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House of Lords

Wednesday, 6th November 2002.

The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Wakefield): The LORD CHANCELLOR on the Woolsack.

National Care Standards Commission

Lord Peyton of Yeovil asked Her Majesty's Government:

    Whether the way in which the National Care Standards Commission performs its duties is satisfactory.

The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, I am satisfied with the performance of the National Care Standards Commission, and with its progress to date.

Lord Peyton of Yeovil: My Lords, the noble Lord may find himself in a rather lonely position. Would he, generally speaking, encourage a situation where preference and priority are given to those within the National Health Service who might sometimes make people feel better as opposed to the host of others who will do no such thing? If people go around laying down the law, they should make clear their authority for doing so and that the rule is quite clear, is known, is relevant and is necessary. In the case I brought to the notice of the Minister, is he aware that a small operating theatre used for many years for minor surgery carried out with a local anaesthetic is suddenly upgraded and told it must adopt quite different standards and have two to three feet added to the size of the premises for no purpose at all at a cost of £60,000? Of course, the people who give such instructions do not care about the money.

Lord Hunt of Kings Heath: My Lords, the noble Lord will be glad to know that I am not entirely isolated in my view as to the progress made by the National Care Standards Commission. I believe that many observers who have seen it in operation over the past few months believe that it is making a sound start. I agree with the noble Lord that those who are to be regulated should know under what law they are being regulated, that they should know, on the basis of the regulations and the national minimum standards, what is expected, and that the whole process should be transparent.

As regards the substantive issue, I have asked the National Care Standards Commission to look at the specific case raised by the noble Lord. Clearly, I cannot comment further. The National Care Standards Commission seeks to ensure that standards are of a high quality in order to ensure that the public interest is served. But I accept that it needs to adopt a

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common-sense and proportionate approach to the inspection and regulation process. I do not disagree at all with the noble Lord about that.

Baroness Northover: My Lords, how does the Minister defend the Government's decision announced last Friday that various tasks in relation to care homes that were supposed to come under the aegis of the Criminal Records Bureau will be indefinitely suspended, including the listing of those who have harmed vulnerable adults? The decision has been announced because of the chaos at CRB. What action will the Government take to put matters right?

Lord Hunt of Kings Heath: My Lords, some of the challenges facing the CRB have been well documented in this House. I do not think that I need to go over them again. The National Care Standards Commission has stated that staff may be appointed on the basis of a self-declaration concerning any criminal record subject to satisfactory completion of other relevant checks such as the POCA register. Staff must then be properly supervised and not work alone. It seems to me, in view of the CRB difficulties, that the commission has made the proportionate response for which the noble Lord, Lord Peyton, asked.

Baroness Noakes: My Lords, does the Minister agree that the National Care Standards Commission cannot do its job effectively because, as with so much else in the Department of Health, the Government get involved in the tiniest details such as what the inspector should do about the size of doors in care homes? Is there any possibility that we shall hear in the Queen's Speech next week that Her Majesty's Government will forswear micro-management?

Lord Hunt of Kings Heath: My Lords, the noble Baroness will surely know that I cannot possibly anticipate the Queen's Speech. Of course, we do not want to micro-manage the health service or the care system. That is why we introduced our policy of shifting the balance of power, why 75 per cent of the budget of the NHS will, from 2004, be spent by primary care trusts and why we are developing our ideas for the establishment of foundation trusts. Having set national standards for the NHS that the previous government never, ever set, we are in a position where we can decentralise the service much more than the previous administration ever did.

Baroness Gardner of Parkes: My Lords, are the Government doing anything to replace the number of care homes that are now being shut as they cannot meet the present standards?

Lord Hunt of Kings Heath: My Lords, we must be cautious as regards believing everything that is said in relation to cuts in the number of beds due to the standards being set by the commission. The net loss of care homes over the past four years is 19,000, not the much larger figures often mentioned. The average national occupancy rate is around 91 per cent. I do not

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ignore the fact that there are problems within the care home sector. That is why we have encouraged local authorities to review the fee structure. I hope that over the next few years as more resources go into personal social services that will lead to secure and stable relationships between local authorities and the care home sector. I also make the point that the whole purpose of setting up the commission was to ensure high standards for the public.

Private Finance Initiative

2.37 p.m.

Lord McCarthy asked Her Majesty's Government:

    What proportion of private finance initiative deals completed since 1997 have been:

    (i) examined by the National Audit Office;

    (ii) found to provide equal or better value for money than their appropriate public sector comparator.

Lord McIntosh of Haringey: My Lords, from April 1997 until July 2002, some 412 private finance initiative (PFI) contracts have been signed. These are listed on the Office of Government Commerce website. These statistics are updated periodically. The next update will follow publication of the official PFI statistics which are reported to Parliament twice each year.

I understand that the National Audit Office has issued some 24 reports on the PFI and these are listed on the NAO website and can be found in the Library of the House. Government policy is that all PFI deals are assessed against the public sector comparator where one is required as part of the assessment of their value for money. Projects will proceed only if individual accounting officers are content that they provide equal or better value for money than the alternative methods of procurement.

Lord McCarthy: My Lords, I am bound to press that Answer a little. The Minister said that 412 private finance initiative contracts have been signed and that 24 were checked up on. That is less than 5 per cent. What about all the others? How are we to know when they are examined—if they are examined—whether they will constitute better value than the traditional way of financing these projects? How will the others be examined? The Minister said that these projects proceed only when they pass the better value test. However, the reports of the National Audit Office do not say that. Will the Government produce rather more sophisticated long-term evaluations of the PFI?

Lord McIntosh of Haringey: My Lords, I said that there were 24 National Audit Office reports. Some of those reports cover much more than one private finance initiative. One of them, for example, is a survey of 120 of them. A figure of rather more than 5 per cent is involved.

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The NAO does not report to the Government. Its value for money studies certainly include the public sector comparator as a test. However, it says,

    "non-financial factors, such as the contractual incentives . . . to deliver on time and budget",

are also of importance. I am afraid that the situation is not as simple as my noble friend Lord McCarthy would like to think.

Lord Saatchi: My Lords, the Government said that their treatment of those items in the national accounts conforms with all accounting rules. Is the Minister aware that the executives at Enron said much the same? They had cleverly used the rules to hide the true extent of their liabilities. Are not the Government doing exactly the same to understate their liabilities by £100 billion?

Lord McIntosh of Haringey: My Lords, the Government had no incentive whatever to try to take items off any balance sheet, and we do not. The criterion for PFI projects is value for money. I wonder whether the noble Lord, Lord Saatchi, is aware of the joint statement of 24th October from the NAO and the Office for National Statistics. They said that these,

    "are not ... alternative ways of looking at the same issue",


    "fundamentally different activities undertaken for distinct purposes and using different criteria".

That is why there is no question of any concealment.

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