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8 Jan 2003 : Column 254—continued

Mr. Lansley: By way of illustration of the way in which expenditure and quality are not necessarily related, I refer to the fact that the NHS is incurring hundreds of millions of pounds of expenditure as a consequence of the implementation of the working time directive. That will take place, first, for non-medical and then for medical staff. That does not deliver of itself any improvements in the service provided to patients, but it counts as NHS expenditure. If one were simply counting money, one would think that an increase in expenditure would lead to an increase in NHS standards, but it does not do that at all.

Mr. Flook: I am grateful to my hon. Friend for making such an important point. No doubt, in April, there will be a consequential rise in the health bill for hospitals and GP surgeries when they have to pay ever higher national insurance charges. It would be a shame for the Government to say that they were putting more money into the health service if that allowed the general population to gain the impression that greater health care was being delivered. That is patently not happening.

The Government see higher taxes and higher spending as a sort of social obligation or as a common morality of citizenship, as they call it. As the leader of

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the Conservative party, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) wrote recently, Conservatives do not believe that the Government have a moral entitlement to other people's money. It is still their own, and the Government have only been entrusted with it. That is why any Government must spend that money wisely and why the Government will fail to meet their 2005 targets, as many of us, including Labour Members, will have read in today's Financial Times.

Careful stewardship is the key, and Conservative Members see that stewardship having a twin aim when it comes to reforming public services. We need not just to improve public services. My hon. Friend the Member for Woodspring (Dr. Fox) rightly alluded to the fact that there has been a 20 per cent. increase in funding, but he did not go on to say that that funding has delivered only a 2 per cent. increase in the number of treatments. That means that much work needs to be done.

Mr. Simmonds: My hon. Friend makes a powerful point. In Scotland, there has been an even greater increase in public expenditure on the health service, but the service, as measured in waiting list terms, has deteriorated significantly irrespective of the amount of money going into it.

Mr. Flook: I am grateful to my hon. Friend. I am also told that the situation is not much better in Wales. It is lamentable that there are 25,000 more administrators in the NHS than there are now beds in the system—225,000 administrators as opposed to not quite 200,000 beds. That is a particular shame.We need to cut the enormous waste that currently occurs in the NHS so that individuals and families can choose where they spend their money. That point applies not to the NHS but to other Departments of state.

In retrospect, I suppose we should welcome an attempt to mimic Tory philosophy with this attempt to create foundation hospitals. Labour Members have spoken much about co-operatives, and the hon. Member for Leigh (Andy Burnham) spoke fondly about how keen he is on the notion of the co-operative societies and how they work. However, Conservative Members also see foundation hospitals as agreeing with our base philosophy.

The problem is that the Government do not fully understand the foundation hospitals that they are trying to introduce. They do not understand how to make hospitals locally accountable. From the prospectus that Ministers have published and from the Secretary of State's response to my hon. Friend the Member for Woodspring, we do not know whether enough people will be willing to come forward to serve as members of the foundation trusts. Local elections are approaching and we all know that it is quite difficult to find enough local councillors to serve on local councils, and the Government have not yet told us how we will find enough suitably qualified to be members of the foundation trusts. What does Xlocal" mean? Does it depend on a travel-to-work basis, as is currently the case with people who work for local authorities? We do not yet know. Some 3,500 people work in Taunton's

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hospital and 50,000 people live in the town, but the hospital serves thousands of people beyond Taunton Deane.

I also represent part of West Somerset, which is a different local authority area. The local authority mainly looks to Minehead, but for its acute hospital services it very much looks to Taunton and, to some extent, Tiverton. Will people who live in Dulverton and Withypool in West Somerset look to serve on trusts in Tiverton or Taunton? We do not know. My hon. Friend the Member for Woodspring said that there is no acute hospital in Woodspring and everyone has to travel to Weston-super-Mare or Bristol. We have yet to find out what the Government think. I quite like the idea espoused by the hon. Member for Putney (Mr. Colman) that there should be a catchment area for membership of the foundation hospital trust.

