NHS Reform

Earl Howe Excerpts

Monday 4th April 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, with the leave of the House, I shall now repeat a Statement that was made in another place this afternoon by my right honourable friend the Secretary of State for Health. The Statement is as follows:

“With permission, Mr Speaker, I should like to make a Statement about NHS modernisation. At the outset I should say that modernisation of the NHS is necessary, it is in patients’ interests and it is the right thing to do to secure the NHS for future generations.

The Health and Social Care Bill is one part of a broader vision of health and health services in this country, which are among the best in the world, where we have world-leading measurement of the results that we achieve for patients, where patients always experience ‘no decision about me without me’, where national standards and funding secure a high-quality, comprehensive service available to all, based on need, not ability to pay, and where the power to deliver is in the hands of local doctors, nurses, health professionals and local communities.

The House will know that the Bill completed its Committee Stage last Thursday. I was also able to announce last week that a further 43 GP-led commissioning consortia had successfully applied to be pathfinder commissioning groups. We now have a total of 220 groups representing 87 per cent of the country; that is 45 million patients whose GP surgeries are committed to showing how they can further improve services for their patients. In addition, 90 per cent of relevant local authorities have come forward to be early implementers of health and well-being boards, bringing democratic leadership to health, public health and social care at local level.

This progress is very encouraging. Our desire is to move forward with the support of doctors, nurses and others who work in the NHS and make a difference to the lives of so many, day in, day out, but we recognise that this speed of progress has brought with it some substantive concerns, expressed in various quarters. Some of those concerns are misplaced or based on misrepresentations, but we recognise that some are genuine. We want to continue to listen to, engage with and learn from experts, patients and front-line staff within the NHS and beyond and to respond accordingly.

I can therefore tell the House that we propose to take the opportunity of a natural break in the passage of the Bill to pause, listen to and engage with all those who want the NHS to succeed and subsequently to bring forward amendments to improve the plans further in the normal way. We have, of course, listened and improved the plans already. We strengthened the overview and scrutiny process of local authorities in response to consultation and in Committee we made amendments to make it absolutely clear that competition will be on the basis of quality, not price. Patients will choose and GPs will refer on the basis of comparisons of quality, not price.

Let me indicate some areas where I anticipate that we will be able to make improvements in order to build and sustain the support for the modernisation that we recognise to be crucial. Choice, competition and the involvement of the private sector should only ever be a means to improve services for patients, not ends in themselves. Some services, such as A&E or major trauma, clearly will never be based on competition and people will want to know that private companies cannot cherry pick NHS activity, undermining existing NHS providers. That competition must be fair. Under Labour, the private sector got a preferential deal and £250 million was paid for operations that never happened. We have to stop that. People want to know that the GP commissioning groups cannot have a conflict of interest, are transparent in their decisions and are accountable not only nationally but locally through the democratic input to health and well-being boards. We, too, want this to be the case. People want to know that the patient’s voice through Healthwatch and in commissioning is genuinely influential. Doctors and nurses in the service have been clear that they want the changes to support truly integrated services, breaking down the institutional barriers that have held back modernisation in the past.

As I told the House on 16 March, we are committed to listening and we will take every opportunity to improve the Bill. The principles of the Bill are: that patients should always share in decisions about their care; that front-line staff should lead the design of local services; that patients should have access to whichever services offer the best quality; that all NHS trusts should gain the freedoms of foundation trust status; that we should take out day-to-day political interference through the establishment of a national NHS Commissioning Board and through strong independent regulation for safety, quality and effectiveness; that the public’s and patients’ voice must be strengthened; and that local government should be in the lead in public health strategy. These are the principles of a world-class NHS that command widespread professional and public backing. All these principles will be pursued through the Bill and our commitment to them as a coalition Government is undiminished. We support and are encouraged by all those across England who are leading these changes nationally and locally and we want them to know that they can be confident in taking this work forward. Our objective is to listen to them and to support them as we take the Bill through.

No change is not an option. With an ageing and increasing population, new technologies and rising costs, we have to adapt and improve. Innovation and clinical leadership will be key. We want to reverse a decade of declining productivity. We have to make productive care and preventive services the norm and we must continue to cut the costs of administration, of quangos and of bureaucracy.

The House knows my commitment to the NHS and my passion for it to succeed. To protect the NHS for the future must mean change—not in the values of the NHS but through bringing forward and empowering leadership within the NHS to secure the quality of services on which we all depend. Change is never easy, but the NHS is well placed to respond. I can tell the House today that the NHS is in a healthy financial position. Waiting times remain at historic low levels, as promised under the NHS constitution. Patients with symptoms of cancer now see a specialist more quickly than ever before. MRSA is at the lowest level since records began. We have helped over 2,000 patients to have access to new cancer drugs that previously would have been denied to them. This is a testament to the excellent work of NHS staff up and down the country and we thank them for their efforts to achieve these results for their patients.

This coalition Government are increasing NHS funding by £11.5 billion over this Parliament, but the service cannot afford to waste any money. We can sustain and build on these improvements only by modernising the service to be ever more efficient and effective with taxpayers’ money. The Bill is a once-in-a-generation opportunity to set the NHS on a sustainable course, building on the commitment and skills of the people who work for it. Our purpose is simple—to provide the best healthcare service anywhere in the world. I commend this Statement to the House”.

