NHS: Health and Social Care Act 2012
(8 years, 2 months ago)
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Viscount Hanworth
That this House takes note of the impact of the Health and Social Care Act 2012 on the current performance of the National Health Service and its future sustainability.
Viscount Hanworth (Lab)
My Lords, the very existence of the NHS is in danger, as is the principle of a universal healthcare provision free at the point of delivery. The NHS is being turned into a market-based system. The proponents of these changes envisage that the system will be financed by private insurance policies that will allow individual policyholders to determine the extent of their insurance cover and the level of care to which they will be entitled. The services will be provided by commercial organisations under the rubric of the NHS. Many of them will be displaying the familiar NHS logo in a deceptive manner. These changes have been proceeding gradually for the past 25 years, but they have been accelerating under the coalition Government and under the succeeding Conservative Government.
Notwithstanding the rubric of this debate, which will be concerned mainly with the developments since the passing of the Health and Social Care Act 2012, I shall begin by recounting the slow and inexorable process by which the original intentions of the NHS have been subverted. It will be helpful to understand how the NHS has been brought to a state where it has become easy prey to the provisions of the 2012 Act. The NHS, at its inception in 1948, was an egalitarian system. In the alliterative words of one commentator, it was envisaged that “judges and janitors” would occupy adjacent hospital beds. The NHS was to be funded by taxation, and no one was to be charged for its services.
The 1948 Act took hospitals into public ownership, but it left GP surgeries in private ownership and seemingly allowed GPs the dignity of continuing to be self-employed. Indeed, many of these surgeries were located in the private residences of the practitioners. Latterly, group practices in dedicated buildings have become the norm; and most doctors are now virtually salaried employees of the state. However, the enduring private ownership of surgeries has allowed them increasingly to fall into the hands of commercial enterprises.
It has been said that the intentions of the Conservative Party to privatise the NHS have been hidden in full view of the rest of us, and it is a wonder that they have so often and for so long escaped our notice. A statement of these intentions was contained in a Conservative policy document of 1988, authored jointly by Oliver Letwin and John Redwood and titled Britain’s Biggest Enterprise: Ideas for Radical Reform of the NHS. Others have drawn attention to this text. The polemic of these authors centred on their unjustifiable claims of administrative inefficiency in the NHS. Their pamphlet also inveighed against the supposed discomfort of the service, which it likened to that of a prison.
The authors were irked by the absence of such modern facilities as private telephones and television sets which, in their opinion, should be available to all those who cared to pay for them. They appeared to dislike the prospect of rubbing shoulders with the masses. To them, the prospect of being placed in a queue was a clear indication of the dysfunctional nature of the system. Their prescription for eliminating queues was to establish a market mechanism which would ration medical services by pricing them.
A minimum list of the measures proposed that should be taken in reforming the NHS may be enumerated as follows: first, the establishment of the NHS as an independent trust; secondly, increased use of joint ventures between the NHS and the private sector; thirdly, extending the principle of charging; fourthly, a system of health credits to be supplemented, if so desired, by the patients; and, fifthly, a national health insurance scheme.
In a telling admission, the authors acknowledged that these reforms could not be achieved in a single step, for the reason that the public would find them unacceptable. Therefore, they accepted that the agenda would have to be fulfilled gradually and in stages. True to this agenda, the current Health Secretary, Jeremy Hunt, is on record as having called for the direct funding of the NHS to be replaced by an insurance system. I would like to suggest that this agenda has been firmly in the minds of the Conservative policymakers from that day to the present. It is on account of its cunning concealment as much as its gradual realisation that many of us have failed to recognise what has been afoot.
The story goes back further in time. The process of reform—that is, the process of turning the NHS into a business—began in a modest way in 1983 under Margaret Thatcher, when she commissioned the so-called Griffiths report, which led to the introduction of a body of managers into a system previously run by clinical professionals. It was not until January 1989 that Thatcher announced a major review of the NHS, which aimed, so she said, to extend patient choice and to delegate responsibility to where the services were provided. These have continued to be the misleading mantras of most of the Conservative reorganisations.
The resulting National Health Service and Community Care Act 1990 created GP fundholding in order to promote a quasi-market within the National Health Service. The subsequent Health Authorities Act 1995 abolished the 14 regional health authorities, which were replaced by eight regional offices of a newly established NHS Executive. Here, we see another theme of the Conservative reorganisations, which claim to promote decentralisation but which actually accomplish the reverse.
There were indications that the incoming Labour Administration of 1997 would reverse some of these reforms. Thus, in 1997-98, GP fundholding was abolished by the Labour Government. However, Labour soon took over from where the Conservatives had left off. In 2001, primary care trusts were established. In 2002, NHS foundation trusts were announced by the Health Secretary, Alan Milburn, and they were established via the health and social care Act of 2003. These trusts were centred on large hospitals, which were to be given a degree of independence from the Department of Health and from the strategic health authorities, and which were to have a degree of financial autonomy. At the same time, an extensive outsourcing of ancillary services was encouraged.
That autonomy enabled the trusts to pursue private finance initiatives, or PFIs, whereby a massive investment in the NHS was achieved under the Labour Administration. The PFIs have bequeathed a crippling legacy of debt to the NHS. Many hospital trusts have been bled dry by contracts that are demanding exorbitant rates of return for periods of as much as 30 years. A typical hospital refurbishment costing perhaps £9 million will eventually yield the private contactor as much as £80 million, and it is estimated that the NHS is currently paying £2 billion a year in PFI-related costs. Much of this income is going offshore in avoidance of taxes. Of course, one of the purposes of PFI was to shift the cost of big projects out of government borrowing figures. The fallacy of that approach to social investment should now be clear to anyone.
In the campaign that led to the election of 2010 and to the formation of a coalition Government, David Cameron asserted that the NHS would be safe in the hands of the Conservatives and that there would be no further top-down reorganisations. These were flagrant deceptions. Within a short period, the Secretary of State for Health embarked on the preparation of a major piece of legislation, which was to become the Health and Social Care Act 2012.
Perhaps that was par for the course. As Professor Turnberg—my noble friend Lord Turnberg—remarked in a speech in February this year, there have been eight reorganisations of the NHS in the 16 years that he has been in the Lords; that is, one every two years. However, as the NHS England chief executive, David Nicholson, famously said in a speech to the NHS Alliance conference, the reforms demanded such a big reorganisation that “you could probably see it from space”.
The Bill was a huge document, but we may remind ourselves of its salient points. To begin with, the leading clause has been widely interpreted as relieving the Secretary of State of the duty to provide a universal and comprehensive health service in England. That duty has devolved on to the newly created NHS England health executive. This interpretation of the clause is debatable. Nevertheless, it has allowed the current Secretary of State to criticise the NHS when things have gone wrong, instead of taking the blame himself.
Under the 2012 Act, NHS hospitals are allowed to make up to 49% of their money from private patients. Presumably, this allowance was intended as a means of alleviating the financial problems of the hospitals. The Act abolished the primary care trusts and the regional health authorities, and replaced them with clinical commissioning groups, or CCGs, which now control a large proportion of the NHS budget and commission local services.
The Act proposed that general practitioners and other health professionals should be given the responsibility for commissioning the majority of health services. However, that is not what has happened; nor does it seem to have been what was truly intended. The CCGs are told what they can and cannot do by the bureaucrats of NHS England, which is the newly styled NHS Executive, and by its secretive local area teams. They have imposed stringent controls on what can be provided, and those controls have become increasingly restrictive in consequence of the financial exigencies of the NHS. Notwithstanding the centralised and hierarchical control that it has imposed, this reorganisation has created a so-called postcode lottery in the provision of services, of which the availability now varies widely across the regions.
The clinicians are typically represented on the CCGs by a small handful of GPs from the largest and most prosperous practices. Smaller practices working under increased pressure cannot afford the necessary time to be involved. In 2013, the British Medical Journal used the Freedom of Information Act to discover that more than a third of the GPs on CCGs have conflicts of interest due to directorships or shares held in private companies. Much of the work of the CCGs is already being undertaken by commissioning support units, which were due to be outsourced to commercial companies in 2016.
Perhaps one of the most significant provisions of the Health and Social Care Act is to be found in Section 75, which has established the requirement for competitive tendering for the provision of services. It is extraordinary that commercial interests, represented by commissioning support units, should have become, in some instances, both providers of health services and the providers of advice on commissioning.
The requirement for tendering has imposed a huge administrative burden on the NHS, which is entailed in the commissioning, invoicing and billing of these services. This is wasting money and it is wasting the time of already overburdened clinicians. It is also seriously undermining the provision of services. The introduction of commercial profit-seeking providers means that services may be pared to the bone.
