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11 Dec 2002 : Column 279—continued

Mr. Milburn: Typical new Labour! Babies, bath water and drawing boards—an interesting metaphor that speaks volumes for the confused state of the hon. Gentleman's mind, I fear. On some of those issues, he might have welcomed the big funding increases for his local PCTs—#39 million in south-west Oxfordshire, #38 million in Oxford city and #14 million in north-east Oxfordshire—that range between 29.1 and 31.55 per cent. over the next three years. They have been achieved precisely by the approach to public finances that this Labour Government have introduced over the past few years. My right hon. Friend the Chancellor is quite right to say that it has been prudence for a purpose. If the Liberal Democrats had been in office, or anywhere near it, I fear that we would have gone back to the sad old, bad old days when deficits were out of control and unemployment was rising through the 3 million mark.

The hon. Gentleman raised specific issues and asked why 75 per cent. of funding is being allocated to PCTs. The reason is simple: certain budgets that he is aware of—for example, training budgets for nurses, doctors, scientists and others—are held nationally rather than locally. Indeed, the research and development budget is held nationally rather than locally because it has to be distributed not on an equitable basis but according to where the R and D centres are, and there is a large volume of cash for information technology systems, which we shall distribute in due course. He has been one of the strongest advocates of better IT in the NHS. I agree with him, but to achieve that we must ensure that the distribution formula is right.

On pay beds, when I last attended the Health Committee, or perhaps the time before that—no doubt my hon. Friend the Member for Wakefield (Mr. Hinchliffe) will remind me in a moment or two—I was quite prepared to hear proposals from all NHS trusts, not just NHS foundation trusts. If they would like to get rid of their NHS pay beds, which serve private patients, and if they think that sensible in order to allow extra capacity for NHS patients, I would be delighted to hear from them.

Several hon. Members rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I propose to move on at eight minutes past 5, so I appeal to Members for one short question and to the Secretary of State for brief answers.

Mr. David Hinchliffe (Wakefield): My right hon. Friend has brought us two Christmas presents today. One is his welcome present of increased resources for PCTs, and he should be warmly commended for the deal that he and his team have won for the health service and for securing the ability to plan health care locally, which we have never had before.

I like the wrapping paper that covers the second present—foundation hospitals—but when I open it I am not too keen on the contents. His statement is somewhat

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inconsistent: on the one hand, we have the devolution of power to local communities and primary care but on the other we have foundation hospitals. Through them, we are rowing back to the tradition, which has been a weakness in the NHS, of empowering the acute sector to drive forward change at the expense of primary care and the community. He ought to address that glaring inconsistency in what he has said today.

Mr. Milburn: I hope that, in time, I can persuade my hon. Friend to love NHS foundation trusts, although I fear that that might be a sticky wicket. He will be aware of the funding increases for Wakefield of between 29 and 32 per cent. for the two PCTs. He was talking to me earlier about some of the considerable pressures that the NHS faces, so I hope that they very much help.

My hon. Friend raises the issue of NHS foundation trusts and the relationship with PCTs. He is on to an important point. Indeed, when he reads the guide, as I know he will, he will see that there are two important roles for the PCTs, particularly to guard against the acute-sector creep that he has talked about. First, for any NHS trust to get the go-ahead to become an NHS foundation trust, it must have the support of its local PCTs. A lock is built in to safeguard the interests of primary care. There is a second lock too, in that the governance structure in a foundation trust includes not just local people, patients and of course members of staff at the local hospital or hospitals, but the local primary care trust.

My hon. Friend is right: we must have a better range of services in the community. I very much hope that the commissioning powers we have given today and the extra resources for PCTs will help to make that happen.

Several hon. Members rose—

Mr. Deputy Speaker: Order. I repeat my appeal.

Mrs. Gillian Shephard (South-West Norfolk): May we have a little more information about the mechanisms whereby foundation trusts will engage their local communities? How will people qualify for membership of trusts; and if elections take place, how will the electorates be constituted?

Mr. Milburn: The guide that we published today, which is in the Vote Office, sets that out in considerable detail—but I shall not do so given your strictures, Mr. Deputy Speaker.

The trusts will operate on a basis that will be familiar to Labour Members but perhaps not to Conservatives: a basis of co-operative societies and mutual organisations allowing people in an area served by a trust to become its members. Obviously there are different sorts of NHS trust—the Royal Marsden is a very different sort from my local trust—so some flexibility is built into the Government's model. There is, however, one important stricture that I think entirely right in terms of public ownership. Whatever happens, a majority of those on the governing body of a foundation trust will have to be elected by members of the public and by the patients who use the trust.

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Mr. Keith Bradley (Manchester, Withington): I welcome the 31.52 per cent. increase in funds for South Manchester primary care trust, which properly reflects the chronic health needs of the people of Manchester. It will allow the development of new, innovatory services in primary and preventive care at the new #20 million Withington community hospital, to be built next year. May I ask, however, how the foundation status of specialist hospitals such as Christie hospital in my constituency will properly reflect local needs?

Mr. Milburn: My right hon. Friend and many of his Greater Manchester colleagues have lobbied assiduously and made a strong case for precisely the changes in the formula that we have made today in order to recognise the pressing health needs of his community. As he says, the increase in resources is considerable—about #40 million for South Manchester PCT and about #50 million for Central Manchester PCT.

Christie hospital is rather like the Royal Marsden, in that it serves two sorts of community. It serves the local community, but it also serves, as a tertiary centre, a wider cohort of patients. As my hon. Friend will see when he reads the guide to foundation trusts, enough flexibility is built into the system to allow both members of the local community and patients who have recently used the hospital to apply to become members. In that way, services, even in excellent organisations such as Christie hospital, can become ever more responsive to the people who use them.

Mrs. Cheryl Gillan (Chesham and Amersham): How free will the foundation trust hospitals actually be? For example, will such a hospital be able to enter into its own private finance initiative project? If so, will it be prevented from exchanging surplus assets for new build facilities by the Secretary of State's legal lock on assets?

Mr. Milburn: A foundation trust will be able to enter into a PFI contract in exactly the same way as existing NHS trusts. As the hon. Lady knows, sometimes there are land swap deals, but trusts will have considerable freedom to enter into new sorts of contract as well.

Mrs. Gillan: That is nothing new.

Mr. Milburn: I think that when the hon. Lady bothers to read the guide she will find that a huge amount is new. For instance, the trusts' ability to borrow from both the public and the private sector will allow them to bring onstream precisely the new capital developments for which she and her hon. Friends have long argued.

Mr. Kevan Jones (North Durham): I welcome the record 28 per cent. increase for Durham and Chester-le-Street PCT, and the 30 per cent. for Derwentside PCT. Although I have reservations about foundation hospitals, I also welcome the opportunity they give local people to have a direct say in their health care. Will my right hon. Friend consider extending that to PCTs?

Mr. Milburn: I am grateful for my hon. Friend's comments on Durham, Chester-le-Street and Derwentside, parts of the country with which I am very familiar. I know of the pressing health needs in those

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areas. On the extension of a more democratic form of governance to other parts of the NHS, the answer is yes but over time.

Mr. Paul Burstow (Sutton and Cheam): May I ask the Secretary of State about the financial flow system that is being introduced to recycle #100 million from the NHS into social services so that they can pay fines back to the NHS? Is that money to be top-sliced from the NHS before money is paid to the PCTs, or will it be taken from individual PCTs or acute trusts?

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