Health Infrastructure Plan

Baroness Pinnock Excerpts

Monday 30th September 2019 Lords Chamber

[Baroness Thornton (Lab)]

I thank the Minister for repeating that Statement. He is getting a full range of ministerial experience today, including what I always regard as the most terrifying thing that you can ever do from a Government Front Bench—handle a Statement. I hope that we will make this as painless as it can be. However, I have to say that some clarifications need to be made and some context given.

Since 2010-11, capital spending by the DHSC has declined in real terms, from £5.8 billion in 2010-11 to £5.3 billion in 2017-18—a fall of 7%. This means that the capital budget in 2017-18 was 4.2% of total NHS spending, compared with 5% in 2010-11. This fall is explained mostly by transfers by the DHSC from capital to the revenue budget to focus on more funding of day-to-day running costs. According to the Health Foundation, the fall in the DHSC’s capital budgets has contributed to the UK having a low level of capital investment in healthcare by international standards. The UK now spends about half the share of GDP on capital in healthcare compared with similar countries and is far behind countries in, for example, the number of MRI and CT scanners per capita. So, although capital to revenue transfers have reduced capital spending, the UK would still have very low capital spending by international standards had these transfers not occurred. That is the context in which this announcement is being made.

Yesterday, the Secretary of State—and, indeed, the Prime Minister—announced that they would build 40 hospitals. I heard it myself early in the morning on the news. It has to be said that that very quickly unravelled and it turned out that, in fact, there is the money for six hospitals. So will the Minister please confirm whether the plans for the 34 other hospitals will go ahead? If so, when is that likely to happen? Like many people, I saw the Secretary of State on television, answering questions about the plans for the NHS. I thought that he was vague, to put it mildly, about where the money for this infrastructure plan will come from. What source of government money tree or money forest will be plucked to provide this plan? Given the Government have repeatedly cut capital budgets, as I have already said—by more than £4 billion in recent years—to transfer money to the day-to-day running of the NHS, can the Minister confirm that this will not happen to this new money? Also, as a point of information, this is not the biggest hospital-building programme ever. That was actually done under the last Labour Government.

I have two issues to raise with the Minister. One concerns the maintenance backlog—the repair bill—which has spiralled out of control in the NHS and has now hit £6 billion. The backlog designated high-risk and significant is at £3 billion. This repair bill is compromising patient care. Research has revealed that ward ceilings are falling in, sewage pipes have burst in treatment centres and surgeries have been delayed and, as I have already said, we have some of the lowest numbers of MRI and CT scanners per head of the population, so we are failing to meet our targets on diagnosis. What impact will this new money—if it is new money—have on that repair bill and maintenance backlog?

The second issue I will raise is mental health. The Government’s policy, which we have always supported, is parity of esteem for mental health illness. Sir Simon Wessely’s review of the Mental Health Act called for £800 million of capital investment in some Victorian, antiquated mental health facilities that we should, as a modern country, be ashamed to have on our estate. But not a single mental health trust was on the list yesterday, so does this show that the Government forgot mental health services, are neglecting them or have some plans for them that they have yet to reveal? These services involve some of the most vulnerable patients that we have, so I would like to know why mental health was not included in this capital budget. If it is going to be, when will we see that happen?

[Baroness Pinnock (LD)]

My Lords, I am not my noble friend Lady Jolly, as you might have noticed. She is on holiday, so I have the pleasure of responding to this Statement. Clearly, any additional funding is to be welcomed in our NHS and will be a huge relief to those hospital trusts seeking to deliver world-class care in wretched buildings.

