Health and Social Care Bill

Baroness Armstrong of Hill Top Excerpts

Tuesday 13th December 2011 Lords Chamber

The NHS already has a competition policy, and I pay credit to the previous Government for making important advances in this area, such as the Co-operation and Competition Panel, which was described by Ben Bradshaw, who was the Minister at the time, as the NHS’s first ever competition policy. So it was, but the previous Administration took piecemeal steps, which left gaps, confusion and ambiguity. The Bill rectifies that. Under the Bill, Monitor would at the same time continue its role as the specific regulator of foundation trusts.

[Baroness Armstrong of Hill Top]

The noble Earl knows that that part of the Bill does that only for a limited period of time. He also knows that many people involved with foundation trusts think that should be a consistent and ongoing role of Monitor. Have the Government reassessed so that that is a more complete and comprehensive approach for Monitor, signalled clearly in the Bill?

[Earl Howe]

What the noble Baroness says it quite right. It would be open to a future Secretary of State to extend the period under which Monitor retained that role. My purpose at the moment is to set out the Government’s position. I am sure we can come on to debate these things, if the noble Baroness will allow, but it is important for the Committee to have the Government’s prospectus in their minds.

The remit of Monitor would be expanded to cover all NHS-funded healthcare providers. This approach ensures that Monitor and everything that it does is governed by a single, coherent legal framework and that all its functions are bound together by a single, overarching statutory duty—the one that I read out. For that reason, I would counsel noble Lords to resist amendments that may seek to achieve similar aims, but do so by retaining a separate legal framework for regulation of foundation trusts.

Many people have sought to portray the new role for Monitor as some sort of mighty club-wielding behemoth, dictating to commissioners how NHS resources should be spent. This is not the case. Monitor’s role, as set out in Part 3, is intended to support and complement the role of commissioners, as set out in Part 2. Our aim is to empower those commissioners—GPs and other clinicians—to take the lead, arranging access to services to meet their patients’ needs and stimulating innovation and improvement. Commissioners will have various tools at their disposal to do this. They will need to decide how to use co-operation, integration and competition to improve quality or efficiency or reduce inequalities.

In that context, the appropriate role for Monitor would be to support commissioners by enabling integration and where competition is used, ensuring that this operates effectively. Monitor’s role is not—I repeat, not—to impose competition from above. Competition is not now and will not be an end in itself.

Our strategy for improving the provision of NHS services is firmly based on the principle of autonomy and accountability for providers. Building on this, we have proposed functions for Monitor that aim to strengthen incentives for providers to improve, rather than simply relying on the ability for Monitor to set and enforce rules. Promoting competition is part of this, but again the context of promoting is quite different from the idea of driving competition through top-down controls. It will not do that, and it would not be effective even if it did.

What has struck me, looking at these amendments, is that, while there are clear differences between some noble Lords and the Government, I also feel that there is a significant consensus emerging. I want to reiterate that the Government are always willing to listen to how the Bill could be improved. I have listened to the points made by the noble Baroness, Lady Thornton, but I have also studied very closely the amendments tabled by other noble Lords, particularly my noble friends Lady Jolly, Lord Clement-Jones, Lady Williams and Lord Marks, as well as the noble Lord, Lord Whitty and the noble Baroness, Lady Murphy.

I am sympathetic to a number of the concerns raised by noble Lords, which we shall hear about. I would like to highlight four at this point. The first is the Secretary of State’s ability to specify matters that Monitor must take into account. I am sympathetic to noble Lords’ concerns that we should clarify the mechanisms by which this can happen. The second is the conflicts between Monitor’s functions. It has always been our intention that Monitor should take responsibility for making appropriate arrangements within its organisation to avoid potential conflicts. However, I will explore this further with Monitor in time to provide greater clarity and reassurance before Report stage. The third area is failures to co-operate. Again, I am sympathetic to noble Lords’ concerns that Monitor should have the ability to address abuses and protect patients’ interests. We believe that the safeguards in the Bill already achieve this aim, but we will look to ensure that Monitor is properly equipped to enforce this. The final issue is reviews by the Competition Commission, where I sympathise with noble Lords’ concerns that the provisions as drafted may not yet fully reflect the revisions to Monitor’s role that were introduced in response to the NHS Future Forum.

That is all that I propose to say for now. I hope that it has been helpful for me to speak early in this debate to give some additional clarity to the Government’s intentions in this vital area of the Bill.

--- Later in debate ---

[Baroness Armstrong of Hill Top]

My Lords, I want to ask the Minister questions, although the debate tempts me into other things. I will start with the other things.

I found the debate fascinating. I have also found some of the re-writing of history fascinating. The previous Government introduced competition, and I am very proud of what the previous Government did in rescuing the health service, as my noble friend on the Front Bench said. The reality is that when we introduced ISTCs there was no pricing in the National Health Service. There were no tariffs. Nobody knew what it cost. The amount of money that the private sector charged was substantially reduced because we put a charge on it, but we had to do something to create the market. I have been extremely frustrated by the Minister saying, again and again, that we introduced preference for the private sector. We were taking the very first steps to introduce architecture which could allow the comparison that he now makes in order to get to a level playing field. However, there was nothing there that would have allowed the previous Government to introduce the architecture of a level playing field from the beginning. I remember discussions at the time with organisations such as Bupa which were really concerned that we were bringing down the amount that the NHS would pay them per patient once we introduced tariffs and pricing.

