Health and Social Care Bill

Debate between Lord Beecham and Lord Mawson

Monday 28th November 2011 Lords Chamber

[Lord Mawson]

My Lords, I am very sympathetic to the amendment of the noble Lord, Lord Rooker, for very practical reasons. I am building a street at the moment in Tower Hamlets, and part of that street is not only a new school but a new health centre, which has been under development for five years. The health centre proposals were begun in the previous Government’s time in office. It is true that the Bromley-by-Bow Centre, when competing for that practice, was not on a level playing field. It is very difficult to compete with a multinational company that could undercut the price per patient to £75 per head, when I, having run an integrated health centre for 20-odd years, knew that the real costs were probably around £119 per patient and that the £75 per patient was not sustainable. It was very interesting going through the whole of that process, of proper competition and then losing the competition, to three years later, when I was approached by that company which admitted that the business plan did not work and asked whether we could help rescue the situation, which we have now done, and the multinational business has now withdrawn. I know that there is a problem here that we need to get our heads round, and I know and believe that the Government are serious about wanting the social enterprise sector and the voluntary sector to play their full role. It is a practical problem that needs to be got hold of.

The other thing that I know from experience is that bureaucracies like to talk to bureaucracies. I know that large government departments often find it easier to talk to large businesses. Indeed, we have seen this happen over many years. I am in favour of the private sector. We work a lot with the private sector, and I do not think that it is a case of one of the other. However, I have noticed how easily civil servants translate across into large companies, with the bureaucracy carrying on under other names, and organisations that are leaner and more innovative sometimes find it very difficult to break in. Therefore, if the Government are really serious about allowing some of us who do this work but are smaller in scale to break into this market and grow in capacity, then something will need to happen here to help that.

I also know from experience that one way in which we have grown in capacity is by forming relationships with one or two businesses. They have got to know what we are about and we have got to know what they are about, and we have formed partnerships and grown opportunities together. As I mentioned earlier, a £35 million LIFT company has now built 10 health centres. When we formed that relationship, which is a bit like a marriage, we got to know about each other’s worlds. We are now in a social enterprise with that business carrying out landscape work on 26 school sites. Therefore, there are things that government can do.

In my experience, some businesses are becoming more intelligent about this, although some businesses are not. The Government should be using their muscle to encourage businesses to form these local partnerships. If they do not do that, the danger will be that the profits made in poorer communities will be sucked out of the area, rather than there being virtuous circles around the areas creating more jobs and opportunities in local contexts. Therefore, I am sympathetic to the amendment. I would encourage the Government to look again at some of the practical issues and how they work in practice on the ground.

[Lord Beecham]

My Lords, for centuries what is now termed the voluntary or charitable sector was the main provider of health services in this country. It is a common view across your Lordships’ House that the sector must be encouraged to play a growing part in the provision of services, partly because it has a track record of innovation, is less inhibited by cumbersome regulations, and perhaps, as I have said on a previous occasion, is a little less risk averse than public bodies tend to be and obviously less motivated by the profit motive than the private sector necessarily has to be.

Surely it is common ground that we want to see a thriving voluntary sector, and I credit the Minister with sharing that aspiration. The trouble is that the Bill does not help him to do that. At best, this clause is neutral in its attitude towards the voluntary sector and, at worst, it will conceivably endanger the realisation of that aspiration. The noble Lord, Lord Greaves, pointed to the curious phrase in paragraph (b), seeking some elucidation, which we may get. However, as it stands, that paragraph could easily be interpreted as referring to the charitable and voluntary sector and as placing that sector at a disadvantage because it would be brought within the scope of the provisions of the clause, which would prevent any positive discrimination—if I might put it in such terms—in favour of that sector. That may not be the intention but it would appear to be very likely to be deemed to be the outcome.

There are already significant inhibitions, as a number of your Lordships have pointed out. The noble Lord, Lord Rooker, referred to the central Surrey experience, where a £9 million performance bond was requested from a social enterprise which clearly was not able to provide it. Incidentally, I contrast that with the financial position of Circle, which had a £45 million pre-tax loss in the year prior to the award of a contract to it and apparently very little relevant experience in running a hospital facility. However, it was awarded a contract. It would be interesting to see what criteria would be applied in future cases of that kind, whether to social enterprises, enterprises purporting to be social enterprises, such as Circle, or other enterprises. Be that as it may, there are clearly considerable difficulties for the social enterprise sector. Social Enterprise UK in its briefing, which no doubt some of your Lordships will have had, points out that the clause could also prevent the continuation of policies such as the Social Enterprise Investment Fund, which helped to support social enterprises in their endeavours.

