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Over the past two decades, the rapid growth of our creative industries has been one of the UK's proudest achievements. The creative sector is driven by imagination and flair-from architecture to advertising, across the media, from fashion to computer games-and Britain has undoubtedly got talent. Most of that talent works through small companies, and their artistry is often combined with an unabashed entrepreneurial zeal. An outstanding example of this is in television where government policy in the 1980s helped to create hundreds of independent production companies. I trust that the Minister can assure us that the public service output of our television channels, which is so widely admired abroad and enjoyed at home, will be protected by the coalition Government, particularly in areas such as regional news and current affairs in England and, most crucially, in the devolved nations of the United Kingdom.

Over the past decade, our creative industries have grown almost twice as fast as the rest of the UK economy. The sector employs about 2 million people, and the UK's creative exports total £16 billion a year. The contribution made by our creative industries to the UK national economy is now greater by proportion than that in any other country. We are world leaders when it comes to creativity. London, in particular, benefits from being an entertaining, edgy cultural capital. Its creative industries employ about 800,000 Londoners, and Mayor Johnson asserts, with regard to tourism and job creation more broadly, that:

"London's cultural environment has become a significant factor in its competitive advantage".

Cities outside London have also flourished in our cultural renaissance. In Brighton, where I now live, May is a month-long festival and music, theatre, arts and media, along with a lively club scene, attract the tourists and keep Brighton buzzing throughout the year. Since the incomparable Edinburgh festival was founded some 60 years ago, the growth of festivals in small towns and every large city has been quite remarkable. Today, the largest creative cluster outside London is in Manchester. Back in the 1980s, Granada Television set about transforming the derelict warehouses around its television station by the River Irwell. The wonderfully anarchic Madchester phenomenon transformed the local music scene. The Commonwealth Games regenerated another rundown area and left Manchester City a world-class stadium in which to compete with Manchester United. In addition, we now have an excellent Manchester International Festival, as the noble Lord, Lord Hall, highlighted in his splendid maiden speech. There is also the Lowry arts centre. Most importantly,

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MediaCityUK in Salford is now nearing completion. It will become the BBC's new production centre in the north, with 2,500 staff jobs being transferred from London.

As the metrocentric BBC strives to make itself more British, Glasgow too is benefiting from the transfer of BBC production to Scotland. Scotland at last gets a fairer share of UK programme-making to match its licence fee contributions. I hope that the Minister will confirm the Government's support for the BBC's policy of creative devolution. Noble Lords may recall that in 1990 Glasgow was the least likely candidate for the role of European city of culture. Like most Glaswegians, I was pretty sceptical. However, in the 20 years since, cultural activity has been a key element in a remarkable regeneration. Glasgow still has its legacy of industrial and social problems, but they are eased by its 3 million tourists spending £700 million a year. That success was repeated in Liverpool in 2008 when, as European capital of culture, it attracted 10 million visitors and had a reported income of £750 million, which was a very welcome boost in these hard times.

Three years into the current financial crisis, cultural budgets are obviously under increasing pressure. Private sponsorship has held up better than expected, but it fell about 5 per cent in 2008 and is likely to have dropped again last year. The budget of the Department for Culture, Media and Sport is now also under pressure. When the Chancellor announced his £6 billion of public spending cuts, £88 million was lopped off the DCMS budget. It was just 4 per cent, but it might be only the start. The Arts Council of England's budget is a central concern for that most important funding engine, encouraging creativity up and down the country. It is a respected and well run organisation that has sensibly trimmed its own administration costs in recent times. The Arts Council, like other bodies, suffered when the income from the National Lottery was diverted to fund the Olympic Games, and I would welcome the Minister's confirmation that the lost shares of lottery funding will be restored to the arts, to heritage and to sports sectors post-2012.

Many in the creative industries were encouraged by the enthusiasm for the arts which Jeremy Hunt, the new Secretary of State at the DCMS, and his junior Minister Ed Vaizey expressed in opposition. Will the Minister therefore assure us that the new team at the DCMS will do its utmost to protect our highly successful but inherently fragile creative industries from further damaging cuts in public support?

6.05 pm

Baroness O'Neill of Bengarve: My Lords, your Lordships' House is extremely fortunate in the two Ministers who have arrived on the government Front Bench. We all know that the noble Earl, Lord Howe, has for many years followed health matters with scrupulous and impressive attention to detail. No one could be better qualified, and it is marvellous to have him in his post. It was also a great pleasure to hear the maiden speech by the noble Lord, Lord Hill, from the Front Bench this morning. I think that we can look forward to serious engagement on a wide range of extremely difficult topics.

