Royal National Orthopaedic Hospital: Redevelopment
(8 years, 8 months ago)
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Baroness Dean of Thornton-le-Fylde
To ask Her Majesty’s Government what plans they have for the redevelopment of the Royal National Orthopaedic Hospital, Stanmore; and in particular what the timings will be for that redevelopment.
Baroness Dean of Thornton-le-Fylde (Lab)
My Lords:
“I am very grateful to have an opportunity of raising the question of the future of the Royal National Orthopaedic Hospital in Stanmore. I also appreciate the courtesy of the Minister in coming to the House to reply. I hope that he will respond positively to my remarks on the future of the hospital”.—[Official Report, Commons, 25/5/1984; col. 1413.]
I agree with those words, which are very relevant to today’s Question for Short Debate. However, they are not my words: I was quoting from the introductory remarks of Hugh Dykes—now the noble Lord, Lord Dykes, in this House—who was then the MP for Harrow East when he opened his debate on 25 May 1984, over 30 years ago. In his response, the Minister, the then Parliamentary Under-Secretary for Health, John Patten MP—again, now a Member of your Lordships’ House—referred to the noble Baroness, Lady Trumpington, then a Minister, answering a Question in the House of Lords on the same topic from Lord Diamond. I could have quoted from a debate in Westminster Hall sponsored by the current honourable Member for Harrow East, Bob Blackman, on 4 March last year, at col. 347.
So the issue of the redevelopment of the Royal National Orthopaedic Hospital has been debated for 30 years. In that time there have been 13 independent reviews, all of which have concluded that the hospital should remain as an individual organisation, continuing to provide on the Stanmore site the excellent care that it has done for over 100 years of its existence.
The hospital has a national and international reputation for excellence and is the UK’s leading provider of specialist orthopaedic treatment and surgery. It is the nation’s largest provider of complex spinal surgery and it trains 25% of the nation’s orthopaedic surgeons. It is rated in the top 20% of hospitals in the national in-patient survey. Its 1,400 staff—70% of whom provide clinical services—look after some 15,000 in-patients and over 100,000 out-patient attendances every year. The care provided by the hospital is highly rated by the Care Quality Commission, which gave it outstanding for medical care, outstanding for clinical outcomes for patients, outstanding for innovative surgery to improve the quality of patients’ lives, and outstanding for the executive board, which it declared as,
“demonstrating leadership and vision for the hospital”.
It judged children and young people services as needing improvement, a factor being that the location of the wards for these patients meant that they had to be taken outside the buildings in order to access and return from theatre—one of the many reasons why a decision to proceed on the redevelopment is now, after over 30 years, not only pressing but urgent. A decision must be taken and acted on.
Indeed, the National Clinical Advisory Team review concluded that reprovision of services on the Royal National Orthopaedic Hospital site was urgent given the condition of the estate and the potential impact on quality of services of any further delay. That is not surprising as some of the buildings go back to the Second World War, built for the airmen defending our shores in that conflict. They are totally unsuited for today’s needs of a modern health service.
Another review concluded that some £50 million was required to be spent on the backlog of maintenance and repairs to bring it up to the required standards. That is more than the cost of delivery of the proposed development now being considered.
So how does it get done? It is not too surprising—those of us who have worked in the public sector will possibly have experience with projects—that the redevelopment of this hospital has gone through several iterations over 30 years. Hopes have been raised and then dashed for a variety of reasons. But now, with a strong executive leadership and vision commended by the Care Quality Commission, the hospital has the best chance yet to get the go-ahead. Some in the hospital and its partners say it is the last chance. One said to me, “Brenda, it is a bit like the Elvis song, ‘It’s Now or Never’”, and, frankly, that is how it is seen by many associated with the hospital.
The outline business case was approved by the NHS Trust Development Authority in March last year. It came, unsurprisingly, with conditions, all of which have been addressed. The full business case is scheduled to be officially approved by the hospital board on 30 March and then submitted to the TDA. The hospital is not asking the Government for enormous sums of money, just £40 million—yes, that is a lot of money in anyone’s terms but, when you put it in the big picture, it is not. Half of that £40 million would be repaid immediately as land is released to a private development partner. The balance of £20 million would be a loan to be repaid by the hospital over 20 years. This is not a PFI scheme; the hospital will not be tied into a project of crippling fees on a never-ending merry-go-round. The TDA has said that it needs eight weeks after receipt of the final business plan to approve the money. Against that promise, the hospital has planned on a contract signature to go ahead by the end of June with Balfour Beatty, which is lined up to start on the site in July this year.
