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In July 2008, the Health Service Journal used a freedom of information request to reveal a confidential analysis of foundation trust private patient income by consultants KPMG. Foundations declared private patients earnings of £165 million in 2008, but the widest definition of private patient income would increase this figure by 70 per cent to £281 million. That is the assessment on which UNISON is making its case.

Monitor consulted its members in 2008 on the interpretation of the law and amended its guidance on the private patient cap. It opted to retain its existing approach but to extend the definition of private patient income to include private patient charges for goods and services provided by associate and joint venture arrangements. However, Monitor claimed that it was unworkable for all income derived from private patients

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to be included in the cap, and the new definition stops short of including additional sources such as donations from charities, when the donation was funded by private patient charges made by the charity. Unison believes that the changes made still fail actively to reflect the intention and meaning of the law and, as a result, the union is continuing to seek a judicial review into the matter.

As more hospitals and other NHS organisations take on foundation status, we need to ensure that there is no room for error. It would therefore be premature to change the law so drastically before the meaning and practical functioning of the current legislation has been clarified by the outcome of this potential legal process.

Finally, I shall touch on one of the arguments being used to justify removing the cap—the fact that mental health foundation trusts are effectively unable to raise any private income as their 2002-03 level of private income was zero. When the trusts were originally mooted by Alan Milburn in January 2002, they were clearly part of an agenda to separate the highest achieving hospitals from the rest of the bunch. It was originally intended that the only hospitals eligible to apply for foundation status would be those scoring a three-star rating. To begin with, it was not envisaged that all hospitals and mental health trusts would eventually be expected to apply for and be granted foundation status. It was a last-minute compromise prior to the 2003 vote that conceded the possibility of trusts having a chance to achieve full foundation trust status, which in itself has created the problem.

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Finally, I offer a word on Anne Campbell and her particular problem, which she has outlined. It was an interesting letter. I have talked to her, and to the noble Baroness, Lady Meacher, about it. I do not close this whole route off completely. In mental health trusts, a refining of the law could provide for a little movement. I do not see the need for a national review, but I hope that someone can turn up with an amendment on Report that is far more refined that this blunt instrument—which, as we know, is a probing amendment—and which might deal to some extent with the problems in mental health trusts because they are on a zero cap. I would like to think that if an amendment surfaced, even if it were not acceptable on Report, Ministers would consider whether there was any scope for further movement in this area.

Lord Walton of Detchant: I shall be brief. First, since I started working in the National Health Service in 1948 when it first began, I have been one of its most fervent supporters. I firmly believe in the principles that led to the establishment of the NHS, and those principles are continuing. Nevertheless, having private patients and services working in partnership with the NHS is of value to it and helps to nurture its development. That is why I support the amendment.

When I spoke so enthusiastically, with tongue in cheek, to the amendment of the noble Lord, Lord Palmer, I was simply concerned that any potential

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opposition from the Government might conceivably have been actuated by what I thought might be an outmoded and outworn ideology. However, when I heard the noble Baroness tell me what the costs would be, I was concerned. I am glad that the amendment was withdrawn. In this case, the argument of the noble Baroness, Lady Meacher, has been powerful. She has drawn to our attention a whole series of problems that are beginning to emerge in a number of the foundation trusts.

What perhaps concerns me most is that the cap that has been imposed, as the noble Lord, Lord Campbell-Savours, has said, was based upon the private charges in the base year of 2002-03—six or seven years ago. The Government have themselves changed their attitude and developed many more public/private partnerships over the succeeding seven years. The cap needs to be considerably revised. As the noble Baroness, Lady Meacher, has said, the legal framework of the private patient income cap is increasingly untenable. The amendment does not seek to remove the cap but to redefine it and, in doing so, to provide the opportunity to discuss how we can ensure that NHS patients derive even greater benefit from foundation trusts. For that reason, I support the amendment.

Lord Judd: Before the Minister winds up this discussion, it might be of interest for the Committee to know just what the noble Baroness’s position is. She has done a masterly job in presenting the case as the network wanted, but also clearly distancing herself from all the possible implications of that amendment. It would be immensely helpful if the noble Baroness, with whom I frequently find myself in complete agreement, could clarify whether she will vote for or against, or abstain from, the amendment.

Baroness Meacher: The first thing that we must do is have further discussions with Ministers to determine the shape of an amendment that might be tabled on Report. I am assuming that if I were to table such an amendment I would vote in favour of it.

