the previous point, is the Foreign Secretary reviewing how the travel information is made available to those who are planning to travel and those who are already travelling, since the situation can change fairly rapidly? In particular, even in this age, many people still do not have quick access to the internet. In places such as south-east Asia, the problem is that many young backpackers may be on long trips through that area and may not be aware of a changing situation. Will he consider whether there is any way in which information can be more widely distributed quickly to people who are already travelling?

Mr. Straw: I thank the hon. Gentleman for the condolences that he offers on behalf of the SNP and Plaid Cymru; they are gratefully received.

Although the primary means of communicating our travel advice is through the website, whenever significant changes are made to the website a press announcement is made. We would draw a really

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important change to the attention of the BBC World Service, for example, and local broadcasters and so on, and we will continue to do so.

Mr. Geoffrey Clifton-Brown (Cotswold): Will the Foreign Secretary confirm the factual accuracy of his statement to the House this afternoon as opposed to the written statement that, during the period in question, the agencies received at least 150 separate intelligence reports a day? Will he also confirm whether the Government have thoroughly reviewed the deposition of the security and intelligence forces' assets throughout the globe so that they are correctly in place properly to assess the emerging threat from al-Qaeda, as the whole intelligence threat has changed since the dreadful events of 11 September?

Mr. Straw: The hon. Gentleman's first point was a paraphrase of the ISC report, paragraph 11 of which says:

the security services

Intelligence priorities are a very important issue; it is the core work of the Joint Intelligence Committee, based in the Cabinet Office and reporting to the Prime Minister and three Ministers—the Defence, Home and Foreign Secretaries—who are involved day by day in intelligence work. The ISC itself said that it was satisfied that sufficient priority was being given to intelligence collection in respect of Indonesia.

Patrick Mercer (Newark): In view of the general threat posed to travellers by the Bali bombing and the specific missile threat in Mombasa, will the Foreign Secretary tell the House what advice is being offered to British airline companies?

Mr. Straw: There are standing liaison arrangements with airline companies, but the crucial thing that we seek to do is to ensure that, so far as is possible and consistent with the protection of intelligence sources, the advice that we give is made public and is transparently available.

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New NHS Resources

4.13 pm

The Secretary of State for Health (Mr. Alan Milburn): With permission, Mr. Deputy Speaker, I wish to make a statement about devolution of resources and responsibilities within the national health service.

I am today allocating revenue resources to England's 304 primary care trusts. I have written to all right hon. and hon. Members with details on the PCTs that serve their constituencies.

The NHS today is the fastest growing health service of any major country in Europe. Just six years ago under the previous Conservative Government, NHS budgets were falling in real terms. By 2008, under this Labour Government, they will have doubled in real terms.

The dedication and commitment of NHS staff is turning those extra resources into improved results for patients. Deaths from cancer and heart disease are falling; waiting times are down; the numbers of doctors, nurses and other staff are up; and the biggest ever hospital building programme is under way. There is a long way to go, but real and steady progress is taking place. We can now build on that momentum by coupling record resources to radical reforms.

I can tell the House that I have made three major changes to the method by which we allocate resources to the NHS. First, for the first time, locally run primary care trusts will receive funding direct from central Government rather than through health authorities—that is about devolving power and resources direct to the NHS front line. PCTs will now control 75 per cent. of the total NHS budget. That was an election manifesto commitment and today we have honoured it. Secondly, the resources that I am allocating today are not just for a single financial year but for three years. Short-term funding has hindered long-term planning in the NHS for far too long, so I am distributing to PCTs resources for the years from spring 2003 to spring 2006 to give PCTs the power to plan with confidence and certainty for the longer term. They will be free to commission services from the public, private or voluntary sectors—wherever they can get the best health services—to meet the specific health needs of their local communities. We want them to use their considerable extra resources to achieve a better balance between services in the community and those in hospitals, and to promote prevention as well as treatment.

Thirdly, the resources are being distributed according to a new fairer funding formula. The existing weighted capitation formula has been widely criticised for failing to get health resources to the areas of greatest health need, and has restricted our ability to address the health inequalities which scar our nation. Poverty and deprivation cause excess morbidity and mortality and bring extra costs to local health services, which is why I asked the expert Advisory Committee on Resource Allocation to review the existing formula and introduce a new one. The new formula reflects those costs by using better measures of deprivation and by taking greater account of unmet health needs. It reflects population changes in the 2001 census, and redistributes resources to some of the poorest parts of the country, such as Tower Hamlets, Newham, Barking and Dagenham in London; Tendring, Basildon and Thurrock in the south;

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Birmingham, Telford and the Wrekin in the west midlands; Ashfield in the east midlands; Liverpool, Knowsley and Manchester in the north-west; Bradford in Yorkshire; and Easington in the north-east.

The new formula, in calculating health need, takes account of the effects of access, transport and poverty in England's rural areas too. In addition, it recognises not just the challenges for the NHS in areas of highest need but challenges in areas of highest cost. We all know that the cost of living in some parts of the country is higher than in others, which impacts on the cost of health care. The new formula takes account of that in a more refined assessment of labour market costs. The allocations also reflect the impact of the recent XAgenda for Change" agreement on regional pay flexibilities and the need to expand capacity in areas where waiting times for treatment are longest. Those changes benefit almost 180 PCTs, including more than 140 in London and the south and almost 30 in the north-west.

