Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20-39)


17 OCTOBER 2005

  Q20  Kitty Ussher: That is extremely useful; thank you. Might I turn to issues which have arisen locally? I have to say, so that people can understand, that we have a building powering up in the centre of my constituency which is a health and leisure centre and people are amazed by how good it looks as though it is going to be. However, some specific issues have arisen. I have four specific ones. The first one is on design and architectural design where about two weeks before the contractor was due to start digging the hole huge concerns were raised by CABE, the Commission for Architecture and the Built Environment, which is the national body to look at architectural standards. I felt that there were some last minute modifications made to the design as a result of that, but I suspect that had those come sooner there would have been more substantial revisions, to be honest. How can we make sure this situation is avoided in future?

  Mr Johns: Partnerships for Health have collaborated with CABE since the very start of LIFT and indeed we invited them to comment and they did comment on the original technical specification for LIFT. They also provided design enablers on a number of the schemes which were the original schemes to be developed. They are working with us on the fourth wave of LIFT, again providing design enablers, but they have limited resources, so they are not able to provide an enabler for every scheme. The most important answer to your question is that we are now working with CABE and DoH Estates to undertake a design review of all the LIFT buildings which have been developed to date. The intention of that design review is actually to provide lessons for designs for architects for future schemes. That is how we are systemically addressing the design issue.

  Q21  Kitty Ussher: Thank you very much; that is encouraging. We obviously have a huge shortage of dentists in my part of the world—I am sure I am not alone—and my constituents are desperate to see as many dental seats in there as possible available to the public on the NHS. Are there any guidelines as far as you are concerned to ensure that happens?

  Mr Coates: I am not aware of any formal guidelines on the number of dental facilities to provide within LIFT. If you wanted a note, I would have to come back to you with that. I am sorry.[2]

  Q22 Kitty Ussher: It would be useful to know whether there are.

  Mr Johns: There are actually dentists taking up occupation in buildings already. We have about a dozen dentists and in fact in Birmingham we have a dentistry training facility which has been developed as part of the initial LIFT scheme there.

  Q23  Kitty Ussher: It is obviously a great opportunity. There has been concern amongst local independent pharmacies that the way that the contracts are being given for pharmaceutical services inside the new LIFT building effectively crowds out local provision. My understanding of current government policy is that they do wish to support independent pharmacies. That certainly will not happen as a result of the way the contract has been let in my constituency, which is a pity. They have not felt able to bid commercially. Is that something you are seeking to avoid?

  Mr Coates: No. There is no guidance of which I am aware where we say that sectors cannot bid for franchises in LIFTCos and there is certainly no central guidance which tries either to target or limit independent involvement in LIFT premises.

  Mr Johns: Indeed on the visit last Thursday there were two representatives from local pharmacies who were there, who are operating from the facility we visited in Church Road in East London. What they told us was that the local independent pharmacists had formed a consortium so that they could provide services from the LIFT building. I think that is a model which has been considered in other localities as well.

  Q24  Kitty Ussher: Perhaps I could pose the question the other way. We only have one or two local independent pharmacies which are interested and I think that the national players are not interested in forming a consortium with them, so they are completely unable to compete in the absence of guidelines to say that local pharmacies should be looked at sympathetically. Should we not have that?

  Mr Coates: Is your question around the money side of it, affordability?

  Q25  Kitty Ussher: I presume it is money. I presume that the large pharmacies like Boots and Moss—I do not know the specifics—are able to undercut by virtue of economy of scale.

  Mr Coates: My understanding on the pharmacy side in LIFTs is that PCTs can support the rental cost within the development. For example, if they feel that it is essential that there is a pharmacy within the building then they can subsidise the rental paid by the independent contractors.

  Q26  Kitty Ussher: So this is something we can take up with the PCTs.

  Mr Coates: Yes.

  Q27  Kitty Ussher: There is also concern that some GPs who are currently based in deprived areas, which is seen as a good thing, will be sucked into this momentum to relocate into the centre of town. Is that something you are seeking to avoid?

  Mr Coates: To avoid?

  Q28  Kitty Ussher: Yes.

  Mr Coates: The location of health services within any economy is clearly down to the local PCTs and their Strategic Service Development Plan (SSDP). All LIFT tries to do is to provide a framework within which we can provide assets and services flexibly to the local economy. There is no central guidance of which I am aware which tries to do what you are suggesting in terms of bringing people in from the suburbs.

  Q29  Kitty Ussher: Do you accept that if the facilities offered in a LIFT centre are of excellent quality then GPs may be more likely to want to move there and thereby provide a less good service to people out in deprived communities?

  Mr Coates: That is a risk, but with the additional funding going into the NHS over the next two or three years it is a case of rolling out improvement as and when we can. All we can do is target the initial developments on the areas of greatest need and then cascade those out to other areas over time. I am not aware of any policy which you are suggesting in terms of trying to squeeze anybody out.

  Q30  Ms Johnson: I should like to start by talking about the role of the local authority and the important role that I think they should have within this structure. I was interested to see in the Report that there is only one local authority which is actually a shareholder and I think that is Barnsley. Do you have any comments about the role that local authorities could or should be playing and are not at the moment?

  Mr Coates: May I ask Brian to answer the question about local authorities' involvement in LIFT now as opposed to when the Report was written?