Earl Howe: I give my strong support to the spirit of the amendment. It seems to me that despite all that the noble Lord, Lord Campbell-Savours, has said, the world has moved on since we first debated the creation of foundation trusts six or more years ago. I suspect that we did not need reminding of how politically charged the issue then was, not so much between the Government and the Opposition as between the Government and their own supporters who were extremely suspicious of this new animal that Ministers were trying to foist on the NHS. Many of them could not come to terms with the idea because they did not feel confident that foundation trusts would in practice operate like NHS bodies. That was why the private income cap was inserted. It was seen as a guarantee that publicly owned hospitals could not move surreptitiously out of the NHS and into the independent sector.

We have now had several years’ experience of foundation trusts and it should be clear to everybody that they are, and always have been, very firmly members

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of the NHS family. Monitor, as regulator, has been outstandingly successful. Trusts are only authorised to operate within very strict terms and their managerial freedoms are counterbalanced by regulatory restrictions. But the private patient income cap was always going to be a problem. Because it originated as more of a political totem than anything else, it was set up in such a way as to be completely inflexible, which was never going to make sense in the real world. At the time I remember pointing out that the cap would prevent a forward-looking, go-ahead foundation trust from investing in a piece of capital equipment that it needed to treat NHS patients but which could only be justified financially if a certain number of private patients were also to avail of it. That absurd situation persists.

We now have the even more absurd situation of trusts such as those mentioned by the noble Baroness, and particularly health trusts, with low or zero private income caps being unable to implement government policy, which is the height of absurdity. The problem is not the rule but the inflexibility of the rule. Until his peroration at the end, I took the noble Lord, Lord Campbell-Savours, to be saying that there is no business case that would convince him that the rule should be relaxed. If that is his inflexible position, it is not a reasonable one and I am pleased that he slightly relented on it at the end of his speech.

The amendment is not quite in the form that I would wish to see. The noble Baroness has acknowledged that, but I genuinely believe that the time has come to amend the rule. I do not say that it should be done away with altogether or that there should be unlimited scope for a foundation trust to generate private income, but where a case can be made in the interests of the NHS for a trust to earn additional private income, why should it be prevented from doing so?

Baroness Barker: I wish to make only two very quick points at this stage. The noble Lord, Lord Campbell-Savours, brought to life again for those of us who had the misfortune to be there, the battles of 2002. The fact that we ended up with such rigid agreements that many years after the fact are slightly absurd is entirely down to the way in which foundation trusts were introduced and sold by the Government. One of the key things that the Government did was to impress upon us all that foundation trusts would be liberated from the strictures of the NHS by having new freedoms. One of those new freedoms was that they would not be answerable in the same way as existing trusts.

I return to the opening, very tentative statement of the noble Baroness about the three conditions that she wanted: private patient work would not damage NHS patients; private patient work would benefit NHS patients; and there would have to be approval by governors for a significant increase in private work. I do not agree with the second point, because I do not think that that is sufficient accountability. I say to the noble Baroness that we are now five years into the existence of foundation trusts. It is high time for there to be a thorough review of the way in which they now work in the NHS. They are part of the NHS family, but we need to look in the round at what cost and what benefit they are to the rest of the NHS.

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The noble Baroness is slightly premature in picking one particular aspect of foundation trusts and trying to change that; that is wrong. If she were to persist in doing that, I suggest to her that to satisfy those people who continue to have misgivings about an age-old problem in the NHS—not whether there are private patient treatments but how there are private patient treatments—there would have to be this: foundation trusts would have to accept the same principles, the same underpinning criteria, for selection for their agreement to private patient work, and they ought to be willing to give the same level of disclosure and accountability as other trusts. That is the level playing field that I would like us to examine before we go any further down either the road of the noble Lord, Lord Campbell-Savours, or the road of the noble Baroness, Lady Meacher.

Baroness Thornton: Amendment 128, tabled by the noble Baroness, Lady Meacher, seeks to remove the current private patient cap that applies to foundation trusts. In its place, the amendment would introduce a new requirement for both foundation trusts and NHS trusts to,

of any income that they may derive from private patients. The noble Baroness introduced this discussion with her customary thoughtfulness.

NHS providers should always focus their efforts on the provision of care to NHS patients. Any private work that they undertake should not compromise this fundamental objective, but there are different types of providers and so there are different ways to achieve the same end. NHS trusts are subject to the Secretary of State’s direction. For example, he can direct them on their powers to provide services to private patients. NHS trusts are also performance-managed by strategic health authorities, which will expect them to follow national guidance on private provision.

Because NHS foundation trusts are not subject to these powers of direction or performance management, it was felt important that from the outset there should be some other protection in place. That is why, when we introduced the concept of NHS foundation trusts, we included in the 2003 Act an explicit restriction on private income—the private patient cap—for reasons that have been outlined by Members of the Committee. Members of the Committee will know that the introduction of a cap addressed a concern in Parliament that NHS foundation trusts would represent a step towards privatisation and destabilisation of the National Health Service.

