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3.20 pm
Sir George Young (North-West Hampshire): Many right hon. and hon. Members were sorry to see the former Leader of the House return to the Labour Back
Benches. However, it has enabled us to listen to him speak without the discipline of collective responsibility on a range of issues on which he has always taken an interest. I agree with much of what he said, although I would go slightly further and veer towards the more adventurous approach of the right hon. Member for Copeland (Dr. Cunningham), who thought that the Bill might go a little further.I agree with the Secretary of State and many others that reform is needed to complement the extra money that is going into the national health service. On the one hand, we all listen to Ministers telling us how much more money is going into the service. On the other hand, I receive letters like this one, dated 28 April, from the chief executive of my local NHS trust. It reads:
- "We have around 100 children waiting for therapy and at present children over 5 years old are waiting 27 months to be seen."
- "the rationale behind deciding what cuts to make."
The problem in my constituency, which neither the Government nor the Bill addresses, is that we get about £84 of NHS money per person, as opposed to the £100 average for England. Sadly, my constituents are not 16 per cent. healthier than average. Until there is recognition that the underlying revenue stream is inadequate and that the formula needs review, changing management structures and giving freedoms on pay and access to capital will make little difference.
I want to caution the Government about the claims that they are making for foundation trusts on bureaucratic freedom, local accountability and access to capital. On freedom, I re-read over the weekend the "Guide to NHS Foundation Trusts", which was published last December. It is peppered with phrases such as "interference from Whitehall" and
- "disempowered by top-down control in the NHS."
The explanatory notes continue the fiction on freedom. In page 2, paragraph 6 states:
- "Part 1 of the Bill establishes NHS foundation trusts—a new form of NHS organisation. NHS foundation trusts will not be subject to direction . . . instead, an Independent Regulator will monitor their performance."
The absence of control from Whitehall is balanced by the sentence in paragraph 1.31 of the December document that reads:
- "An NHS Foundation Trust will be required to submit reports and information to the Independent Regulator."
That brings me to accountability. In his foreword to the December document, the Secretary of State claims that NHS foundation trusts
- "will be able to gear their services more closely to the communities they serve."
I was reading the Secretary of State's Social Market Foundation speech last week. He said that the trusts will
- "give more responsive services and ensure community services are better met."
It is also absurd to play with words and call one thing "central control" and the other "local accountability". Local control has the potential to be every bit as intrusive or destabilising as central control if it is not done well. What is proposed in the Bill is a leap in the dark. It is a management style that is virtually untried in this country outside the Co-operative movement and Network Rail. It might be better but it could be worse.
It has been argued that the Government are democratising the wrong body: the trust that manages the hospital, rather than the trust that commissions the services. It is as if the Government had said that the management of my local Tesco should be elected locally; but that the product range, quality and price and the frequency of delivery will continue to be dictated by Tesco headquarters. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, there is a risk of the trust being pulled two ways—one by the primary care trust and the other by the governing body. The governing body will claim a democratic mandate and try to reorient the hospital to meeting what it sees to be local need. However, the PCT, which has the cash and the contracts, will be governed by national frameworks, targets, ministerial priorities and the regime from Whitehall. There is a real risk of crossed wires under the proposed regime.
Finally, I shall say a few words on financial freedom, which is likely to be far less than the rhetoric has implied. We are told in the document to which I have referred that trusts will be able to access capital
- "based on financial performance and not on the basis of national or local capital rationing by the Department of Health or SHAs."
I have tried to work out whether my local hospital will be able to borrow more under the new regime than it receives now in capital from the Department. Under what the Department is pleased to call a transparent-ratio-driven-credit ratings methodology using key ratios benchmarked with leading analysts, my hospital could borrow £12 million in year 1, but it could not do that every year. It is by no means clear whether this will be more or less than is available at the moment.
There could be advantages in the regime, but the Chancellor of the Exchequer and other Labour Members would water them down. I fear that what is left will not deliver the step change in NHS performance that we would all like to see.
3.27 pm
Mr. John Denham (Southampton, Itchen): This, of course, is a Second Reading debate. As a Minister, I introduced several Bills, including a couple of health Bills. All those Bills proved well capable of amendment and improvement after I had introduced them. I am sure that this Bill will be capable of amendment and improvement. However, on Second Reading, it is important to consider whether the strategy that lies behind the Bill is right.
The question of how to manage the national health service has been present since the inception of the NHS; that is, to manage the immense resources and to manage the staff, who range from some of the most poorly paid but most motivated public servants to some people who, frankly, are largely motivated by money, to some of the most senior and best clinicians in the world, and to professional managers, who often see themselves as professionals in political football. However, it is not simply a managerial challenge. It is also a political challenge.
