Health and Social Care Bill

Debate between Lord Warner and Lord Rooker

Monday 28th November 2011 Lords Chamber

[Lord Rooker]

If the Minister’s words in the last debate mean anything at all, he will accept this amendment. It is as simple as that. It is his lifeboat. In fact, it is the lifeboat that—nothing personal to the Minister—will stop the team of Ministers becoming a laughing stock for the third sector, bearing in mind what was said last year, which we have heard a little bit about, and what is being done in this Bill. It will also stop them taking the Lib Dems for a ride. I heard some of the most profound words in our debates on the Bill uttered by the noble Baroness, Lady Williams of Crosby, at around 3.30 pm this afternoon, when she deeply questioned once again the motives of the endgame of this exercise. That is what she said; it is very profound and she has said it before. They are words that others have also used. What is the endgame of this process? To stop themselves being taken for a ride, the Lib Dems would do well to accept the amendment too. We have heard about creating opportunities and,

“the largest social enterprise sector in the world”.

Last year, the Secretary of State said there was,

“also opportunity because across government we are going to open up to new providers, and the voluntary sector is at the heart of that”.

That is what he actually said, before this Bill was drafted. I know you can get carried away on conference platforms, but as the Minister you are, at the end of the day, responsible. We have probably all done it, but the fact of the matter is that is what was said, and it could be held to be misleading. The amendment, which has come to me via Social Enterprise UK, is a lifeboat. It does not require anything, it says “may”, and it goes to the heart of what the Minister said about not trying to do it for ideological reasons. Clause 20, as drafted, may be used to prohibit any interventions that support the voluntary and social enterprise sectors. The fact that it can be used for that purpose is bad enough in itself and undermines the point which the noble Baroness, Lady Williams of Crosby, made earlier on. It would be a disaster. Therefore, the amendment, which has been looked at by those outside, would be of assistance.

Why do we want the amendment? In the previous debate, we heard the well rehearsed arguments for social enterprise and the voluntary sector providing a greater share of public services. They were the implications of the Secretary of State’s words at the conference last year. They are recognised and proven, and it is a trend that crosses all political parties. That point must be taken on board if the credibility of Ministers is to be maintained. Indeed, all parties in the House and next door support the passage of the Private Member’s Bill tabled by Chris White MP that would open up public service markets and require commissioners to consider how they might promote or improve the economic, social or environmental well-being of their local area through contracts. The parties are supporting that Bill in the other place. Are they kidding anyone or are they being genuine about support for a mixed economy, because this Bill, as drafted, could stop the mixed economy and stop any changes? I am not proposing my amendment for ideological reasons.

There are about 62,000 social enterprises in the UK. They contribute some £24 billion to the UK economy, and they need to be treated seriously, responsibly and as adults. Of these, a third operate in the healthcare sector. By the way, I am reliably informed that Circle is not one of them—whatever might have been put over as spin by the Department of Health. Add to that the vast number of voluntary and community organisations that are providing a huge range of health and social care, and you can see that knocking out their continued development—I repeat, continued development—would be a disaster for the market and most importantly for service users.

If there is to be a competitive market, and I do not argue against that, then it can operate only if there is a fully functioning market. We do not have a fully functioning market at present—it is embryonic. That is the difference and that is the point that did not come across in the Minister’s response to the earlier debate. Healthcare markets in England are, by any definition, in their infancy with regard to supply and demand sides. That must be the case as regards this Government, the previous Government and the one before that. Where both supply and demand sides are underdeveloped, I believe that open competition will result in high barriers to entry, limited choice and compromised quality and outcomes. We have seen a few examples of that in the past few years. A small number of large firms will dominate and there will not be the innovation or value that introducing competition is designed to bring about. There has to be another way of looking at this.

Knowledge barriers, capacity barriers and structural barriers put social enterprises, and voluntary and community groups, at a disadvantage. Knowledge and understanding of the social enterprise and voluntary sectors by the public sector has improved but remains particularly weak in the healthcare sector. Without understanding the sector, commissioning may be designed in such a way that precludes its involvement. It will be all right for the smart lawyers to argue about the way it was done, but the consequences are snuffed out before they start. That is the difficulty we are seeking to overcome.