Private clinics are now competing with hospitals to conduct routine surgery on the understanding that, if complications arise, NHS hospitals will be obliged to provide the remedy. Hospitals can be financially unsettled when cheap and easy functions are subtracted in this manner. Also, if they are teaching hospitals, the experience of routine operations is denied to trainee doctors.
There have also been significant commercial inroads into general practice, where there is now a serious shortfall in the number of GPs. The response of NHS England to the resignations and retirements of the members of a group practice has been to put the services out to tender under a so-called APMS contract, with a limited five-year term. Such contracts are liable to be taken by commercial enterprises motivated by profit and intent on saving costs. The short-term nature of the contracts discourages investment, and the cost-saving motive results in inadequate levels of staffing, with peripatetic locum doctors in place of resident GPs. The costs and risks of tendering mean that independent GPs will struggle to compete with larger healthcare corporations.
Why are politicians of all parties and senior civil servants so attracted to the prospect of the commercial provision of health services? In answer to this, I should observe that many of them have strong affiliations to private health that often entail pecuniary interests. Simon Stevens, the current chief executive officer of NHS England, spent 10 years as a senior executive in UnitedHealthcare, which is the biggest multinational healthcare corporation in the United States. I should also observe that, with Andy Burnham as a notable exception, the majority of former Secretaries of State for Health have financial interests in commercial healthcare.
The conditions are now in place for a wholescale takeover of the NHS by commercial enterprises. In spite of numerous withdrawals of the private sector due to unprofitability attributed to the exigencies of the NHS finances, and in spite of some outstanding cases of fraud and malfeasance among private providers, it appears that the proportion of the NHS budget devoted to purchasing from private providers is increasing apace. Some commercial enterprises, such as Serco and UnitedHealthcare, have pulled out of providing medical services to patients, leaving behind them a wake of disorganisation. The overstretched NHS has had to pick up the pieces. Nevertheless, the accounts provided by the Department of Health in July of this year have shown that 7.3% of total NHS expenditure in 2014-15 went to private providers, which represents an increase of 1.2% over the previous year. This is the biggest annual rise in both absolute and percentage terms since 2006.
Meanwhile, so-called sustainability and transformation plans are being demanded from local NHS areas by NHS England. These are aimed at saving large sums of money, while improving the quality of healthcare. It has become abundantly clear that such plans amount to dangerous fallacies. They have already been widely discredited. They would lead to widespread closures and amalgamations of hospitals, and they would strip the NHS bare. I beg to move.
Lord Lansley (Con)
My Lords, I am sure that we are grateful to the noble Viscount for initiating the debate. I hope that the debate will be more directed towards the future of the National Health Service, its sustainability and how it can achieve improving quality. I do not, therefore, propose to examine in detail the many assertions made in the noble Viscount’s speech, but I put on record that I think there were many errors in what he had to say about the past.
On one particular point, from my personal point of view, I will just say this. As the Conservative Party’s lead spokesman on health for more than nine years, I am proud that, with David Cameron’s active support, we made it very clear that we would not at any point countenance a shift away from the NHS as a comprehensive, universal service, available free at the point of use and funded out of general taxation. I am also proud that, in the midst of the financial imperatives that we faced in 2010, he and I, together with our Liberal Democrat colleagues in coalition, gave the NHS the priority that it needed and increased its budget in real terms through the last Parliament.
What did the Health and Social Care Act set out to do? It was and has been a structural change. It was founded on a set of principles that were not new to the National Health Service at all. Over the preceding 20 years, pretty much every Secretary of State agreed, with the exception of Frank Dobson—the noble Viscount in his speech was at least even-handed in condemning past Labour Governments and coalitions as well as the Conservative Party—that we needed to devolve responsibility within the National Health Service, to give greater freedoms to providers to promote patient choice and indeed to be very clear about the distinction between the commissioning function and the provider function. I make no bones about the fact that it is designed to create a stronger commissioning structure. Where I agree with the noble Viscount is that that is as yet an unfinished task.
There is a constant pressure within the National Health Service for the providers to control the structure of activity and for commissioners, not independently, to use their budgetary and statutory powers to determine what is in the best interests of patients. That actually is what is in the Bill. It does not say that there has to be compulsory competitive tendering. It does not tell the commissioners how they should go about it in terms of the use or otherwise of competition. What it says is that they have to use their powers in order to deliver what is in the best interests of patients, and if there is something that does not involve competition, they are entirely at liberty under the statute to do exactly that.
Secondly, what did the Health and Social Care Act not do? It did not introduce competition. There is a reason why the noble Viscount referred to 2006 as the starting point for his analysis of private sector activity on outsourcing in the National Health Service. It was in 2006 that the previous Labour Government introduced it. PFI is the largest element of privatisation, and there is nothing in the 2012 Act that requires any extension of privatisation. On the contrary, it did away with the past Labour Government’s ability under the law to discriminate in favour of the private sector. There is no potential to do that. The only reason why any commissioner should use the private sector is because it would provide a better service and at a lower cost. Actually, we shifted the structure of “any qualified provider”—which is not in the Act—from a cost basis to a quality basis; it has to provide a better quality and they are on the same tariffs.
What the Act also did not do is create deficits in the National Health Service. I am proud of the fact that, in the three years during which I was responsible for the financial situation in the National Health Service, it was in surplus all that time and, indeed, not on a declining trend. The number of trusts in deficit in 2013-14 was proportionately the same as in 2009-10. There are subsequent reasons why the NHS has shifted into financial deficit. It is partly to do with the Francis report, which came after I ceased to be Secretary of State. It is not that it was not a good report, but the response to it focused on the extension of staffing and measuring staffing, with the consequent impact on agency costs not least, rather than a focus on outcomes. I am proud of the fact that the outcomes framework for the National Health Service and a focus on quality and outcomes were at the heart of the reform process—and should be, and often still is not. Too often, the debate about the National Health Service is completely obsessed with inputs and activity levels, and far too little focused on outcomes. We have an outcomes framework and we should focus on it.
What do we need to do in the future? We should not, in my view, revert to monopoly. Sustainability and transformation plans, while they are rightly the product of collective and collaborative working, should not attempt to create monopolistic structures in the NHS because a monopoly in the NHS would do exactly the same thing as it does anywhere, which is to pretend, through offering short-term benefits, to provide long-term benefits but actually to entrench provider interests as opposed to the patient interests. We should not restrict choice and we should not end clinical commissioning. We should not allow the commissioning function and the provider function to be submerged into one organisation; they are distinct and separate, and the conflict of role between those two should not be confused. As to sustainability and transformation plans, we should not allow them to become what they were back in 2006, when there were substantial deficits, albeit at a time of rising resources. We should not allow them to be an effort to try to constrain demand by restricting supply, which is what tended to happen back in those days.
What we need is more integration, and the Act led, through health and well-being boards and the role of local government and its ancillary additional functions on public health, to a real opportunity for greater integration. The commissioning function should involve local government and the NHS very much working together. One of the principal reasons for the deficits is the lack of reform in social care, and we should implement Dilnot. As I have said in this House, there were reasons why it was not done, which I do not accept. It should have been done, it still must be done and it should form part of an input to social care.
Finally, we must acknowledge the necessity for the NHS to have the resources it needs for the future. Time does not permit me to explain all that, but we never would have anticipated in 2010 that we would go for a full decade with a less than 1% real-terms increase year by year. We have to accept that the sustainability of the NHS requires resources for the NHS and for social care on a scale that is not presently anticipated in the current spending review.
Baroness Tyler of Enfield (LD)
My Lords, I congratulate the noble Viscount, Lord Hanworth, on securing this vital debate. The starting point for our debate is the impact of the 2012 Act—legislation which is etched on the memory of many in this Chamber, and I suspect none more so than the noble Lord, Lord Lansley, who has just spoken. It was the first Bill I was actively involved in after joining this Chamber and, my goodness me, it felt like a baptism of fire. It is fair to say that it was a highly charged and contentious piece of legislation. However, rather than rehearse the heated arguments again, today I will focus primarily on how the system has responded to the changes and what it means for the future.
We probably all agree that there is no appetite for further structural reform, and I doubt whether there will be in the years ahead. Therefore, the current immense problems of sustainability will need to be resolved within the current architecture. This will require huge ingenuity, creativity, cultural and behavioural change, and transformed styles of leadership at both national and local level, along with very different financial incentives.