However, it seems the funding is inadequate compared with the desperate need. The NHS England chair, the noble Lord, Lord Prior, said that £50 billion of capital investment is required to bring the NHS estate up to scratch. In comparison, this £2.7 billion is a drop in a very large ocean. In addition, as the noble Baroness, Lady Thornton, has said, an additional £6 billion-worth of urgent repairs have been identified on the NHS estate. They too need capital funding. It is no good having political headlines when basic needs are being neglected. In that context, this seems too little and too late. Further on the funding question, we ask where the money will come from. Presumably it will be government borrowing, which will therefore have a revenue consequence. I am sure the hospital trusts want to know whether that will be passed on to them to fund, as revenue consequences from capital investment.

The next area that I want to explore is the apparent ending of the PFI funding approach, which has put such a burden on too many hospital trusts that have PFI payments on their bottom line. The IPPR think-tank published a report on this—earlier this month, I think—in which it said that NHS hospital trusts have been crippled by the private finance initiative and will have to make another £55 billion in payments by the time the last contracts end in 2050. Those payments relate to an initial £13 billion of private sector-funded investment in new hospitals, so the approach will cost the NHS in England a staggering £80 billion by the time all contracts come to an end. Some trusts are having to spend as much as one-sixth of their entire budget—I stress, one-sixth—on repaying debts due as a result of the PFI scheme. Can the Minister supply the evidence that has resulted in such a U-turn on how capital builds are now being funded? Presumably, the Government are changing from a PFI approach to their own funding approach. Have they decided that PFI funding is not value for money? If such a conclusion has been reached, can the Minister assure the existing PFI hospitals that additional funding support will be provided to those hard-pressed trusts?

Moving on to the list of those hospital trusts that are to benefit, I am obviously pleased that the six in the first phase of the scheme are there. But the question remains: how were they chosen? Where is the data to support such choices and will the Government please publish it, so that we can all be assured of the transparency of decision-making? I am absolutely sure that plenty of hospital trusts across the country are wondering why their particular hospital was not in that first six. Why are there only six in the first list? If there are so many in urgent need of renewal why are there not seven, eight or 10? If the Government are so keen on having world-class facilities, perhaps they ought to be more ambitious.

I move on to what I call the “maybe” list. The headline in the Statement is about,

“40 hospital building projects across the country”,

but we have the six—so that is a reduction—and then we find that there are 21 identified somewhere. I have a little list somewhere of which they will be; I was not filled with optimism about them. What I have discovered from the list of 21 which are to have seed funding is that there are absolutely none in my own Yorkshire and the Humber area. I think there are three in the north-west but none in the north-east at all. Perhaps the Government will be able to tell me that there are no hospitals in Yorkshire and the Humber, or in the north-east, that require any seed funding to develop plans for new builds. If the Minister is struggling to answer that, perhaps I may refer him to the Huddersfield Royal Infirmary, which is in desperate need of investment. Perhaps he will be able to explain why it and other hospitals are not on this list of 21. It leads me to wonder, if that list gets us to 27, where are the other 13? I am sure that many Members around the House will be able to supply the Minister with the names of hospitals that could be added to this list.

We then move on to the fundamental issue of recruitment of doctors and nurses, as referred to by the Minister in the Statement, to enable the NHS to deliver the high quality of care that we want in the new buildings that are apparently to be built. We know that there are currently 40,000 vacancies for nurses in hospital trusts and 20,000 vacancies for doctors. The Statement as it was published in the Printed Paper Office refers to the,

“wonderful staff … at the heart of the NHS”—

we can all agree with that—and talks about “bolstering the workforce”. However, there is then a phrase that the Minister omitted when reading it out. The published Statement says,

“bolstering the workforce through greater international recruitment”.

I wonder why the Minister omitted that phrase, because, unless that is the case, we will be unable to have a sufficient number of qualified nurses and doctors in our hospitals.

Finally, I want to draw attention to the conclusion of the Statement, which refers to,

“a long-term, strategic investment in the future of our NHS”.

Where is it and where is the money that goes with it? Announcing funding for six hospital trusts is not a strategic plan; some of us would probably call it an electoral bung. Where is the funding and where is the plan for a wholesale upgrade of the NHS trusts estate? If there is no funding, I have to conclude by saying that fine words butter no parsnips.