On capacity, we know that a lot of community-based organisations could play, and currently do play, a huge role in improving healthcare through early intervention, community-level delivery, advocacy and behaviour change, but they lack the capacity to engage with competitive tendering, and alternative approaches specifically designed for them can make a huge difference. The Bill as currently drafted may—I repeat, may—prevent commissioners from feeling that they have the power to do this. That is the point. If we had a fully functioning market, the situation would be slightly different.

Structurally, we know from the central Surrey case—as has been repeated several times—and others that barriers to entry can be set structurally too high for many social enterprises. We are not on a level playing field. Not everyone is a big firm or a multinational. That is not the purpose of the exercise, which is to allow 1,000 flowers to bloom in the interests of the patients. That is what it is about. However, the fact is that the entry level can be set structurally too high for many social enterprises and voluntary organisations that lack the ability to raise the same levels of capital as private organisations but are often better placed when it comes to quality of care. That is the other side of the balance. They reinvest their profits into the organisations, which means that their balance sheets always appear less strong. It is an inevitable consequence but a strength when it comes to service delivery.

The Bill must make provision for the continued development of these groups and certain interventions need to be made; without this we will not see the realisation of a truly plural ambition for these reforms. As has already been said, where would we be without the hospice movement, community drug and alcohol projects, the range of mental health work and so on? The innovation and user-centred services will disappear to the detriment of all. The multinationals do not come with that ethos to start with and what is really wrong with Clause 20 is that it assumes an already existing level playing field where there is an established mixed market. I challenge that assumption which underlines this clause and, although I would not dream of questioning him personally, I challenge the Minister that if he is serious about what he said in answer to the last debate, he must be prepared to come back with something in the Bill which does not snuff out social enterprise in the way that this Bill, currently structured, will do. I beg to move.

[Lord Warner]

My Lords, I speak in support of my noble friend Lord Rooker’s amendment. I pose a couple of questions and add a couple of facts for the Minister. I will not repeat what I said on the previous group of amendments. I speak from two perspectives; first, as a former chairman of a number of voluntary organisations competing for public service contracts; and, secondly, as the former Minister involved in the setting up of entities at the centre to facilitate the growth of social enterprises and voluntary organisations to participate in NHS service provision.

I want to mention some of the things which were set up at the centre because you could not rely on people at local level to actually provide this kind of help to the voluntary and social enterprise sector. Can the Minister say whether these initiatives will continue in this brave new world we are going into? The first one was the Department of Health voluntary sector and social enterprise programme, which was set up to maximise,

“the extent to which third sector organisations are able to achieve their full potential”.

That was a central unit aiming to help people to develop their capacity. There was the social enterprise investment fund, which provides investment to social enterprises to start up, grow and develop in order to deliver NHS services. The third I would mention is the health and social care volunteering fund—both the local and national programmes—which supports volunteering in health and social care.

Those are three areas where an initiative had to be taken well away from the local level to ensure there was some capacity building of social enterprises and voluntary organisations. If those are disbanded in the guise of leaving it up to clinical commissioning groups, it is very difficult to see how those sectors will be able to participate.

Now briefly, I turn to my experiences as a chairman of voluntary organisations. Voluntary organisations simply do not have the capacity to go at risk for entry into new markets without some guarantees. They often do not have the working capital or access to loan facilities because there is no guarantee of the revenue streams that would fund those loans. Unless they happen to have very large reserves, which many do not, they cannot easily enter that market without a big brother to help them over their first steps. I cannot see how we can move in this direction without an amendment of the kind that my noble friend has proposed, and which has backing it some capacity to help these sectors grow when the need arises rather than just leaving it all to clinical commissioning groups.

I hope that the Minister can give us some reassurances about how that capacity-building capability can continue to be preserved and developed because, if it is not, we will see a growing volume of partnerships between the private sector and the voluntary sector, because they have the capacity to borrow money and provide the working capital to help those organisations to play their role in developing services in the NHS.