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Mr Dave Watts (St Helens North) (Lab)
It is a pleasure to have the opportunity to debate this subject under your chairmanship, Mr Meale.
Before I set out my concerns, I put on record my appreciation and that of my colleagues for the work of the excellent St Helens and Knowsley Teaching Hospitals NHS Trust. I pay tribute to its doctors, nurses, technicians, cleaners and all its support workers, who provide an excellent service to my community and to the communities of my colleagues.
I am pleased to have the opportunity to debate this important subject. St Helens and Knowsley is a five-star hospital trust, benefiting from excellent staff and management and delivering well run hospital services that are clean and safe. The trust now provides state-of-the-art treatment to the people of our communities. I asked for the debate in an attempt to discover the details of the secret discussions currently taking place between the trust, the strategic health authority and the Department of Health.
The trust provides services mainly for St Helens, Halton and Knowsley, but for the wider north-west community as well. Its burns and plastic surgery department provides treatments for patients over a wide area, including the Isle of Man, Cheshire and north Wales, altogether serving a total population of more than 4 million. The trust operates on two sites, St Helens and Whiston. The new hospital opened in 2010 and, as is the norm for the trust, did so on time and on budget. There was new hospital investment of £350 million, so the trust now boasts world-class services at the St Helens site as well as the newer Whiston site.
The trust has a strong performance record: three stars, a “double excellent” rating and performing above average in all key indicators. It is one of the few trusts to have achieved the maximum overall score in the auditor’s local evaluation. The hospital trust is well run and well managed, and the financial problems it faces are not of its making. It has managed to achieve high standards over the past five years despite having a low level of funding and extremely high levels of demand—its accident and emergency units have some of the highest levels of use in the whole country—and serving a community with poor health indicators. The trust used to operate from two run-down main buildings, one of which was a workhouse before being turned into a hospital, and from 40 separate sites in total. Imagine the difficulty of providing health care to a community when operating from so many different sites, with the related management problems.
The trust’s current problems stem from it having to become a foundation trust hospital by 2014; that is something the Government are insisting on, not something the trust is attempting. To achieve that aim, the trust must make efficiency savings. Every hospital, as we know, is having to struggle to make the efficiency savings expected by the Government. On top of the efficiency savings to meet the Government’s financial requirements for FT status, the trust must save a further £20 million a year to pay for the PFI estate. That is impossible and will not happen.
The trust commissioned its own report, I think by Coopers & Lybrand, on the feasibility of those savings. Coopers & Lybrand came back and made it absolutely clear that such levels of efficiency savings are not possible. Efficiency savings are already being made, but the requirement to save a further £20 million a year is impossible to meet. At the same time, the trust must run a state-of-the-art hospital on virtually the same budget as when it had three worn-out hospital buildings in St Helens.
The Government need to act, and to do so transparently, but the discussions so far have been held behind closed doors. The local MPs believe that such important discussions taking place in private is totally unacceptable. The community, health professionals, local MPs, councillors and the House need to have the information in the public domain, so that we know exactly what is going on behind closed doors and what options the Government are considering. Despite written questions, letters to the Minister and an oral question last week, that information has still not been put into the public domain. That is not acceptable. We wonder what is happening not only in our trust but in others. Are the same sort of secret discussions taking place throughout the country? If so, why are they taking place behind closed doors, instead of openly and transparently?
In case some people wonder whether a new hospital was required, as I said earlier, the trust was previously working out of 40 buildings, including two old hospitals, one a former workhouse. Clearly, new hospital buildings were needed. Furthermore, the health problems of St Helens, Knowsley and Halton are extremely well known: we have poor health indicators, high levels of deprivation and had poor medical services for many years. Before the new hospitals were built, we had poor health services provided in poor buildings.
One of the health indicators is that St Helens, Knowsley and Halton males are likely to live 10 years less than the national average, and women seven years less. The poor health indicators are partly owed to the poor lifestyles of many of our constituents: smoking, obesity and drinking levels are all higher than the national average. The local partnership is addressing some of the issues successfully, but not all our problems are related to lifestyle; we also have an industrial past to deal with and high levels of poverty. In my constituency of St Helens, the traditional industries of coal, chemicals and glass left a legacy of poor health. My colleagues in Knowsley and Halton would say the same.
Not everyone is in favour of PFI schemes; they have their critics. Frankly, I would welcome a change in the rules, which are controlled by the Treasury, because they are inefficient and ineffective. I want my hon. Friend the Member for Halton (Derek Twigg) and his Front-Bench colleagues to consider whether there is a better way than PFI to provide the capital required for public services. At present, however, no political party—not the Liberal Democrats, nor the Conservatives, nor the Labour Opposition—is proposing to change the Treasury rules. I understand that the Conservatives are looking at a new vehicle, resembling PFI mark 2, which the Government claim would cost the Treasury and the public purse less and provide better value for money, but all Governments say that when introducing new schemes, and few succeed in achieving those aims. I wish them well with delivery, but I suspect that they will have similar problems to those the Labour Government had when introducing our PFI schemes.
The private finance initiative has achieved a great deal. It has created Britain’s biggest hospital building. The previous Labour Government delivered 118 new hospitals—88 PFI schemes and 30 with public capital, amounting to a £10 billion investment in our hospitals. In its last report in 2003-08, the National Audit Office confirmed that PFI schemes provided guaranteed price certainty. Much hospital building before the PFIs—under the old Health Department schemes—came in well over budget, and delivery was delayed. Even before PFI schemes, hospital building programmes often came in at a much higher budget than expected when they were first approved.
The second issue, which was often raised by the then Opposition, is that health investment was simply unaffordable. That is not true. Most of the investment in our health and public services was made at a time when the national debt was lower than in most European countries. On top of that, under the Labour Administration we had long-term economic growth, unlike what we are seeing now under the new coalition Government. However, when the world financial crisis came, it hit countries such as the UK, which had large financial sector industries: the USA, Britain, Ireland and Iceland all had large financial institutions and were hit harder when the financial crisis came. It is worth remembering that in 1997, 50% of our hospitals had been built before 1948. Now, only 20% of hospitals remain to be modernised. It was a substantial achievement by a Labour Government to turn around the hospital-building programme as we did.