There have always been those who want the NHS to fail, so as to be able to replace it with a real private insurance market alternative. With the record resources that are going into the NHS today, both the managerial and the political challenges are as alive as ever. If the Government fail to show that the NHS can deliver, despite the extra resources, those who want to bring down the NHS—people who are quite quiet in the public debate—will be back into the debate with a vengeance.
Foundation trusts represent a radical step. It is one that I think is overdue. It follows from what we have already achieved as a Government, but recognises that what has worked since 1997 will not be sufficient to deliver the quality of services that the patient wants.
The NHS that we inherited in 1997 was chaotic and fragmented. Many parts of it had no NHS identity. Strategic planning was being abandoned and the capital building programme had collapsed. The two-tier NHS was a reality, and not only in terms of variations
between institutions. Neighbours in the same street with the same condition were receiving different treatment in the same local hospital. That was the situation produced by the previous health reforms.In theory, it may have been possible to go from what we inherited in 1997 to something like what is being proposed now. One could imagine building on the successes of local commissioning groups of GPs by going straight to primary care trusts, giving them more freedom to concentrate nationally on inspections, high clinical standards and so on. On reflection, I believe that a little more could have been done earlier in that direction. However, the truth is that the NHS, as we inherited it, needed a central shock to get it back on course. As I saw in overseeing the emergence of PCTs, the divisions and suspicions between, for example, fundholding and non-fundholding GPs could not be overcome overnight to bring people together to form primary care-led bodies that could take over commissioning from health authorities—that was bound to take time. We had to be able to challenge a culture in which every piece of poor performance was always blamed on the shortage of resources, no matter what the real reason was, and in which the component parts of the NHS did not work with each other or even accept responsibility for doing so.
The impact of targets and, yes, central direction was needed then to bring about improvements in waiting times and accident and emergency services, to establish NHS Direct and walk-in centres and to develop cardiac and cancer strategies. Only central direction could make public-private partnerships work and give us the largest ever hospital-building programme. That is why, in every part of the NHS, we see a significant improvement in the NHS that we inherited from the Opposition. However, we must recognise that that approach has its limits. While targets can provide focus and direction, ultimately they stifle innovation and distort performance. Central direction can produce change in key areas of service, but it cannot cover all the multiple challenges of a complex service, nor can it fully motivate staff, whether management, support or clinical, who are now required to take the NHS to its next stage. Indeed, I worry, as some clinicians do, that we are getting to the stage where some things, like the collaboratives, that have produced change will begin to lose their impact and impetus because, at the local level, clinicians do not have the freedom to carry out necessary changes.
The next stage of NHS reform must therefore enable trusts to take greater responsibility for their own activities and development, and that is why we should support the Bill. However, the Bill goes further, as it opens up new possibilities in the NHS for greater community ownership and control. There has always been a wing of the Labour party interested in social ownership, social entrepreneurship, decentralisation and co-operation. Many of us were able to pursue that in local government but have not seen a great deal of it in central Government. Now that we have done so, we should seize the opportunity to put it at the heart of a great public service and advance it further.
The Bill does not do everything, and I shall mention briefly three things that it does not tackle. First, it is important that foundation trust status is offered to all hospitals, but the Bill does not deal directly with failing hospitals. I welcome the promise from my right hon.
Friend the Secretary of State of extra money and support for the Modernisation Agency. Both those things will help, but we must still recognise that there is a need to deal with very poor hospitals. I simply remind him and hon. Members on both sides of the House that the Health and Social Care Act 2001 provided powerful mechanisms for dealing with genuinely failing hospitals where encouragement, support and guidance had failed to deliver. We do not need new legislation to deal with that problem—we need to use the legislation that we have when all else has failed.Secondly, we need to do more on strategic planning. At the moment, no one is entirely responsible when things go wrong. It is not quite the hospital management, the trust board, the PCT, the strategic health authority or the Secretary of State. If we are not careful, we will still have a system in which PCTs plan from the bottom up, and strategic health authorities sort out problems from the top down. There is a lack of clarity about accountability that needs to be thought through. I simply suggest to my right hon. Friend that if he put PCTs collectively in charge of the work of strategic health authorities so that the jobs of planning from the bottom up and sorting out problems from the top down were brought together, a lot of reservations about fragmentation could be dealt with easily and lines of accountability would be clearer than they otherwise would be. However, those are points that can be considered in Committee. The Bill's strategic direction is right, and many Labour Members will regard it not as a shift to the right but as bringing some good, left Labour ideas on to the agenda for the first time in many years.
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