As we have heard, the 2012 Act introduced major structural changes—I am not going to run through them again—but how has the system responded to these changes in the face of huge financial and operational pressures? To answer that question it is important to highlight some key factors. First, whatever their rights and wrongs, the geography of clinical commissioning groups is not strategic. Simply put, there are considerably more CCGs—some 209—than there are hospitals, of which there are just over 150. That is not helpful. Such fragmentation militates against strategic planning and decision-making.
Secondly, the more market-based system that competition and the introduction of foundation trusts by successive Governments heralded may have been okay during times of plenty, but during a period of unprecedented austerity, coupled with a major growth in demand, it has proved much harder to sustain. Each trust fights hard to protect its own position, making collaborative working and the significant shifting of resources much harder.
Thirdly, in practice it has proved very hard for GPs to undertake the role envisaged for them of fundamentally reshaping the services provided by hospitals for the benefit of their patients. Too often they have been overwhelmed by rising demand, making effective collaboration between GPs and hospital consultants, which can be hard at the best of times, a distant dream.
The simple truth is that there is not enough money in the system to do all the things being asked of the health and social care system at a time of rapidly rising demand from a growing and ageing population—and that is before we come to the newest policy goal of seven-day working. We would all like to see that in an ideal world, but it must be properly resourced and planned if it is ever to become a reality. The current approach of trying to ram it through on resources that are not really adequate for five-day working, let alone seven, is clearly not viable.
There has been no shortage of recent reports demonstrating the parlous state of NHS finances. Reports from NHS Improvement, the King’s Fund, Nuffield Trust, the Public Accounts Committee and others have all shown rapidly declining financial performance and an alarming scale of deficits. In short, the NHS ended 2015-16 with an aggregate deficit of some £1.85 billion—a threefold increase on the previous year and the largest deficit in NHS history.
It is not at all clear how the £22 billion funding shortfall by 2020 will be achieved. When resources and demand are so out of kilter, what is urgently needed is a system-wide response, with system-wide thinking at its very core. This means putting far greater emphasis on geography—or place-shaping, as it is sometimes called—and, in essence, thinking in terms of local health economies rather than in terms of individual institutions or bricks and mortar. That system-wide thinking needs to be based on trust, collaboration, innovation and sophisticated networking—in short, the key ingredients of a joined-up response.
In fairness, the Five Year Forward View—widely regarded as an excellent document setting out a long-term vision—coupled with the planning guidance are both attempting to do just that. We have recently had the introduction of the five-year sustainability and transformation plan, which highlights the need for systemic leadership and a truly place-based plan, with local leaders, including from local government, coming together and developing a shared vision of what will work best for the local community.
This is a welcome shift in emphasis towards collaboration rather than competition in the way NHS services are planned, even if it is being done somewhat by stealth. It also provides a much-needed opportunity to plan for a health service focused far more on people living in the community with long-term conditions rather than on treating illness in hospitals.
The country is divided into 44 sustainability and transformation footprints, as they are being called. Getting the geography right is essential, and they should have the strategic scale to look at major reconfigurations of services, including shifting resources from the acute sector into primary care, community care and, critically, social care—something that the smaller CCGs clearly struggle to do.
The approach feels right if the focus can be on far greater integration, collaboration and system-wide thinking. It is a real concern that the general mood music around these plans, due to be published in October, is negative at the moment. We have had reports of excessive secrecy, lack of local engagement and a strong emphasis on preventing immediate financial collapse at the expense of proper long-term thinking and planning towards long-term sustainability.
A recent statement from the chief executive of the King’s Fund, commenting on the plans, was blunt. He said:
“Almost all the additional funding provided by the government this year is being used to reduce deficits in acute hospitals, leaving little if any to invest in services outside hospital. Sustainability and transformation plans will not be credible unless they demonstrate how money and staff for these services will be found”.
Similarly, a recent Nuffield Trust report concluded the same thing. It had in it the memorable phrase that we would have to “preserve the NHS in aspic”—meaning having to halt any further advancement in healthcare quality and new treatment.
The final sentence of that report reads:
“The political acceptability of that—following a Brexit campaign which highlighted a potential £350 million for the NHS a week—is highly questionable”.
That is putting it mildly. We must have an honest debate which recognises that the service transformation needed for a health service fit for the future will take much longer than one Parliament, must be properly resourced, even if that means raising extra taxation, and, critically, have the financial incentives which encourage and reward collaboration and system-wide thinking. Otherwise we will simply limp from one crisis to another, and that is to no one’s benefit.
Baroness Armstrong of Hill Top (Lab)
My Lords, it is a pleasure to be involved in today’s debate, although it is a troubling area of policy. The Minister has heard me on this before. The introduction of this legislation and the way that things have gone have not been a happy tale for the National Health Service—and, most importantly, for too many patients who look to the National Health Service and rely on it.
We know that one of the biggest challenges facing the NHS is the change in the nature of the population. Those changes in the population, and therefore the patient profile, were not addressed in this legislation, which was about structures. I am the last person to say that structures do not matter, but in the National Health Service people work with what they are given. They have to spend so much time trying to sort out what the legislation means in terms of structures and who is responsible for this, that and the other that they have not been tackling the issues that really affect patient care.
I am concerned particularly, as the Minister will not be surprised to hear, about the integration of the different sectors—the integration of the National Health Service with social care—which is one of the real priorities at the moment. They are two totally different systems and the changes in the Act have not enabled and helped those two systems to work more closely together. It is a real problem. There are many other problems but I am leaving it to other people to talk about them. I will concentrate on this issue.
What has happened is that there has been a greater concentration on trying to sort out hospital provision, and subsequent government policies have added to the total inability properly to deal with social care. It is social care that is absolutely critical to hospitals in terms of bed blocking, but also to the most vulnerable: the elderly and people with disabilities. Their voice is not as loud as other people’s in the system—it would not be, for obvious reasons—and their ability to have choice and quality of care differs hugely across this country.
I could weep over the Government not having worked more effectively across government on this issue. The idea that 40% cuts in local government—when so much of local government money is spent either on the elderly or on children—would not affect social care and not have consequent effects on the NHS, and not to have worked that out before the Government initiated certain policies, is risible.
As I uncovered in written PQs, the position is particularly difficult in the north-east—I suspect the Minister knows what I am going to say. I applaud the Prime Minister’s ambition that no area should feel left behind and that no individuals should feel that they do not have an equal opportunity to prosper. But look at what has happened and what is happening in the north-east. The actions that the Government have taken have exacerbated the problems and not eased them.
Poverty affects health. We should not need to say it but we still need to. The incredible reports from Marmot and so on show us just how much they affect health. In the north-east we have many more people who do not have the financial means to assist their own healthcare, so we have a much higher proportion of the population who are dependent on public subsidy in social care. As the Minister knows, I uncovered through these Parliamentary Questions that we have the highest proportion of people who are reliant on public funding for their care needs and the lowest ability to raise money in council tax because of the low value of housing.
The Government took a decision that one of the main ways of further funding social care would be through a 2% levy. When that happened, not a single authority in the north-east gained sufficient money from the 2% levy even to meet the rise in the minimum wage that the Chancellor announced on the same day. Whereas some authorities—I am told—have as a little as 1%, 2% or 3% of their social care users who are reliant on public funds, in South Tyneside, as one example, 89% of those who are dependent on social care rely on public funding. That authority got some £794,000 from the 2% increase and it nowhere near covered the costs in the social care sector of the minimum wage.
There is also, as the Minister knows, a crisis among the private sector providers of residential social care because they are not getting enough money. The Government have made a small attempt to alleviate that. But I am saying to the Minister that he really has to persuade his colleagues that if they want to get anywhere near meeting the Prime Minister’s ambitions, there has to be an urgent national review of how they fund social care and not to push it on to impoverished people in local authorities that have taken the cuts and do not have the council tax base that other parts of the country do. This is unfair, it is unequal and it has to change.
Lord Kakkar (CB)
My Lords, I join in thanking the noble Viscount, Lord Hanworth, for having secured this important debate and in so doing declare my own interests as chairman of University College London Partners, professor of surgery at University College London and a member of your Lordships’ House ad hoc Select Committee for this Session on NHS sustainability.
We have heard that the Health and Social Care Act 2012 introduced new structures and new organisations to assist in both the commissioning and the delivery of healthcare, but it also put on the Secretary of State for Health, for the first time, new duties with regard to research, education and training in the National Health Service. The research function is vitally important because it is with research and innovation that we are able to develop the novel therapies and technologies that will over time transform healthcare. The duty of the Secretary of State to ensure that this is promoted throughout the restructured National Health Service—ensuring that hospital trusts, primary care and all the other arm’s-length bodies were sensitive to this requirement—is vital. The adoption of innovation will provide the opportunities as we move forward for more precision medicine and, as a result of that, to ensure that personalised medicine will transform the prospects for our fellow citizens and hopefully drive improved clinical outcomes delivered more effectively and efficiently throughout the entire NHS.