The noble Baroness, Lady Williams, bravely interposes herself between the raging Opposition and the beleaguered Minister—as he appears to deem himself—but for what purpose I really cannot quite understand. Nobody is doubting his bona fides; the question is whether the legislation reflects his intentions. The very best that can be said of the clause which the amendment of the noble Lord, Lord Rooker, seeks to improve is that it creates a neutral situation. However neutrality, like patriotism, is not enough in this context. If we want to support the sector then we have to recognise the disadvantages with which it starts and not go for a simple level playing field on the assumption that all parties on the field are equal. We have to prepare the ground to assist this particular sector. At the moment, I do not think that the Bill provides for that.

The amendment does not require the board to favour the sector. I might have gone along with it had it done so. It provides the option for the board to assist the sector in making its particular and distinctive contribution to the provision of health services and removes what would be a substantial obstacle to that happening. This clause reflects a positive attitude to a sector that needs that kind of support. I therefore hope that the noble Earl will accept the suggestion made by my noble friend Lady Thornton in the earlier debate and hold some kind of discussion with representative bodies such as ACEVO, which is clearly concerned. The chief executive of ACEVO was a member of the Future Forum and his views should be taken very seriously. There are other organisations, some of them already in the field providing services, which clearly have an interest in this. The hospice movement, which has been referred to, is a very good example. A meeting convened by the Minister would be very helpful in that respect.

Social enterprises are perhaps slightly different from traditional third sector organisations. They are essentially a new form of enterprise in this field and again they ought to be represented at such a discussion. At the very least, I cannot see what the Minister would have to lose by accepting the noble Lord’s amendment. It does not impose a positive requirement. It does not prevent other parties being involved in undertaking work or competing for the provision of services in this area, it merely provides for a third option. If that is consistent with the Minister’s approach I cannot see what the Government have to lose by accepting it. It certainly is no reflection on his intentions, as I am sure the noble Lord would confirm and as I have repeatedly said. I therefore hope that the Minister can respond positively—if not tonight by simply accepting the amendment, which would be the easiest and most preferred course for many of us, then at least by entering into discussion with a view to assessing the degree of difficulty that the sector fears would arise from this provision. We could then see on Report whether we might amend the clause something along the lines of—if not on the actual lines of—what the noble Lord, Lord Rooker, has proposed. That would meet the wishes of all Members of this House to see a thriving sector contributing in that mixed-economy provision to which we all subscribe.

Localism Bill

Debate between Lord Beecham and Lord Mawson

Thursday 7th July 2011 Lords Chamber

[Lord Mawson]

My Lords, I apologise for coming in and out of the debate on Tuesday and missing the key parts of the discussion. I will speak to Amendment 136A. My day on Tuesday was punctuated by meetings about the Olympics and a meeting with a Minister. However, by 11 pm on Tuesday evening I think I had managed to get a good flavour of the debate. I also apologise for being another speaker in the debate who hails from Bradford. I do not know what was being put into the school milk all those years ago up there for so many Bradfordians to be speaking in this Chamber on this subject. I was a milk monitor for a while, but it was not me who put anything in the milk.

More seriously, who decides what land or buildings are included in the list? As I have listened to this debate on the Bill there has often been an assumption that local authorities, be they in Bradford or Tower Hamlets, are in close contact on the ground with local communities, that they know what is going on and that their staff have the entrepreneurial flair and skills to spot a building or land and create an opportunity when they see it. I hear a very different message in some things I have looked at in Bradford and elsewhere. Having had 30 years of experience attempting to negotiate with local authorities, both in east London and up and down this land, I must say that this is not my experience. There is one view looking down the telescope into a local community from the offices of a local authority. There is quite a different view looking up the telescope in east London from one of the poorest housing estates in Britain.

In my experience, often local authorities are actually not in touch with the practical opportunities on the ground presented by land and buildings. Local authority staff, and sometimes the local councillors, do not always possess the skills and mindset to know what to do with these assets, which they view from a fairly traditional public sector point of view. Some local authorities are just not innovators, and some are. Some local authorities resist social entrepreneurs like me who come along and suggest a wholly new approach or point to new opportunities presented by land and buildings that challenge the status quo. Of course, there are some excellent exceptions to this rule.

