Health and Social Care Bill
Lord Noon Excerpts(12 years, 8 months ago)
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Lord Noon
My Lords, I speak in support of Amendments 1 to 6. I add my thanks to the Minister for his support in seeking to improve this Amendment, which I believe has been done in a number of ways. I should also declare an interest in these matters as chair of the Noon Foundation, which provides financial support to charities and other not-for-profit organisations, including those caring for people in end-of-life situations, such as the Marie Curie Cancer Care charity.
As a philanthropist and a businessman, I understand very well the importance of having a level playing field. We all know the immense value that is provided by charities, social enterprises and small voluntary agencies. I believe that they form the bedrock of our society. They provide essential support and care to those who are most in need, and do so on a daily basis.
The VAT issue for me is very clear. As someone who provides funding for charitable work, I do not want to see those funds taken up paying VAT that was not charged to the NHS when it provided the service. However, we need to go beyond VAT and look at all the barriers faced by the not-for-profit sector. As a business man, I understand the significant risks taken on in any new enterprise. There must be adequate time to accumulate capital, contracts must be fair and any additional undertaking such as the transfer of staff must be fully funded. So why should we expect any less of the charitable and not-for-profit sector? Is it fair that those organisations which exist solely for the benefit of those they serve should be penalised for not being wealthy private enterprises?
Even an issue such as insurance can be difficult. Most of these organisations rely on volunteers, people who have chosen to freely give their time because they want to give something back to society. However, as more services are taken on with a wider range of activities, the risks increase and so too do the insurance premiums. These increased costs are not always taken into account in contracts and can represent an excessive and increasing burden for charities.
However, this is not only about levelling up the playing field to be fair; this is about the kind of healthcare organisations we want to see thrive. At a time when government resources are severely challenged and shrinking—we cannot hope to manage solely on charitable donations—bringing the not-for-profit sector more firmly into mainstream provision of services is one of the ways in which we can continue to provide much needed care, but this will work only if we ensure that these organisations can enter the market fairly and with fully costed and supported service contracts.
In supporting these amendments, the Government are accepting that this is a vital issue and they have made a commitment to provide a report with recommendations within a set timescale. This represents a significant move in the right direction and I commend the amendments.
Lord Newby
My Lords, I strongly support the noble Lords, Lord Patel and Lord Noon, in seeking to promote the role of the not-for-profit sector within the NHS, as indeed I do across the whole of the public sector. They have given reasons why within the NHS, particularly at this point, the not-for profit sector can play a valuable role. As the noble Lord, Lord Patel, pointed out, there are a number of serious technical problems facing the sector in successfully bidding for contracts, and he has dealt with some of them.
I remind the House that least week Royal Assent was received for the Public Services (Social Value) Bill which requires all procurers, including those in the NHS, to consider the social value of a tender as well as its financial value, in such explicit terms, for the first time. This is one of the pieces of the jigsaw which I hope will mean that the not-for-profit sector finds it easier to successfully bid for business. The Bill lays a requirement on the public sector, but the problem is whether the public sector will implement the Bill and take the provision seriously. It would be relatively easy for it not to.
Therefore, I and other noble Lords, including the noble Baroness, Lady Thornton, who have been supportive of this principle and the Bill, seek to ensure that the Government put in place specific measures to ensure that procurers take account of the Bill rather than it simply lying idle on the statute book. When we debated this issue at an earlier stage in your Lordships’ House, the Minister suggested that it might be possible to refer to this in the draft commission of procurement regulations, and I hope that he will be able to confirm today that that is the Government’s intention.
Health and Social Care Bill
Lord Noon Excerpts(13 years ago)
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Lord Noon
My Lords, I wish to support the amendment moved by my noble friend Lord Patel of Bradford. I declare an interest as chair of the Noon Foundation, which has made significant donations to charitable organisations and others concerned with the care of those living with cancer and those in hospices or receiving palliative care in the community.
My noble friend has outlined many of the key issues faced by the charitable sector with respect to VAT exemptions. I do not want to repeat these arguments, but let me add further information on the scale of the services that we are discussing. The combined contribution of these services amounts to more than 26 million hours of care every year. In excess of 2,000 adult in-patient beds are provided by the voluntary sector and more than £1 million is raised in charitable donations every day.