Can the Minister say what assessment has been made, since the passage of the Act, with regard to this duty of the Secretary of State? Has the NHS as a whole become more effective and efficient at delivering the research agenda? Has the performance of organisations within the NHS with regard to clinical research improved? As a result of increased research activity, have we seen greater adoption of innovation throughout the system? Are we able to demonstrate that the adoption of innovation at scale and pace, through a variety of health economies, is providing clinical outcomes for patients availing themselves of NHS facilities?
Beyond the question of research, there is the question of education and training, and once again new arm’s-length bodies, by way of Health Education England, were established as part of the Act. There was also a duty placed on the Secretary of State for Health to ensure that education was promoted and that we developed a workforce fit for purpose, recognising over time that the changing demographics of the national population availing themselves of NHS services and the change in the nature of disease that the NHS would have to deal with, with more chronic disease, would require a much more flexible workforce. We need the ability for those committing themselves to a professional career as healthcare professionals to be provided with the opportunities not only to establish themselves at the beginning of their careers but also to adapt and change over time to ensure that they can address the changing needs of our fellow citizens and the NHS itself.
How successful has Health Education England been in achieving those objectives? These were important new obligations and duties on the Secretary of State that provided excellent opportunities to transform the workforce to ensure that it was better able to deliver the changing needs of the NHS.
As part of the discussion during the passage of the Bill, there was much emphasis on ensuring early post-legislative scrutiny of the legislation to ensure that these important objectives were established. I know that in 2014 the Department of Health did undertake some post-legislative scrutiny. The outcome of that demonstrated that the principal provisions of the Act had indeed been established, but beyond that what has been achieved by way of the anticipated outcomes in those two important areas?
We have also heard in this important debate about integrated care and how so much of the purpose of the original Act was to ensure that integrated care could be delivered. This is a vital objective. The fact we will see the need to manage so much more chronic disease over time in the National Health Service demands a different approach to the delivery of care, focused no longer on the boundaries of individual institutions but on understanding the pathways that the large numbers of patients with chronic disease will have to follow—pathways that will require interaction with the hospital sector and with highly specialist centres at some times during their disease’s natural history but predominantly in the community.
One of the concerns raised during the Bill’s passage through your Lordships’ House was whether the bodies charged with regulation of the healthcare system were in a position to determine the quality outcomes achieved through true integrated care, rather than care delivered in institutions. I ask the Minister what assessment the Department of Health has made of the ability of the Care Quality Commission and NHS Improvement to assess outcomes of integrated care packages delivered across hospital and community boundaries, and their performance in terms of their clinical effectiveness and their value to the health economy across those institutional boundaries. As we move to greater integrated care, it is vital that we understand that the systems we currently have in place are adapting themselves to ensure they can assess how quality and efficiency are delivered beyond institutions and in such a way that the investment of valuable healthcare resources in new models of care always delivers the very best for our patients.
We have also heard in this important debate about the vital need to explore further the link between healthcare and social care. Sir Cyril Chantler, a distinguished clinician, in a letter to the Daily Telegraph last month reflected on the fact that in the United Kingdom—in England—it is easy to get into hospital and very difficult to get out. One of the best-performing countries for healthcare in Europe is the Netherlands, where it is very difficult to get into hospital because there is such an emphasis on well-integrated care in the community prior to the hospital stage that they save a huge amount of resource by keeping patients in the community.
In assessing the impact of the Health and Social Care Act and the opportunities avoided by it, what has been demonstrated to date is the need to improve the collective and integrated nature of care in the community prior to hospital admission to ensure that patients might be best managed in the community, rather than admitted to institutions.
Lord Colwyn (Con)
My Lords, I declare my interest as a retired dental surgeon and a fellow of the British Dental Association. I thank the noble Viscount, Lord Hanworth, for securing this debate. Although I shall need to read his speech in Hansard to make full sense of it, he gives me time to make a brief intervention to remind noble Lords of the importance to the long-term sustainability of the NHS of improving the nation’s oral health and ensuring good dental care.
We were reminded of this very starkly earlier this week when the front page of the Times and other newspapers reported the results of the research carried out by the British Dental Association, showing that 600,000 people a year seek help with toothache from their doctors—their general medical practitioners—who are neither qualified nor set up to deal with dental issues. This puts unnecessary pressure on the system, costing the NHS at least £26 million a year and wasting GPs’ time, resulting in longer waits for people whom they can really help.
People are seeking a free GP appointment instead of going to see a dentist because of the chronic underfunding of NHS dentistry and constantly increasing dental patient charges. The fees for NHS dental treatment continue to rise much faster than inflation and people’s earnings, having gone up by 5% this year and increasing by a further 5% next year. I have been arguing that this unprecedented increase will discourage patients who most need to see the dentist from going to see one, but this latest research clearly shows that it also puts an avoidable burden on the rest of the already-strained NHS.
While NHS care is supposed to be free at the point of use, this latest increase means patients now cover 26% of their NHS dentistry costs—up by more than a third compared with a decade ago. If this trend continues it will take just 15 years before patients pay for most of their treatment. This is set against the backdrop of £170 million of NHS dentistry funding having been cut by the Government since 2010, with patient charges increasingly used to make up the shortfall.
Neglecting oral health puts pressure on not only our general practitioners but our hospitals. The number of people going to A&E with emergency dental problems has been rising sharply and tens of thousands of people continue to be admitted for scheduled tooth extractions. It is frankly a scandal that tooth extractions under general anaesthesia remain the number one reason for hospital admissions in young children, with 160 youngsters and their parents going through this painful and stressful procedure, which is not without its risks, every day. The cost of these completely preventable treatments has gone up by more than 60% in the past four years and now stands at £35 million a year. Again, it is the kind of avoidable pressure our struggling hospitals could really do without. We simply cannot continue to treat oral health as separate and inferior to other areas of health, neglecting prevention and reducing NHS dentistry funding while topping it up with inflated patient charges. It is not only bad for people’s dental and general health; it is also a false economy that puts unnecessary strain on our GPs and hospitals. It is an important part of our health service which we must not overlook when discussing the long-term sustainability of the NHS.
Lord Rea (Lab)
My Lords, I thank my noble friend Lord Hanworth for bringing this important topic forward.
Before the 2010 election David Cameron specifically ruled out “a disruptive top-down reorganisation”, but this is what the Act has proved to be. It was also largely unnecessary: many of the changes brought about by the Act, particularly the beneficial ones—and, yes, there are quite a few—could have been achieved without new primary legislation. In my seven minutes, I will concentrate on public health and prevention, which is where my current involvement with health lies.
Twenty-three years after retiring from NHS clinical practice, I declare an interest as honorary president of the UK Health Forum, an independent but publicly funded body representing some 60 national organisations with an interest in “upstream” prevention of non-communicable disease—the “causes of the causes”. The Government have repeatedly emphasised the importance of prevention as the way to approach our current increasing load of chronic non-communicable disease. The Five Year Forward View, whose findings have been accepted by the Government, referred to the work of Derek Wanless, who warned some 15 years ago that unless the country took prevention seriously we would be faced with a sharply rising burden of avoidable illness. The Five Year Forward View points out that that warning has not been heeded and that the NHS is,
“on the hook for the consequences”,
with an increasing burden of largely preventable chronic illness that can be expensively treated or cared for but mostly not cured. So I will concentrate on the sections of the 2012 Act which concern public health and the reduction of social inequalities which are at the heart of any policy to improve the health of the population.
Theresa May pointed out, in her first speech as Prime Minister, the “burning injustices” of the wide gap in health between the highest and the lowest socioeconomic groups of the population. As the noble Lord, Lord Prior, knows very well, this gap has been extensively studied by Sir Michael Marmot and his colleagues at UCL. They have shown that the mortality rates and incidence of most diseases—particularly those which form the main burden on health services today—are consistently related to social status across the board. The concept of the social determinants of health, first described in detail by Michael Marmot, is now recognised worldwide as basic to public health thinking. The 2012 Act includes changes in the provision of public health services that are potentially beneficial. Among measures that were given a guarded welcome by public health professionals in local government was the transfer of many public health functions from PCTs to local authorities. This change was logical, since local authorities have always been involved in some important public health activities. I could list other desirable changes related to the wider determinants of health, but it would take too long in a time-limited debate.
