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29 Jan 2003 : Column 940—continued

Mr. Howard Flight (Arundel and South Downs): As has been mentioned, that report goes on to make the point that the legal costs are likely to be just as great as the claims, thus implying that the ultimate costs arising from that source may amount to about £7 billion.

Mr. Steinberg: Not being a mathematician, I will not go into the exact figure, but I intend to deal with that issue almost immediately.

On average, such claims take a long time to settle—about five and a half years. The point is that almost half the claims settled the year before last cost more in legal and other costs than the settlements themselves. For example, the cost of reaching settlements up to £50,000 was greater than the damages awarded in more than 65 per cent. of those cases. That report and the evidence itself make it clear that the whole system is chaotic and desperately needs an overhaul.

I think that all PAC members received a letter from Dr. Anthony Barton, who is apparently a solicitor and medical practitioner. In the letter that he wrote to me, he said:

I have investigated that, and the figure is 24 per cent. He went on to say:

He is absolutely right, as became clear when we undertook that report.

The report made it clear that because of the difficulty of pursuing claims, few people were able to do so unless they were getting legal aid. If the legal aid was not

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available, they were excluded from the legal aid process, exactly as has been described. Steps were taken to address the problem by bringing in a no-win no-pay scheme, and claimants' solicitors have been able to add to their charges a success fee of up to 100 per cent. of their costs if the claimant wins—a bonus that is claimed from the loser. That worries me greatly, as I am sure that it will encourage the development of a litigation culture—as we have seen in the United States of America—in which solicitors chase ambulances and patients sue for the flimsiest of reasons.

A short while ago, I visited the hospital that is being built in my area under the private finance initiative, with which I am very pleased. When I came out of the gate, I saw pasted on nearby bus shelters posters advertising a firm of solicitors in Newcastle called Samuel Phillips and Co. The huge headline on the poster encouraged people to contact the firm "If the nurse has made it worse". I do not know what other Members think of that, but I found it very distasteful. I accept that solicitors must advertise for business, but stooping to that kind of campaign is unacceptable.

I do not believe that the new conditional fee arrangements have improved patient access to justice. Indeed, they could have a detrimental effect, because solicitors will not want to take risks and claimants may not be able to get insurance. Between 1990 and 1998, claims rose by about 72 per cent. Is there more negligence, or are the public more aware of the litigation culture? In five years, the cost of claims has risen from about £200 million to £1.5 billion. The report says that the total value of outstanding claims—with only a 50 per cent. chance of success—in 2000 was about £4.3 billion. Those are staggering figures, which seem to indicate that we should concentrate on the apparent clinical incompetence throughout the national health service.

Obviously, claims are successful only if there has been negligence, and the report indicated that there had been £4.3 billion of incompetence in the NHS. I shall refer to some of the 94 negligence claims examined in a recent report, "Clinical Negligence in the National Health Service in Wales"—I presume that the situation is similar in England; there is no reason why it should not be. The Auditor General for Wales produced the report, so it is very reliable. One of the aspects examined was the frequency of alleged or admitted causes of clinical negligence. Of the 94 claims, more than 30 per cent. were for misdiagnosis by a doctor, 20 per cent. were for technical mistakes during an operation, 18 per cent. were for surgical mistakes during an operation, and fewer than 10 per cent. were for drug complications. To me, that was unbelievable.

The report also notes some of the main alleged or admitted causes of negligence; for example, under misdiagnosis, it lists

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What are doctors for if they cannot even do that? Other causes of negligence are listed under the heading "Operation, technical" and include

Do we really want to go into hospital? The list under "Operation, surgical" includes

The list goes on; it is a horror story.

We need to take drastic action to eradicate that incompetence. The arrogance of many medical professionals needs to be tackled, otherwise we shall continue to pay out millions of pounds in compensation. I have no faith at all in the British Medical Association as a regulator; we need an independent body to look into cases of alleged incompetence.

A pilot study in two London hospitals concluded that about 10 per cent. of patients admitted to acute hospitals experienced an adverse event, but that half those events were preventable. That is appalling and does not give us much confidence about going into hospital.

Patients should be able to check on whether a doctor has a record of negligence. Almost every constituent who comes to me with a complaint about a hospital has experienced a negative attitude from the hospital. Patients must have clear guidelines on the options open to them, whether for a complaint or a claim. If that occurred, most cases would never reach the stage where solicitors were involved. If trusts were more open and honest, the number of cases resulting in litigation would be considerably reduced and so would the bill to the taxpayer.

The House will be delighted to know that I have almost reached the end of my speech. The examples that I have highlighted from our investigations in 2001–02 show both the importance of the PAC in the fight against waste, inefficiency and incompetence and the need for all Departments to achieve value for money. Government spending needs constant scrutiny if there are to be real improvements. Scrutiny by the PAC has clearly led to improvements. By virtue of the excellent reports that we receive from the NAO and the vigorous way in which my colleagues on the PAC carry out their work, all expenditure is made accountable to Parliament.

4.33 pm

Mr. Richard Bacon (South Norfolk): It is a great pleasure to follow the hon. Member for City of Durham (Mr. Steinberg). We have all been delighted and entertained by his enthusiasm for the private finance initiative, especially in relation to his local hospital.

I, too, want to dwell on the PFI. It is a matter of great concern and affects much of what the PAC does, in relation both to central Government projects, such as buildings and computer systems, and to schools, prisons and hospitals.

The work of the PAC is of huge importance and I am privileged to be one of its members. According to figures that the Committee has seen on just three aspects of

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Government—Customs and Excise, health and social security—between £16 billion and £24 billion of taxpayers' money disappears in one way or another. I do not say that it is all unaccounted for, as not all the accounts are qualified. Neither do I pretend that it is easy to account for all such money, or someone would have done so by now, but the figures show the large scale of Government expenditure and thus the importance of the PAC's work.

The PFI has been the subject of much comment and debate; it is a matter of some controversy. The Institute for Public Policy Research recently pointed out that only 6 per cent. of PFI projects completed by central and local government were subject to independent value-for-money examination by official audit bodies. I discussed the 6 per cent. figure with the National Audit Office, which suggested that it might be slightly higher depending on how it is calculated. None the less, a substantial proportion of PFI projects have not been independently evaluated. The institute called for a full and independent review of value for money in the PFI to check both that the schemes are expected to deliver value for money when signed and that they deliver the predicted benefits once they are up and running. During last year's conference season, the trade unions called for a moratorium on the PFI until a full assessment had been made, although they got short shrift from Treasury Ministers for doing so.

The Health Committee mentioned the PFI in its recent report on its work over the last Session. It noted that its inquiry, "The Role of the Private Sector in the NHS", was undertaken in the knowledge that there had been a great deal of controversy and debate about the merits and cost-effectiveness of the PFI. The Committee sought to discriminate between polemical evidence that was being advanced by both sides in order to reach a balanced judgment. Its report noted:

The Audit Commission recently published a report on the PFI in schools that was critical of some of the early contracts. By measuring PFI projects against a control group of traditionally funded schools, it concluded that the PFI had not yet delivered some of the most important benefits expected of it. I accept that those were early contracts and that lessons have been learned—I am sure that that is what the Economic Secretary would say; that is probably what he is writing down now—but my enduring impression from my time on the Public Accounts Committee is that, across various areas of Government, lessons that should have been learned from experience often are not: they are ignored or forgotten. Regardless of the merits of the case for the PFI, I hope that the Economic Secretary will accept that neither the Treasury nor the Government generally has yet succeeded in building a settled will in

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favour of the PFI. On the Committee, sceptics include left-wing state socialists and right-wing free market chartered accountants.

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