As Members of the Committee may be aware, the way in which the law has been interpreted is the subject of an application for judicial review. The Government are an interested party in the legal proceedings. In those circumstances, I do not propose to comment in detail on the interpretation of the current provisions. Instead, I will restrict my remarks to the practical effect of the current law and of the amendment which has been tabled.

I understand that, in tabling the amendment, the noble Baroness seeks to highlight two issues. First, that the cap on private income does not apply to NHS trusts. Secondly, because the cap is based on levels of

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activity in the financial year ending on 31 March 2003, there is wide variation between one NHS foundation trust and the next regarding the proportion of private work that they can now undertake.

I have already touched on the first of these issues. NHS trusts do not have a cap because their accountability arrangements are quite different from foundation trusts. There are different but no less effective safeguards in place. It is perhaps an oversimplification to suggest that there is a great disparity between NHS trusts and NHS foundation trusts in this respect.

However, it is more difficult to ignore the second issue, that the variation in cap levels means that there will be some NHS foundation trusts with very low caps, or whose cap is set at 0 per cent. This is plainly true.

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What is the practical effect of those low and zero caps? One consequence may be the risk that continuity of care for some patients may be fragmented, as described by the noble Baroness. For example, if repeat cycles of IVF, for which a patient pays, mean that the cap is exceeded, the patient must go elsewhere to continue her treatment. More generally, some NHS foundation trusts may be unable to develop new patterns of service delivery, as outlined by the noble Baroness, which could potentially support our efforts to improve health and well-being, make services more widely accessible and available, and support innovation. We want NHS providers to be able to reach out into their communities, and work seamlessly and in partnership with their communities, the voluntary sector, employers and so on. This is especially, but not exclusively, true of mental health trusts. That this progress might be impeded by the private patient cap is a matter of some concern. The Government’s position is that we seek to maintain and strengthen the protection of NHS services for NHS patients, which is non-negotiable. We cannot ignore the fact that the current cap locks some providers into historic levels of income derived from private charges, irrespective of what may be considered best for patients and public. For that reason, we are already discussing with a variety of stakeholders their views and concerns about this issue.

The interpretation of the current law is a matter for the courts and I have no desire to influence this. But we would like a broader debate about the longer term direction, as mentioned by the noble Baroness, Lady Barker, and about how to strike the best possible balance between protecting services for NHS patients, while at the same time creating maximum flexibility for NHS providers to serve the best interest of patients and the public. There are good reasons for keeping this approach under close review.

I turn now to the specifics of the amendment tabled by the noble Baroness, Lady Meacher, which seeks to replace the cap with a new requirement for NHS foundation trusts and NHS trusts to demonstrate how any private income they earn benefits NHS patients. We have significant concerns about this approach, which would remove the restriction on NHS foundation trusts to grow their private provision. We recognise that income from privately funded work can be used

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to improve and widen the services for NHS patients. However, we believe that this amendment could potentially allow a market to develop in competition with the NHS. A test which simply requires private income to be used for the benefit of NHS patients could, in principle, allow an NHS foundation trust to generate almost half its income from private charges yet remain within the law and compliant with its terms of authorisation. We would not wish to see unrestricted private income in an NHS foundation trust leading to a poorer service for NHS patients—for example, for this to interfere with its ability to carry out its NHS functions and obligations under NHS contracts with commissioners.

It is not clear how the proposed approach—demonstrating benefit to NHS patients—would work and be overseen in practice. Demonstrating benefit could be a highly subjective approach. I appreciate that the noble Baroness raised this matter in order to open the debate, but this proposal raises as many questions as it answers. Members of the Committee will understand that on this issue we are particularly keen not to introduce ambiguity and uncertainty.

I want to assure the Committee that our goal is to ensure that NHS foundation trusts remain focused on the provision of the high quality services they deliver for NHS patients. As part of this, we are committed to their ongoing development and share their desire to promote innovation, enterprise and partnership working. I do not believe that it would be sensible or timely to prejudge this debate, nor should we attempt to make changes to the current law while it is subject to an application for judicial review. Therefore, I would ask the noble Baroness to withdraw her amendment.