The concern of public health professionals about the move to local authorities was twofold: would the rearranged services be properly funded and would the status and independence of public health professionals within local authorities be assured? As noble Lords know, these concerns have been more than justified. The House of Commons Select Committee on Health’s report Public Health Post-2013, published just a week ago, states:
“There is a growing mismatch between spending on public health”,
which is set to reduce,
“and the significance attached to prevention in the NHS 5 Year Forward View”.
In fact the ring-fenced levels of local authority funding for public health were cut by £200 million last year, a move that was questioned in the House at the time by my noble friend Lord Hunt. This funding is on a steady downward trend until 2020, and will then have fallen in real terms by 25% since 2013. In addition, overall central government funding allocations for local authorities have been cut drastically since 2012, as everyone knows, affecting many local authority services which have a public health component. The Commons Select Committee on Health’s report concludes:
“Cuts to public health are a false economy. The Government must commit to protecting funding for public health. Not to do so will have negative consequences for current and future generations and risks widening health inequalities”.
These are strong words for a Select Committee.
The committee reports many other concerns about the functioning of the new arrangements and makes useful suggestions about how difficulties can be overcome, often using verbatim reports from witnesses describing both good and bad practices. I commend its excellent report—it should have a green cover but in the Printed Paper Office it has a white one—to the Minister and hope he will be able to say that the Government will accept its recommendations and enact them in full.
Baroness Pitkeathley (Lab)
My Lords, I too thank my noble friend for bringing forward this important debate, and I congratulate him on getting the time.
I always thought that the best thing about the Health and Social Care Act was its title. I was not alone in thinking that. It gave us hope that, at long last, the issue of social care would be put on a par with health in the delivery of services. Over the many years that I have been concerned with these issues, I have lost track of the number of times I have heard people say, “You cannot run a patient-focused NHS without regard to the whole patient experience”, which of course includes their experience of social care. Admission, discharge, post-discharge and follow-up are all inextricably entwined, especially for those with long-term conditions. So we had high hopes from that title and were repeatedly assured that the Government understood the importance of social care, that the new arrangements would ensure collaboration and co-operation between health and social care providers, and that adequate funding would be provided to local authorities to ensure that their obligations could be met.
Like many noble Lords, I had major misgivings about the disruption that the Health and Social Care Bill would cause and the money it would cost—especially as the promise had been made that there would be no top-down reorganisation of the NHS, as my noble friend Lord Rea has reminded us. The Bill appeared to presage not just a top-down but a bottom-up reorganisation. However, the idea of better integration certainly appealed to me. In 40 years of working in this area, I have noticed two things repeatedly. First, there is the absolute inability of any patient of any kind to understand the lack of integration, or sometimes the lack of communication, between the two services. Patients will always say, “But I don’t understand—why are they so different? Why don’t they talk to each other?”. Secondly, there is the repeated response of any professional involved in delivering patient care that more integration and co-operation is not only desirable but essential. So the test which I now apply to the Act is how we are doing on integration.
The Government were warned at the time that their proposals for structural reform were going too far, too fast. So far as social care is concerned, it is perhaps not fast and far enough. We have seen a social care system which is neither well funded nor sustainable and which, as a consequence, contributes to the problems in the NHS that so many noble Lords have mentioned. Two weeks ago, I visited an elderly friend in an acute ward. She had been ready for discharge for two full weeks but was unable to be discharged because of the lack of social care provision. Eight more people in the ward she occupied were in the same position.
A well-funded and sustainable social care system underpins a sustainable NHS. Delayed discharge is possibly the most pressing concern for the NHS and the Department of Health at present. It is inextricably linked to rising social care demand, caused by the greatest social and political challenge of our time: the ageing population. That ageing population is of course also a triumph and we should celebrate it, but we cannot ignore the strain that it puts on our provision of health and social care services. Social care is the largest area of spending at local level and has been hit hard by central government-enforced austerity. Meanwhile, demand for social care is of course rising; it is predicted to increase by 44% by 2030. More people are living longer with more complex, long-term conditions that require a higher level of expertise and intervention. The Nuffield Trust has estimated that by 2020, there will be a funding gap in adult social care of between £2 billion and £2.7 billion, despite the social care precept and the better care fund.
I hope the Minister will not use the better care fund and the precept as a panacea, a cover-all, for these difficulties because they are already inadequate and do not compensate for the 37,000 social care beds which will be lost before 2020 nor for the introduction of the national living wage.
The Health Select Committee conducted an inquiry into the impact of the spending review on health and social care, and the chair, Dr Sarah Wollaston, concluded:
“Historical cuts to social care funding have now exhausted the opportunities for significant further efficiencies in this area. Increasing numbers of people with genuine social care needs are no longer receiving the care they need because of a lack of funding. This not only causes considerable distress to these individuals and their families but results in additional costs to the NHS. We are concerned about the effect of additional funding streams for social care not arriving until later in the Parliament”.
Will the Minister say when additional funds will be achieved and when they will arrive, and will he give us his estimate of how they are going to cope with many of these problems? I remind him that ADASS calculates that the sector will need £1 billion per year just to allow it to stand still and that most local authorities say that they will have to spend the whole of their budgets on social care within five years or so.
I have been disappointed in my hopes for social care from the Act, but I have also been disappointed in my hopes for the strengthening of the patient voice which was promised. Local Healthwatch and local health and well-being board organisations have been patchy, as we warned the Government at the time that they would be, while the disempowerment of Healthwatch England by denying its independence and clipping its wings has not been an edifying spectacle.
As far as social care and integration is concerned, there are some excellent examples of good practice, as the Prime Minister acknowledged yesterday, but they are far too few and, as she also said, further review is necessary. I was very pleased to hear her say that at PMQs yesterday. I hope the Minister, who is so knowledgeable on this topic, will assure us that this review will take place soon, as it could not be more urgent.
Lord Lipsey (Lab)
My Lords, like the noble Lord, Lord Kakkar, I sit on the Select Committee on the sustainability of the health service, chaired by the noble Lord, Lord Patel. Last week, I came out of St Thomas’ Hospital, where I had had a TAVI—an operation on a heart valve—to sit down to the backlog of papers from the committee. The first paper I picked up said quite clearly that unnecessary treatments should be eliminated—for example, TAVIs, which are completely ineffective. All I can say is, in that case I have had the mother and father of a placebo effect.
I mention this simply to say that in the general gloom that so easily pervades debates on our health service, we can forget what it is really like. My experience was marvellous—clinical marvellousness, caring marvellousness—and I was in and out, after a general anaesthetic, within three days. So let us not play down what our health service is delivering. It is because it delivers these things that it is so precious and our people will never let it go.
I am very grateful to my noble friend Lord Hanworth for introducing this debate. I think he sometimes got a little carried away with his own rhetoric. The moment at which he accused the party opposite of cunning concealment by putting their proposals in a pamphlet struck me as one example. In general, I cannot share his view of the 2012 Act and its consequences any more than I can share that of the Secretary of State who introduced it. My take is that only three years have gone by since its provisions came into force and it is clearly too early to form any sort of verdict, particularly since there is a much more important effect, which is the amount of spending that is taking place and the staff and resources available. It is far too early.
However, Sir Muir Gray of Oxford University, a most distinguished witness who appeared before our committee on Tuesday, said:
“I speak as a veteran of 22 re-organisations, most of which have made no difference at all”.
I expect that this one will be broadly the same. Talking to people who understand, work in and know the work of the health service, there is a consensus that it works not because of the Ozymandian bureaucracies erected by Governments—and endorsed by Parliaments, let us remember—but in spite of these bureaucracies, which mostly serve only to add cost and complexity.
I will say a word or two about the sustainability of the health service. This language has become embedded in all sorts of words. We even have sustainability and transformation plans—words which fill me with gloom at their lack of transparency. The trouble with sustainability is that it suggests black or white. We either have a health service that works or a health service that has collapsed, in which case we have to have a new system: private healthcare as in America, a Bismarckian system as in Germany, or whatever. But, of course, it is not like that at all.
First, we have to ask what it is about the health service that has to be sustained. A phrase that is trotted out as if it were obvious the whole time is, “free at the point of use”. We do not have a health service that is free at the point of use. Lots of healthcare is paid for, as the noble Lord, Lord Colwyn, made clear in his speech on dentistry. We have north of £500 million of prescription charges—which, incidentally, are becoming quite a barrier to some people taking the care they need—for across-the-counter medicines. John Appleby of the Nuffield Trust suggested to the committee that private spending on health in this country amounted to 1.5% of GDP. It is not as big as public spending, but it is a pretty big chunk. So let us be clear that there is a wide range of “free at the point of consumption”.