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I will make one undertaking at the beginning of this speech; I will not plead for the protection of a particular area of expenditure. I have my favourites and my interests, and I have a long university career behind me, but I am not going to plead for those. I looked at what would be at the head of the queue, and it is of course the Academies Bill, so I decided that I would focus on the issues that legislation in that area will raise. We expect to hear, and a first reading of the Bill suggests that we will hear, quite a lot about governance. I strongly support better governance and more independence for schools, with the caveat that we must all realise that more independence means that some will do a less than ideal job. We cannot expect greater independence to have uniformly good effects, but it will have better effects, and that is its justification.

The topic on which I want to say something today is not directly about governance but about the concepts of accountability and assessment that are ancillary to governance. Rather too often, systems of accountability undermine the independence that governance supposedly secures for institutions, and systems of assessment can undermine our educational aims for pupils. Of course accountability and assessment are both needed, but we need intelligent accountability and intelligent assessment, and in these matters more is not always better. That is why I have a suggestion for noble Lords on the Front Bench as to where savings might be made.

I will give two examples of defective accountability. When at breakfast I mentioned the theme on which I would speak today, my son, who is a governor of a very poorly performing primary school in Tower Hamlets, remarked that the governors of that school are accountable for 98 school policies that run to 100 or so pages of A4. He commented that if they did nothing but review those 98 policies every two years, as they were required to do, they would do absolutely nothing else. That is a reasonable example of a defective form of accountability. Requirements of this sort seemingly delegate but actually confer a quite illusory independence that obstructs other activities. The test in taking forward academies is that we do not undermine their independence and the education that they might offer by imposing forms of accountability that obstruct them.

My second, and unfortunately far from local, example is the system of assessment by which pupils, teachers and schools now find themselves held to account. Pupils and schools are judged on the scores achieved in SATs, at GCSE, at AS and at A-level. These are used not solely for educational purposes, which might be their proper use, but to construct league tables with very heavy implications for the futures both of pupils and of schools. This form of assessment becomes a rigid and educationally distorting form of accountability.

We hear that academy status is to be available to the best schools. Behind that phrase "the best schools" lurks of course a system of accountability and in this case perhaps a system of accountability that is in part based on pupil performance and league tables. But if merit is to be judged by pupil attainment, schools will continue to be hyper-incentivised to push limited forms of educational attainment. Gaining academy status will not lead to real independence for schools.

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I remember talking to the head of an independent school which was very close to the top of the league tables when AS-levels had been introduced a few years before. I asked her whether it had had benefits for pupils. In her judgment, it had not. It had reduced the educational attainment possible in the lower sixth by cutting into teaching time and requiring a relentless focus on less demanding-indeed, quite often terminally boring-examined content. More generally, the system incentivises schools to push those subjects where A grades are more easily obtained.

I rather naively commented that, given the position of her school, she could refrain from entering pupils for AS-level. Her reply has stayed with me. She said, "With parents like mine, I can't. They want every point that is available". Systems of assessment can undermine the independence even of independent schools. If they are used for ranking schools in the future, the independence which the coalition Government seek will be undermined because all schools will be driving their pupils across the same hurdles. Even if those hurdles are not very high, there are a lot of them. More passes is always regarded as better. Another generation will be subjected to Stakhanovite quantities of exams, rather than being given plenty of teaching and an interesting and thoughtful education in which skills are assessed by exams and by examiners who are permitted to use their judgment and are trusted.

For too long the assessment tail has been wagging the education dog. I hope that the Government can be bold enough to see that serious judgments of quality cannot be based on test scores. If schools are to have greater independence, they must be free to teach more and to examine less, to emphasise skills, including skills in academic subjects, more. I greatly welcome the comments of the noble Lord, Lord Baker, who is not in his place, about technology colleges for 14 to 19 year-olds, but we need to free schools to concentrate on skills in academic subjects, not merely on the imparting, memorising and regurgitation of information-you may say factoids. We need better skills in languages, maths, science and writing. At A-level, pupils deserve to be offered an exam system in which reading beyond the syllabus is valued and celebrated, and not penalised as it has been by the examination system. There is a long way to go and I wish the Government well.

6.14 pm

Lord Rea: My Lords, like all other noble Lords I welcome the appointment of the noble Earl, Lord Howe, as Health Minister. I am only sorry that he did not get the top job. He certainly deserves it and he would have done it very well. I also welcome the noble Lord, Lord Hill. I am gratified to hear his support for professional independence.