I do not accept the point, which I am sure that the Minister will make, that in the past the coalition and its friends called for greater regulation of the banking industry—I am moving a little away from PFI schemes—and one reason given was that it was unaffordable. Banking regulation rules were weak, and I accept that they needed to be changed, but I will take no lessons from the Conservatives, who claimed for many years that we had too much regulation and that we needed to loosen our grip on the financial institutions.
Why was such major investment required? The Government would have us believe that before 1997, Britain was a success story. That is simply not true. It had run up massive public debt not to invest in Britain’s public services and future, but to pay for mass unemployment and economic failure. It had failed to invest in our schools, hospitals, roads and railways. Many of my colleagues have been involved in local government and we remember the state of our public buildings before 1997. I remember schools and hospitals with holes in the roof; I remember the shortage of nurses and doctors; I remember people waiting six or seven years for operations. The investment the Labour Government need to put in to deal with the problems caused by the preceding Tory Government was clear for anyone to see.
Returning to the main point of the debate, I want the Minister to be open and transparent. I want him to set out his own views on the options open to the hospital trust in my constituency. I want him to agree today to publish all the documents on discussions between the Department and the trust, which he has failed to do so far. I have one here, but we have not seen the other documents. There is only one option. The Government should invest in and reflect the cost of running the PFI scheme at St Helens and Whiston hospitals by increasing the budget in proportion to the increased PFI cost.
On 26 April, during Health questions, the Minister stated that the Government are not and will not seek to privatise my trust or any other trust. Will he explain why his Department produced a document containing three options, of which the first is a national solution; the second is a merger with another trust, although no one knows where that would take place, and the Minister and the Department seem unwilling to discuss it; and the third option, which requires a proper explanation, is a joint venture with a private provider? I am not sure what that means, but most people I have spoken to in the health industry in St Helens, and my political colleagues believe that that is an element of privatisation. I would welcome the Minister setting out what the comment in the document about a joint venture with a private provider means. I have here a copy of that document, and the Minister should explain why it was produced and what the implications are, and provide the assurances that we seek today.
The Minister of State, Department of Health (Mr Simon Burns)
I am somewhat confused. At the beginning of his speech, the hon. Gentleman made an important comment: that one problem is that no documents are available for people, including MPs, to see. As he is now quoting one of those documents, surely it must be in the public domain. He has produced it at this debate, and I know that it has been written about in the Liverpool Echo. Is there not a contradiction in what he is saying?
Mr Watts
It seems that the Minister is the only person who has had difficulty getting hold of a copy. Mine is a leaked copy, but it is clear that it is from the Department of Health. When I raised the matter with him, he seemed to have great difficulty in finding it. He should get a grip on his Department, and find out what documents are being produced and why he is unable to obtain a copy when he needs one.
Mr Watts
I understand why the Minister asked for more detail, because another document was also produced. I do not have a copy of that, but I hope that when he returns to his Department he will publish the second document. I understand—the Minister will clarify whether this is the case—that when the document was produced, and the option for private sector involvement partnership was suggested, my local trust refused to endorse that option. I am told that it endorsed it only on the back of the fact that a sentence would be included stating that it was at the direction of the Department of Health—not only was the Department involved in the discussions, but it was driving them. I understand that when the document went back to the Department, it refused to accept the amendment to the original document. That leads me to believe that the Government are trying to influence the trust to go down a path that it does not want to go down, but that they are unwilling to do so publicly.
The only way to clarify the matter is for the Minister to guarantee that he will produce the original document, a copy of which I have, and the second draft, so that we can see what is going on between the Department and the trust. Discussions are being held behind closed doors for obvious political reasons, and my colleagues and I suspect that they are being kept quiet until the outcome of the local elections. Frankly, I think the Minister knows that my constituents and voters who support his party in St Helens, Halton and Knowsley would not support the proposal that is being pushed forward by the Department.
Mr Watts
I do not normally believe in conspiracy theories, but I have seen a document that everyone claims does not exist. I passed that document to the national media, and an article was written for The Sunday Mirror by an excellent journalist, Vincent Moss. Apparently, when he contacted the Department of Health the officials asked whether the document existed and whether he had a copy and he replied that he did. They asked to see the document but he said that they could not. The Department then refused to comment on the matter.
The reason behind the conspiracy theories is clear: the Department is acting in an underhand way. Those discussions should take place not behind closed doors but in an open and transparent way so that the community, local health care providers, MPs and the House can understand what is driving Government policy and where it is going. My view is that the Government intend to try to privatise hospitals. Unless the Minister publishes the documents in question and clarifies some of the points raised, people will be left to come to their own conclusions.
I do not believe this is an isolated case. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) and other hon. Friends with new PFI hospitals in their constituencies will experience similar problems to those faced by the trust in my constituency. Unless the Minister can clarify how the costs of running those estates will be paid for in the future, the uncertainty will remain and many people will believe that he intends to do exactly what he claims not to be doing.
I hope the Minister will provide some reassurance today. I am looking for one particular assurance. The only way to resolve the outstanding problem is if the Minister gets to his feet and says that he will provide the £20 million a year extra funding required to run state-of-the-art hospitals at Whiston and Knowsley, rather than the old workhouses we had before. If the Minister can do that, I will gladly congratulate him. Most of my constituents and the trust itself would welcome such a decision.
Mr George Howarth (Knowsley) (Lab)
May I repeat what my hon. Friend the Member for St Helens North (Mr Watts) said about it being a pleasure to serve under your chairmanship, Mr Meale? I congratulate him on being fortunate enough to secure this debate on a matter that is of great concern to our constituents, and on the manner in which he presented his case.
It is right and proper to begin by repeating something mentioned by my hon. Friend, which is that the hospital staff, whether medical, support or care staff, are highly regarded by the local community. The St Helens and Knowsley primary care trust is highly thought of, and has been prominent in ensuring that we get the health service we deserve. The new hospital facilities at Whiston and St Helens are considered to be at the cutting edge in technology, the use of space and the way that services are conducted, and we appreciate the service that we currently receive. I know from recent personal and family experiences that those who make use of the hospital facilities on both sites have every reason to be grateful that they are available.
The communities served by the two sites have particular, and in some ways difficult, health needs. Some of those health needs are related to former and current occupations, and some to the prevalence of poverty and consequent lifestyle choices. In parts of my constituency, for example, we have abnormally high rates of cancer. That is partly a result of high levels of smoking, but in some cases it is the result of former occupations. My hon. Friend mentioned the mining industry and the legacy left by that in St Helens. Some of the chemical processes that have taken place over the years in and around that area have also taken their toll on people’s health, and we therefore need a very good hospital service. We also need a good primary care trust that can provide a lot of the treatment people need, but hospital services are an important part of that mix.