Another phrase is “a national health service”. We do not have a national health service. The provision of specific treatments varies hugely from place to place, in a way that is very difficult to account for—factors of fourfold and even tenfold, as Sir Muir explained to our committee. Different social classes get widely different provision and as a result have widely different expectations of life. For example, in some areas 78% of people die at home and in others 46%; that is the range of experience.
There is a more sensible way of looking at sustainability. Somehow or other, the supply and demand for healthcare has to be balanced—that is inevitable. The main factor affecting supply is how much money the Government, and by extension society—taxpayers—are prepared to raise to pay for it. Healthcare is a menu with prices and we can imagine a health service in which people can choose only thin gruel and one which provides caviar for all. It depends almost entirely on how much money people are prepared to put in.
The real question is therefore not whether we have a health service that is sustainable, but what kind of health service we want. When we have decided what we want, are we prepared to pay for all of it, some of it, or rather little of it? Importantly, how can we get the maximum of what we want for the minimum we put in? I am afraid that those people who think there is a magic wand that can be waved and surgeons can double the number of operations they do in five minutes are barking up the wrong tree. From these core questions, the 2012 Act was essentially a distraction. I hope your Lordships’ committee may do a little better.
Baroness Walmsley (LD)
My Lords, I thank the noble Viscount, Lord Hanworth, for initiating this debate, and the noble Lord, Lord Lipsey, for what he said at the beginning of his remarks. I think we all have a great deal to thank the NHS for and we should always remember that.
There is no doubt that the 2012 Act was the biggest reorganisation the NHS has ever seen. It was also probably the most controversial. It was opposed by the British Medical Association, the Royal College of Nursing, the Royal College of Midwives and the Royal College of General Practitioners. While accepting the principle that doctors should have a role in commissioning, the Royal College of Surgeons and the Royal College of Physicians were highly critical of the proposed mode of implementation.
I would judge the success of the Act by whether it minimised the health inequalities in this country, whether it treated physical and mental health equally, and whether it made health and social care sustainable for the foreseeable future. Whatever David Cameron and the noble Lord, Lord Lansley, had hoped would be the benefits, I suggest that we are yet to see them fully realised. Experts agree that none of the many reorganisations has really benefited patients in the end, and this was a particularly expensive one. One wonders how many treatments could have been paid for by the £1 billion redundancy bill alone.
The stated purpose was to “liberate” the health service. Well, it certainly liberated a lot of money which is now in the pockets of many private providers who have come into the health service since 2012. I am not saying that I believe any participation of private companies is in itself a bad thing—of course not—if they can provide better services at an equal or smaller cost to the public purse than that offered by NHS providers. The primary principle must always be that healthcare is, as far as possible, free at the point of need and cost effective to all of us taxpayers. The problem is that we are now seeing evidence that the criteria for whether we need the services or not, and therefore whether we get them, are being tightened in both health and, particularly, social care, as some services close down and the rest try to provide for a growing and ageing population, and pay for healthcare price inflation.
Of course, one cannot attribute all the cost inflation to the profits made by privatised services. Some of it is attributable to the increasing cost of the research that underpins the development of wonderful new drugs and treatments. That of course is something that I, like the noble Lord, Lord Kakkar, welcome, although there is always room for effective price negotiation at a national level. However, the fact remains that the NHS is struggling in a way that we have not seen before, and this is surely unsustainable. The NHS budget for this Parliament, as we heard from my noble friend Lady Tyler of Enfield, will be short of £22 billion by 2020, and the solutions outlined in the Five Year Forward View are not yet showing convincing results. It is right that all services are scrutinised as to their efficient use of money, and I understand that millions could be saved if the least efficient took several leaves out of the books of the most efficient. However, as with many other things, you need money up front in order to save costs down the line, especially if you are going to replace face-to-face consultations with digital communications and home testing kits.
On top of that, the Government promise £8 billion extra for the seven-day NHS, which even Simon Stevens says is not enough. A majority of acute hospital trusts are in deficit, and many GP practices are ceasing to take new patients because of unacceptable waiting times for appointments. Everyone knows how concerned the junior doctors are about all this. Although I believe that the planned series of five-day strikes should not go ahead without a further ballot of all BMA members, this historic reaction of the doctors to government policy does indicate that the dispute is not just about the detail of their weekend pay or training structures. They are worried about the survival of the NHS as we know it. Clearly, they have made their judgment about the effects of the 2012 Act.
Sustainability was a key word in the noble Viscount’s Motion for this debate, and it has to be one of the key criteria for judging the 2012 Act—apart, of course, from whether it improves services for patients. Nobody I have talked to believes that the current proposals for economies and efficiencies will deliver what is needed, especially given the continuing rising demand. There is evidence that the preparation of the sustainability and transformation plans is not going well. The STP process has been very top down and has become focused on short-term savings rather than longer-term sustainability. This could lead to fragmented care and wider inequalities. Neither has it been very transparent.
A current example of short-term savings is the recent closure for three months without consultation of the 12-bed ward at Rothbury Community Hospital in Northumberland. The hospital is only nine years old, purpose built to serve this very rural community, and is a valued resource. It serves a remote and ageing population, providing care to patients whose families would have enormous difficulty visiting them if they had to go to the nearest general hospital. There are serious concerns about whether due process has been followed. I am not sure, frankly, whether it is part of an STP, but it certainly does not sound like the result of a thoughtful, long-term review of local need, and is opposed by the local people and the local GP practice. Would the Minister care to comment?
Accountability is another issue which has not been well served by the 2012 Act. Even when the Bill was going through Parliament, there were concerns about this. Senior figures from the King’s Fund said at the time:
“At a national level, it is difficult to see who, if anyone, will be in charge of the NHS”.
It is still unclear how the five national bodies interact with each other, and where the Secretary of State comes into the picture. Does the buck stop with the DoH and Jeremy Hunt anymore, other than providing the money? It seems that when it is inconvenient for him to take responsibility Mr Hunt relies on the fact that powers have been delegated to these five agencies.
At local level, fragmentation, as we have heard from other speakers, makes accountability difficult. Although the principle of clinicians having a role in commissioning is one which most of us would support, there are concerns about the abilities of some of the clinical commissioning groups and about the fact that their very existence means a postcode lottery. Devolution to a local level has its advantages, but there are dangers, such as to patients with rare but expensive diseases which may not be funded by their local CCG. This is where national strategies come in, but they need money too.
Mental health, as we have heard from the noble Lord, Lord Lansley, is still a work in progress. Only today, my right honourable friend Norman Lamb has published evidence of the shambles in CCG provision for psychosis.
My greatest hope for the 2012 reorganisation was the local health and well-being boards. I hoped that they would bring together local services and resources and make the most appropriate provision for public health and social care in their areas with the involvement of the local authorities. Sadly, repeated cuts in public health funding have got in the way of local authorities’ realising their potential in making a difference to the health of their local communities. When public health funding is cut, and cannot be subsidised by cash-strapped local authorities, prevention suffers, leading to increased costs in the long term. We have seen preventive services being cut all over the country. In addition, local council representation on the boards is in the minority. The boards’ powers are not really broad enough for them to influence matters such as housing and air pollution, both of which have major consequences for health. Colleagues on health and well-being boards believe that the cultural divide between the self-determination of local government and the top-down NHS is a huge hurdle to these boards achieving better health and social care integration.
I strongly believe that the public do not want to be treated by more and more doctors on more and more days of the week. What they want are services to help them remain well for longer and for appropriate services towards the end of their lives, and they want that period of acute need to be as short as possible. Sadly, this country falls behind others in that respect. In the Scandinavian countries, the period of high-level need for health services at the end of life is, on average, much shorter than it is here. People remain well longer. Why is that? I would judge the 2012 Act on whether it promotes the Scandinavian standard. In order to do so, it would have supported more preventive services. I for one would have cheered. But it did not, so I have not.
What we need now, as has often been said by my right honourable friend Norman Lamb, is a genuine cross-party debate on how much we need to spend on health and social care and the fairest way of raising the money. I encourage all parties to consider this proposal seriously.
I would also propose that one of your Lordships’ excellent ad hoc Select Committees should do post-legislative scrutiny on the effects of the 2012 Act, along the lines of the very useful report of the committee chaired by the noble Baroness, Lady Deech, on the impact on disabled people of the Equality Act 2010, which was debated in your Lordships’ House on Tuesday and was a very useful exercise.
Will the Minister consider supporting proposals for such a committee on the impact of the Health and Social Care Act 2012? It would be able to take evidence in a way that has not been possible for noble Lords preparing for today’s debate. I think that we would learn a great deal from it.
