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Lord Rea: My noble friend will be pleased to hear that I shall not say a great deal on this amendment except to record my view that the noble Baroness, Lady Robson, in tabling the amendment, and the noble Lord, Lord Ezra, in moving it, have performed a useful task because it allows my noble friend further to clarify the Government's position on what is certainly a thorny problem.

4.15 p.m.

Baroness Jay of Paddington: I thank the noble Lord, Lord Ezra, and my noble friends who have spoken, including my noble friend Lord Rea whom I thank for his helpful intervention. We are at one in seeking to exclude clinical services from PFI agreements in the NHS. As has been said by several Members on different sides of the Committee, the difficulty is to define those services in a way which is legally and professionally watertight as well as making common sense. I am aware of the BMA's contribution to that and its proposal which is framed in the amendment.

Since Second Reading I have tried--possibly without the flair and imagination which the noble Baroness opposite attributes to me--with officials to draft exclusions which appropriately reflect the concerns which the noble Lord, Lord Ezra, and I share. Some of our discussions have more resembled linguistic philosophy seminars than drafting committees for a Bill. Every attempt we have made has met with objections. That is why I feel that I cannot recommend the amendment to the Committee although I sympathise with its purpose.

If we look in detail at the wording of the amendment, the Committee may understand some of the difficulties we are all encountering in attempting to enshrine this policy in primary legislation. The amendment refers to,

I can see endless scope for lawyers to argue over the exact definition of such terms as "professional staff". My noble friend Lord Monkswell has already identified an area where that might happen. The phrases "direct impact" and "patient care" are other areas where I believe there is scope for enormous debate. For example, is the accountant who might negotiate effectively on the hospital's behalf covered by the definition, or the chef who prepares the food that helps the patient on the road to recovery? I am afraid I do not think the amendment helps us to get round those problems.

When noble Lords discussed this issue at Second Reading I reiterated the Government's clear commitment that we would not allow clinical services to be included in the PFI, or in public/private partnerships as they develop. That is an extremely important point and I am happy to repeat it here. We have decided that if we attempt to define clinical services on the face of the Bill we immediately introduce an element of doubt into the legislation whose sole purpose--as I have said before--

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is to remove any doubt. I am sure that that is not what the noble Lord or the noble Baroness, whose name was to the original amendment, intended, but I believe that that is precisely what would happen. Once the banks and their lawyers detect any uncertainty of purpose this Bill will face trouble and the real overriding concern which it attempts to deal with, which is to get hospital building programmes off the ground as soon as possible, may be delayed again.

As there is not yet any agreed definition of the boundaries of "clinical services" and we cannot delay the Bill while the work is carried out to arrive at such a definition, my honourable friend Mr. Milburn, as the noble Baroness, Lady Cumberlege, mentioned, is looking again at the thorny problem. Members of the Committee are right to challenge the Government about their intentions regarding clinical services. It is right that we should be prepared to demonstrate that there is now more certainty than ever before about the commitment not to privatise the NHS.

Under the previous administration--the noble Baroness, Lady Cumberlege, explained it clearly--there was no commitment to exclude core clinical services from the PFI. Under this Administration, there is. It is our stated policy that clinical services are excluded from PFI and we will abide by that. However, there is ongoing debate--I acknowledge reference again to the fact--about some of the grey areas, in particular the definitions of so-called clinical support services. We have said that that is being addressed as part of the wider review of PFI in health which has already begun and which was announced on 10th June. It is obviously essential to consult widely on these issues before decisions are made, precisely to avoid the problems, to which the noble Baroness, Lady Cumberlege, referred, in somewhat alarming language, about central bureaucracy. Any schemes which come forward before the review is complete will be considered on a case by case basis. None will be allowed to proceed where projects transfer to the private sector categories of services which Ministers believe, in the interests of the health service, should be provided directly by the NHS.

Once the review is complete, we shall have a categorical statement of what may or may not be included in PFI. I am sure the Committee will understand that there would be no purpose in this widespread consultation if I sought to anticipate the detail of what that review may uncover. However, I am pleased to be able to answer one of the most pressing questions raised at Second Reading. I am sorry that this will disappoint the noble Lord, Lord Jenkin of Roding. We have decided that pathology and radiology services will be excluded from PFI. I know that there will be other services about which noble Lords may want immediate similar assurances, but I believe strongly that the review should be conducted before conclusions are drawn. Our commitments on pathology and radiology are given both to respond to specific issues raised by noble Lords during the Second Reading debate and, I hope, to act as a signpost for the future about our intentions.

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Perhaps I may make one further general point. Before this Bill, it was theoretically possible for clinical services to be included in PFI. The Bill does not make it any easier for clinical services to be included. Its impact is neutral in that respect. The important difference is that the present Government are committed to excluding clinical services from PFI; previously there was the discretion which the noble Baroness, Lady Cumberlege, explained. The wider review of PFI will result in a list of services which may or may not be included. But to amend the Bill today to try to make the commitment more explicit would be a serious mistake because it would undermine the purpose of the legislation which is to move quickly ahead on the organisation and start on hospital building programmes.

Following what I hope is a convincing restatement of the Government's overall policy on this issue, and the specific exclusion of pathology and radiology services from PFI, which I am happy to announce today, I trust that the noble Lord will not feel it necessary to press the amendment.

Baroness Cumberlege: Before the noble Baroness sits down, perhaps I may thank her for that clear explanation. I am left in no doubt that the Government are seeking a centralised solution. What are the Government's objections to leaving it to local determination?

Baroness Jay of Paddington: The noble Baroness's question reveals the Government's clear difference in philosophy in relation to PFI: to make it possible for hospitals to be built under private finance initiative, we hope with further public-private partnerships. The previous Government's intention was to allow such wide discretion that privatisation of individual schemes could occur at local level. We do not want that to happen. We want there to be safeguards for what we regard as a National Health Service, with all the guarantees that were in our manifesto.

Lord Jenkin of Roding: Before the noble Lord, Lord Ezra, responds to the noble Baroness, perhaps I may say this. The noble Baroness recognises that her announcement today causes me much disappointment; it will also disappoint many people in the health service. Schemes which have been in preparation for perhaps a year or more because of the need to find sources of capital to invest in new, modern, up-to-date equipment will now be abandoned. Schemes for collaboration between neighbouring trusts will probably founder. I do not know whether the noble Baroness realises that that will happen. It will be for my noble friends to form a view. However I suspect that we may wish to return to the matter at a later stage of the Bill. If that is the Government's final word, I think that they have made a silly decision and I hope that the noble Baroness recognises that.

Baroness Jay of Paddington: I am sure the noble Lord would not expect me to agree that what has been decided is silly. I said that I knew he would be disappointed. I

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confirm to him that as regards the initial schemes under the PFI hospital building programme none of the concerns that he expressed is relevant.

Baroness Cumberlege: Perhaps I may follow my noble friend to ask this. As regards schemes which are being stopped in midstream, will there be compensation for the developers who have invested so much in them?

Baroness Jay of Paddington: I am not sure to which schemes the noble Baroness refers. I can only repeat what I said to the noble Lord, Lord Jenkin of Roding. As regards those schemes under immediate consideration, none of the issues that I have raised in relation to pathology and radiology services will be affected. If the noble Baroness is so concerned about retrospective financing, I hope that she will think about the £30 million spent under the previous regime in private consultancy fees which did not result in one hospital building programme being started.

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