The situation in Taunton is intriguing. The trust is well regarded by many local people. Taunton and Somerset hospital, commonly known as Musgrove Park, was built during the war. The old building, which still stands, has corridors wide enough for jeeps to go down because it was built by the American forces to look after expected casualties following the D-day landings. Fortunately, the hospital had massive infrastructure spends in the 1980s and the mid-1990s which to a large extent matched the population growth in the area. However, there has been a big lull since 1994. I am pleased that recently there has been much talk of spending tens of millions of pounds of taxpayers' money in upgrading the old building, which has structural problems and cannot deliver the needs of modern surgery as well as a new building. Parking is also a problem. Local people, especially the Member of Parliament, strongly welcome the planned investment to match the bigger and now growing population. A cancer unit is on its way. That is welcome but not before time. There is only a small Xp" promise of a tertiary cardio-thoracic unit. Somerset residents have been paying for those improvements for some time in ever-rising amounts of tax, but we still have not got that big XP" promise for the cardio-thoracic unit and the huge amount of spending that we need.

How does that relate to foundation hospitals? The Taunton and Somerset NHS Hospital Trust was awarded three stars in the original round when stars were given out, to some extent like confetti. Sadly, it now has only two stars. There are a number of reasons for that and the chief executive is confident that he can rectify the situation. The staff and all his management team are working on that. They consider the trust a rising two star because of their hard work and good management. However, that cannot detract from the fact that the star system is flawed, as the hon. Member for Wyre Forest (Dr. Taylor) explained so eloquently.

Where does that leave Taunton's fairly important hospital in the bigger scheme of things if it is trying to get that large infrastructure spend? Its increased needs and expected increased financing means that it must consider whether to go for foundation trust status as spelt out by the Government. A local senior NHS manager described going for foundation trust status as not dissimilar to Dumbo's magic ears. As far as he was concerned, setting up foundation hospitals would provide the same confidence that made Dumbo think that his ears could make him fly. To put it another way,

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he meant to say that the foundation trusts are not dissimilar to the original aims of the NHS trusts at the beginning of the 1990s, in which greater clarity and identity is given to the hospital and its local management capability so that there is more delegation, greater responsibility and sharper accountability to the taxpayers who fund it and the local people.

However, there are still too many unanswered questions on whether the hospital could go for foundation trust status and, at the same time, be hopeful that it will get all the money it needs, especially as it will not be in the first wave of hospitals to qualify because it has two stars.

We do not yet know whether the Secretary of State will guarantee any borrowing, or whether the Somerset and Dorset strategic health authority will do so if the hospital achieves foundation trust status. Perhaps the Taunton Deane primary care trust will do so. We do not know whether the private sector will lend to foundation hospitals. We know that the private finance initiative might work for the large building programme, but we do not know whether foundation hospitals will be acceptable to the City. How will the loans be treated in the national accounts? That is not especially relevant to the management of Taunton hospital, but it is relevant to the SHA and, in turn, to the Government.

There are other concerns about foundation hospitals. Taunton hospital has a well regarded private wing, Parkside. It is very small, accounting for only 1 per cent. of the hospital's total activity, and it has to compete with the nearby Nuffield hospital. According to the prospectus—the hastily drawn up plans for foundation hospitals—the licence to become a foundation hospital will restrict the number of private patients a trust can treat. Paragraph 3.16 states that the Government would be keen to see applications that propose to convert NHS facilities wholly used for paying patients. Is that the Government's real wish? We are not sure, but suspect that that is more likely to be mere spin, designed to assuage the concern of sceptics on the Labour Benches, who are, it seems, having to be asked not to speak in this debate.

Mr. Barber's paper, carefully leaked to today's Financial Times, states that No. 10 appears to be impatient at the speed with which the Secretary of State and the Department of Health are pursuing choice and diversity. Has the Department just come up with the concept of foundation hospitals, which was poorly thought through and rushed out on 11 December; or are the Government, as they did in the announcements in the summer and on 11 December, borrowing the language, but not delivering the substance? The Government recognise what needs to be done, but have failed to implement a policy that will deliver the aim.

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