The new funding formula is fair to all parts of the country, reflects extra needs and extra costs, and benefits PCTs in both London and the north. The average PCT budget will grow over the next three years by almost #42 million—in real terms, an increase of 22 per cent, in cash terms, of over 30 per cent. No PCT will receive an increase in funding over the next three years of less than 28 per cent. For the information of Members on both sides of the House, the real-terms increase in resources for local health services in this Parliament will average almost 7 per cent. In the 1992–97 Parliament by comparison, it averaged just over 1 per cent—that is the difference a Labour Government make.

The resources, together with our reforms, will make a difference to the care that patients receive. There will be better emergency care, shorter waiting times and improvements in cancer, heart, mental health, children's and elderly services.

The allocations to PCTs include resources to finance the costs of pay reform, new drugs and treatments and additional NHS capacity. They include the commitments that we set out in the NHS plan. However, none of the growth money has been identified for specific purposes. PCTs will be able to use these extra resources to deliver on both national and local priorities. PCTs are about shifting the balance of power in the health service so that while standards are national, control is local.

I am today placing in the Vote Office copies of a document that provides details of the help—in cash and in kind—that the Department of Health will now make available to all NHS trusts to raise standards of service for patients. There will be help, support and, where necessary, intervention to raise standards in all NHS hospitals, from the best-performing to the worst.

We on the Labour Benches reject the internal market idea that NHS hospitals should be left to sink or swim. Equity in health care demands support for all, just as it demands national standards of care, but for more than 50 years uniformity in health provision has not guaranteed equality of outcomes. Sadly, health inequalities have widened not narrowed. Top-down Whitehall control has tended to stifle local innovation, and it has too often ignored the differing needs of different local communities.

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Sustained improvements in local services can happen only where staff feel involved and local communities are better engaged—where improvement is something done by local people, not just done to them. That is why devolution is at the heart of our reform programme for the NHS. It is why PCTs are so important, and it is why we now look to reconnect local hospitals to the local communities that they serve.

I am today publishing a guide to NHS foundation trusts—again, copies are available in the Vote Office. These NHS foundation trusts will usher in a new era of public ownership where local communities control and own their local hospitals. NHS foundation trusts will be part of the national health service, providing NHS services to NHS patients according to NHS principles—services that are free, based on need, not ability to pay. They will be subject to NHS standards, NHS star ratings and NHS inspection. They will be owned and controlled locally, not nationally.

Modelled on co-operative societies and mutual organisations, these NHS foundation trusts will have as their members local people, local members of staff and those representing key local organisations, such as PCTs. They will be its legal owners and they will elect the hospital governors. In place of central state ownership, there will be genuine local public ownership. Subject to Parliament, NHS foundation trusts will be guaranteed in law freedom from Whitehall direction and control, so that we can genuinely unleash the spirit of public service enterprise that so many NHS staff share. By putting staff and public at the heart of this key public service, these NHS hospitals will have the freedom to innovate and develop services better suited to the needs of the local community.

NHS foundation trusts will operate on a not-for-profit basis. They will earn their income from legally binding agreements with PCTs based on a national tariff. They will not be able to undercut other NHS hospitals. They will be free to borrow from the public sector or the private sector. They will be able to retain any surpluses and any proceeds from the more efficient use of their assets, where this is for the benefit of NHS patients. They will have the freedom to recruit and employ their own staff. Indeed, NHS foundation trusts will be among the first NHS organisations to implement the new pay system that we recently negotiated with NHS trades unions. Providing they can undertake extra work and make improvements in productivity and performance, they will also be able to offer staff extra rewards.

NHS foundation trusts will operate under a statutory duty of partnership under which they will use these freedoms only in a way that does not undermine other local NHS organisations—for example, by poaching their staff. There will be other safeguards to protect the public interest. NHS foundation hospitals will operate according to a licence, issued and monitored by an independent regulator who will be accountable to Parliament, to guarantee NHS standards and NHS values. The presumption will be light-touch regulation, but there will be intervention powers where they are needed. In extremis, foundation status can be withdrawn.

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I can confirm today that the proportion of private patient work undertaken by any NHS foundation trust will be strictly capped to its existing level. Indeed, we will be particularly interested to see applications for NHS foundation trust status that propose to convert existing private patient facilities for the exclusive use of NHS patients.

To prevent any demutualisation or any future Government seeking privatisation there will be a legal lock on the assets of NHS foundation trusts. They are there to serve NHS patients—not just for now but for all time.

The freedoms that NHS foundation trusts have will be a powerful incentive for others to improve. The first round of foundation hospitals will be drawn from trusts rated three star next summer. Forty per cent of existing three-star trusts are in some of most deprived parts of the country—places such as Sunderland and Liverpool, Doncaster and Bradford, Southwark and Hackney. As more NHS trusts improve more will be eligible to gain foundation status. There will be no arbitrary cap on numbers. Over time foundation trust status will become the norm for many, perhaps most, hospitals in the NHS.Subject to Parliament, the first will be in place by Spring 2004.

Today I am announcing large-scale investment accompanied by radical reform, investment to get more resources to the NHS front line, and reform to give more power to the NHS front line.

The Labour Government have an unquestioned commitment to the NHS. It is time not just to invest more resources in front-line services, but to invest power and trust in those front-line services. That is what we seek to do. I hope that it is what the House will support.

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