Community Hospitals

Anne Marie Morris Excerpts

Thursday 6th September 2012 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

I congratulate my hon. Friend the Member for Totnes (Dr Wollaston) on securing this debate. We are discussing an important topic and there are many wide-ranging issues to be addressed. I also congratulate the Minister on having been appointed to her new role. We all look forward to working with her.

Community hospitals do not just provide excellent clinical medical care. They are also places where patients feel the warmth of the community, which adds to a sense of well-being that is also part of their recovery. One reason why people feel so strongly about having community hospitals close and accessible is because it means friends and relatives can attend, which helps to make patients feel well. That is not just emotional clap-trap.

My hon. Friend the Member for Totnes put her finger on a key point when she said that this is about the community and trying to extend and expand the range of community services that are available. My community hospitals in Teignbridge are going from strength to strength, and there is a move towards integrating social and health care. That will be the salvation of community hospitals in the future. I support my hon. Friend’s comments about volunteers, too. The league of friends and the community transport in my three hospitals are first class. Without them, our community hospitals would not be nearly as successful and happy.

My three hospitals are quite different, but they all have minor injuries units and X-ray facilities, and provide a variety of services to the old and the young. Dawlish was the first private finance initiative hospital ever built, and patient surveys consistently put it in the top three of the 22 Devon hospitals. Remarkably, Teignmouth still has an operating theatre, as well as a physio unit funded by the league of friends—well done! Newton Abbot got the 2007 PFI deal of the year. Unusually, it has a maternity unit, as well as a first-class stroke unit.

My hon. Friend the Member for Totnes also raised the important issue of ownership. I raised this matter last year in a Westminster Hall debate. It is crucial that we get clarity about how ownership is to be managed once the asset is transferred from the primary care trust. In the case of Teignmouth hospital, the property is owned outright by the PCT. As I understand it, that property will be transferred to NHS Property Services Ltd. My local community has put in £850,000, so how does it feel about that? What will happen on future fundraising? Will the money just go into a central pot? What terms and conditions will be imposed on the service provider?

The situations at Newton Abbot and Dawlish are much more complicated, because those hospitals are the subjects of PFI contracts. That means that the buildings are owned by a private contractor and are, in effect, rented out to the service provider subject to two charges, an availability fee and a service charge, both of which have historically been extraordinarily high. In those cases, the contracts will be transferred to the NHS Commissioning Board. That raises a number of legal questions about the validity of the transfer, given the nature of that contract, and about the ability of the new owner to renegotiate the contract. Why do I talk about renegotiation? I do so because it is well known from evidence in the press that some of the charges that have been levied are disproportionately high. What can we do to enable such a renegotiation? Clearly it will be completely inappropriate for a local trust provider to undertake such a renegotiation, so will the NHS Commissioning Board do it?

My hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) has been brilliant in raising a campaign to look at renegotiating these contracts. The Government have already started to look at the whole management issue of these contracts to see whether costs can be cut, and they reckon that a substantial saving has been made and 5% savings can be achieved. They have established a fund of more than £1.5 billion for this; that is the amount that any one trust can get over 25 years to assist with the blighting cost, but that can be obtained only in exceptional and historic circumstances. The fund has been used, but generally that has been in much larger cases involving much bigger hospitals; I cannot see a community hospital being able to pass the test of having exceptional and historic problems. So what can the Government do to help those hospitals blighted with the burden of a PFI contract? I have heard of hospitals that, under the service charge, have had to pay £333 just to change a light bulb. I am pleased to say that that was not the case in my local hospital, but my goodness me that sort of situation has to change.

[Guy Opperman]

My hon. Friend rightly raises the issue of PFI and asks what the Government can do. I would venture to suggest that the previous Health Secretary’s decision to approve the county council’s assistance to the health trust so that it could buy out the PFI contract that was crippling Hexham hospital is exactly the right way forward. Under that approach, a PFI arrangement is bought out and a much better financial basis is put in place—an ongoing future financial basis approved by all.

[Anne Marie Morris]

My hon. Friend makes absolutely the right point, but the tragedy is that few communities can afford that sort of buy-out. As he rightly says, if we could achieve that, it would undoubtedly be the answer.

All we need from the Minister is some clarity as to exactly how these properties are to be transferred; what the position with the local community will be when properties are owned by NHS Property Services Ltd; and what the position will be on the PFI contracts when they get passed across to the NHS Commissioning Board. Clarification on those matters would be helpful and it is now urgently needed, because local trusts that are looking at continuing to run these hospitals need certainty about what they are going to be including in their budgets, and the sorts of figures that the availability fee and the service charge take out are phenomenal. The availability fees at my local hospitals range from 18% to 35%; that is the fee simply to repay the funding costs of the overall PFI arrangement. The service charge can also be high, reaching 18% to 20%. Set against that, private investors are currently seeing returns of up to 50%. That is huge and it seems unreasonable. The previous Government entered into a voluntary arrangement whereby any excess profits, particularly as a result of contracts being bundled by external private bodies, should be shared between the taxpayer and the private investor.

All those tools, which are available for the Government, need to be used. We need certainty and manageable budgets so that our community hospitals can thrive and so that money is available for what we really need—the services.