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We have listened and we are acting. By enabling the application of a cap of 1.5 per cent, Amendment 12 will give our highest-performing providers of NHS mental health provision more room to innovate and support the development of further high-quality services for the NHS. The calculation of 1.5 per cent does not purport to be an exact science; it is an acknowledgement that mental health foundation trusts need some freedom. The figure is based on the average cap for acute foundation trusts in 2008-09. I stress that this is an interim solution, which will not prejudice the review's aim of a lasting solution for all foundation trusts. We believe that we should only do something now that is clearly defined and around which
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The Government's amendment offers a pragmatic solution to the immediate anomaly of mental health foundation trusts. Combined with the policy review that is under way, our approach will ensure a better, fairer, lasting system for all foundation trusts. I beg to move.
As an amendment to the motion that this House do agree with the Commons in their Amendment 12, to leave out "agree" and insert "disagree"."
Baroness Meacher: I shall speak also to Amendment 14A, which seeks to build upon Amendment 14, moved in the other place by the Government. Amendment 14A will provide for a 1.5 per cent private patient cap for all foundation trusts with a cap below that level. As the Minister eloquently explained, the Government have accepted the need for a 1.5 per cent cap for mental health trusts. It is very difficult to see any logic in not extending that cap to all other foundation trusts.
I should draw your Lordships' attention to misprints in the amendment on the Marshalled List. A correction slip has been issued to clarify these points and we shall debate the amendment as on the amendment slip.
As the Minister explained, the Government accepted the principle implied by our amendment, moved during the passage of the Bill, that there should be more rationality in the system of private patient caps and that it should be possible for foundation trusts to raise at least a little more revenue for the pressing needs of NHS patients. The significance of these matters is increasingly apparent as the results of the credit crunch and the pressure on resources in the public sector, particularly the NHS, become apparent.
I applaud the Government's decision to institute a review of the private patient cap structure, and I particularly like the principles that the Minister set out to guide that review. The aim of the review, which is taking place immediately, is to inform a policy review that will start in the new year. The only problem with this, which the Government accept, is that they will be unable to do anything about the results of the review or introduce legislation before a general election. Therefore, foundation trusts will have to stagger on with this rather ludicrous structure of private patient caps-some with 0.3 per cent, one with 30 per cent and others with 5 per cent-for the indefinite future. It is difficult to argue that that makes any sense.
I welcome, of course, the Government's amendment agreed in the other place to give mental health trusts a private patient cap of 1.5 per cent. That amendment means that mental health foundation trusts will be able to deliver additional services and, as the Minister said, employment support to benefit NHS patients. It is a good example that the cap enables positive things to be done by trusts, not only the straightforward provision of beds for private patients one might imagine. It is not like that; this issue covers all sorts of eventualities.
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However, I should emphasise that my purpose in moving amendments on the private patient cap has never been motivated by the needs of mental health trusts, particularly, and certainly not by the needs of the East London NHS Foundation Trust, which I chair. I put on record that that trust has no plans at present to undertake private patient work, although that would now be possible.
The Foundation Trust Network has asked foundation trusts to indicate what a 1.5 per cent patient cap would mean in terms of additional revenue. It is interesting that an additional £132 million would be brought into the 55 trusts which responded for the benefit of NHS patients. It is useful to think about that funding in terms of saving jobs in the NHS. If we assume a cost of £40,000 per job, a 1.5 per cent cap for all foundation trusts could save about 7,000 jobs. It may be that a few mental health trusts will not take up the cap-in which case 7,000 would be a slight overestimate-but that would not make a huge difference. I raise the employment point because it relates to UNISON's concerns about any change to the private patient cap, and it may be particularly interested in the idea of saving 7,000 jobs per year in the NHS in the coming period.
The other benefit of the amendment is that, for the first time, there would be a level playing field for some 75 per cent of foundation trusts. The remaining 25 per cent would have a cap above that level going back to 2002-03. That will have to be settled after the general election, when and if a new Government get round to dealing with these issues.