As my hon. Friend rightly said, the difficulties we seem to have arrived at are due to the deficit carried by the hospital. We could have a long discussion about how that deficit was created, but that would not necessarily be fruitful. The deficit appears to stand in the way of the hospital achieving foundation trust status, and that seems to have been the impetus behind the three options referred to by my hon. Friend and mentioned in the tripartite document of which he has a copy.
I do not for one minute underestimate the seriousness of the deficit. Any responsible Administration or Government should take a deficit of that size seriously, and I understand that is the case. The difficulty arises, however, because the three options under discussion leave people concerned about what might be going on. I will talk about what has and has not been published, because the Minister tried to cast some doubt on that a few moments ago.
Mr Howarth
Had the Minister been listening, he would know that I said that a little later in my speech, I will try to cast some light on what has and has not been published. He cast some doubt on whether there is in fact material that we should have seen but have not, and I will return to that issue in a moment.
My hon. Friend referred to the three options that have been suggested. The document refers to a national solution, and even if it is not spelled out in clear terms, I take that to mean that it is intended—presumably by Department officials—for some means of closing the deficit to be found nationally, in order to get rid of the £20 million deficit that is creating the problem. I am not in a position to say whether that is a likely solution; hopefully, the Minister will be better able to explain that. To me, however, that solution is the most preferable of the three options.
The second option would involve some kind of amalgamation or merger with other existing NHS facilities, although that seems fraught with inevitable difficulties. If an existing facility already carries some sort of deficit, presumably it will not be keen to add to that by amalgamating or merging with another institution that might bring even more of a deficit to the table. Furthermore, I do not see any of the synergy that would need to exist between the St Helens and Knowsley trust and other nearby hospital trusts for such a move to be thought of as a likely solution.
We are therefore left with the third option, which is some kind of merger or joint venture with the private sector. I was interested to see that when my hon. Friend the Member for St Helens North referred to that option, the Minister, from a sedentary position, seemed to indicate that it was not an option. [Interruption.] Well, I am glad that he clarified that. When my hon. Friend mentioned that option—I think that he used the word “privatisation”—the Minister said no.
Mr Howarth
But presumably the Minister is not ruling out now the possibility that something could happen that would involve the private sector in the long-term future of these hospital sites. No doubt he will enlighten us on that when he replies to the debate.
Mr Howarth
I have to warn the Minister that I am not someone who believes that everything should be owned by the state. There are occasions when I can understand that some co-operation with the private sector is required. In fact, the PFI in itself is in many ways an exemplar of that. On occasion, such an approach is appropriate, but any wholesale transfer of these hospital facilities would meet strong opposition from the public in St Helens, Knowsley and Halton, and it would certainly include my hon. Friends and me, because we do not see that as a viable way forward for these hospital sites. The body language coming from the Minister is encouraging. I just hope that the words that follow are equally encouraging.
Before I conclude, I want to clear up one point, which is what we know and do not know and what we hope the Minister can enlighten us on. I am sure that he is aware that my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) wrote to the Secretary of State about this matter several weeks ago, seeking clarification; my hon. Friend the Member for St Helens North tabled written parliamentary questions about the subject; and I wrote under the terms of the Freedom of Information Act to the regional health body, the Department and the hospital trust, asking not only for the tripartite document that my hon. Friend has a copy of, but for any advice and other, associated documentation that would throw any light on it. It is because we do not have all the information that there is a great deal of suspicion on the part of local people.
The Minister is a reasonable man whom I know will want to be as open and frank as possible in the debate. I hope he will be able to dispel those fears and leave people with the belief that no conspiracy is going on, that the Government are not trying to manoeuvre our hospitals into some kind of private sector solution and that a solution will be found that is within the NHS and is acceptable to all concerned. If he can do that, the debate that my hon. Friend the Member for St Helens North has promoted today will have been a worthwhile exercise.
Derek Twigg (Halton) (Lab)
It is a pleasure to speak under your chairmanship, Mr Meale. I congratulate my hon. Friend the Member for St Helens North (Mr Watts) on securing this very important debate and my right hon. Friend the Member for Knowsley (Mr Howarth) on the contribution that he made. As you will have picked up, we are constituency next-door neighbours, but there are wider issues that we need to discuss and that I intend to raise with the Minister.
Derek Twigg
I will say more about the St Helens and Knowsley Teaching Hospitals NHS Trust a little later, but I have a lifelong relationship with the Whiston hospital, which is used by many thousands of my constituents. As I said, my right hon. Friend the Member for Knowsley, my hon. Friend the Member for St Helens North and I work very closely on issues relating to it, as neighbouring MPs.
I congratulate the hospital on delivering the PFI six months ahead of time and to an excellent standard. The chief executive, the board and the staff have done an outstanding job. The many medical staff, support staff and ancillary staff do an amazing job, and the hospital has the highest reputation, but I will talk specifically about the hospital in more detail later.
It is important to understand the use of PFIs, what was required and what was achieved. In 1997, after 18 years of Conservative disinvestment in the NHS, the service was in crisis: 1 million people were on waiting lists, hospitals were in disrepair, staff felt undervalued and buildings had been neglected. As my hon. Friends will confirm, people regularly complained to us in 1997 and thereafter—my right hon. Friend will say that they were complaining before then—about waiting more than two years to have an operation or even to be seen by a specialist in some instances. It is important to make that point.
The Labour Government made a firm commitment to improve, support and protect the NHS. In government, we did what was necessary to turn it from an organisation that was struggling for survival into the world-class and world-leading service it is today. It is important to make that point about the improvements made under the previous Labour Government, which included achieving the lowest waiting times, the highest public satisfaction, a two-week turnaround to see a specialist, a massive decrease in the number of those dying early from heart disease and cancer, and improved facilities. In the context of PFI, investment in the NHS is important.