Lord Hunt of Kings Heath (Lab)
My Lords, as this is such a general debate, I remind the House of my interests as president of GS1 UK, the Health Care Supply Association, the Royal Society of Public Health and the British Fluoridation Society, as a trustee of the Royal College of Ophthalmologists and as a consultant and trainer with Cumberlege Eden.
I am very pleased that my noble friend Lord Hanworth opened this debate today with an extensive, and indeed passionate, analysis of the NHS. He thinks that it is in a critical position, and I agree with him. Whether it is down to the overt privatisation of the NHS encapsulated in the 2012 Act or whether it is essentially down to underfunding is, I think, a matter for some debate. On the matter of privatisation, I should say that I have no problem whatever with the involvement of the private sector in the NHS; indeed, I think that there is much to be gained from partnership with the private sector. The noble Lord will know that, as a Minister, I was responsible for some of the contracts that were put in place to enable us to reduce waiting times, which I think was an excellent thing to do.
I agree with my noble friend that the NHS seems to have been forced to tender out services willy-nilly, at great expense and, frankly, with very poor outcomes. I know that the noble Lord, Lord Lansley, said that it was not his intention that clinical commissioning groups should be forced to do that; it was going to be down to them. Indeed, when he introduced the Bill and talked about it, the emphasis was very much on local GPs making the decisions. The problem is that CCGs themselves—and certainly NHS England—misunderstood those messages, and CCGs felt under pressure to put some services out to tender. I do not think that the outcome has been very satisfactory at all.
I say also to my noble friend that I disagree with him about the NHS foundation trusts. I believe that the local governance that they have, making them much more accountable to members locally, is something to be treasured and supported.
I will just address PFI. Yes, there were some schemes that were expensive and not well-managed contractually, but the fact is that, as a result of PFI, we were able to invest huge amounts of money in the infrastructure. If you want to look at PFI, I would look no further than my own local district general university hospital, Birmingham QE, which is a magnificent example of a PFI scheme, delivering fantastic services and which, overall, is affordable. It is worth saying that unpublished figures to the Health Select Committee from the Health Foundation, which look at expenditure on PFI in 2013-14, showed that it accounted for 1% of providers’ total expenditure. It is not PFI that is breaking the bank.
We need to be more dispassionate about the kind of health service we want and how we want to see it organised in the future. What happened in the 2012 Act is a salutary lesson to us all. I, too, was surprised at the Government’s decision to go for wholesale reorganisation. After all, it had a pretty good inheritance: there had been investment; waiting times had been reduced; and the infrastructure had been invested in. I tempt fate to try to persuade the noble Lord, Lord Lansley, to say at some point, but I never understood why he simply did not get PCTs to do what they should have done, which was to delegate much more decision-making with budgetary responsibility to GPs, rather than going for the wholesale reorganisation that we saw. I accept that the health and well-being boards—the potential integration of health and social care—were a very important and supportable part of that Bill. The problem is that the rest of it has produced a chaotic system in the field.
My noble friend Lord Lipsey mentioned Sir Muir Gray. He said that no reorganisation has ever produced anything of any use. I have some sympathy with that, although I suppose I must own responsibility for two or three of them. The fact is that this reorganisation produced great confusion and fragmentation at local level and, above all, a sense that no one was in charge.
My reading of sustainability and transformation plans is, essentially, that they have been established by NHS England to replace strategic health authorities because they have to have some kind of local plan and leadership. The problem is that they lack legitimacy; I am afraid they lack openness and I hear that, in many parts of the country, they have not involved local government at the start. That is a great pity.
More worrying, I hear too that STPs have come up, in the main, with tired, old solutions. So they are going for heroic reductions in acute sector capacity. They say that they are going to have fantastic, demand management approaches to reduce the intake, but the reality is that there will be no leverage over GPs, primary care or local government to make it happen. It was fascinating listening to the comments of the noble Lord, Lord Kakkar, about the Netherlands and the way in which it should be done. I am afraid that, so far, there is very little evidence that STPs are going down that route.
In July, the chief executive of NHS Improvement said that the NHS is “in a mess”. That was putting it kindly. We have huge deficits; performance has gone completely south, and I doubt that the Government are going to get back to any of those targets in any substantial way over the next four years. No one else in the health service believes that the targets are going to be recovered. At heart, we have this issue of an increase in demand for services, coupled with demographic changes, and the growth rate in resources is less than the health service has ever had in the past. We know that, historically, up to 2015, average real terms growth was 4% a year; it is now down to about 1%. It is abundantly clear that it simply cannot be done.
When you look at the OECD comparisons, they are pretty shocking. There are 29 countries which have more CT scanners per capita than we do. There are 28 with more MRI units and 25 have more hospital beds per capita. That gives the lie to those who think that the acute sector in this country is overinvested. Thirteen have more doctors per capita; 18 have more health expenditure; 18 have more nurses. On comparative terms, I agree with my noble friend Lord Lipsey, it is almost a miracle that it achieves what it does with the kind of resources that it is given.
My noble friends Lady Armstrong and Lady Pitkeathley spoke eloquently about the issues in social care and the funding squeeze. The noble Lord, Lord Lansley, was right about the disappointment over the implementation of the Dilnot report. It is very difficult to see where we are going overall in health and social care, except into a long-term decline. It feels like we are going back to the days when you had long waiting lists and disintegration between different parts of the service. The rhetoric is there. Ministers talk about integration, as do the STPs, but, from talking to anyone in the field who has either to do it or is a patient or a client experiencing the service, things just seem to be getting worse and worse and worse.
I do not have the time to talk about Brexit but, at the same time, there are issues to do with staffing. My major concern is about long-term investment in the life sciences in this country. The research issue to which the noble Lord, Lord Kakkar, referred is very serious.
We have the Select Committee, two members of which spoke in the debate today. It has a very important task ahead of it. It could come up with a soft report, looking at all the options one way or the other and then ducking out of a hard recommendation. I urge it to go in hard. As my noble friend Lord Lipsey said, we face fundamental questions about what sort of health and social care system we have, what we are trying to do and about the demographics and how we are going to afford it. It would be all too easy to shy away from making the kind of hard decisions that have to be made. I very much hope that our Lordships’ House and its Select Committee will help us do that; I do not think the Government will.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, first, that was an extremely good, incisive speech from the noble Lord, Lord Hunt. I do not agree with all of it—he would not expect me to do so—but it raised all the right issues.
I join everyone in thanking the noble Viscount, Lord Hanworth, for raising this subject. I do not recognise the picture that he painted of the NHS and I have been involved with it since 2002. For the avoidance of any doubt at all, I put it on the record that Jeremy Hunt, myself and the Conservative Government believe wholeheartedly in a tax-funded comprehensive National Health Service. I do not want there to be any doubt about that and I want it to be on the record. I know that Jeremy Hunt would absolutely refute any thought that he believed in an insurance-based National Health Service.
I want to focus noble Lords’ attention on today’s debate, which is about the Act. Therefore, if noble Lords will forgive me, I will not address the social care settlement and will not give our response to the Public Health Post-2013 report, which was raised by the noble Lord, Lord Rea. We have only just received this report. I think that response will come in due course. I say to my noble friend Lord Colwyn that I will not address in any detail the questions he raised about dentistry.
The noble Baroness, Lady Walmsley, gave a list of all the people who opposed the Act. I hope she will not think me churlish if I remind her that the Liberal Democrats supported the Act at the time. On the impact of the Act, I find myself in almost total agreement with the noble Lord, Lord Lipsey—not total agreement, but almost—because if we look at what drives healthcare and the changes in healthcare in this country, it is not the numerous reorganisations, however big or large they may be. It is in part demography, as the noble Baronesses, Lady Armstrong and Lady Pitkeathley, mentioned. Demography is at the heart of it. We have an ageing population yet we have a healthcare service which is not geared up to serve an ageing population, many of whom have multiple long-term conditions. It is also a question of lifestyles. I was in America for much of August and obesity is a massive problem there. It is a huge problem in this country as well. The comments made about Michael Marmot and the social determinants of healthcare were equally true. Poverty is a huge contributor to health inequalities, as we know.
The noble Lord, Lord Kakkar, raised technology and its uptake. Technology will have a huge impact on how we deliver healthcare over the next five, 10 and 20 years. Genomics, bioelectronics, integrated health records, big data and personalised medicine will have a huge impact. We will publish the accelerated access review later in September, which I think will address some of the questions that the noble Lord raised.