During the passage of the Bill, we discussed a number of the disadvantages of the uneven and very restrictive private patient cap. I do not wish to repeat those debates except to briefly summarise a few of these problems. The Government's top-up policy is unworkable in foundation trusts without reform. The private patient cap makes it hard for some leading NHS providers to become foundation trusts. A mental health foundation wanted to buy out a private-sector competitor that was going out of business and whose services were, presumably, needed and could have been taken into the NHS. However, because there was no cap-although 1.5 per cent would not have covered it-that sort of initiative was simply not viable.
Private patient income was the means by which one foundation trust bought leading-edge technology and equipment for the benefit of NHS as well as private patients. More trusts need that option, and that is going to be more and more pressing. The private patient income cap is threatening the development of cancer services to both NHS and other patients. Investment in laser dermatology for the benefit of NHS and private patients is being prevented by the current private patient cap.
In the tight financial climate of the coming years, these restrictions on NHS services for NHS patients will only worsen. I hope the Minister will agree that this modest amendment would assist trusts to some extent while the nation waits for the results of the review and new legislation. I hope she will agree that it deserves the Government's support. I beg to move.
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6 pm
Earl Howe: My Lords, the world has moved on considerably since we last debated these matters in your Lordships' House in May. When the Lords amendment was passed at Third Reading, the Government were not prepared to countenance a variation of the current rules on the private patient income cap because a judicial review about the operation of the cap was underway in the courts. Not only have the Government now changed their mind on that point and decided that there is no issue of principle at stake here, they have also felt able, of their own volition, to make a concession in respect of mental health trusts, as we now see in the Commons amendment before us-a concession I naturally welcome.
It is instructive to read the remarks of the Minister in another place, Mr Mike O'Brien, who said on Report on 12 October:
"We take the view that the way the system operates now is not the way we want to see it operate. It is not fair. We concede that argument immediately".-[Official Report, Commons, 12/10/09; col. 70.]
Referring to the honourable Member for Eddisbury, he said:
- "He asks whether we have changed our mind: yes, we have. Have we considered the matter again? Yes. Have we taken the view that we can go ahead with the change now? Yes, we have".-[Official Report, Commons, 12/10/09; col. 77.]
We are now in a strange situation. There is no issue of principle at stake any more. The Government agree that the system is not fair and needs revision; they admit they have changed their minds and accept that the system can be changed now. If all that is true, there is absolutely no argument for resisting the amendment of the noble Baroness, Lady Meacher.
The amendment does its level best to defer to the Government by not asking for too much. In all honesty, the figure of 1.5 per cent which the Government have alighted upon as a concession to mental health trusts is completely arbitrary. One could argue that it simply perpetuates the arbitrary nature of the entire private patient income cap regime. There is absolutely no logic to the figure of 1.5 per cent, but it is the percentage that the Government now feel comfortable with. As an interim measure, this is certainly better than nothing. The noble Baroness, Lady Meacher, is to be commended for advancing a proposal which is both moderate and reasonable. I find it difficult to imagine what rational argument the Minister can put up against it.
At Third Reading, the noble Lord, Lord Warner, focused on one aspect of this issue which we would all do well to bear in mind:
"We are moving into a financial climate where the NHS ...will need every penny that it can get to meet public expectations".-[Official Report, 12/5/09; col. 936.]
The noble Lord was absolutely right. The problem with doing things as the Minister suggests is that if we let this Bill go without inserting this amendment into it, it is likely to be a long time before another legislative opportunity comes before us. As the noble Baroness said, it is likely to be 2011 at the earliest before Parliament is able to revisit this matter. That is not acceptable. More to the point, the Government should not regard it as acceptable given that they now agree that the current rules cannot remain in place.
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The Government have announced a rapid review of the private patient income cap and have issued a paper calling for evidence about it from the NHS. This review is unlikely to bring much to the table because the Government already know the system needs to change pretty radically. A key point is the need to provide foundation trusts with a breathing space, which is just what this amendment would do. Some 75 per cent of existing foundation trusts have a private patient income cap of less than 1.5 per cent. A lot of trusts are not being permitted to meet the needs of their NHS patients as fully as they would like to do by investing in new services, trusts whose NHS budgets are stretched to breaking point because they are barred from generating any additional private patient income whatever.
The perversity of the situation is well exemplified by Great Ormond Street children's hospital, which cannot apply for foundation status because if it did so it would be instantly in breach of its cap. It carries on as it is, with no restriction whatever on the amount of private patient income it can generate. Is that really what we all want?