Baroness Meacher: I thank the Minister and all Members of the Committee who have contributed to this discussion. In response to points made by the noble Baroness, Lady Barker, FTs should be as transparent as NHS trusts. In fact, in my view, they are far more transparent because we have to account to our boards of governors and the local people who can go everywhere, including our wards. On the whole, the Secretary of State does not tend to do that. We are absolutely transparent to our local communities. We are also accountable to Parliament. I believe that those are good safeguards, but I would always support an evaluation of any model of treatment of any kind. However, at the moment, all evaluations of foundation trusts and NHS trusts show the foundation trust to be vastly better in terms of the quality of services that they provide. No doubt there are other ways of looking at these things, and I would absolutely support that.

As the Minister recognises, this is a probing amendment; there is no question of putting it to a vote at any stage. However, it is an important issue. We currently have a very unsatisfactory situation. I hope that we can continue discussions on how best to ensure that we have a better, fairer system in the future. On that basis, I am happy to withdraw the amendment.

Amendment 128 withdrawn.

Amendment 129 had been withdrawn from the Marshalled List.

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Amendment 130

Moved by Baroness Tonge

130: After Clause 32, insert the following new Clause—

“Charges to overseas visitors

(1) The National Health Service (Charges to Overseas Visitors) Regulations 1989 (S.I. 1989/306) are amended as follows.

(2) In regulation 4, paragraph (1), sub-paragraph (c) after the second “Kingdom” insert “or under the Human Rights Convention, whether or not such application has been decided.”

(3) In regulation 4, paragraph (1), sub-paragraph (c) omit “which has not yet been determined”.”

Baroness Tonge: I shall speak also to Amendment 132. I have spent seven Committee sittings in this Room listening—actually, trying to avoid catching my noble friend’s cold and, as Members of the Committee will see, my upper respiratory tract has finally succumbed so I did not succeed. However, I have sat patiently, listening to ways of improving the lives and safety of our citizens, and of improving already good health services for a very privileged population in this part of the world. This amendment is, for me, the most important. It addresses what we do for some of the most oppressed and unfortunate people in the world. I feel passionately about it, and ashamed that, as a privileged nation, we do not do enough.

This is a probing amendment, to clarify an unclear, confused and sometimes inhumane policy that has operated since 2004. Since then, there has been no free treatment for refused asylum seekers in hospitals except in emergencies. Ostensibly, this puts people’s lives in danger and requires doctors to consider immigration status before treating a patient. This is difficult for a doctor who simply wants to help the patient. Organisations representing asylum seekers have many examples of patient suffering which they, of course, have given to me.

People with non-life-threatening illnesses can be turned away until those illnesses become a life threatening emergency. As a simple example, what happens if you are a diabetic? You cannot access treatment because it is not an emergency, but if you go into a diabetic coma and could die, it is an emergency and you will then be treated. This is extraordinary.

Cases are cited where failed asylum seekers who have been admitted to intensive care from accident and emergency departments are charged for further treatment when they leave the intensive care unit. You cannot go straight home, but you have to pay for the rest of the treatment. Some asylum seekers who are too ill to be deported are denied treatment that would make them well enough to return home. GPs often refuse to register failed asylum seekers and refer them to accident and emergency departments instead. There have been examples of pregnant women being denied maternity care or being made to pay enormous fees.

Of all these examples, the one that concerns me most is that of people with conditions deemed not an emergency being refused treatment until it becomes one. I cannot imagine a concept that goes against medical ethics more than that; it is quite extraordinary.

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The extra expense to the NHS, not to mention the suffering of the patient, is just not acceptable. As a Member of Parliament in the other place whose constituency had its fair share of asylum seekers, because it was very close to Heathrow Airport, I know how long it can take before a failed asylum seeker actually gets returned home. It can be a very long time indeed.

Moreover, the UK is signed up to the Convention Relating to the Status of Refugees of 1951, which says that host countries must provide those fleeing tyranny and persecution with access to health services, housing, education and employment. Even at the point of entry, when application is made for asylum, we do not do basic testing that would help the individual and protect our society. Testing for TB, hepatitis and HIV should be routine. If people are being tortured, swift referral to psychotherapy would help them and us—our society. It is terribly important that children should have their vaccination status assessed and be vaccinated against childhood diseases if necessary. Why is that not done?

I am well aware of the list of conditions exempt from these regulations. I have them here—I have been sent the list—and I thank the department very much for that. They are all conditions that are relatively obvious and are certainly a great danger to our society as well as the asylum seekers. We take those measures, but the rationale for the current policy was to protect us from health tourism, whereby foreign nationals deliberately come for healthcare. If you cross the continent of Africa and trust yourself to some unseaworthy little boat, are at sea for I do not know how long, finally make land and are accepted as an asylum seeker, apparently you have come deliberately for healthcare treatment and you are a health tourist. I am very sceptical.

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