As the Bill stands, and as the noble Baroness, Lady Thornton has reminded us, the nomination of land or buildings as a community asset can be done only by a parish council, a county council or local authority. This means that, for example, the Bromley-by-Bow Centre in east London—which I founded, and of which I am now the president, so I must declare an interest—could not suggest that any land or building be included in the list. This is ridiculous. The Bromley-by-Bow Centre began 27 years ago as a small charity and has today expanded its operation such that it works closely with local residents across the whole of Poplar and beyond. We have done in practice what many contributors on the Bill have talked about. Today, what began as a small charity runs a three-acre site and has 170 staff. With local people, we have created 37 businesses and social enterprises that operate across Tower Hamlets and beyond. We built the first integrated health centre in the country that is owned by local people through a development trust, and now our doctors and their partners run four health centres in Poplar with responsibility for nearly 40,000 patients.

I also helped found the housing company Poplar HARCA, with which I do some work now and so must also declare that interest. This £300 million company has challenged the traditional logic of the housing association movement and has done a great deal of work to demonstrate how housing associations can use their capital investment in housing to trigger social and economic development with residents in a way that allows local communities to start to think very differently about how we can use both land and buildings in an innovative way. Today, the company has responsibility for nearly 10,000 housing units, operates in Poplar on an area of land that is the same size as the Olympic Park, on the opposite side of the road, and now owns 34 per cent of all the land in the area. This is a resident-led organisation. Today, Poplar HARCA, in partnership with the Bromley-by-Bow Centre and Leaside Regeneration Ltd—another interest that I must declare, as I am a director—has put together a £1 billion regeneration programme, which will have major implications for the area over the next 15 years, both for land and for buildings.

The idea that the Bromley-by-Bow Centre and Poplar HARCA, both of which are charities, should not be able to nominate land and buildings on to the list would be resisted by local residents, who have voted through a democratic process for the housing company. These charities have widespread support and are far more in touch with the opportunities for innovation on the ground than the local authority, even though we work in partnership together. What I am describing in practice is the opportunities that the Bill can present to local social enterprises and their partners if we get the detail right. I am describing what the noble Lord, Lord Jenkin, has rightly described as the wider opportunities with which the logic of this Bill might, if the detail is right, present local communities.

With regard to the fears that the noble Lord, Lord Greaves, expressed on Tuesday about large companies coming into the local area and cutting out local organisations, I understand that fear, but in practice the Bromley-by-Bow Centre has a very successful partnership with the multinational company G4S. Together, we created the first £35 million LIFT company, which has now built 10 health centres in east London. The social enterprise Green Dreams, which was founded at the Bromley-by-Bow Centre, is a landscape business that now has a contract with G4S to work on 26 school sites across Tower Hamlets. Together, social entrepreneurs and a large business are now going for large contracts that are focused on creating local jobs and skills. This has all been done in partnership with local residents. Because G4S as a company has a long-term interest in the area, as does the Bromley-by-Bow Centre, good working relationships exist on the ground. Both partners are of course constantly looking at the opportunities presented by land and buildings.

For those reasons, I suggest that this amendment should be on the face of the Bill. Local community organisations should be able to nominate both land and buildings if going local is to look like this in practice in the future. If such an amendment is not included on the face of the Bill, I fear that some local authorities will not necessarily listen to the pleading of a small but developing local charity or social enterprise that is attempting, as we have done, to grow in capacity. The danger is that the local authority will ride roughshod over the community organisation, and a small flower in a new garden, where a thousand flowers need to be allowed to bloom, will be crushed in the process. Outside this Chamber, a new world is emerging that is challenging both local authorities and the public sector, and that world is made up of organisations that are often deeply committed to the lives of local people. We need to enable this world to grow.

Finally, I must say that, in my experience, we sometimes need the intervention of the Secretary of State—not too often, but occasionally—because, without the intervention of key Ministers of State in the development of the Bromley-by-Bow Centre, we would not be where we are today. Innovation in local communities is difficult to do. I know that—I bear the scars—and sometimes you need friends in high places to help you to break through the local inertia.

This is an important amendment for charities and social enterprises across the country. I suggest that the Government should support it if they truly desire to let a thousand flowers bloom. My colleagues and I would certainly be willing to sit in a room with the Minister and her colleagues to discuss further how we might make this part of the Bill work in practice. I have certainly found my conversations with the Minister on the Bill to date very helpful.

[Lord Beecham]

My Lords, I almost feel the need to apologise for not being a refugee from the dark satanic mills of Bradford, unlike so many other noble Lords who have spoken in this debate.