The main problem facing the National Health Service is how to keep front-line services up and running, and improving, as the coalition has pledged, at a time of great financial stringency. This means that the health service needs to be scrutinised and monitored even more carefully to identify inefficient or wasteful methods of working. It is important that if any quangos or other health-related organisations are to be abolished, as has been mooted, public health, or the effective functioning of the National Health Service as a whole,

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is not impaired. For instance, were NICE to be wound up, a valuable evidence-based resource would be lost. Can the noble Earl give the House any information on the Government's thinking here? There are those in the pharmaceutical and food industries who would like to see the end not only of NICE but also of the Food Standards Agency, which provides vital science-based public health guidance. I am sure that the noble Earl recognises the unique value of these two agencies, but can he reassure us that the Government will reject any pressure to close them or restrict their activities?

A good start in looking at where efficiency might be improved can be made by reading the final report of the House of Commons Health Select Committee of the previous Parliament entitled Commissioning. It will be the present Government's duty to respond to it, which I guess will happen in a month or two, but I would be interested in any preliminary thoughts the noble Earl might have about this hard-hitting but constructive report. Some members of that Select Committee were, like Members on these Benches, the Liberal Democrats, all the health professions and the universities, strongly opposed to the creation in 1990 of the internal market, particularly without a pilot study. However, it is now here and has become even more entrenched under the last Government, which carried on much as Kenneth Clarke might have wished. This is without any objective evidence that the internal market is beneficial except in the creation of bureaucracy and opening the door to the private sector. According to the Centre for Health Economics at York University, the percentage of NHS expenditure on administration has risen from less than 5 per cent in 1990 to 13.5 per cent. The Department of Health is rather shy about revealing this figure, although I gather that it commissioned the research. That percentage rise means that at today's costs we are spending £8.5 billion more than we would have had the administrative costs remained constant at 5 per cent.

The great majority of NHS expenditure is now channelled through primary care trusts. Acute hospital trusts receive the bulk of the funds disbursed, around 70 per cent or more. I would be grateful if the noble Earl could give me the latest data on the proportion. PCTs have little control over these powerful organisations which tend to lean on them to give them what they ask for. But of course they provide critical care for life-threatening conditions and are target-driven to reduce waiting lists. I do not say that in any derogatory way; it is a fact and it is necessary. It is therefore difficult for PCTs to decrease or stop funding hospital services, some of which may in fact have become redundant.

Paragraph 95 of the report states that,

One solution to this would be for acute hospital trusts to have an entirely separate funding stream, as suggested in Volume II at Ev 135 of Commissioning by Professor Andrew Street, also of the York University health policy team. This would allow PCTs to concentrate on what is really their role, providing good-quality community-based care.

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"World Class Commissioning" is a rather grand title. But consider the finding of the Select Committee at paragraph 108 of its report:

"Weaknesses, due in large part to PCTs' lack of skills, notably poor analysis of data, lack of clinical knowledge and the poor quality of much PCT management".

There are other highly critical paragraphs. It is worrying that the great increase in administrative costs since the introduction of the purchaser/provider split 20 years ago is largely spent on funding a system which has such major deficiencies.

Two findings in the report which seem crucial concern the lack of clinical knowledge by administrators and the involvement of clinicians in the commissioning process, and the lack of skill in gathering or analysing complex data to guide rational decision-making. If the current system of PCT commissioning is to be retained, more medical and nursing input is needed, as my noble friend Lord Darzi said on many occasions, and as have the royal medical colleges and several noble Lords who have taken part in the debate today. A more meaningful use of practice-based commissioning, which so far has achieved very little, would see GPs, as well as consultants, in an advisory role at the highest level-and therefore with clout-as part of PCT commissioning teams.

Information on population needs and hospital activity should be made more meaningful and be processed more expertly. The outcomes of referrals and procedures need to be measured and assessed, again as my noble friend Lord Darzi said repeatedly, and not merely counted as episodes of activities-referrals, discharges and so on. Payment by results, apart from creating difficulties in predicting the costs of care, is a misnomer; it does not relate to the quality of care received but only to easily counted processes.

To cut swathes of administrative staff-30 per cent has been suggested-without first ensuring that the quality of the commissioning process is improved will lead to less effective care and might well increase rather than decrease costs. Constantly to bring in consultants to do the job is expensive and weakens the National Health Service, which should instead build up its own expertise.

Apart from the major burden of carrying the costs of acute or foundation hospital trusts and community health service care, PCTs have to fund a number of uneconomic, and sometimes redundant, independent sector treatment centres which they were obliged to engage, as well as meeting the heavy recurrent costs of paying for PFI or LIFT projects, which were brought in as part of the prevailing gung-ho culture of "buy now, pay later, even if it costs more" that underlies our parlous economic situation.