Mitigating the cost of the project will require some of the 112-acre site to be sold for redevelopment. Planning permission is in place and there is no local campaign against the project. It is all going in a positive direction, except for the decision. The hospital board submitted the necessary land sale part of the project to the NHS TDS Investment Committee in March this year, which was approved. The cost to build will be £42.5 million, which is why the initial £40 million investment is needed. The first build will be a ward block and completion of the first stage will allow for the sale of the land for redevelopment—decanting into the new building will release the land. This will bring in, according to the professional assessments, an estimated £20 million, which will be repaid immediately to the NHS.
The project is visionary and will secure not only world-class facilities for a hospital providing world- class treatments, but more than 300 new homes locally, including affordable housing, as well as staff accommodation for the hospital itself. The plans include a new private patient care centre, which will generate income from outside the NHS both nationally and internationally, as the hospital has international patients. Investment of £23.5 million, of which £16.5 million is from University College London, with the balance coming from the sale of the orthopaedic hospital land, will be used to build a new bioengineering hub, with UCL. This will increase the orthopaedic hospital’s role as a national research reference centre. In addition, the redevelopment will provide for the expansion of the current National Orthopaedic Alliance vanguard and getting it right first time programmes. All this will help to realise improved care and savings for not just this hospital but the wider NHS.
Before I close, I should cover the issue of the current financial position of the hospital. For the last six years it has been in surplus. This year, for the first time in quite a long period, as with the overwhelming majority of hospitals in the NHS, the hospital will be in deficit by circa £5 million—not the eye-watering amounts that we have seen elsewhere. That is for the year, not the month, as it is in some other parts of the NHS, particularly in London. It is most certainly not something that should cause a delay in approval to go ahead.
This hospital is not part of a big trust group; it is not, in that sense, a local hospital simply providing services for people in the area. It therefore has no active campaign group making a noise to make sure the development goes ahead. It is a national, and international, provider of excellent care. It deserves support in our UK national interest, with an ageing population needing the very services the hospital provides, because it is a centre of excellence leading the way in so many areas of speciality—and, yes, because it is so highly regarded internationally too.
I could put it no better than the statement of the Care Quality Commission itself, which said:
“The Royal National Orthopaedic Hospital is a recognised world leader in treating patients with complex orthopaedic conditions”.
My request today, and the purpose of this debate, is to ask the Minister and his department for their full and active support in getting approval for the final business case to go ahead. Furthermore, I ask the Minister for his department to commit and lend support to the eight-week timetable given by the TDA. I ask for support to be given in minimising the barriers to the April to June period, given the history of delay, and that a clear, yes or no, decision is given, not a maybe.
I thank all Members of the House who have given up their time today to take part in this debate; it is just one hour but it is very important. I look forward to their contributions as much as I do to the Minister’s.
Lord Tebbit (Con)
My Lords, I congratulate the noble Baroness, Lady Dean, on securing this brief debate on the future of the RNOH at Stanmore. I first came to know the hospital some 30 years ago when my wife was transferred there from Stoke Mandeville to continue her rehabilitation from the injuries she had suffered in the attempt by IRA/Sinn Fein to murder Prime Minister Thatcher. Indeed, until this year when the deterioration in her health has made the journey there from our home in East Anglia too arduous for her, my wife had continued to be a patient at Stanmore.
Through those years, we have also seen the development of the splendid charitable trust facilities to provide for both able-bodied and disabled people alongside the hospital, and they are an important part of the whole complex. Less happily, we have also seen the inability of successive Governments to get on with the long overdue replacement of the tatty, inefficient buildings which have hampered the skilled and loyal staff in their offering of the treatment needed by patients, not least the spinally injured ones, from around London and the Home Counties. We know that the extent of recovery from serious spinal injury is critically dependent on whether the patient can receive immediate care in a specialist unit. That is why Stanmore is so important to London and the Home Counties. I have lobbied many Ministers for many years over this rebuilding programme. At least it is now a great comfort that the most pernicious proposal—and I use that word as I usually use words, in its literal sense—of a PFI has been rejected. They are the most awful device which has ever been created in an attempt to dodge the rules of public sector accounting.