My Lords, that concludes the Statement.

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[Earl Howe]

My Lords, I am grateful to the noble Baroness for her not entirely critical response, in that she acknowledged that we are listening to the concerns that have been expressed. I am almost tempted to remind the House of that dictum of Oscar Wilde or at least to modify it: if there is one thing worse than not listening, it is listening.

I believe that it is right for the Government to take advantage of a few weeks where Parliament is going into recess in order to take stock of some of the criticisms that we know are being voiced about the possible effects of the Bill; indeed, some arose in last Thursday’s debate in your Lordships’ House.

Let me answer the noble Baroness’s points in turn. We are clear that the modernisation of the NHS is a necessity and not an option. There is significant evidence that our reforms across the country, as evidenced by the pathfinders mentioned in the Statement, are welcomed by general practitioners. We have been engaged in a continuous process of listening and engaging. The consultation process following the publication of the White Paper, our response to that and our clarification of the kind of competition that we wish to see in the health service are all examples of that approach.

We remain completely committed to the principles of the Bill that patients should be involved in decision-making about their care, that there should be a stronger patient voice and that there should be stronger clinical leadership in the way in which services are commissioned. We are completely committed—I hope that the House will hardly need me to say this—to the founding principle of the NHS: universal access free at the point of use, regardless of the ability to pay. Indeed, that is what the reforms are about. They are about protecting the NHS now so that it can survive into the future.

This pause—and that is all it is—is about taking advantage of the short break in the parliamentary process of the passage of the Bill as we go into the Easter Recess by listening to how these measures are being received on the ground and taking stock of the feedback that we get. It is about ensuring that those implementing the changes on the front line have everything that they need to help the NHS to improve for the better.

We have listened and we will continue to listen. The noble Baroness was a little doubtful that the Government had ever been in listening mode. I hope that she will recognise that, in response to the White Paper consultation last summer, we made a number of changes to our proposals: strengthening the role of health and well-being boards; creating a clearer identity for Healthwatch England; increasing the transparency in commissioning by requiring all GP consortia to have a published constitution; and changing our proposal that maternity services should be commissioned by the NHS Commissioning Board. All those were a response to feedback that we had had. When we introduced the Bill in January, we amended it in a number of ways to respond to particular concerns that had been raised in another place. I have already mentioned competition only being on the basis of quality and not price. We are continuing to listen to the messages that have come out of Committee stage in another place.

It is a pity to hear the noble Baroness criticise our plans for an economic regulator, as that is the way in which we see a fairer playing field emerging for providers to the NHS. We do not have the guarantee of a fair playing field at the moment. As the Statement pointed out, her Government—for the best of motives—engaged the independent sector in providing services to the NHS, but they did so on very preferential terms, which in my book were unfair to and disadvantaged the NHS. We want the system to be blind to the ownership of providers so that patient choice and the quality of services determine where care is provided for the individual patient and so that there is no bias, or as little bias as possible, in the system. You can achieve that only through independent regulation.

It is not true to say that we want a market free-for-all; that is far from the truth. Again, however, this listening exercise will enable us to take stock of opinions on that score. Moreover, if there are some unintended consequences emerging from the Bill as worded, we will certainly address them. We have no wish to get this wrong. As the noble Baroness said, this is too important a matter to get wrong. I hope that, despite her scepticism of and opposition to much of what the Government are seeking to do, she will seek to engage constructively in order to ensure that we take advantage of the opportunity that we now have to drive further efficiencies and quality in the way in which care is commissioned in the NHS. We want to put the patient truly at the centre of healthcare and thereby create a more cost-effective service for the taxpayer. I believe that we will come out of this period of reflection stronger, because no doubt we will have some clear messages that we will need to reflect and act on.

[Lord Alderdice]

My Lords, I am grateful to my noble friend for repeating the Statement made in another place and I will not rehearse our support on these Benches for reform of the health service. Some of those reasons were wonderfully spelt out by the noble Lord, Lord Turnberg, in his debate on the NHS last week. However, it is no secret that Members on these Benches do not regard the Bill as it presently stands as perfect. Despite the fact that it did not receive a great deal of attention in the speculative narrative of the noble Baroness, Lady Thornton, it is known that my colleagues want to see changes and indeed have welcomed some of the changes that we have already seen.

I wonder if I may press my noble friend on two issues. The first was also raised by the noble Baroness—the timescale. My noble friend indicated that he sees the timescale as using the Recess, but the Health Secretary wishes to engage and consult with a substantial number of people. Given that, when the Bill comes back after Report in the other place with amendments, which we would welcome, can we expect it to come to this House before the Summer Recess or will the natural break take us a little further? That may be necessary, and some clarity would be helpful, if my noble friend can provide it.

Secondly, in repeating the Statement my noble friend mentioned increasing accountability,

“locally, through the democratic input to the Health and Wellbeing Boards”.