Finally, I would like the noble Earl to explain how the stated coalition policy of allowing access to any chosen GP regardless of place of residence is going to work. This could result in a two-tier service with local residents not being able to get an appointment to see a popular GP with whom they might be registered. This would undermine the basis of good primary care in which a practice looks after a defined population.

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6.23 pm

Lord Williamson of Horton: My Lords, I am still here and I intend to speak today on health and, in particular, on mental health. I welcome the noble Earl, Lord Howe, to the Government and recall that we had amiable and effective co-operation on mental health issues during the previous Parliament-we often agreed-so I am hopeful today.

Although there were no specific legislative proposals on mental health in the gracious Speech, the Government have indicated some forthcoming changes in the health field which may have repercussions for mental health. It is also evident that because the amount of financial resources for health expenditure is limited and is going to be under serious pressure, mental health is certainly not exempted from the pressures in the period ahead. Indeed, it may be under greater pressure than provision for physical health.

We do not have to legislate and re-legislate time and again to achieve the best results, but it is important that the Government should have a clear idea of their priorities, even if the implementation rests, as it does in many health areas, with the health authorities at local level. I am glad to see specific priority given in the coalition programme to research on dementia, and to see reference in paragraph 25 to "talking" therapies, both of which are important matters.

What, then, are the priorities for action on mental health in this period of strong pressure on the public finances? First, health authorities should try as far as possible to carry through the implementation of improvements to care decided on in the Mental Health Act in the previous Parliament. These include better provision of advocacy for those people, particularly young people, who are caught up in mental health problems which they do not always understand, and the provision of age-appropriate accommodation in mental health units for young persons and children. These changes resulted from amendments to the Bill in this House which I believe the noble Earl, Lord Howe, supported. I congratulate Lancashire Care on opening in April new facilities to provide age-appropriate accommodation for the young exactly as Parliament wished. I acknowledge at this point the efforts of the previous Labour Government, particularly the Ministers in this House, in carrying through the Mental Health Act. They perhaps needed a little prodding, but they did a good job none the less. Secondly, I share the view of Rethink, the largest voluntary provider of mental health services in the United Kingdom, which supports more than 48,000 people every year through its services and support groups. The areas which it considers crucial are: access and investment; criminal justice; and stigma and discrimination.

On access and investment, NICE produced as recently as 2009 updated guidelines on how schizophrenia should be treated, which individual NHS organisations should try to follow through. Currently, some of them are struggling, and it is clear from the very recent report of the all-party parliamentary group that this continues. Contrary to some misunderstandings, a first onset of schizophrenia in many cases never recurs. In other cases, its impact can be much reduced by various treatments and rehabilitation achieved. We

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know that cognitive behavioural therapy-CBT is a rather easier way of describing it-has a significant effect on treating schizophrenia. This issue now arises because of the extremely long waiting times for access to this treatment. The average in the whole kingdom is between five and seven months-in some cases, of course, it is much longer because that is the average figure. Waiting times are a significant factor affecting engagement with therapy. They affect the effectiveness and the uptake even when therapy is later received. Despite the economic climate, an improvement in waiting times should be the objective.

I make my plea for mental health services because we know that the pressure on them is likely to be disproportionately strong. In his letter of 1 April to foundation trusts, Stephen Hay of Monitor, the independent regulator, pointed out that mental health providers face a different set of risks from those in the acute sector. Historically, during periods of financial pressure in the healthcare system, expenditure on mental health activity has fallen more rapidly than expenditure in other areas. Mr Hay was quite right to draw attention to revised, downward financial assumptions, but we in Parliament can rightly stress the importance of some elements of mental health treatment, as do I.

I wish to say a word about the large number of people with severe mental illness caught up in the criminal justice system without much-needed treatment. In a powerful speech in the debate on the Address last week, the noble and learned Lord, Lord Woolf, pointed out the mess that we are in as a result of the overload on our prisons and the very high cost to the taxpayer. One of the most evident features of the problem is the very large number of prisoners who have some form of mental problem at any one time. At any one time, about 10 per cent of the prison population have serious mental problems and 30 per cent of female prisoners have had a psychiatric acute admission to hospital before they enter prison. I urge the Government to act on the recommendations in the excellent Bradley report, and make it a priority to reduce the large number of persons with mental illness in the prison system and divert more of them into healthcare.

Finally, we must keep up the effort to remove stigma and discrimination against those with mental illness. The Time to Change campaign, led by Mind, Rethink and Mental Health Media, is good, but mental health service users consistently identify stigma as an impediment to their overall health and well-being and access to other health services. I have spoken today to press on the Government why we must have priorities for improvements in mental health provision, and I look forward to a favourable reply.

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