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Earl Howe: My noble friend Lady Cumberlege is to be congratulated on presenting us with such a well-argued set of proposals at the start of our Committee proceedings. I venture to say that few former health Ministers on these Benches command greater respect in the House than she does, and I have no doubt that that respect will extend in full measure to her speech today. For my part, I thank her for steering us towards some extremely interesting and fruitful debating territory.

It seems to me that we can best approach that territory by looking back at recent NHS history. In my lifetime, a succession of structural changes has been imposed on the NHS by governments of both parties. In the 1960s, we had Labour's grand design to rationalise the structure of the NHS under single administrative authorities. We then had the Crossman White Paper of 1970 which proposed an entirely new plan for integrated health services under fewer, larger health authorities. Under the Heath government, we had Keith Joseph's White Paper which proposed 15 regional health authorities above the 90 area health authorities proposed by Crossman. In 1982, the 90 area health authorities were replaced by 200 district health authorities to facilitate better planning and provision of health services at a local level. And so it went on. The aim of all those reforms was the same: to improve the delivery of healthcare to the patient, and to make the system as a whole more co-ordinated and cost-effective.

The language used nowadays may be slightly different from that of the 1960s and 1970s, but in essence the aim of the new reforms set out in this Bill is absolutely identical. I think that the Government would do well to learn a lesson or two from the past. When it comes to health service reform within the existing Bevanite model, there is really nothing new under the sun. We have been here before. Consequently, we have to ask ourselves a rather obvious question. If past reorganisations of the model have not been entirely successful, why should this latest reorganisation fare any better? We are told that—as the noble Baroness, Lady Pitkeathley, has

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reminded us—the difference this time is the devolution of 75 per cent of the NHS budget to local level. I have serious doubts about the credibility of that claim. However, because I do not want to anticipate our later debates on PCTs, I shall simply say for now that, after so many reorganisations, over decades, it is at least open to question whether the problem facing us in the NHS is not so much the balance of power within the system as the very nature of the system itself.

It is of course the pursuit of that line of thought that has prompted my noble friend Lady Cumberlege to table her amendment. Within a nationalised monopoly, we can shift the balance of power all we like, but at the end of the day it is still a nationalised monopoly. Genuine devolution of power would take politicians out of the driving seat and put patients and doctors in their place. I agree entirely with the noble Lord, Lord Clement-Jones, that, for all the Government's claims to the contrary, this Bill does not do that. Ministers will retain as much power, if not more, to influence the delivery of healthcare as they have ever had in the past.

The Government, understandably perhaps, are sensitive to the suggestion that they have micro-managed the health service. But how else are we to describe the multitude of politically inspired targets imposed on the NHS since 1997? I readily admit that that has happened not just since 1997, but the practice has been put into much sharper focus in recent years. I have no doubt that these targets are, in their own way, well meant. The trouble is that they tend to distort strict clinical priorities. The sickest patients find that they are waiting longer than they should because of the need to treat fewer sick patients within an imposed deadline. Wheels are taken off trolleys so that they are no longer trolleys but beds. The BMA has described the situation as follows:

"Artificial targets imposed on an overstretched service cannot be met without resorting to ingenious massaging of the figures. It does not fool, nor does it help patients".

Perhaps the most damning recent criticism has come from the former chief executive of the NHS Confederation, Stephen Thornton, who told his annual conference last year that,

"Labour has embarked on measures to tighten the grip of central control of the service, motivated by a desire to end unacceptable local variations, which has had the unintended consequence of disempowering many at the front line".

Of course, as a number of noble Lords have said, that affects morale—which is a point not so far removed from that very well made by the noble Lord, Lord Desai, about the need for a sense of ownership in the health service. In October 2001, the NHS Confederation went on to complain that "target fatigue" was setting in, so numerous were the targets that the Government were setting.

I would be the first to applaud if I felt that the Bill was going to change that situation. I would be the first to welcome a set of proposals that offered the prospect of genuine empowerment of patients and of doctors as patients' advocates. However, the essential structure of the health service will remain unaltered—based, as it always has been, on centralised, top-down control,

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with extensive powers residing with the Secretary of State. Political appointments will continue. This type of centralised management, although motivated by a worthy desire for uniformity and fairness, costs a very great deal of money. The highest percentage growth in NHS staff in the past five years has not been in doctors or nurses, but in managers. There is a price to be paid for the NHS in terms of bureaucracy and, therefore, of efficiency. The system wastes money. In a service that, throughout its life, has been under-funded, that is a heavy price to pay.

My noble friend's proposition that we should set the health service free from politicians is not new, as she acknowledged. Nor is it free from intellectual hurdles: principally the need to ensure that ministerial accountability to Parliament is preserved to an extent that is balanced and meaningful and, if an NHS agency existed, it would need to avoid the very centralisation and bureaucracy that the present system tends to embody.

The scale of the difficulties in the NHS makes this an opportune moment to revisit the ideas that my noble friend has set out so well and to examine their implications; not least as a backdrop to this important Bill. I hope that in introducing her amendment, my noble friend will have started a debate that will continue to run in and outside this Chamber among politicians of all parties. It deserves our full attention and engagement.

6 p.m.

Lord Hunt of Kings Heath: This has been an interesting and high quality debate. I am sure that we are all grateful to the noble Baroness, Lady Cumberlege, for introducing a subject which, in terms of the balance between local and central, will permeate throughout the debates on the Bill. She has had a distinguished career in the National Health Service and as a health service Minister. From my own experience in the NHS and in the Department of Health for nearly three years, I certainly accept that micro-management of the health service from Whitehall is not sensible or feasible.