Even at this late stage, it is not too late for the Government to change their mind yet again. I hope they will do so by accepting the amendment of the noble Baroness. I shall not hesitate to follow her should she choose to test the opinion of the House.
Lord Warner: My Lords, I rise to support the amendment of the noble Baroness, Lady Meacher, to the Commons amendment. I do so as the Minister who took through this House the 2003 legislation setting up foundation trusts and imposing what I can only describe as the arbitrary private patient cap. Later I was also the Minister responsible for policy on foundation trusts but have no current public or private interest to declare in speaking to this amendment.
I recognised at an earlier stage of this Bill that we had got the 2003 Act wrong on the private patient cap. I am pleased that my colleague, Mike O'Brien, in the other place appears to have had a Pauline conversion since our discussions at Third Reading here. We also know that lurking in the background is the attitude toward private patient income and the private patient cap of UNISON and other public sector unions. They have rather forgotten that the patron saint of the NHS, St Nye of Ebbw Vale, himself wrote into the NHS founding legislation provision for trusts to obtain private patient income and indeed for NHS patients to secure more privacy by buying a space in amenity beds. There is a long tradition of using private patient income in the NHS for the benefit of NHS patients and the development of services.
We now have a situation where some FTs have a cap of 30 per cent, some of five per cent and some zero per cent. I welcome the fact that in the other place the Government have improved the situation in relation to mental health trusts. However, this still leaves some 75 per cent of foundation trusts below that cap, according to the excellent piece of work circulated to Members of this House by the Foundation Trust Network. I find it extremely disappointing that, for reasons of
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The Foundation Trust Network's excellent briefing sets out some of the missed opportunities presented by these new, equally arbitrary, arrangements from the Government, both for foundation trusts and for NHS patients. As that briefing paper illustrates, the Government's position is a bit of an own goal in that it thwarts their own policies on well-being and top-up of NHS services.
The amendment of the noble Baroness, Lady Meacher, is a moderate attempt to introduce greater coherence into the capping of FT private patient income while also protecting the interests of NHS patients. It also gives foundation trusts a good slug of additional income. I would suggest, on the Foundation Trust Network's calculations, something of the order of £200 million a year in extra income, which buys quite a lot of extra services for people. As the noble Baroness, Lady Meacher, mentioned, it creates extra jobs at a time of difficulty in and around public finances.
I would be a bit more convinced about the Government's review if the Department of Health had supported Monitor rather more vigorously over the judicial review sought by UNISON. I was concerned to find that recently, the Department of Health, acting as an "interested" party in that judicial review, is giving evidence to the High Court supporting an even more restricted position than Monitor is in now. I do not think that that bodes terribly well for an objective review of our private patient income cap. I am sorry to be sceptical but I operate on the basis of the evidence in front of me, and I do not find that terribly convincing.
If they had wanted to, the Government could have dealt with this legal challenge differently by acknowledging that there were problems and by setting out their plans to deal with the arbitrary and inconsistent nature of the 2003 cap. This rather last-minute call for evidence does not totally convince me. It could have been done a long time ago and the case could have been made in plenty of time for an amendment to this Bill or earlier legislation. The amendment moved by the noble Baroness, Lady Meacher, is a practical way to improve matters while the Government make up their mind about what they want to do. I am not at all clear from the call for evidence what they want to do in this area, apart from setting out some principles with which most people would find it difficult to disagree. The amendment moved by the noble Baroness, Lady Meacher, does good for NHS patients and FTs alike and, in a modest way, helps implementation of government policy. If she wishes to press her amendment to a Division, I shall certainly join her in the Lobby, and I encourage my noble friends to do likewise.
Lord Walton of Detchant: My Lords, I shall be brief, because I think that this is an excellent amendment which is well worthy of support. I could not resist intervening when I heard the noble Lord, Lord Warner, say that there is a long history of the NHS taking private patients and deriving from them income that has supported the National Health Service. When I
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I think that the memory of the noble Lord, Lord Warner, is rather short. He may not remember that when Mrs Castle, as she was before she became Baroness Castle, was Secretary of State for Health, under pressure from the unions, a major campaign was undertaken to remove, as far as possible, all private beds from NHS hospitals. It reached a stage when there were three major hospitals in Newcastle-upon-Tyne and only one private bed was available in each hospital. I, as an academic, used to receive patients referred to me from countries across the globe-even from the United States and Australia-but I had to refuse to take them because there was not a private bed to which they could be admitted. That policy of the then Labour Government, under pressure from the trade unions, gave the biggest impetus to the development of private hospitals outside the NHS of any policy adopted by any Government.
