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Health and Social Care Bill

3.6 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Hunt of Kings Heath.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Boston of Faversham) in the Chair.]

Lord Clement-Jones moved Amendment No. 26:

In section 14 of the Health Act 1999 (exercise of powers by NHS trusts) at the end there shall be inserted--
"(10) The exercise of powers conferred by paragraphs 10 to 17 of Part II of Schedule 2 to this Act may only be exercised to the extent that it does not involve or permit--
(a) the transfer of contracts of employment of registered doctors, registered nurses or professions allied to medicine from an NHS trust or Care Trust to a non-NHS organisation, or

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(b) the creation of contracts by an NHS trust or Care Trust with any non-NHS organisation for the provision of the services previously provided by registered doctors, registered nurses or professions allied to medicine to the Trust.""

The noble Lord said: At this stage, I believe that it is customary to speak for a few moments about generalities so that noble Lords are able to make their way out of the Chamber. Indeed, if I were to start speaking to Amendment No. 26, I am sure that the interest in its provisions would prove to be so over-powering that people would wish to stay to hear the profound arguments that I am about to make. However, I see that I have the Minister's attention, so what more could I want in the circumstances?

In moving Amendment No. 26, I shall speak also to Amendments Nos. 29 and 31. All these amendments are closely related: they relate to the new provisions that the Government are introducing as regards PFI/PPP. We are not perhaps great fans of PFI/PPP on these Benches, not as a matter of principle but simply because we do not believe that those provisions have achieved some of the aims that they were originally meant to achieve. Moreover, they have not been a very transparent instrument of government in many respects. The intention of my amendments is to try to improve that transparency. As I am sure the Minister is aware, a number of outside organisations have considerable doubts about the width of the current provisions, and my amendments are also designed to narrow the scope of such provisions.

The Government's intentions seem reasonably clear, especially as regards the equity participation provisions. In his response, the Minister may care to explain the motives behind such provisions. There are some who would say--far be it from me to agree with them--that this situation arises because it is not possible to get agreement with the private sector in some circumstances because, quite frankly, the return is not there on some of these schemes if the money is put forward by way of debt, or companies expect to get the full return on their investment. That is why the device of allowing government participation in such companies has been adopted. The Minister needs to give us a very clear idea of the true picture. After all, current PFI/PPP powers are fairly wide, which means that this is a rather novel provision.

In addition, the concordat, which many of us welcomed, allows the private sector a strong relationship with the NHS. It allows a straightforward commercial relationship to exist between the NHS and the independent healthcare sector. That in itself seems to us to have advantages as it is perfectly transparent; the commissioning process is clear and the amount of money that is allocated is clear.

The key area of concern arises in the area of acute services. It appears that the new provisions are mainly directed towards LIFT, the primary care structure which is now to be adopted in order to improve provision in under-resourced areas. In many respects that is to be welcomed. By and large GPs are independent contractors unless they work under PMS contract. That kind of public/private sector

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partnership is welcome. These amendments are probing. However, in our view the Government should give an assurance on the extent to which clinical services could be the subject of PFI/PPP. By clinical services, we mean front line specialty services such as medicine, surgery, obstetrics, diagnostic services such as radiology, pathology, clinical biochemistry--services which are an integral part of the acute medical practice in our hospitals.

The case is being strongly made that it will be extremely difficult to have those services provided by PFI/PPP when other services are not provided by PPP. Indeed, we believe that the whole principle of providing clinical services needs much further debate than simply making it an adjunct to the clause. Indeed, it may be an unintended consequence of the clause but the Minister certainly needs to explain what his intentions are in that respect. I beg to move.

3.15 p.m.