As my hon. Friend said, 114 new hospitals were built over Labour’s 13 years in government to replace the existing ageing and neglected infrastructure. In 1997, half the NHS estate dated from before 1948; in 2010, that figure was down to about 20%. That rapid modernisation was unprecedented, but vital to the regeneration of the NHS, and PFIs played an important part in making that possible. They made possible the move from the previous workhouse-style provision of health care to a modern, technically advanced health care system for the 21st century. [Interruption.] The Minister tuts, but an old workhouse building was still being used on the Whiston site at the time. In fact, back in the 19th century, one of my distant relatives died in that building when it was still a workhouse, so it was a workhouse and it was used for health care. Now, we have a modern hospital to replace it. It is important to make that contrast, as my hon. Friend did.
Graham Stringer (Blackley and Broughton) (Lab)
Even with the massive investment and improvement under the previous Labour Government, my local hospital is still 60% a Victorian workhouse, and we need more. [Laughter.] The Minister laughs, but I mean that we need more investment, not more workhouses. Does the shadow Minister agree that although PFI was incredibly valuable in bringing that expansion about, it had two fundamental flaws? In a pragmatic way, it relied on the private sector being more efficient than the public sector to recover the higher borrowing costs, but that has not happened in many cases, because of the strict configuration of the contracts. Secondly, when the private sector is involved—I am not totally against that—we have the secrecy that my hon. Friend the Member for St Helens North (Mr Watts) mentioned. There are commercial interests, which is bad when public money is being used for the public good, because we cannot find out what is going on.
Derek Twigg
I totally understand my hon. Friend’s concerns. As regards his local hospital, he will realise that I never said that every hospital was modernised and improved. The issue now is how they will be modernised and improved under this Government, and I will return to that because we need to know from the Minister today what the Secretary of State’s and the Prime Minister’s plans are for modernising our NHS estate. The massive improvement under the previous Labour Government was unprecedented, but my hon. Friend is right that there were concerns. Not everybody supported PFIs, and there were issues, which I will come to later. My hon. Friend raises an important point.
It should be remembered that PFIs were also used under the previous Conservative Government. As noted in the Public Accounts Committee report entitled “PFI in Housing and Hospitals”, which was published on 18 January,
“PFI has delivered many new hospitals and homes which might otherwise not have been delivered”.
It is also important to note that the report’s summary says that hospitals are mostly
“receiving the services expected at the point contracts were signed and are generally being well managed.”
Again, I accept there were some problems, but the Public Accounts Committee recognised that they were generally well managed. Labour not only invested in the NHS, we invested in protecting its future. The contracted maintenance of buildings under the PFI agreements will ensure that the standard of NHS buildings will be as high in 30 years as it is today. The present generation is only the custodian of the NHS. Future generations are its owners, and PFI agreements will ensure that they are served by the same exceptional standard of facilities as today. That is an important point.
The system is not perfect, but at least it guarantees the maintenance of the buildings over a 30 to 35 year contract period. We all know that, with financial pressures, funding was cut for maintenance. Rather than being a one-off, that became a regular occurrence. That is why we found hospitals in the state they were in 1997—for which we, too, had some responsibility, as we had been in government for various periods before then. The fact was that there was massive under-investment, which was exacerbated by the Thatcher Government.
Under Labour, PFIs gave private sector partners responsibility for the completion of large infrastructure projects. A crucial point—of importance to my hon. Friend the Member for Blackley and Broughton (Graham Stringer)—is that accountability for services and the satisfactory completion of such projects remained in the public sector. That meant that the Government were still accountable to the people and Parliament for improving services to patients.
The PFI arrangement is a tool; it is a method that can be used badly or well. It would be disingenuous, as I said to my hon. Friend, to suggest that we were all in favour of PFIs when we were in government. It is important to be frank and honest and acknowledge that. There are strong views opposed to PFIs—it would be wrong to suggest otherwise with regard to some schemes. What we can be sure of is that, under Labour, the PFIs formed part of a carefully managed NHS in which the private sector could play a limited role. Sadly, under the Government’s current reforms, that will no longer be the case. The Government continue to rush through their NHS reorganisation; despite the so-called pause, work is still going on, without sufficient evidence or consultation on its true effect. Pressure has been relentlessly piled on to the NHS and foundation trusts, with insufficient consideration for the future. Through these costly, unwise and unwarranted reforms, spending cuts and efficiency savings, the Government are showing once again that they cannot be trusted on the NHS.
My hon. Friend the Member for St Helens North and my right hon. Friend the Member for Knowsley highlighted the issues surrounding the St Helens and Knowsley Teaching Hospitals NHS Trust, with which they have had a long association. However, it is important to repeat some of the things they said. This trust has a strong track record of high performance, achieving three stars and consecutive double excellent ratings from the Care Quality Commission. That high standard of care has been maintained: in 2010, it was the only acute trust in the country to perform above the national average in every indicator of quality of services and care in the CQC assessment. Therefore, I believe it could be described as the nation’s top-performing hospital. In addition, the trust achieved the maximum overall score in the auditors’ local evaluation for the use of its resources, for the fourth year running, acknowledging the trust’s excellent financial management.
Therefore, the trust performs to an excellent standard, not only in services and hygiene, but in financial management. The benefits of the PFI scheme for the hospital have been tremendous—more than 80% of the accommodation is new build on two sites, to which my right hon. and hon. Friends have referred; there has been capital investment of £350 million, with a 35-year concessionary period; radiology imaging equipment through a managed equipment services has been provided by GE Medical Systems; and hard and soft facilities management services, including catering, domestic estates, grounds, gardens and so on, have been provided. An important point for the Minister is that there is also 50% single room provision, with en suite facilities, as per Department of Health guidance. That is important in meeting both what we wanted and what the Government have said in respect of single-sex wards.
In 2009, the Secretary of State for Health, who was then the shadow Secretary of State, said this in an interview on Mumsnet about the pledge regarding single-sex rooms:
“This pledge will be delivered as part of our plans to provide 45,000 more single rooms in the NHS.”
Funnily enough, that pledge was dropped, and we have heard no more about it. I am interested to know, in the context of any PFI plans or hospital building programmes that the Minister has to comment on, whether there are plans to increase the number of single rooms, which is an important part of improvements in the NHS. I look forward to hearing any details that the Minister might give us.