It seems, at last, that something like the charitable finance initiative, proposed by Mr Laurie Marsh and others, to finance the rebuilding of the hospital out of the profits from residential development of surplus land, is now to go ahead. I am, however, still concerned that—if I read the briefings right—the development of the surplus land is expected to yield only £20 million. That seems a pathetically small sum of money to come from the sale and development of residential land in the Stanmore area. It is extraordinarily small, and I hope that the Minister will look very closely at how that sum has been reached. Finally, I give heartfelt thanks for the great kindness and the care which my wife received at Stanmore, and I say to my noble friend Lord Prior, come on, for goodness’ sake get on with it.
Baroness Ludford (LD)
My Lords, I, too, thank the noble Baroness, Lady Dean for this vital and timely debate. I am pleased to speak in the presence of the chairman and the chief executive. I am very glad to count myself among the friends of the RNOH. I have absolutely no experience or knowledge of the NHS, but I am speaking out of gratitude because my husband is a very appreciative patient at the royal national hospital, so I am in a similar position to the noble Lord, Lord Tebbit.
My husband has an NHS position, which I should mention: he is chair of Whittington Health, a trust in north London which consists of a hospital and community services. He was initially treated at the Whittington last autumn for a very serious, life-threatening infection and received the most marvellous and dedicated care from the medics there, whom he and I cannot thank enough. Thanks to them and his own fighting spirit, he pulled through, but his leg had to be amputated, so he passed into the care of the royal national hospital, Stanmore, initially as an in-patient for five days. To be frank, my only personal experience derives from being a visitor there for those few days.
I was, it is fair to say, aghast when I first saw the hospital. “It’s a bunch of Nissen huts”, I exclaimed, which is, of course, precisely what much of it is. I did not see the whole estate, but as it was built in the 1940s, I think that that was fair comment. We went in through a heavy, plastic door, which was all that kept the winter winds from the ward into which we entered directly. So my second thought on arrival was, “What on earth are the heating bills?”. My third thought was that, on a dark winter night, having to find the visitors’ loo outside, across the road and down some steps was less than congenial.
So my first point is that this is no way to treat a national, indeed, an international, centre of excellence. The staff are first class and deliver excellent care, as recognised by the “outstanding” rating given to the hospital by the Care Quality Commission in 2014 for its medical care, which includes the rehabilitation from which my husband is benefiting. However, the staff, the patients, their families and the community are being horribly let down by the appallingly bad, old and decrepit physical conditions. The CQC said the hospital’s premises were,
“not fit for purpose – it does not provide an adequate environment to care and treat patients”,
which is, no doubt, why the ratings for out-patients and children’s services were, “requires improvement”. I did not see the children’s wards but I am told that they are the worst of all.
What is it doing to staff morale and the ability to attract the brightest and the best that the powers that be are stalling over the green light for desperately needed redevelopment? With the best will in the world, the morale of patients and their families, at a time when they may be very vulnerable, whether after an amputation or for another reason, will not be increased by such grotty surroundings.
Secondly, I want to express deep frustration at the delay in getting the go-ahead from the NHS Trust Development Authority. This unelected quango— I use that term not to be abusive but as a statement of fact—seems to be the body on which everything now depends. It approved the outline business case a year ago, and I do not understand why it takes so much to get to the final sign-off and permission to borrow.
When the local MP, Bob Blackman, with whom I have been fortunate to have a word, initiated a short but very valuable debate a year ago, the Minister, Dr Daniel Poulter, rightly said of the RNOH:
“With the care it provides to its patients, it is one of the best centres in the world … a leader in the field of orthopaedics in the UK and worldwide”—
including through training and research, and—
“produces the very best possible care and results for patients … The RNOH is renowned worldwide for its clinical excellence”,
He said:
“I am aware that most of the buildings at Stanmore date from the 1940s, and many are no longer appropriate or fit for purpose for the high-quality care and excellent clinical outcomes that the RNOH provides for its patients”.