I strongly favour the public-private mix. I strongly favour the proposal that private patient income should be used to the benefit of the National Health Service. I believe that the amendment tabled by my noble friend Lady Meacher goes a long way in that direction. Personally, I would have loved to see the cap greatly increased, but I know full well that Unison would not accept it at the moment. However, I hope that the consultation on which the Minister is now engaged, and in which the Government seek to take advice, will lead to a substantial modification of the cap in the long-term.
In the mean time, as my noble friend Lady Meacher has made clear, the income derived from private patients is at the moment of benefit to foundation trusts. For that reason, her amendment, modest although it is, is a crucial development. Whatever the consultation shows, no legislation further to amend the cap is likely to come about for several years to come. I strongly support the amendment.
6.15 pm
Lord Campbell-Savours: My noble friend Lord Warner said that in 1983, the Government got it wrong.
Lord Campbell-Savours: I am sorry, in 2003. I am sorry to take issue with my noble friend, but the Government got it right. The reason they got it right was that it was on that basis-the undertakings given to Parliament on this matter-that the Government got foundation status through the House of Commons. Without those undertakings on this matter, there would be no foundation trusts in the United Kingdom today. What happened then should be clearly in the minds of those who want to amend the legislation in the way suggested .
I have to say delicately that in tabling her amendment, the noble Baroness astonished me. I well recall her comments at Third Reading. Perhaps I may read them
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- "it is our intention to begin a review to address precisely how to strike the right balance between protecting NHS services for NHS patients and allowing NHS foundation trusts the flexibility they need to operate effectively in the best interests of patients. This would mean a review of the cap and appropriate action to follow ... I repeat our commitment to take forward a review following the outcome of the current judicial review. This is the most sensible way of making sure that any new approach reflects the views of those affected and enables us to test those practical solutions".
So the Government were conceding to the noble Baroness, Lady Meacher. In response to that generous offer from the Government, she said:
"When the Government are able to institute a review, we would all hope to be involved in it, contribute to it and support it. Then, if possible, a consensus can be found through a good consultation process in which all the issues can be resolved, and a set of principles wider than we are able to deal with today can be put into a future Bill".-[Official Report, 12/5/09; col. 939-40.]
In other words, she fully supported the review that my noble friend was offering at Third Reading. It is no longer a question of the review being in the future, it is now in the past. The decision has been taken and the review is in place.
Baroness Meacher: My Lords, I intervene only to say that I still agree with every word that I said at the time. On all sides of the House, we recognise that this is an interim measure. We still have 25 per cent of foundation trusts with variegated private patient caps. Clearly, that is not sensible or useful. Ultimately, 1.5 per cent may not be the right figure, but I think that there is a general understanding across the country that the present completely illogical and inconsistent private patient cap is unhelpful for all concerned. This modest amendment is an attempt to improve matters in the interim, pending the result of the review and, no doubt, ultimate legislation in a few years' time.
Lord Campbell-Savours:The noble Baroness says that this is an interim measure. I argue that the interim measure is the concession on mental health trusts. My noble friend is breaching the wider principle of extending the amendment to the cap right across all National Health Service foundation trusts in the United Kingdom. I choose my words delicately, but she is making a mockery of her acceptance of the very generous offer that my noble friend made at Third Reading. I have argued repeatedly in the past that this is a sensitive matter for the Commons. In the event that these matters are to be dealt with, they should be dealt with in primary legislation in the House of Commons in a Bill that goes through all its stages in the House of Commons, not be dropped in at the last moment at the fag end of a Bill, which effectively gives the House of Commons only one opportunity to debate it. The House of Commons is being denied the right comprehensively to consider this very sensitive issue. I reject this amendment, and I hope the House does too.
Baroness Cumberlege: My Lords, I remember the tremendous struggle six years ago to get the principles of foundation trusts through in the legislation. There
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