My hon. Friend the Member for St Helens North, backed up by my right hon. Friend the Member for Knowsley, made some important points about secret documents. One has now been put into the public domain, though not officially, but we have not been able to see the other one. The Minister must answer who suggested as an option that a private sector provider could be brought in to manage this specific trust, and perhaps other trusts. Who suggested that that was the case? I understand that the trust board rejected that option and would only deal with it if directed to do so by the NHS, whether that involved the strategic health authority or the Department. I understand that that was the case. Will the Minister clarify that important point? I understand that one reason why the trust board would not accept the option of voluntarily considering a private sector provider coming to run it was a concern for patient safety. The cuts it was being asked to make to get to foundation trust status were too great and, in its opinion, were threatening patient safety. Will the Minister tell us whether that was the case?
What part of the NHS would suggest that option for a hospital that has achieved a double excellent rating, that has excellent financial management, that has been well run for years, that has a brilliant chief executive and management board, that has a committed staff and that has the support of the community? What person in their right mind would suggest a private sector provider? How could a private sector provider run it better than a double excellent rating?
Mr Simon Burns
I want to deal with this in detail when I come to my contribution. The hon. Gentleman said, “What man in his right mind would consider the private sector being used in the NHS for the management of an NHS hospital?”
Mr Burns
I am talking about the generality. I can answer the generality and will come to the specifics in my speech. The gentleman concerned, who accepted the principle in a generality, was the right hon. Member for Leigh (Andy Burnham), who was Secretary of State for Health before the election.
Derek Twigg
I am not sure that that is worthy of a reply. I am being specific. The Minister may remember—and the hon. Member for Broxtowe (Anna Soubry) sitting behind him will—that when the Health and Social Care Public Bill Committee discussed foundation trusts and insolvency, I made the point that it does not always follow that a hospital that gets into financial difficulties is badly run. That is the issue that the proposals in the Bill do not take into account. What was the logic behind the proposal for this specific hospital to have a private provider brought in to help manage it? That is a different point from the one that the Minister took.
I also want to make the point that the Government are placing NHS trusts under intense pressure through the policy of forcing foundation status within three years, coupled with the costs of reorganisation and the efficiency savings that trusts have been asked to find. That is leaving many NHS trusts in peril as they struggle to meet foundation trust status, or become foundation trusts with financial difficulties from day one. The Minister knows a number of hospitals are in financial difficulty. I do not know whether he has yet decided to put that list in the public domain.
The dangers are clear. St George’s hospital in Tooting, London, recently decided that it was too risky to push ahead with the Government’s preferred timetable for NHS trusts to become foundation trusts. Speaking after announcing a two-year delay to the plan to become a foundation trust, the board of the hospital said:
“The board recognises that if we put the organisation under pressure to become an FT during 2011-12 then this could impact on the quality and safety of the patient care that we provide.”
I wonder whether parallels can be drawn with the St Helens and Knowsley trust, as the board is not prepared to take the risk. Put simply, existing pressures on NHS trusts are too great to risk a massive reorganisation. Hospitals realise that, and so should the Government. It is important to understand that the pressures are great, and what is being asked behind the scenes at particular foundation trusts is important.
Now more than ever, the dangers of an FT or NHS trust experiencing financial difficulties are growing. Under the Tory-led Government’s plans for the NHS, a struggling FT will be faced with two options. One is insolvency in line with commercial insolvency procedures, and the other is the sort of takeover dictated by clause 113 of the Health and Social Care Bill, which the Committee discussed in some detail, or a takeover on unknown terms. The Minister refused to be drawn on giving an example of what hospitals might be in difficulty and what sort of takeover might be considered. I do not know whether he has changed his mind since then, because an example would help us with the detail of our deliberations.
Although the debate on PFIs and their appropriate use will continue, it is important to be clear on one issue. During our time in government, we supported the NHS. We undertook no step that would have endangered its position as a world class public health care system. In comparison, this Government’s policy on health care has been in turmoil from the very beginning. It is hated by the public and despised by the professionals, and we believe that that is dangerous for the NHS.
We need to know what plans the Government, the Secretary of State and the Prime Minister have for capital investment in the NHS. What will hospitals and NHS facilities have to do if they require large capital investment? Is it the case, as reported in the Financial Times last year, that the Secretary of State has ruled that they should no longer have access to public sector cash for big capital projects? Is that the Government’s current policy? Alternatively, will the Minister confirm that future investment in NHS capital projects will be determined solely by the market, as part of the Government’s plans to place the market at the centre of the NHS?
The Minister will expect me to remind him that he was forthright—it is not what the Secretary of State would have wished—in identifying the extent to which EU competition law will increasingly apply to the NHS. Just as importantly, we need to understand where the Government are going on PFI. Much has been said about what they are considering, but when will they publish their plans?
I remind the Minister that he is now in government. Whatever matters he raises this afternoon, he must realise that he needs to supply the answers to these difficult questions. There is great uncertainty within the NHS, which is not helped by the lack of policy detail on which course the Government intend to pursue. It is a crucial question for NHS services, and the answers need to be heard.
The Government should make no mistake about it that their massive reorganisation proposals are putting the future of the NHS as we know it in peril. They are causing massive uncertainty and distracting the professionals, and, as the Health and Social Care Bill impact assessment shows, it could have an impact on the safety and care of patients. The fact remains that opposition to the Health and Social Care Bill, which has been led by the Labour party, and the increasing rejection of the Government’s plans by medical professionals, health experts and patients groups alike have forced the Government to take this humiliating pause. If it is to be more than a simple political ruse to get through the local elections tomorrow, real and significant changes will need to be made to the Bill, including the crucial deletion of part 3, which has severe implications on the issues that we have been discussing today.
Labour left the NHS with record levels of public satisfaction, record low waiting lists and world class hospitals such as those at St Helens and Whiston. It is becoming increasingly clear that the NHS is moving backwards because of this Government’s cuts and broken promises. I have no doubt that that will inform the choice that people will make tomorrow at the ballot box.
Mr Alan Meale (in the Chair)
I call the Minister to reply. As an ex-Whip, you will be aware that you have extra time—11 minutes will be added to our debate because of the Division.
The Minister of State, Department of Health (Mr Simon Burns)
Thank you for that, Mr Meale. It is a pleasure to serve under your chairmanship.
I congratulate the hon. Member for St Helens North (Mr Watts) on securing this important debate. I take the opportunity to pay tribute to the many who work so hard to deliver high-quality NHS services and health care for the benefit of his constituents and the constituents of the right hon. Member for Knowsley (Mr Howarth) and the hon. Member for Blackley and Broughton (Graham Stringer). I pay particular tribute to the St Helens and Knowsley Teaching Hospitals NHS Trust’s approximately 4,500 staff and its many trainee specialty doctors, who bring a consistently high level of care to patients throughout Merseyside and Cheshire.