Lord Hunt of Kings Heath: I am grateful to the noble Lord, Lord Clement-Jones, for allowing me to say something about the relationships between the NHS and the private sector which the Government wish to see developed. He mentioned two specific aspects: the concordat and the PFI development. I believe that the concordat, which was signed with the Independent Healthcare Association on 31st October 2000, provides a powerful framework that encourages a longer term more proactive relationship between the NHS and the independent sector but which allows for key decisions to be taken at local level. Over the past few months that has been extremely helpful in relation to winter planning and has enabled the NHS both to withstand the many pressures that arise during the winter and to ensure that we maintain progress in relation to waiting list targets. The concordat should be viewed as a wholly encouraging and responsible measure. We wish to see that relationship developed in the future.

As regards PFIs, we have made great progress since 1997 in our hospital development programme. Some 34 major PFI hospital development schemes have been approved since May 1997. In addition, there are a number of PPP arrangements connected with the delivery of IT and information for health projects. I see Clauses 4 and 5 as building on that general philosophy of co-operation and partnership with the private sector. Essentially, Clauses 4 and 5 are both concerned with providing the Secretary of State and the NHS with powers to invest in companies. That will provide a new way of developing public/private partnerships for the purpose of providing services to the NHS or generating income for the NHS. We believe that these two clauses open up exciting opportunities that have not been available to the NHS to date.

I take the point the noble Lord, Lord Clement-Jones, made about what I believe he described as the straightforwardness of a contractual relationship between the NHS and an independent provider, as opposed to what is enabled by the two clauses. One great advantage of what is being proposed here is that

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it makes the NHS much more involved as a key player in the organisation and direction of the kind of partnerships about which we are talking.

The noble Lord rightly referred to what we describe as NHS LIFT--that is another "anacronym" beloved of the NHS--the NHS Local Improvement Finance Trust. This is an exciting proposal, a public/private partnership to raise £1 billion to improve primary care facilities initially focusing on deprived areas. NHS LIFT will invest in local schemes, bringing the local health community and private sector partners, including property experts, into a local partnership to improve primary care facilities. As many Members of the Committee will be aware, the standard of many primary care facilities within deprived areas is poor indeed. We see NHS LIFT as a way of bringing in capital, both public and private, to enhance those facilities and also as a way of providing a great deal of expertise in primary care to develop first-class new facilities.

The first application we envisage of the investment in companies for income generation is the creation of intellectual property spin-off companies. The NHS through its research generates a huge amount of intellectual property, but I am afraid that it has not always realised the commercial potential of its discoveries and inventions. We see spin-off companies as being a recognised approach to exploiting intellectual property that is well understood and is used both by the universities and the commercial sector. Allowing the NHS to adopt the same approach will provide significant new opportunities to realise the value of NHS intellectual property.

I have considered with care the three amendments tabled by the noble Lord, Lord Clement-Jones. I consider that they would inhibit the kind of developments that we want to see. In addition, the amendments would place new restrictions on the manner in which NHS bodies currently deliver services. NHS trusts currently subcontract work to the private sector. The concordat framework is a good example of that. Amendment No. 26, if accepted, would prevent that happening.

Amendment No. 29 attempts to circumscribe the services which future public/private partnerships may provide. We have published a list of services which may be provided under contract by the private sector under existing public/private partnership arrangements. The NHS plan commits us to exploring new forms of partnership with the private sector. I say to the noble Lord, Lord Clement-Jones, that any proposals which include categories of services or staff other than those on the list must be approved by Ministers. I believe that his amendment would prevent the development of many new forms of partnership, for example--this is mentioned in the NHS plan--the proposals to develop partnering arrangements for modernising pathology services.

Amendment No. 31, if accepted, would prevent NHS trusts or care trusts from providing many of the services that they currently provide. It would stop those bodies providing clinical services for the

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purposes of generating additional income and it would mean that NHS trusts might have to close all private patient wards. I do not think that that is practical or desirable. I believe that the clauses that we have are sensible and enable the NHS to build on successful public/private partnerships. In particular NHS LIFT gives us a real opportunity to enhance the quality of primary care services.

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