He agreed:
“The RNOH’s proposed redevelopment of the Stanmore site is key to ensuring that it can continue to improve the care it provides”.
I was a little worried by his comment that the RNOH,
“manages to maintain high standards of outcomes despite the condition of the estate ”.—[Official Report, Commons, 4/3/15; cols. 350-51WH.]
That is only through the heroic efforts of its staff, which no doubt cannot be taken indefinitely for granted. If they are being heroic about rising above their surroundings, I would prefer their heroic efforts to go into patient care.
Dr Poulter acknowledged the frustration at the delays, saying that due diligence was necessary to ensure financial viability. That is understandable, but the TDA has been on the case for three years, asking for more and more information. As we have heard, the deliberations have gone on for 30 years. Planning permission was received three years ago, which was, of course, the result of a transparent and democratic process by the London Borough of Harrow.
Given the high degree of centralisation of the NHS, I am bemused by the gap between expressed ministerial support and the lack of speedy output from the TDA. Surely the Government cannot be saying that they have no levers to encourage the TDA to get on with it. The medical case for a modern, state-of-the-art hospital seems unanswerable, and it seems that the financial case is equally sound and straightforward. It was given by the noble Baroness. The debate that Bob Blackman MP held was followed five days later by TDA approval of the outline business case. Let us hope that we, through this debate, thanks to the noble Baroness, Lady Dean, might have a similar catalytic effect on its final decision. I look forward to hearing from the Minister that this will indeed be the case.
Lord Lansley (Con)
My Lords, I am pleased to have the opportunity to contribute to the debate and to join colleagues in congratulating the noble Baroness, Lady Dean, on securing the debate and on the way she introduced it. She absolutely captured a sense of what the RNOH is and has been, and what it means for the patients whom it has looked after.
In that respect, I share with my noble friend Lord Tebbit a sense of gratitude for how the RNOH has looked after Margaret Tebbit. Indeed, it was at exactly the same time 30 years ago that I first got to know Stanmore because I was the Civil Service Private Secretary to my noble friend, who was then Secretary of State. When I was not carrying his box to and fro at Stanmore, I was learning about the hospital. About 25 years later, it was somewhat ironic that my noble friend was lobbying me as Secretary of State to secure the rebuilding of Stanmore. I believe he was right when he said that it would have been wholly wrong to have pursued the PFI route to secure the rebuilding of Stanmore. It was my responsibility in 2011 to say that that was not the way I thought Stanmore should go. I am pleased that that is not the way that the RNOH chose to go.
I will quickly say three things. First, I believe in specialist institutes in the NHS. That was not always the case. I remember that probably 25 or so years ago, Stanmore was being pushed to merge with Northwick Park. Subsequently, there were other proposals for the hospital to be absorbed into a large trust. All the evidence tells us that this is the wrong way to go. Amazingly, specialist institutes in the orthopaedic field, not just the RNOH but the Robert Jones and Agnes Hunt Orthopaedic Hospital in Gobowen near Oswestry, obtain excellent results. That is true for clinical outcomes and for innovation and research. When we introduced the friends and family test, I was especially struck by what fantastic numbers the specialist institutes, such as Stanmore and Gobowen, got on recommendations through the friends and family test from staff and patients. That is incontrovertible. That being the case, we have to find ways to support them where they are.
Secondly, the partnerships that they create are tremendously important. Papworth Hospital in my former constituency is going alongside Addenbrooke’s. It will remain a specialist institute but it needs to be alongside for clinical partnerships and research partnerships. Given its location, Stanmore does not need to move anywhere else for these partnerships to function. Indeed, as the noble Baroness said in introducing the debate, it has drawn UCL into an excellent bioengineering centre based at Stanmore. That is evidence of the partnerships that are integral to specialist institutes’ future success, not least because they need to be part of the academic health science networks to make that success work. Creating those partnerships is tremendously important and can secure its position.
Thirdly, and finally, however, we need to understand where the difficulties lie. RNOH is an extremely well-run hospital and has been for a very long time. The calibre of staffing and clinical leadership is excellent. For example, when we looked at MRSA bloodstream infections, notwithstanding the circumstances in which RNOH works, I do not think it has had such an infection for about seven years. That is a wonderful record. When you look at clinical leadership, Tim Briggs, a clinician at Stanmore, has been integral to the work that the noble Lord, Lord Carter, and his team are doing on delivering improvement and efficiency by demonstrating how it was done at the RNOH.