The trust has a track record of first-rate clinical performance. As we heard, it achieved three stars and consecutive double excellent ratings from the Care Quality Commission, a feat that was maintained in 2010. It also achieved the highest score nationally for cleanliness in the recent national in-patient survey. The people of St Helens and Knowlsey can be very proud of what has been achieved. The hospital’s staff do a tremendous job, and the Government will support and empower them and all front-line staff in continuing to improve services free from the interference of meddling politicians in Westminster—and free at the point of use for all who are entitled to use the national health service.
The fact has been underlined that in 2010-11 we increased PCT allocations for the area to just under £600 million, a cash increase of £17.2 million or 3%. I know that the House will share with me the pleasure of knowing that, in the last two years for which figures are available, there was an increase in the number of nurses, consultants and doctors who serve the local community.
The hon. Member for St Helens North raised the important issue of PFI contracts. I shall deal with this topic in two parts. First, I shall outline the coalition Government’s approach to the private finance initiative generally. Secondly, I shall examine the situation at St Helens and Knowlsey.
The Government confirmed at the end of last year that we remain committed to public-private partnerships, including those delivered via PFI, if they can be clearly shown to represent good value for money. Such arrangements will continue to play an important role in delivering NHS infrastructure. However, we believe not only that too many PFI schemes have been undertaken but that some were too ambitious in their scope, a point made in an intervention by the hon. Member for Blackley and Broughton.
Mr Watts
Will the Minister say which PFI schemes should not have gone ahead? Frankly, we had a legacy of neglect under the previous Conservative Government, and most people believe that we should increase the hospital building programme, not decrease it. Will the Minister itemise those schemes?
Mr Burns
I do not share the hon. Gentleman’s blinkered view of what went on in the health service prior to May 1997. I am probably of a more generous spirit, in that I am prepared to pay tribute to the achievements of the last Labour Government, although it would be more difficult to discover those of the Wilson-Callaghan Government and before that the Wilson Government because of the chronic economic situation.
Unfortunately, the hon. Gentleman is not as generous of spirit; he seems to think that everything changed in May 1979 and did not improve again until May 1997, despite the fact that for every year between those dates we saw a real-terms increase in health spending. Indeed, health spending went up from just under £9 billion a year in 1979 to more than £39 billion in 1996-97, which at the time was an incredibly large sum, although due to inflation and other factors, it now seems far more modest. However, I am prepared to be more open-spirited and to acknowledge achievement when justified, but also to criticise when justified.
Derek Twigg
No one suggested that everything was renewed and changed under the previous Labour Government, but there was record investment and an unprecedented hospital building programme. How many hospitals did the Thatcher and Major Governments build?
Mr Burns
This is the point. Perhaps the hon. Gentleman is taking a punt on something with which he is not very familiar, but if he had been in the House in the mid-1990s, he would know beyond doubt that there were record levels of investment in the NHS. Even he said, looking at the report in front of him, that the Major Government used PFI, and there was considerable investment in infrastructure. He would probably argue—with some justification because one can always argue this—that there should have been more investment, but there was more. I shall give one example, but—
Mr Burns
I will. There are so many examples of old and dilapidated buildings or buildings that were past their sell-by dates that the Thatcher and the Major Governments knocked down and replaced through new investment. One example was the moving of the European-renowned burns and plastic surgery facility on a Billericay site in Essex, which wanted to expand to maintain its position at the forefront of providing highly specialist services and was moved to Broomfield. I remember a particularly happy day in February 1997 when, as a junior Health Minister, I accompanied the then Prime Minister to open it.
May I now get back to the point I was making to the hon. Member for St Helens North? However reasonable the hon. Member for Halton is trying to be, his hon. Friend was not quite so generous, suggesting that everything was appalling prior to 1997 and everything was magnificent after it. The hon. Member for Blackley and Broughton rather unfortunately brought the speech of the hon. Member for Halton to a bit of a halt by highlighting some of the perceived criticisms of the PFI system under the Blair and Brown Governments, but the hon. Member for Halton very neatly sidestepped the issue. He did not want his story of good news on investment in hospital buildings to be punctured, and neatly avoided it.
Mr Watts
The Minister must understand that St Helens was served by three Victorian workhouses. After the Labour Government were elected in 1997, three brand-new, state-of-the-art hospitals were built and we had a walk-in centre, new GP services and more doctors and nurses. He should understand that my experience is that after 1997 there was massive investment, and before 1997 there was very little.
Mr Burns
To pick up the point made by the hon. Member for Blackley and Broughton, until October last year, I, too, for the 13 years of the previous Labour Government had a hospital in my constituency that was an old, Victorian workhouse, with ancillary wards that were improved Nissen huts. We could go round the country and find many buildings that needed improvement.
I am sure that Labour Members will accept that even the NHS is restricted in that it cannot have unlimited funding, there will be priorities for improvements and reinvestment, and not everything will be done all the time. The process is ongoing. To answer another point before I focus on St Helens, the hon. Member for Halton asked about what is happening to the capital spending settlement and programme. As I am sure he is aware, as an outcome of the spending review, the Government have a capital spending settlement up to 2014-15, and capital will continue to be used to provide investment for NHS development, as well as PFI.
Mr Burns
The hon. Gentleman wants me to list some more new hospitals. There is the Chelsea and Westminster hospital on Fulham road, which was a flagship hospital for the centre of London initiated by Baroness Bottomley, I believe. I could continue round the country, but I will not because my time is limited. I think that the hon. Member for St Helens North would prefer it if I spent more time discussing his local PFI project, because there is a lot to be said to clear his mind and reassure him, if only he has the open ears to listen; an open mind would help as well.
As the Government confirmed at the end of last year, where they can be clearly shown to represent good value for money, we remain committed to public-private partnerships, including those delivered via PFI. Such arrangements will continue to play an important role in delivering future NHS infrastructure. However, the Government also believe that not only have too many PFI schemes been undertaken, but some were too ambitious in their scope. The Treasury has now reviewed the value for money guidance for new schemes and looked at how operational schemes can be run more efficiently. We are clear that the focus should now be on releasing efficiencies at the many existing PFI schemes.
