North Tees and Hartlepool NHS Foundation Trust
(Limited Text - Ministerial Extracts only)
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The Minister of State, Department of Health (Mr Simon Burns)
I begin by congratulating the hon. Member for Stockton North (Alex Cunningham) on securing the debate on the future of the North Tees and Hartlepool NHS Foundation Trust and its hospitals. I join him, with the greatest pleasure, in congratulating clinicians, GPs, ancillary workers and all those who work so hard on Teesside, in the north-east and in the rest of the country to provide a first-class quality health care service for the people of this nation.
The decision to cancel the North Tees and Hartlepool NHS Foundation Trust proposal has to be seen within the context of the wider economic climate. This year’s budget deficit of £155 billion—inherited, I gently remind Opposition Members, from the previous Government—illustrates the scale of the economic challenge facing this Government. As part of this Government’s determination to face that challenge head on, the Treasury and other Departments have reviewed every significant spending decision made between 1 January and the general election on 6 May. As the proposed new hospital scheme at the foundation trust received the previous Government’s approval only in March, the North Tees decision formed part of that review.
In these tough economic times, it is essential that all major hospital building schemes be affordable. On 17 June, as the hon. Member for Stockton North rightly said, my right hon. Friend the Chief Secretary to the Treasury announced to this House the decisions of the Government’s review of spending commitments. The review cancelled 12 projects throughout Government and considered four major NHS capital investment schemes with a total capital value of more than £1.2 billion.
The size and funding of the schemes were considered in relation to the nature of the organisations concerned. The aim of granting foundation trust status is to give such bodies greater financial independence. As well as being able to keep any internally generated resources, foundation trusts have greater freedom to borrow from either the public or the private sectors, and, by requiring an allocation of public dividend capital from the Department of Health of more than £400 million, the proposals were not consistent with that financial independence.
Mr Iain Wright
What local clinical advice did the Minister and his ministerial team take prior to the decision to scrap the new hospital?
Mr Burns
If the hon. Gentleman waits, as I develop my argument I shall continue to explain the reasons for cancelling the scheme within the public spending review.
Treasury and Department of Health Ministers, myself included, decided that, overall, these factors—affordability within the changed economic climate and the foundation trust status—weighed more against the scheme for North Tees and Hartlepool than against the other three schemes for the Royal Liverpool and Broadgreen University Hospitals NHS Trust, Epsom and St Helier University Hospitals NHS Trust and the Royal National Orthopaedic hospital. For those reasons, the Government withdrew their support for the scheme.
If I may, I shall just answer one question that was mentioned in an intervention on the hon. Member for Stockton North. The question was, “Why North Tees and Hartlepool and not the three other schemes?” After looking into the situation, we found that, for example, the Royal Liverpool university hospital building is not compliant with fire safety regulations, and that its mechanical and engineering services are more than 30 years old and at increasing risk of failure. Some 94% of St Helier hospital’s buildings are more than 50 years old, and the 2007-08 data show that the total maintenance backlog for the Royal National Orthopaedic hospital is £53.8 million; for Epsom and St Helier it is £23.8 million; for the Royal Liverpool it is £16.3 million; and for North Tees and Hartlepool it is £3.5 million.
Grahame M. Morris
On the point about affordability and the Minister’s suggestion that the foundation trust look towards PFI, how would such a proposal be more affordable when the evidence suggests that PFIs are 14 to 20% more expensive to deliver? The need certainly exists, and we need to deliver quality health care, but affordability suggests that the public purse is the best way to do it.
Mr Burns
I am very grateful to the hon. Gentleman. Earlier today, his right hon. Friend the Member for Leigh (Andy Burnham) made the point that it would be cheaper to have a new hospital than to maintain the existing two ageing hospitals. I do not believe that that is accurate. The business case actually showed that the whole-life costs of continuing to operate and provide services from the two hospitals were very similar, but slightly lower than the whole-life of costs of operating and providing services from the proposed new facility. Over the appraisal period of 35 years, the total net present cost—that is, the whole-life cost—of building, maintaining and operating the new facility was £5.033 billion, but the cost of repairing defects, maintaining, operating and providing services from the two existing buildings was £5.024 billion.
However, the North East strategic health authority, Hartlepool primary care trust and Stockton-on-Tees primary care trust have pledged to continue working closely with North Tees and Hartlepool NHS Foundation Trust to plan and develop the best possible health services for the local population of Hartlepool and North Tees. I understand that the chief executive of North Tees and Hartlepool NHS Foundation Trust is currently reappraising the available options. As I have said, NHS foundation trusts have greater financial independence, which includes consideration of the private finance initiative. I am advised that the chief executive of the trust has already said that the PFI is one of the options that he is looking at, but any new proposals must be realistic, affordable and provide value for money. I cannot in any way give any guarantees that such a scheme would or would not be approved. Like all schemes, any proposals that might come forward would have to be considered on its merits and in the light of the economic climate at that time.
The local health economy is also ensuring that the wider momentum project, which involves bringing health care services closer to communities, will continue. I am delighted that on 10 May this year, the new integrated care centre known as One Life Hartlepool, located in Hartlepool town centre, opened its doors to patients. Hartlepool primary care trust has transferred a range of community services into this new £20 million facility. The PCT is working with North Tees and Hartlepool NHS Foundation Trust to agree a programme for moving a range of out-patient services into the building. In addition, work is continuing on the outline business cases for integrated care centres in Billingham and Stockton.
In conclusion, any new proposals to develop—
Alex Cunningham
I have just one question. Will the funding for those two centres in Stockton and Billingham be guaranteed?
Mr Burns
As I understand it, the finance is in place, and I assume that the measures will proceed on that basis.
Any new proposals to develop local NHS services must be affordable, but they must also now take into account the further criteria on service reconfiguration recently set out by my right hon. Friend the Secretary of State. I believe that it is vital that any proposals focus on improving patient outcomes, are based on sound clinical evidence, increase choice for patients, and have the backing of GP commissioners. I, like the hon. Gentleman, his hon. Friends and everyone else in this country, want a high-quality NHS that is accountable to patients and led and controlled locally. This Government have been elected on a platform of real-terms increases in the NHS budget for every year of this five-year Parliament. But hand in hand with that, we must have an NHS that puts patients at the centre of high-quality care and delivers care that is efficient, productive and, importantly, affordable. This must be the case nationally; it must also be the case locally, including for the people of Stockton North and Teesside.
Question put and agreed to.