That was a significant development. It then allowed other developments to take place. Yes, it has allowed the Government to take a comprehensive look at all of this, although, as we have been reminded on occasion, the Government did not need ideologically to say that they had to completely open things up. The Government have admitted that 90 per cent of what they wanted to do could have been done without this legislation. I now suspect that the Government wish that they had never embarked on this in the way that they have done. It has actually meant that most people out there think that, following the pause, there will be no competition. Some of them will be surprised by the debate that we have been having today and, indeed, the debate that we had a couple of weeks ago.

The introduction of foundation trusts was very significant and a real revolution. It said that you had to take control in your own area and be responsible for how you were organising hospital services. That principle is very important. Given the changes that the Government are making in allowing the Secretary of State to intervene in the way that the noble Lord, Lord Newton, described earlier, can the Minister assure me that that will not mean that the Government will be tempted to, for example, raid the successful FTs to ensure that they cover up with sticking plaster those which are not succeeding and therefore not take the difficult decisions?

We are having the debate while, outside, there have been significant reports from the King’s Fund and comments from my noble friend Lord Darzi about the challenges in London. Those challenges will demand that the Government recognise that you cannot have comprehensive healthcare that works effectively, let alone efficiently, on every street corner. There will have to be places that specialise in hips and knees. The noble Lord, Lord Ribeiro, talked of the efficiency of ISTCs. Although it is within an NHS hospital, there is what is essentially an ISTC in Epsom. The hospital, from what I read, may be having problems generally, but its unit that just does hips and knees is now the most efficient in Europe, if not the world. It has done incredible things to make it so, such as buying a taxi firm so that it can ensure that it gets people there and so does not lose any slots. That, of course, helps with efficiency.

We are going to face very different challenges and the Government have to be careful that they do not introduce architecture that institutionalises the superiority of hospitals. One of my concerns about our discussion is that sometimes we reinforce the centrality of hospitals in the modern healthcare system when we should not. We ought to be embedding the centrality of the patient pathway, which is much more about the patient’s experience before they go to hospital and after they leave hospital than the period—I hope it will be shorter and shorter—that they are actually in hospital. That is where competition will play an increasingly important part. There has to be some sort of regulation of other providers but it has to be done in a way that does not reinforce hospitals. This has been the experience of Monitor to date, so is it going to be most effective to have it regulating other bits of the architecture? There needs to be regulation of the private sector and of the voluntary sector that are providing pieces of patient care. How do we do that in a way that does not reinforce hospital care?

I have been fascinated by today’s discussion of the European Union and whether the NHS will be subject to the competition law. I remember very well, as Housing and Regeneration Minister, trying to negotiate with Mario Monti, who simply did not understand that we would frequently want to give support from the public sector, but to have that matched from the private sector. That was seen as anti-competitive and a real problem. I do not want the NHS to get involved in that architecture. I would love the Minister to comment on what his colleague Simon Burns said in the Commons. Mr Burns agreed that the application of EU competition law was inevitable but also desirable. Does the noble Earl concur with his friend in the Commons?

I have also been fascinated by the discussion around how competition is to be measured and the fact that we are now going to measure competition on quality as well as price. Ideologically I support that absolutely, but I am not sure how you do it, and I want to know how the Minister intends that to happen. What is it that will be measured so that, at a local level, proper decisions that are not contestable in court are made around the wording currently in the Bill? We all want to get there but the reality is that it is very difficult to find an objective measure that will be clear about the quality of patient care. We have a long way to go in terms of getting an architecture that will deliver the health service that the majority of people want to see where the patient is at the centre of every decision. I have been impressed with the foundation trust board that I have joined in Durham and Darlington. The businessmen on the board are saying that if you get patient care right, the financial decisions will become much easier and more straightforward. I believe that but we have to be able to get there. The real problem is that the Government have got so many things confused that people out there do not see it as simple. They see it as a confused and muddled agenda that has objectives which do not look for a patient pathway that is clear and open to the patient, with the patient getting a hold of how they can be more in control of that pathway. That is where we all want to get to. I am just not sure that the Government have got us there.

[Lord Ribeiro]

Does the noble Baroness agree with me about the pricing of ISTCs? As a surgeon I had a perfectly good idea of the cost of operations in the private sector because I did private work. I also had a reasonable idea of how much it cost in the NHS. One of the principal reasons why the Labour Government introduced ISTCs was to act as the grit in the oyster to challenge the NHS to reduce its costs and to improve the quality of its care. The issue was not just that the Government did not know what the actual price was going to be.

[Baroness Armstrong of Hill Top]

It certainly was not. I do not believe that the previous Government ever acted just on price, despite what the Minister keeps alleging. The noble Lord might have known what the price was but the price in his hospital was very different from the price in another hospital. One of the problems was that there was massive inconsistency across the health service, and that was being addressed. The Government were also challenging everyone involved in healthcare to be honest about what they were doing and to put patients at the centre, making sure that they got treated more quickly—a very important issue for us and our commitment to the public—and as fairly and as well as possible. We were able to get more consistency by driving through a price mechanism.