However, since the NHS is the overwhelming customer for this work, it is very hard if the tariff does not support it. We must recognise that the heart of the issue lies in the prudential work done by the TDA—and before it by the strategic health authorities and others—to ensure that the project and the hospital are financially sustainable for the long run. Frankly, it is not just about asking, “Is this a good project?” or, as my noble friend asked, “Do the numbers all stack up?”. I am sure that it can be afforded in the sense of borrowing being available, but what also needs to be affordable in the long run is the revenue to support it. That is where NHS England and Monitor, working together, need to bring in tariffs—not least through the latest iteration of ICD tariff structures when they get to them—that recognise the additional costs involved in the complex and specialised work done by hospitals such as the RNOH. Many big hospitals used to be able to carry such specialist work in the midst of very large amounts of routine work, but a specialist institute cannot do that. Indeed, many large hospitals cannot afford to do it now either. We need the NHS and Monitor together to design a tariff that recognises not only the quality but the cost involved in continuing to deliver this world-leading work.
Lord Dykes (Non-Afl)
My Lords, it is a great pleasure and honour to follow the former Secretary of State, whose analysis I agree with entirely. It is good to focus on these issues again. The analysis given by the noble Baroness, Lady Dean, who we thank for initiating the debate, was exactly spot on about the problems facing a hospital that I thought would be redeveloped and modernised years ago. I remember the speeches I made on this—one from 1984 was referred to, but there were many others after that. I had the great honour of being a member of the board of governors in the old days of the teaching hospital. Subsequently, I was chairman of the save the hospital action committee when there was a threat of closure in the 1980s. I had the pleasure of being president of the league of friends for many years.
When I first went to the hospital in 1972, I immediately fell in love with the place. Its history is magical, given what it achieved in the war, what it did for brave airmen and other service men and women who were injured—incredibly hideously sometimes—and its work of repair. Subsequently, in inadequate buildings, the amazing achievements of this hospital have been really stunning. I am so glad that the noble Lord, Lord Tebbit, was able to make his tribute to its work as well as to offer his analysis about the facts and figures. I remember exchanging correspondence with him when Margaret Tebbit went there for the first time. I was so glad about the treatment she received after that horrific incident. The noble Lord has been a good champion of the hospital ever since.
It really is now time. The analysis has gone on for so long. When I was defeated in the 1997 election, I never believed that it would take so long for this to get going. There is no reason for any further delay. The amounts of money are minuscule and modest. I also rather share the apprehension of the noble Lord, Lord Tebbit, about the amount of money to be realised by property sales. In that area, where property values are stupendous, if it is a free market syndrome—presumably it will be in the final analysis when the transaction is completed—then it should be done on a much higher basis. Maybe that can be looked at again, although I am not in any way criticising the present management team because it has dealt with this for a long time and knows all the ins and outs.
However, there is now no excuse or reason for any further significant delay. This is a magical specialist hospital with a wonderful history. It has a future that will be even greater. We are also getting to grips with new technology and new invention possibilities, particularly in spinal injury cases. An exciting scenario is opening up with the recent developments that have been announced in many parts of the world, including, of course, in the United States. That, too, is an opportunity for this hospital to shine again as it has done over so many years.
There is a lot of local loyalty. It is interesting that the noble Baroness, Lady Dean, said that there is no campaign against redevelopment, which there often would be if suddenly there was going to be an urban sprawl created around a hospital. Not a bit of it: there is a lot of local geographical loyalty and a history of support in the London Borough of Harrow as well. This hospital needs to remain separate but specialist, with modern buildings and new facilities, to build on patient care, especially that of physically injured children, which is a very important area.
I conclude by thanking the noble Baroness, Lady Dean, for this debate and repeat the sagacious advice of the noble Lord, Lord Tebbit, to the Minister to get on with it please.
Lord Finkelstein (Con)
My Lords, occasionally it happens in the House of Lords that after five people have spoken everyone else starts to repeat the arguments that have already been made. I am the sixth to speak and will do so briefly.
