Royal National Orthopaedic Hospital: Redevelopment

Debate between Lord Prior of Brampton and Baroness Dean of Thornton-le-Fylde

Thursday 17th March 2016 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

I thank the noble Baroness, Lady Dean, for bringing forward this debate. I did not know anything about the history of Stanmore until today and the briefing I had beforehand. It has been an extremely good debate. I echo the words of my noble friend Lord Finkelstein that we have reached the stage where everything has been said but not everyone has said it. I fall into that category. Let me put on record that I agree with everything the noble Baroness said in her speech rather than repeating it, as I would otherwise have done.

I wish to address a number of points and themes. First, this is not a PFI. We need not today go into the pros and cons of PFIs, save to say that my sympathies are with my noble friend Lord Tebbit: many of them have been incredibly expensive. When he used the word “pernicious” I think he meant that not only were they expensive but they have hidden liabilities that should appear on the public sector balance sheet. He may like to know that the future costs of the PFI schemes for health alone total £79 billion. This includes some of the soft FM contracts but it is a huge liability that ought to be on the face of the public balance sheet but is not. I say that on PFI, but this is not a PFI scheme.

Secondly, my noble friend Lord Tebbit and others made reference to the land sales that are part of this scheme. We use our property resource in the NHS fantastically badly. I am not saying whether or not the £20 million assumption here is a low level of money but sometimes in the NHS, because we are in a hurry, we sell things off quickly, whereas if we had more time and could explore matters through a joint venture or a more creative arrangement we might be able to bring in a lot more money. That is something I would ask the management to look at, but not as a way of deferring this scheme. I am pleased that Rob Hurd and Professor Goldstone, respectively the chief executive and chairman of the RNOH, are here today listening to this. We do not deal properly with our massive property resource. In gross terms we have £40 billion to £50 billion-worth of property assets within the NHS, which we do not use very well. If we walk around London we can see some of our hospitals in prime residential areas. These are worth a huge amount of money which we could use to redevelop our real estate within the NHS.

Thirdly, Stanmore is not only a beacon of excellence but the work that Professor Tim Briggs is doing to spread his Getting It Right First Time scheme across the NHS is hugely important. If we are going to get long-term sustainable improvement for the NHS we must have clinical engagement. The work that he is doing through his exposure of variation in orthopaedic practice is hugely important. If we can spread the learning that he has gained in orthopaedics into other surgical and medical specialties, it will make a huge contribution to the massive saving programme that we need to achieve over the next five years. Related to that, the fact that the RNOH is leading the National Orthopaedic Alliance vanguard around the country with a view to franchising the excellence in the RNOH into DGHs and other hospitals around the country must be a good thing.

My noble friend Lord Lansley raised the issue about specialist institutions. I agree the evidence is that, from a patient and clinical outcome point of view, specialist institutions are extremely successful. However, there are two caveats to that. One is that they can become insular; and the second is that they can be high cost. Often they are relatively small institutions and, because the tariff does not favour complex specialist work, they can be a disadvantage to the tariff.

The RNOH has addressed that insularity issue in two ways: first, through the tie-up with UCL on the biomedical engineering facility; and, secondly, through developing its work with the Royal Free, which is very important. That may enable it to take some costs out of its existing institutions.

The tariff, which my noble friend also raised, is something that we should address with NHS England and with NHS Improvement to be sure that it does not favour just those more commodity or routine orthopaedic operations at the expense of the more specialised, complex operations. I think—and my noble friend will know more about this than I do—that, originally, the tariff was structured to encourage the private sector to come into the more routine, so to speak, orthopaedic business. It has disadvantaged the more specialist institutions, which is something that we need to address. If I were coming here to say, “No, we’re not going to do this”, I would have to deal with not just my noble friend Lord Tebbit but an even burlier character in Professor Tim Briggs. He is a fairly typical orthopaedic surgeon and saying no to orthopaedic surgeons is never a happy experience.

I am, as I say, leaving aside the speech I would have made because it would simply repeat what has already been said. The TDA received the trust’s revised outline business case in January last year. Following its review of the business case, the TDA required assurances on two strands of work to be completed. The first was the development of an interdependent estates strategy and land disposal business case for the Stanmore site. The second was the further development of the NHS England vanguard partnership with the Royal Free London NHS Foundation Trust as part of securing the long-term sustainability of the trust. In relation to the vanguard partnership, the trust plans to present a formal report to the TDA on progress ahead of the full business case submission. Negotiations with the Royal Free have gone well, with an MoU between the two organisations signed, which aims to identify the clinical synergies of the two organisations and how their working more closely together could strengthen the clinical model. Those discussions have gone extremely well.

An outline business case for the land sale has been submitted by the trust and approved by the TDA investment committee and will go to the full TDA board. That should not hold up this project. If there is a way of increasing the receipts from the land sale, then clearly the management will be trying to do so. A full business case containing Balfour Beatty’s final proposals for the redevelopment of the hospital is expected to go to the trust’s board on 30 March. In April, the trust is expected to submit a full business case to NHS Improvement for review. In June and July the full business case is expected to go to NHS Improvement’s investment committee and, following that, to the NHS Improvement board. Approval will allow the trust both to clear the site available for sale and to fund the part of the new facility not covered by the land sale receipt. Construction will be completed in December 2017, with the new facility opening to patients in February 2018.

To conclude, this is very much a priority project for the Department of Health and NHS Improvement. The Government fully support the redevelopment of the RNOH and are grateful for the contribution it has made to the Getting It Right First Time project, led by Professor Briggs. I am happy to arrange a meeting, as the noble Lord, Lord Hunt, requested, with NHS Improvement on this issue. If it is all proceeding according to plan, that meeting might not be necessary but, if there is a glitch, I am happy to come back for another debate, but we fully support this and can see no reason why it will not be given the go-ahead according to the timetable that I suggested. Before I sit down, is there anything that noble Lords would like to raise that I have not covered?

[Baroness Dean of Thornton-le-Fylde]

We are not often asked to intervene in a Minister’s contribution so I thank the Minister very much indeed and welcome his contribution. If the hospital reaches any glitches, will his door be open for a meeting with the CEO and chairman of the hospital?

[Lord Prior of Brampton]

Yes, any time. I should have said that I have not had a chance to visit Stanmore but I would certainly like to do that. We are fully behind this case. I will go to the hospital anyway, but I hope that this will go ahead on this timescale.

[Baroness Dean of Thornton-le-Fylde]

They hope to break the land—first spade in—on 7 July. How wonderful it would be if the Minister did it.

[Lord Prior of Brampton]

Perhaps at the same time we could fill in the hole dug by my predecessor.