The noble Lord, Lord Hunt, raised the much wider issue about life sciences in the post-Brexit world. We cannot address those issues today but it is an absolutely critical area that we as a country have to address.
My noble friend Lord Lansley was absolutely right that money is critical in this regard. When the Act came in, he did not know then as Secretary of State that we were looking at a 10-year period with an approximate 1% real growth in healthcare spending against a background when we were spending 4% or 5% a year for many years, and, of course, a very tight local authority financial settlement as well. Finally, there is an issue of culture. People always say culture eats strategy before breakfast. Well, it devours reorganisations. In a people-centred organisation like the NHS, where you have deep vocational and professional attitudes, culture is hugely powerful. We may think that we can tinker with the healthcare system in this House or in the other House, but getting behavioural change from clinicians takes many years. Let us look at NPfIT, the national programme for information technology, which the noble Lord, Lord Hunt, was very much involved with. You can fiddle around with these things in Richmond House, but to persuade people to change the way they work is much more difficult. I think Sir Muir Gray and the noble Lord, Lord Lipsey, are by and large right: we exaggerate the impact these reorganisations can have.
Let us look at the current performance. I acknowledge it is really tough. The targets for acute hospitals—the four-hour waiting times, the 18-week RTT—and the ambulance service are very hard to meet. I totally acknowledge that. It is not surprising, because over the last five years, the number of attendances in A&E have gone up by 2.4 million people. Over the same period, 1.7 million extra people with suspected cancer have been seen; 6 million more diagnostic tests are taking place this year than five years ago; and there are 22,000 more daily out-patient appointments. I could go on. The growth in demand over this period, at a time of great financial stringency, makes things extremely difficult. We should be under no illusion about it. The NHS is doing magnificently against this difficult background; the noble Lord, Lord Lipsey, gave a personal example. The Economist Intelligence Unit recently found that, in its view, our end-of-life care was the best in the world. The Commonwealth rankings are still very favourable. The OECD has reported on improving outcomes in a number of cancer specialties. However, the noble Lord, Lord Hunt, is right; we have fewer doctors per capita in this country, fewer nurses, fewer MRI machines, and fewer CT machines. Despite all the PFI investment over the years, many hospitals are in desperate need of refurbishment, renovation and rebuilding. The NHS performs fantastically well in very difficult circumstances. I still believe that it is the best-value healthcare service in the world. All this has been helped a great deal by the overhead savings that came out of the Act introduced by the noble Lord, Lord Lansley: £6.9 billion of overhead reduction in the last Parliament, at a one-off reorganisation cost of £1.3 billion. I accept that is a huge amount of money, but nevertheless the overhead savings have been significant.
At the heart of many reorganisations is the issue of how we drive improvement. During the new Labour years, we went through a period of command and control from the centre, moved to targets and then moved to more devolution with foundation trusts. Competition and choice were put at the heart of the new Labour efforts to get sustainable change in the NHS. The Act went no further than that. In many ways it put things on a more even footing. Talking to my noble friend Lord Lansley, it is clear that he is agnostic. I think we are all agnostic about who supplies. The noble Baroness, Lady Walmsley, is agnostic; the noble Lord, Lord Hunt, is agnostic. We want the best suppliers to the NHS, whether they are from the public, private or third sector, or anywhere else. I clearly remember the then Secretary of State for Health, John Reid, now the noble Lord, Lord Reid, talking in 2007 or 2008 about perhaps 15% of supply for elective surgery coming from the private sector. Today, the scale of private provision is 7%.
This is where we come back to culture being stronger than anything that we, or the previous Labour Government, do in these Houses. The culture in the NHS is not all that open to private provision, but where private sector companies can provide a better service at a better price, they should be entitled to do so. However, we have to recognise that the opening up of the market, with choice and competition, has not had the success that we would have hoped for. Healthcare is not a perfect market; it is about as imperfect a market as you can find. So we have moved beyond choice and competition to a new approach—one based on transparency and on trying to identify and eliminate unwarranted variation, whether through the Right Care programme in NHS England or the Getting It Right First Time programme in NHS Improvement. I have huge hopes that we will be able to engage clinicians and try to drive improvement through a process of transparency.
Turning to the future, I want to give noble Lords two short quotations. The first is from the NHS Plan of 2000:
“The NHS is a 1940s system operating in a 21st century world”.
I think we would all agree with that. There is a similar quotation from 2014—14 years later—from Simon Stevens in the NHS Five Year Forward View. He says that there is,
“broad consensus on what that future needs to be … It is a future that dissolves the classic divide, set almost in stone since 1948, between family doctors and hospitals, between physical and mental health, between health and social care, between prevention and treatment. One that no longer sees expertise locked into often out-dated buildings, with services fragmented, patients having to visit multiple professionals … endlessly repeating their details because they use separate paper records. One organised to support people with multiple health conditions, not just single diseases. A future that sees far more care delivered locally but with some services in specialist centres where that clearly produces better results”.
We are all agreed on what the future should be. The noble Baroness, Lady Pitkeathley, says that she has heard this for 15 or 20 years. That is true, but it does not make it wrong. We have to join up health and social care; we have to integrate healthcare. Yet, since 2000—the date of the first quotation I gave—we have gone in almost the opposite direction. We have driven more and more care into acute hospitals.
I shall give your Lordships an interesting statistic. Between 2000 and 2014, the number of hospital consultants rose by 82%, the number of GPs by 22% and the number of community nurses by 14%. That shows where the money has gone—it has, I am afraid, gone to the wrong place. We have to reverse that trend but it is very difficult to do so. We have to take resource away from where it has been going for the last 15, 20 or 40 years and put it back into the community, back into mental health and back into primary care. That is the genesis and essence of the five-year forward view. It is the essence of the devolution to Manchester and it is behind the STPs that we have been talking about.
In response to the question, “Does the 2012 Act hinder or facilitate this process?”, I have to say that I do not think we would have had the five-year forward view without the Act. If that forward view had not been an NHS forward view—if it had involved Tony Blair and Alan Milburn or Jeremy Hunt and David Cameron—it would not have happened. The devolution of a great deal of operational power—away from politicians and away from the Department of Health and Richmond House to the NHS—at least gives us a chance of integrating care in the way that we all know it should happen. Whether we are going to be able to do it, I do not know. We have heard a lot of pessimism today about the STP process. However, I am much more optimistic. I shall not stand here and say that I think we are going to have 44 STPs and that they are absolutely marvellous, but most of these plans are genuinely local. They are being drawn up by local people—by hospital trusts, but also by CCGs and local authorities—many of them are led by local authorities.
I think the jury is out. These plans will come out at the end of October; we will have a chance then to see them. They will not all be good, but if a number of them are good and we can get behind them, it will make a difference. In Simon Stevens’s document, there are a number of care models, which are nearly all based on reducing demand on acute hospitals. It may be that finally we have won the argument. I hope that this will not embarrass the noble Baroness, Lady Armstrong, but three or four months ago Paul Corrigan wrote a very good blog—he is always incisive, and it was a very incisive blog—in which he said that the pressures on acute hospitals are great, and that if we carry on putting resources into acute hospitals, they will not change; there will be no need to change.
For the first time, there is a real possibility that we will get this change, although I do not for one minute underestimate the practical difficulties of doing so. I think it was Mao Tse-Tung who said, when asked about the impact of the French Revolution, that it was too early to say. It probably is too early to give a final verdict on the impact of the Act brought in by my noble friend Lord Lansley. However, like all reorganisations, it will be smaller than originally anticipated. If it enables the fulfilment and the implementation of the five-year forward view, I think it will be judged a resounding success.
Viscount Hanworth
This has been an interesting and disturbing debate. We have had a diversity of opinions regarding the state of the NHS and its likely future, not many of which have been favourable. I am heartened by what I understand to be the reaffirmation of the founding principles of the NHS by the noble Lord, Lord Prior; however, I am very doubtful of his optimism.
Be that as it may, I draw attention to the National Health Service Bill, a Private Member’s Bill that had its Second Reading in the Commons on 11 March. The Bill, which was known in a previous version as the NHS Reinstatement Bill, proposes to reverse the 25 years of privatisation in the NHS by abolishing the essential purchaser-provider split, by re-establishing public bodies and by enshrining that the NHS reverts to an accountable public service. The Bill, which has been presented again for the 2016-17 Session, had another First Reading in the Commons on 13 July. It received the support of numerous Labour MPs and even from some Conservative MPs. This Bill merits our attention, as do the speeches that accompanied its introduction.
I reiterate that I am very grateful for all contributions to what has been a very fruitful debate—at least I hope it has been.