I read the King's Fund report with great interest, and there is much in it that I support and commend to the Committee. However, there are some serious issues that need to be put before your Lordships in relation to the specific proposal that the noble Baroness has put before the Committee. I understand the desire to prevent the NHS from becoming what is often termed "a political football". Over many years, several ideas have been put forward of ways in which to organise the NHS to lessen the degree of political influence in the running of the health service. The noble Baroness, Lady Cumberlege, even referred to a paper that I wrote some years ago on this subject. However, that was before I had had the benefit of the extensive re-education provided for me by my officials at the Department of Health. The idea has always been the same: to improve the quality of NHS management by removing it from over-extensive political control. My

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noble friend Lord Desai, who attached his name to the amendment, is shortly to launch his book entitled Marx's Revenge!

As ever in such matters, I prefer to turn to Bevan and Morrison for encouragement and advice on the balance between the centre, the department, Parliament and the local National Health Service. If one refers back to the extensive debates of the post-war Labour government, one sees the arguments of Morrison, who championed the cause of local government and wanted the NHS to be a local authority service, and Bevan, who rejected that by saying that he thought that such a service would be patchy, and that there would be great inequalities. In a sense, a compromise emerged of a national service run through locally appointed boards. However, as the noble Earl, Lord Howe, pointed out, many changes are taking place to the structure, but essentially that is the model with which we are still running the National Health Service. It is certainly true that over the years there have been many debates as to whether that is appropriate.

As early as 1956, the Guillebaud committee considered this issue. That was a very good report into the financing of the health service. It came to the conclusion that creating a special corporation to run the NHS was flawed. The committee said that,

"The exact relation of this proposed body . . . to its minister has never been defined, and it is here that the crux lies. If, in matters both of principle and detail, decision normally rested in the last resort with the minister, the body would in effect be a new department of government . . . if, on the other hand, certain decisions were removed from the jurisdiction of the Minister (and consequently from direct parliamentary control) there would be need to define with the utmost precision what these decisions were. Clearly they could not include major questions of finance. Nor could any local government authorities responsible for local planning or administration reasonably be asked to submit to being over-ruled by a body not answerable to Parliament".

The noble Baroness, Lady McFarlane, was a distinguished member of the 1979 Royal Commission. Again, the matter raised by the noble Baroness, Lady Cumberlege, was discussed. It said:

"The establishment of an independent health commission or board to manage the NHS was one of the solutions most frequently advocated in evidence. There are a number of possible models including the British Broadcasting Corporation, the Post Office, the University Grants Committee and the Manpower Services Commission".

The commission's conclusion echoed that of Guillebaud. It said:

"The very large sums of public money required by the NHS would . . . make some continued parliamentary supervision inevitable. Parliament would, as now, be involved in legislation, the provision of funds and securing financial accountability. The Secretaries of State and the health departments would continue to have major functions, for example in appointing the commission's chairman and members, negotiating the appropriate level of funding and setting priorities and objectives. A commission might act as a buffer between the NHS and Parliament but the NHS would remain dependent on the willingness of Parliament to vote funds. The effect, therefore, might be to duplicate functions that at present are carried out, however unsatisfactorily, by the health departments and the top tier of health authorities".

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In 1983, Sir Roy Griffiths, in his writings, came to a similar conclusion:

"A case could be made for an independent corporation . . . This has a variety of defects, not least that one would have to formalise unnecessarily the role of the corporation vis-à-vis the Secretary of State, which would be extremely difficult in such an intensely politically sensitive operation".

The Griffiths report was highly significant in reaching that conclusion because the logic of all that Griffiths wrote in relation to general management was that there should be a separation between the NHS and the Department of Health. None the less, Roy Griffiths, whose expertise I believe has been unequalled in terms of analysing the issues of management in the health service, came to the conclusion that the kind of independent corporation proposed by the noble Baroness was, in the end, untenable.

My understanding is that the final review that took place was an internal review by Terry Banks in 1994—a functions and manpower review. As a result of that the then Secretary of State in the previous government reached a similar decision. I say that not to dismiss out of hand the proposals put forward by the noble Baroness, Lady Cumberlege, because I fully understand and sympathise with where she is going. It is of great interest that all those notable reviews and committees started out sympathetic to the notion, but in the end came to the conclusion that it is not practical to go down that route.

One problem is that those who advocate the removal of the NHS from the political arena have never satisfactorily explained how proper political accountability would be maintained.

There is another reason why one should view this proposal with a great deal of caution. Both the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, have hinted at it. There is no guarantee that removing the NHS from the purview of ministerial control would remove the risk of over-centralisation. Given that what is proposed is essentially a public corporation, experience over the past 50 years suggests that they tend to be highly centralist. That is not the route down which the Government wish to go.

The noble Baroness, Lady McFarlane, spoke eloquently of the need to take the NHS out of politics. The noble Lord, Lord Clement-Jones, spoke about the risks of centralisation. He did not speak about the impact of parliamentary scrutiny on the oversight and management of the National Health Service. The noble Lord, in his distinguished career as the Liberal Democrat spokesman on health, has asked many questions. He has made many suggestions of decisive firm action that the Government should take in managing the health service. I have yet to hear him ask a question seeking to remove a target or suggest that the department does not set a policy in a particular area. That applies to many noble Lords who speak in our debates on health. The emphasis of scrutiny in your Lordships' House is to press the Government to take further action, to set further targets—

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