In January, the Treasury published new draft guidance, “Making Savings in Operational PFI Contracts”, which will help Departments and local authorities to identify opportunities to reduce the cost of operational PFI contracts. As part of that initiative, my noble Friend Lord Sassoon, the commercial secretary, launched four pilot projects to test the ideas raised in the Treasury’s draft guidance. The focus of the pilots is to find efficiency gains and savings within the PFI contract itself, allowing the quality of care for patients to remain the priority. The pilots should end by the end of this month. The lessons learned will be used to finalise the Treasury guidance and to improve other relevant PFI contracts, including the one at Whiston hospital. One essential element is that all NHS trusts will retain any savings made to reinvest in improving patient care.
The other important aspect of operational PFI schemes and their cost to local health economies is their effect on NHS trusts seeking NHS foundation trust status. The coalition Government have set a clear commitment for all remaining NHS trusts to achieve foundation trust status by April 2014. That policy will finally realise the ambition of the previous Labour Government. It is about ensuring high quality and sustainable NHS services by giving trusts the freedom to serve their patients to the very best of their ability, unhindered by top-down bureaucratic control.
An issue facing some NHS trusts in their move towards attaining FT status is the affordability of their PFI schemes, as hon. Members are aware from examples in their constituencies. We are tendering for an independent review to establish where PFI schemes may, in some organisations, be the root cause of problems that prevent them from becoming foundation trusts. St Helen’s and Knowsley NHS Trust is one such organisation, and will be considered as part of the scheme. In addition to the independent assessment, the Department and the NHS are developing solutions in a systematic and comprehensive way to manage the PFI schemes in the very small number of trusts where a local or regional solution cannot be found.
When the current management of St Helens and Knowsley NHS Trust signed their PFI agreement in 2006, with the agreement of the then Secretary of State for Health, Patricia Hewitt, and other Ministers, local PCTs agreed to make up the shortfall between the revenue generated by the hospital through the national tariff and other means and the cost of the unitary payment—the annual PFI charge, which was some £20.3 million. Unfortunately, that decision built a deep lack of sustainability into the trust’s finances—a lack of sustainability that the trust, the strategic health authority and the Department are now working extremely hard to rectify. To that end, the trust’s board and the strategic health authority, NHS North West, are developing a tripartite formal agreement, or TFA, to be agreed with the Department of Health, which will support the work to achieve foundation trust status.
Every trust is required to produce a TFA, setting out how it plans to progress to FT status by 2014, the challenges that it faces and how it plans to overcome them. In the case of the St Helens and Knowsley trust, the TFA is still in draft form and is very much a work in progress. Beyond what was leaked to the Liverpool Echo and to the hon. Member for St Helens North, I have not seen the draft and while discussions are ongoing it would be inappropriate for me to do so and I will not see it. Therefore, it would also be inappropriate at this stage to publish the documents.
Mr Watts
Minister, the local community and the local MPs will believe that that is a totally unacceptable stance to take. It is clear that there are grave doubts about the future financial viability of the trust—the St Helens and Knowsley Teaching Hospitals NHS Trust, including the Whiston hospital—and that a number of options are being considered in the current discussions about the trust. For the Minister to hide behind the fact that he does not want to see that report removes the accountability that we would expect him to have. Will he reconsider that decision and will he look at that document? Also, will he rule out some of the options, including the private provider option? If he does not do those things, people will continue to suspect that his Department is being driven by the fact that it wants to privatise our hospitals, but he and other people in the Department do not want to see the documents that are being discussed now. I can see no reason why he should not see that draft document and why we should not see it.
Mr Burns
First, of course, the hon. Gentleman has seen the first draft document—it was leaked to him and I think that he held it up during his remarks this afternoon—so it is slightly stretching the point to say that local MPs have not seen it. I have no doubt that he has shown it to his hon. Friend the shadow Minister for Health, the hon. Member for Halton, and I would be rather surprised if the right hon. Member for Knowsley has not seen it too.
Mr Burns
Because it was a first draft document, drawn up between officials in the Department of Health, the SHA and the trust, and I do not think that at that stage it was appropriate for me to see it. Also, I suppose that if one is being totally candid, which often gets me into trouble when the hon. Member for Halton or particularly the hon. Member for Leicester West (Liz Kendall) are around, it does make it slightly easier for me because I can say, “In all honesty, I have not seen it.”
I will now make some progress, because I think that what I am about to say may answer some of the questions put by the hon. Member for St Helens North and it may well help the right hon. Member for Knowsley, too. If it does not and I have time to do so, I will give way then.
The TFA process should be completed soon, with the final approved version hopefully being published some time in June or July. I can confirm—if the hon. Member for St Helens North would like to listen to me, because I think that he will find what I am about to say particularly interesting, as he has expressed a degree of confusion about the issue—is that one of the options under review is not, I repeat not, to somehow “privatise” the NHS. As I said to the hon. Gentleman during Health questions last week, this Government will never privatise the NHS and we have no intention of doing so at the St Helens and Knowsley trust.
Perhaps it would be a help if I took a moment to explain the process through which the trust, like all trusts in a similar position, is progressing towards becoming an FT. First, the trust, along with local health authorities, will attempt to find a local solution to whatever financial issues there may be. If a simple local solution cannot be found from within its own resources, then a more radical solution may be necessary, such as merging with another trust and examining whether services need to be reconfigured. On that point, it may be of some consolation to Opposition Members that the benefits of a merger with another trust are that it reduces the percentage of the unitary payment of the PFI in relation to income, which helps with the financial situation, and for other FTs in a merger it increases the income base and economies of scale become possible, which again potentially helps with the finances of a trust.
If the problems cannot be resolved in that way, we would work to a national solution, which is being developed by the Department and which will be agreed with the Treasury. If there is no foreseeable solution, a final option would be to consider tendering the management of the trust. Under that option, management teams from within the NHS, from a social enterprise or from the private sector would put forward their ideas on how to find a way forward for the trust.
Mr Burns
May I just continue, because this is rather important?
While that option is a very long way down the line of potential solutions, it is only what is currently being done at Hinchingbrooke hospital in Huntingdon, in the constituency of the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly). The decision on that hospital was taken by the previous Labour Government, when the right hon. Member for Leigh (Andy Burnham) was the Secretary of State for Health. So it is not a new option dreamt up by the present Government since coming into office. We are simply taking an option that is already on the table and that was there when we came into power, which the previous Secretary of State for Health—a Labour Secretary of State for Health—was prepared to accept.