[Lord Bethell]

My Lords, I thank noble Lords for the warmth of my welcome to this initiation in the art of Statement-giving; I shall try my hardest to answer as many questions as were put. They were terrific questions.

I start by reiterating the point made by the noble Baroness, Lady Pinnock, which is that this is fabulously good news. An announcement of an investment such as this does not come often. It is a cause for celebration and something in which we should take pride as a country.

The question of new money is always important when there is a major spending announcement, so let me cut to that first of all. This is additional funding; it is not moving cups around, and it comes directly to the department’s capital budget, the CEDL, which is being increased accordingly. The vast majority of the funding will be in the form of public dividend capital, which is commonly understood as a grant, but the one caveat is that where schemes have related land disposals the proceeds from those land disposals will contribute to the scheme funding.

The funding for this investment is £2.8 billion; £2.7 billion is for the six schemes that I mentioned and £100 million is seed funding to assist the further 21 HIP schemes in developing their plans. That is very important money and I shall come back to it later in my response. Future funding will of course be agreed with the Treasury in due course.

On the number count, the noble Baronesses, Lady Thornton and Lady Pinnock, raised questions about the 40. Let me explain. Six new hospitals are getting the full go-ahead now and 21 more schemes will get the green light at the next stage of developing their plans. Some of those schemes are multi-site: therefore, there are 30 hospitals within the 21 schemes. That is why we get to a number that is over 40.

Maintenance was brought up. It is critically important. We can invest all we can in the staff and the science but, if we do not have good infrastructure—clean, non-leaking hospitals with wi-fi and the latest technology—the system will not work properly. I think that the NHS acknowledges that its infrastructure has fallen behind. This investment is a recognition of that fact. There is a maintenance backlog: the Government have put in £3 billion in capital funding to fix the leaking roof. We provided an additional £1 billion in August, which will enable the NHS across the country to take forward existing plans for more investment and to address urgent capital issues in line with local priorities. The NHS’s full capital needs will be provided for as part of the DHSC’s settlement in the next capital review.

I thank noble Lords for bringing up mental health. Of course, some of the hospital projects have mental health dimensions to their locations. However, I confirm that the health infrastructure plan covers all types of investment, including mental health. We will invest in community and mental health facilities when the long-term capital budget is confirmed in the second round.

I can confirm that none of these projects will be financed using PFI. We will see a return to financing major health infrastructure projects from the government grant. This is part of a change in approach that will see a long-term plan for health infrastructure that can be fine-tuned as the years go by, informed by NHS England and interactions with stakeholders. It can be a really clear route map for how we do investment, and it can be funded reliably and without dependency by government funds, which means that there is no negotiation or third party that we have to handle in funding these hospitals.

I thank noble Lords for asking how the hospitals were chosen. It is a very important question. NHS England conducted a strategic assessment of hospital estates and came up with a list of priority schemes selected on the basis of age and/or where a combination of other metrics indicated a high need for investment in the estate. Based on that, a small number of schemes were identified as suitable for full funding now, given their advanced level of readiness to deliver in the near future. I emphasise that point: the number of shovel-ready plans on the conveyor belt and ready to go today is quite limited. A very limited list met the criteria. The £100 million that has been set aside to help hospitals invest in those plans is a really important part of developing the capability and resources within hospital and trust capital planning teams, so that they can put together the thoughtful and persuasive plans that mean that they will qualify for the next round. The remaining list of priority schemes was then filtered, based on a combination of criteria including the level of critical infrastructure risked in the estate and the overall check of regional breakdown, to make sure that no regions were overrepresented or underrepresented.

It is a concern for the Government to make sure that we have enough staff to fill these new hospitals. That is why the noble Baroness, Lady Harding, is putting together her workforce plan for the NHS, which we hope will answer the question of how we will develop the NHS workforce to man these hospitals.