Of course, these are voluntary sector services that rely on thousands of people who give up their time to ensure the work is done. In fact, the estimated value of the 100,000 volunteers is said to be more than £112 million each year. The value of this sector as a whole in providing hospices and palliative care is in the order of £3 worth of care for every £1 invested. This is an outstanding achievement that should make all of us very proud. It is also why we should be doing much more to protect the sector and ensure that it can operate and grow on a level playing field.
I am a businessman so I know something about VAT and the need for equality in financial arrangements when different providers are in the same market. I am perhaps less anxious than some about the use of competition as a driving force in healthcare. I believe that competition can be harnessed for good and that there are many benefits to be realised by opening up the healthcare sector to this kind of discipline. However, competition must be fair and the current arrangements on VAT between health services and the charitable sector are certainly not fair.
One of the charities that I have been most closely involved with, as a donor and a supporter, is Marie Curie Cancer Care. Marie Curie provides high-quality end-of-life nursing care throughout the UK and has more than 2,000 Marie Curie nurses, who care for half of all cancer patients who die at home. These nurses provide essential care for patients and their families at the most stressful time of their lives. I have met many of these nurses, and their dedication and passion is second to none. They not only provide essential practical support to people as they face the end of their lives but are an emotional support for the whole family.
In addition to a range of community and home nursing services, Marie Curie is one of the largest providers of hospice care outside the NHS in the country. It runs nine specialist hospices which deal with all the patients’ needs—physical, social and emotional—across in-patient and day-care services. These services are vital to those who use and need them but we should put them in this context: 65 per cent of people say that they would like the choice of being able to die in their own home, surrounded by family and friends, but the reality is that only 20 per cent manage to achieve this choice.
It is clear that we need more of these provisions, and the Health and Social Care Bill will help to extend them. The new arrangements for commissioning mean that other organisations can provide more health services. This will also mean that there will be much more competition from lower-quality commercial organisations, but we must support them to be able to do this. Part of that support must be to ensure that there is a level playing field in respect of VAT. We should not expect charities to take up an extra burden in providing these vital services by expecting them to take on costs that do not currently apply to the NHS. The amendment provides a way of achieving this social goal by placing a clear duty on the Government through the Secretary of State’s report to Parliament on the treatment of VAT provisions across the charitable sector. I hope the Minister agrees that it is an important move in the right direction and will support the amendment.
Baroness Finlay of Llandaff
My Lords, I declare all my interests in relation to hospice and palliative care services.
The amendment is particularly important because of the any qualified provider provision which seeks to bring in more charitable sector providers, working with NHS commissioners, to provide essential services where the NHS is not able to plug the gap. That is why there was a debate in the other place in May this year on the effect of VAT on hospices. However, it goes much wider than simply hospices.
The VAT gap means that the private sector can claim back VAT by passing on the cost to customers; the public sector pays VAT, which is then refunded by government; but the charitable sector can do neither—it fund raises. In the hospice world—I am grateful to Help the Hospices for the figures—an average hospital in the UK, supporting about 1,000 patients and spending £8 million on care, may receive about 30 per cent of its funding from the NHS but it will spend about £82,000 on irrecoverable VAT. So money has to be raised just to cover that VAT gap.
As the hospital takes on more and more responsibilities, the problems become greater. As we try to get hospices to work together on joint ventures and share services with other providers and other charities, one hospice has to recharge services to another—one voluntary sector provider to another—including VAT, and that cannot be recovered. It also cannot recover any VAT on the repair and construction costs of charitable buildings. As there is increasing use of its buildings and it needs to upgrade to meet more modern quality requirements, VAT becomes a problem because, for the hospital to provide the quality service that we need, it has to outlay on capital expenditure.
The other difficulty is that VAT is fairly complicated for charities and requires expertise to manage the VAT process for them, which of course also incurs a cost on them in terms of personnel, which again is irrecoverable.
This is an extremely important amendment and the principle behind it has to be tackled if the fundamental idea of any qualified provider is to work in practice in the long term and provide stable, quality clinical services.