I start with the words of the Secretary of State for Health:
“I visited the hospital two years ago and it was clear to me then that the facilities on the site did not match with the world renowned status of RNOH. I am thrilled to announce the rebuild of the Stanmore site today. ... The urgent need for this rebuild has been apparent for many years now”.
Quite right too, except that the Secretary of State in question was Andy Burnham and the statement that he made was in 2010. The Health Minister said:
“I fully accept that the buildings at the hospital are not ideal at present. That is why the trust has made its proposals and the London regional office is currently considering them. … It would be very unfortunate if no progress was made on refurbishment over a number of years. We should look at this issue with some sympathy”.—[Official Report, 28/2/01; col. 1293-94.]
Quite right too, except that the Health Minister was the noble Lord, Lord Hunt of Kings Heath, and the year was 2001.
The Health Minister said:
“A detailed appraisal of the options for capital development at Stanmore should be undertaken”.—[Official Report, Commons, 18/3/1988; col. 1402.]
Quite right too, except that the Health Minister was Edwina Currie and the year was 1988. In considering the future of Stanmore, the Health Minister said that,
“my hon. Friend will be familiar with some of those problems, including the very poor condition of some of the buildings”.—[Official Report, Commons, 25/5/1984; col. 1418.]
We have already heard that, and quite right too, except that the Health Minister in question was John Patten—as he was then—and the year was 1984. Another Health Minister said:
“My Lords, I am aware of the faintly unsatisfactory state of the Stanmore premises”.—[Official Report, 3/5/1984; col. 632.]
Quite right too, except that the Minister was my noble friend Lady Trumpington and the year again was 1984.
The arguments have been made today and in the past, and for many years, for rebuilding Stanmore RNOH and they do not need my elaboration. They have been made for more than 30 years and they are so obvious that they make themselves. We now need action.
I have risen really just for one purpose, which is to add my name to those people demanding action and to add my sense of urgency to that of the others around the table. To have a world-class facility that requires action, to agree upon action and then not act is shameful. There is no point in saying that we are the builders if we do not build.
Lord Hunt of Kings Heath (Lab)
My Lords, mea culpa. The noble Lord certainly got me bang to rights. As noble Lords have heard, many noble Lords and Ministers have commented on the position of the RNOH. I start by paying tribute to it for its outstanding work. I certainly paid a ministerial visit. I do not know about the noble Lord, Lord Lansley, but I remember digging a hole in the ground there. Alas, I think that the hole is still there. I have no doubt he too has been to see the site to look at where the development would take place.
Clearly, a powerful case for this wonderful hospital’s development has been made by my noble friend. It is significant that the NHS TDA gave business-case approval a year ago. Therefore, it is absolutely right to press the Minister to say what on earth has happened and why the NHS TDA apparently, if not reversing its decision, does not seem to be able to take it any further forward.
I pay one other tribute to the RNOH and that is to the partnerships that are developing. We have already heard about UCL, but my noble friend Lady Dean is also aware of the work that is being done with the Royal Free. That is very encouraging in relation to the comments made by the noble Lord, Lord Lansley, about the importance of specialist hospitals working with other hospitals.
I shall put four or five points to the Minister. First, it is always risky to ask a Minister for a straight answer, but it seems to me that the time has come when a straight answer needs to be given. If it is no, no should be said, and the hospital can make other dispositions. It surely cannot be left in abeyance for another one, two or three years because it must be impossible for the people running this institution to know whether to invest any money in the current infrastructure, whether they should wait, what they should do about the staff and how they retain staff. An honest answer is required at the very least.
Secondly, is the state of the current public capital programme within the Department of Health having an impact? I know of the Department of Health’s financial difficulties towards the end of this financial year, and the five-year forward look at money for the NHS involves a transfer of capital to revenue. What has happened to the public capital programme? Is that the real reason that the NHS TDA cannot give approval?
The noble Lord, Lord Tebbit, and I probably disagree about PFI because, although some of the contracts were clearly badly negotiated, we have very fine buildings and hospitals as a result of it. However, if there is no public capital—and public capital is much less than was expected—and we do not use PFI, how are we going to see investment in health infrastructure over the next five to 10 years? It is a very serious question which the noble Lord, Lord Prior, is, no doubt, looking at very carefully.