  Mr Johns: Things have moved on since the Report was undertaken by the NAO. I am aware of four localities which have local authority shareholding already. They are Newcastle, Barnsley, Doncaster and Nottingham. There may be one or two others of which I am not aware but at least those four do have shareholdings. I fully agree with your question. We think it is absolutely vital to get the joined up working between primary care trusts and local authorities. Referring back to the Burnley scheme, that is actually an integrated scheme which is both health provision and also a sports centre for the local population. The strategic partnering board encourages that joint strategic planning between PCTs and local authorities.

  Mr Coates: You do not have to be a shareholder to invest in local authority accommodation. It does not necessarily follow that you have to be an investor to get in.

  Q31  Ms Johnson: I wanted to ask about that because, as you were saying, you can become a tenant of the premises as a local authority without being a shareholder. Are most local authorities taking up the option?

  Mr Johns: I could not quote exact numbers but the majority of local authorities have signed up to the partnering agreement, that is the long-term agreement, which means that they can actually commission the schemes from the LIFTCo. As Mr Coates said, they do not actually have to be shareholders in the company to have that facility. The majority have taken that option and, having done that, they can be tenants in LIFT buildings going forward.

  Q32  Ms Johnson: I want to refer you to paragraph 2.5 in the Report which talks about the constraints preventing the full involvement in LIFT which local authorities have found. What were these constraints and have they started to be addressed?

  Mr Coates: I think the constraints relate to their own corporate governance arrangements within the local authority. There are no barriers of which we are aware to prevent local authorities becoming shareholders within LIFTs. My recollection of the Barnsley transaction is that the local authority there did seek legal opinion on whether they were entitled to invest or not and eventually came to the conclusion that they could do so. There are obviously the usual things about change and doing things differently. All we can say is that over time local authorities have become more accustomed to the idea of LIFT and you often see articles now in papers and periodicals written by the 4Ps, local authority advisory group encouraging local authorities to participate in LIFT and become more fully involved in it.

  Q33  Ms Johnson: So there are no structural barriers, it is just a perception that this is not how they have operated in the past.

  Mr Coates: Not that I am aware of.

  Mr Stewart: There is one practical point which is that when the LIFTCos are set up for the first time there are the sample schemes which are bid on. In practice the local authorities have not had a very significant involvement in these sample schemes, but they will have a much greater involvement downstream. They are looking at a LIFTCo and they are wondering whether they are involved, whether it is worth putting their equity in and becoming a shareholder in the LIFTCo from day one, probably thinking it is not really and that they can sit on the strategic partnering boards. That is the very practical consequence of the makeup of the first schemes.

  Q34  Ms Johnson: What interests me about this is the idea that you can bring together the primary care sector and the care sector that the local authority provides. Is there any kind of condition or coercion about making these two work together in a more coherent way? At the moment it just seems to be left that if people feel this might be helpful they will do it. Is there a way of making people work together?

  Mr Coates: We have to provide a framework within which the local communities can work together and deliver services on a collective basis. I confess I cannot answer questions about any specific examples where we can give incentives to the voluntary sector. We obviously have good examples locally where people have come together, but all these things depend on the gradual learning from others who do successfully involve the voluntary sector, for example. There is no framework here.

  Q35  Ms Johnson: May I turn to GPs? I want to ask about the extent to which you think that LIFT will contribute towards an increase in recruitment and retention of GPs?

  Mr Coates: There is evidence from the LIFTs we have, indeed we heard it from our visit on Thursday, that people generally, not just GPs, want to come and work in LIFTs because of the buildings, because of the better quality facilities, but we are collecting no data to try to demonstrate whether that is the case or not.

  Q36  Ms Johnson: So it is just a feeling that it might help.

  Mr Coates: We do have evidence from individual LIFTs saying that it is helping recruitment and retention, but we do not try to collect data in that area.

  Q37  Ms Johnson: Why do you think that there is a problem with dentists and opticians being interested in getting involved in LIFT?

  Mr Coates: I think in the Report it was their associations which said that rather than the individuals. All we can say is that when we try to have those facilities within our buildings by and large we are able to attract the tenants and the one you saw last week did have both optometrists' and dentists' facilities.

  Q38  Ms Johnson: I was also interested that in the Report there is mention about PCTs having to subsidise rents to meet the wider health agenda. I think it is paragraph 2.14 of the Report. How often is that happening and is this an indication that rents are too high?

  Mr Coates: It is partly a reflection of the ability of the location to attract enough of these businesses and certainly for chemists there is the ability for the PCT to subsidise the rents. It is one of those areas and situations where it is up to the local PCTs to talk to the health economy more widely and demonstrate the benefits of bringing together these services on one site.

  Q39  Ms Johnson: What is concerning me is that again this might be taking money away from the local health economy to subsidise rents; that concerns me somewhat.

  Mr Johns: The way the PCTs look at it is that they see pharmacists as part of primary care. Pharmacists can provide a substantial amount of assistance to GPs in the work they do and it is in those circumstances that PCTs have elected to provide some sort of subsidy for the pharmacists to come in there. If that were not the case, because the pharmacy has the opportunity of over-the-counter sales and that opportunity does not exist for GPs, the LIFTCo could be charging a more commercial rate for the pharmacy. If the pharmacist is assisting the GP to provide primary care services, then in those circumstances the PCT may subsidise part of that rent.

  Mr Coates: However, we do accept your point that there is this perception that as you develop one area it seems to suck resources in out of other areas. All we can say is that there is record funding going into the NHS and over time these things will equalise.

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