Mr Burns
Just one minute. I must say that at the time, during the discussions about what should happen to Hinchingbrooke hospital and about the use of the option that the right hon. Member for Leigh agreed to, nobody said that that was privatising the hospital, because it was not. If—and it is a big if—that solution were to be considered the right way to solve the problems at the St Helens and Knowsley trust, that would not be privatisation either.
Derek Twigg
With respect to the right hon. Gentleman, we are not comparing like with like.
Derek Twigg
We have a double-excellent hospital at St Helens and Knowsley; it has excellent financial management and excellent services. It meets all the standards. I put the question back to the Minister. On that basis, why is the Department—whether we call it the SHA or not, it is part of the Department and it has responsibility to the Secretary of State—
Derek Twigg
Well, I understand the SHA discussed this as an option with the hospital. I want the Minister to ask my question. Did the hospital voluntarily reject the third option of a private sector provider coming in to manage or run the hospital? Did it refuse that option and also say that it would not accept the cuts being asked of it by the SHA as that would put patient safety at risk? Is that correct or not? If he does not know, will he find out?
Mr Burns
That the trust rejected consideration, or the possible consideration, of that option, because—[Interruption.] What I want to do is to put it in context. As I said in my comments earlier, that is very much a last possible solution if the other solutions are not able to be worked out.
Derek Twigg
I understand that the SHA, not the hospital trust, suggested as a third option having the private provider, on the basis that the hospital—I understand that it was approved by the board—would not accept what was on offer because of the cuts that it would have to make and it was concerned about patient safety. It therefore would not accept voluntarily an option to have a private sector provider come in. The question is whether that option was proposed by the SHA and whether the trust, because of concerns about patient safety, rejected it on that basis, on a voluntary basis. I make that point very clearly.
Mr Burns
If—I will pursue the matter after the debate—there is anything in that that is incorrect, I will come back to the hon. Gentleman as quickly as possible, but my firm understanding and the advice that I have been given is that the answer is no.
May I reassert what I said earlier about the processes of the options, because it seems to be getting lost in the telling? I have said that it is important to find a local solution to whatever financial issues there may be. That is what the trust and the local health authorities are working to try to secure. If a simple local solution cannot be found from within the trust’s own resources, a more radical solution may be necessary, such as merging with another trust and considering whether services need to be reconfigured.
I think that it was the hon. Member for Halton but it may have been the hon. Member for St Helens North who said, “But nobody has ever said what other trust there might be.” I may be able to help the hon. Gentleman who asked that question. One of the options is the North Cheshire trust.
Mr Watts
I am extremely grateful to the Minister for giving way, because this goes to the heart of the matter. The lack of accountability comes from the fact that he has not seen the documents and therefore does not know what is in them. If he published the reports, he would see that there is a first draft and a second draft, and that the idea of the privatisation of the management comes from his Department. I do not want to see the Minister embarrassed. The best way for him to resolve the problem is to publish the two documents, and everyone will then be able to see that the third option was not wanted by the trust but is being driven by the Minister’s Department.
Mr Burns
May I return to the intervention made by the hon. Member for Halton? I said that as soon as I heard anything I would get back to him. He asked whether it was the trust that said it would not accept the option, and about the patient safety and quality of care recommendation. My answer should have been “I do not know,” not “No.” The advice I have been given is that I do not know, and we do not know.
As time is running out, may I reiterate the process? I do not want any confusion. I have said that if a simple solution cannot be found from within the trust’s own resources, more will be done to find a radical solution, perhaps involving a merger with another trust and examining whether services should be reconfigured. Although that option is a very long way down the line of potential solutions, it is similar to the one at Hinchingbrooke hospital that was embraced by the previous Labour Government and accepted, in principle, by the former Labour Secretary of State for Health, the right hon. Member for Leigh, as the way forward in a particular hospital with a particular problem. However, even if that were, in any circumstance, to become an outcome for a hospital, to suggest that it somehow equates to hospital privatisation is nonsense, for a number of reasons.
First, the hospital will remain a wholly owned NHS hospital, with NHS assets and NHS staff remaining entirely within the public sector. Secondly, I remind the hon. Gentlemen that the hospital has achieved its record of sustained excellence in part due to the significant involvement of private sector companies, a policy that was actively encouraged under the previous Labour Government. All the Labour Members present for this debate were proud members of that Government at some point during the Administration’s 13 years. Examples of that policy in operation in the hospital are that radiology imaging equipment has been supplied through a managed equipment service provided by GE Medical Systems since 2006, when Patricia Hewitt was Labour Secretary of State for Health. Facilities management services, which the hon. Member for Halton rightly praised and which have been vital to delivering high levels of cleanliness throughout the trust, have been provided by two companies—Vinci FM and Medirest—also since 2006. The use of the private sector does not mean privatisation, nor does it lead to a poorer quality of patient service, and I hope that hon. Members will acknowledge that the hospital trust’s excellent clinical reputation is evidence of that.
This Government want all NHS trusts to become foundation trusts because they will provide better patient care. Foundation trusts will be free to respond to the needs and wishes of local people and will be far stronger, both clinically and financially. To become a foundation trust hospital, an NHS trust must prove that it has passed strict tests on clinical care—the care that patients deserve. It also must prove that it is financially sustainable in its own right, which is what all taxpayers deserve.
Hospitals that are built on sand will sink, and this Government will not stand idly by and allow that to happen—the people of St Helens North deserve no less. I am sure that in due course, when the proper procedures have been adopted and the strategic health authority, the primary care trust, the hospital trust and the Department of Health have reached conclusions, documents will be published and decisions will flow.
This is not a conspiracy; it is a sensible and coherent way to move forward and discover a viable, practical and proper decision to help what is, in many ways—as all speeches in the debate have shown—a very good hospital that has a problem because of its PFI scheme. I gently remind Members that the PFI was approved by the trust and the Department of Health under the Labour Government, not the coalition Government. That is what has caused the problem, and it is why a viable solution is important. I wish everyone well in seeking a solution that is relevant and meaningful to the future success of the trust.
For a variety of reasons, it is always nice to have a conspiracy theory tucked in one’s back pocket to cause concern, but this is not a conspiracy. Just as I said earlier, Americans did land on the moon in 1969, John F. Kennedy was sadly shot in 1963 and, contrary to some people’s views, Barack Obama was not born in a manger.