I want to come back to the point made by the noble Lord, Lord Lansley. We have already heard of the number of reviews that have taken place. All have come to the conclusion that this hospital should be redeveloped on its current site, yet he will be aware that within the NHS managerial culture there is opposition to single-site specialty hospitals. I wonder whether at heart the issue is that, although Ministers and reviews have said this hospital should be redeveloped, the truth is that the managerial cadre at NHSE and in London do not think it should take place. That was always my suspicion. When I answered that debate in 2001, the distinct impression I had was that actually the powers that be, below ministerial level, simply did not want this to happen because they do not believe in specialist hospitals. The noble Lord mentioned Oswestry. He could have mentioned the Royal Orthopaedic Hospital in Birmingham as well, which is another stand-alone hospital. I have always got the impression that senior executives in NHS England now and before in the department think these hospitals should not be stand-alone and should move into DGHs. It is legitimate to ask whether this is the real reason. Given that NHS TDA officials almost all come from NHS managerial backgrounds, I ask whether this is the real reason, alongside the squeeze on capital.
The noble Lord, Lord Lansley, asked about the tariff. It is my impression that NHS England is not favourably disposed towards specialist services in general and that the squeeze on specialty tariffs is because of that. I remind him of the order that he forced through this House taking away the right of providers to object to tariff proposals. They can no longer use the arbitration system because they need commissioners to object as well, and frankly the chance of a commissioner objecting to any tariff proposals by NHS England is a little remote.
Finally, will the Minister arrange for the NHS TDA to meet parliamentarians to discuss this urgently? The NHS TDA has new leadership: its chief executive and its chair. Mr Ed Smith will bring a great deal of fresh thinking to the work of the NHS TDA, and I would appreciate an opportunity for noble Lords to talk with him further rather than either the decision being delayed for many more months or years or it simply not going ahead.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
I thank the noble Baroness, Lady Dean, for bringing forward this debate. I did not know anything about the history of Stanmore until today and the briefing I had beforehand. It has been an extremely good debate. I echo the words of my noble friend Lord Finkelstein that we have reached the stage where everything has been said but not everyone has said it. I fall into that category. Let me put on record that I agree with everything the noble Baroness said in her speech rather than repeating it, as I would otherwise have done.
I wish to address a number of points and themes. First, this is not a PFI. We need not today go into the pros and cons of PFIs, save to say that my sympathies are with my noble friend Lord Tebbit: many of them have been incredibly expensive. When he used the word “pernicious” I think he meant that not only were they expensive but they have hidden liabilities that should appear on the public sector balance sheet. He may like to know that the future costs of the PFI schemes for health alone total £79 billion. This includes some of the soft FM contracts but it is a huge liability that ought to be on the face of the public balance sheet but is not. I say that on PFI, but this is not a PFI scheme.
Secondly, my noble friend Lord Tebbit and others made reference to the land sales that are part of this scheme. We use our property resource in the NHS fantastically badly. I am not saying whether or not the £20 million assumption here is a low level of money but sometimes in the NHS, because we are in a hurry, we sell things off quickly, whereas if we had more time and could explore matters through a joint venture or a more creative arrangement we might be able to bring in a lot more money. That is something I would ask the management to look at, but not as a way of deferring this scheme. I am pleased that Rob Hurd and Professor Goldstone, respectively the chief executive and chairman of the RNOH, are here today listening to this. We do not deal properly with our massive property resource. In gross terms we have £40 billion to £50 billion-worth of property assets within the NHS, which we do not use very well. If we walk around London we can see some of our hospitals in prime residential areas. These are worth a huge amount of money which we could use to redevelop our real estate within the NHS.
Thirdly, Stanmore is not only a beacon of excellence but the work that Professor Tim Briggs is doing to spread his Getting It Right First Time scheme across the NHS is hugely important. If we are going to get long-term sustainable improvement for the NHS we must have clinical engagement. The work that he is doing through his exposure of variation in orthopaedic practice is hugely important. If we can spread the learning that he has gained in orthopaedics into other surgical and medical specialties, it will make a huge contribution to the massive saving programme that we need to achieve over the next five years. Related to that, the fact that the RNOH is leading the National Orthopaedic Alliance vanguard around the country with a view to franchising the excellence in the RNOH into DGHs and other hospitals around the country must be a good thing.
My noble friend Lord Lansley raised the issue about specialist institutions. I agree the evidence is that, from a patient and clinical outcome point of view, specialist institutions are extremely successful. However, there are two caveats to that. One is that they can become insular; and the second is that they can be high cost. Often they are relatively small institutions and, because the tariff does not favour complex specialist work, they can be a disadvantage to the tariff.
The RNOH has addressed that insularity issue in two ways: first, through the tie-up with UCL on the biomedical engineering facility; and, secondly, through developing its work with the Royal Free, which is very important. That may enable it to take some costs out of its existing institutions.
The tariff, which my noble friend also raised, is something that we should address with NHS England and with NHS Improvement to be sure that it does not favour just those more commodity or routine orthopaedic operations at the expense of the more specialised, complex operations. I think—and my noble friend will know more about this than I do—that, originally, the tariff was structured to encourage the private sector to come into the more routine, so to speak, orthopaedic business. It has disadvantaged the more specialist institutions, which is something that we need to address. If I were coming here to say, “No, we’re not going to do this”, I would have to deal with not just my noble friend Lord Tebbit but an even burlier character in Professor Tim Briggs. He is a fairly typical orthopaedic surgeon and saying no to orthopaedic surgeons is never a happy experience.
I am, as I say, leaving aside the speech I would have made because it would simply repeat what has already been said. The TDA received the trust’s revised outline business case in January last year. Following its review of the business case, the TDA required assurances on two strands of work to be completed. The first was the development of an interdependent estates strategy and land disposal business case for the Stanmore site. The second was the further development of the NHS England vanguard partnership with the Royal Free London NHS Foundation Trust as part of securing the long-term sustainability of the trust. In relation to the vanguard partnership, the trust plans to present a formal report to the TDA on progress ahead of the full business case submission. Negotiations with the Royal Free have gone well, with an MoU between the two organisations signed, which aims to identify the clinical synergies of the two organisations and how their working more closely together could strengthen the clinical model. Those discussions have gone extremely well.
An outline business case for the land sale has been submitted by the trust and approved by the TDA investment committee and will go to the full TDA board. That should not hold up this project. If there is a way of increasing the receipts from the land sale, then clearly the management will be trying to do so. A full business case containing Balfour Beatty’s final proposals for the redevelopment of the hospital is expected to go to the trust’s board on 30 March. In April, the trust is expected to submit a full business case to NHS Improvement for review. In June and July the full business case is expected to go to NHS Improvement’s investment committee and, following that, to the NHS Improvement board. Approval will allow the trust both to clear the site available for sale and to fund the part of the new facility not covered by the land sale receipt. Construction will be completed in December 2017, with the new facility opening to patients in February 2018.
To conclude, this is very much a priority project for the Department of Health and NHS Improvement. The Government fully support the redevelopment of the RNOH and are grateful for the contribution it has made to the Getting It Right First Time project, led by Professor Briggs. I am happy to arrange a meeting, as the noble Lord, Lord Hunt, requested, with NHS Improvement on this issue. If it is all proceeding according to plan, that meeting might not be necessary but, if there is a glitch, I am happy to come back for another debate, but we fully support this and can see no reason why it will not be given the go-ahead according to the timetable that I suggested. Before I sit down, is there anything that noble Lords would like to raise that I have not covered?
Baroness Dean of Thornton-le-Fylde
We are not often asked to intervene in a Minister’s contribution so I thank the Minister very much indeed and welcome his contribution. If the hospital reaches any glitches, will his door be open for a meeting with the CEO and chairman of the hospital?
Lord Prior of Brampton
Yes, any time. I should have said that I have not had a chance to visit Stanmore but I would certainly like to do that. We are fully behind this case. I will go to the hospital anyway, but I hope that this will go ahead on this timescale.
Baroness Dean of Thornton-le-Fylde
They hope to break the land—first spade in—on 7 July. How wonderful it would be if the Minister did it.
Lord Prior of Brampton
Perhaps at the same time we could fill in the hole dug by my predecessor.
The Deputy Chairman of Committees (Lord Brougham and Vaux)
As an ex-patient of the hospital, I can say that the Committee stands adjourned until 4 pm.