I and my colleagues welcome this, but can he spell it out a little further? At present, the locally elected democratic input to health and well-being boards is extremely modest, so we would be keen to see an indication that something rather more substantial might be possible.

[Earl Howe]

I am grateful to my noble friend. In answer to his first question, it is likely that the period of listening and engagement will extend through the Easter Recess and beyond. The precise duration of the intermission has not been fixed yet because much will depend on the volume of feedback that we receive. While I have not spoken to the usual channels about this, I am still working on the premise that your Lordships’ House will receive the Bill prior to the Summer Recess. I believe that, if the House agrees, we can thereby reach the Bill’s conclusion within a reasonable space of time. That will enable us to adhere to the current timetable for the implementation of our proposals. But that statement does come with what I might call a health warning because we are clear that we want to listen to the opinions of everybody who counts in this, and it could be that the period of reflection may extend into the late spring. But no doubt I will be able to enlighten him further in due course.

My noble friend mentioned the democratic input at health and well-being board level. This is one of the issues that we will want to receive opinions about because I know there has been disquiet on this front. He knows that his party was instrumental in building into our plans the democratic element of health and well-being boards and the fact that they should be situated at local authority level. That was a very positive contribution made by the Liberal Democrat Party which has, by and large, been widely accepted. If there are ways we can bolster that democratic accountability without cutting through the core principles that we have articulated for decision-making in the health service, then we are willing to look at them.

[Lord Touhig]

My Lords, the Minister said that the NHS was in a healthy financial position and that the Government intend to increase NHS spending by £11.5 billion over the life of this Parliament. Yet, in the last financial year, the NHS had an underspend of £5.5 billion and the forecast this year is a further underspend of another billion. The Chancellor has said that he intends not to hand this money over to the NHS but to keep it in the Treasury. The Nuffield Trust says that this is a retrospective cut in health spending. Does the Minister agree?

[Earl Howe]

My Lords, the noble Lord needs to bear in mind that the forecast surplus for 2010-11 represents a very small proportion of the department’s budget. It is greatly to the credit of the health service and the department that they have managed to come in on the right side of the line and by a margin that, in the scheme of things, is not significant. I say that without being at all blasé about the figure of £1.4 billion. I suggest to the noble Lord that that represents good financial management. Yes, the money that represents the surplus cannot be carried forward into the subsequent year but that is not the same thing as saying that providers, for example foundation trusts, may not use their carry-forward balances. That is still possible at provider level. I hope, on reflection, that the noble Lord will not think too badly of the way the service has been run in the past few months.

[Lord Blackwell]

My Lords, I am sure the Minister must be correct that, in a reform of this scale and magnitude, it is right to take as much advantage as possible to listen to those who can help in the implementation and timing of the reforms. I hope he can also assure the House that the Government will not be diverted from the essential purpose of these reforms by those who have never accepted that public services do not need to be run by a central organisation in a public monopoly. As my noble friend will be well aware, we were already some way down this road in 1997 with GP fundholder practices. We wasted five years when the then Government reversed those changes and went back to a centralised organisation before realising that that would not work and had to restart the process of introducing delegation and alternative providers into the NHS.

We are now 10 years further on from that and it is important that the changes are not lost in the voices that will always oppose changes that are necessary to reform the way that the NHS works. I hope that, while listening to those voices, the Minister can assure us that these essential reforms will be carried through and that the period of uncertainty for the NHS will not be any longer than it needs to be before we can get to the kind of reformed NHS that we all want to see.

[Earl Howe]

My Lords, I am grateful to my noble friend and can give him those assurances. He is right: we have somehow got ourselves into the position of having a National Health Service that is, in essence, managerially and administratively led instead of being clinically led. That has happened by a process of accretion and slow and steady development. We need to get back to one of the principles that the incoming Labour Government articulated in 1997 when they introduced primary care groups. That was an attempt by them to do exactly what we are trying to do: to have clinically led commissioning in the health service. Unfortunately, to my mind, primary care groups morphed into primary care trusts and thereby became administrative units which became more and more divorced from clinical decision-making.

I can reassure my noble friend that we do not want to dilute the principle of clinically led commissioning. We believe that it is right and that we can build on the experience of the past; not just primary care groups, but also the good parts of fundholding, which had some good elements, and practice-based commissioning groups, which the previous Government introduced. This is an important opportunity, as I said earlier, to capitalise on the NHS as it now is and to shed some of the unhelpful elements that get in the way of driving quality and patient care.

[Lord Patel]

My Lords, the Statement suggests that the Government are satisfied with the performance of the health service, both fiscally and in the quality of care it provides. It is therefore surprising that the Statement also says that we need to improve productivity and quality. How does an economic regulator promote competition based on quality?

[Earl Howe]

The economic regulator will do two things. It will fix prices for the purposes of the tariff and it will preside over the marketplace—such as it exists—in healthcare so that anti-competitive conduct will be prohibited. It will bear down upon conflicts of interest and anti-competitive practices of all kinds and, in conjunction with the NHS commissioning board, it will ensure that the pricing system in the NHS incentivises quality. There are, as the noble Lord knows, a number of levers that we can use to do that through the tariff.

[Lord Warner]

Is the Minister aware that many people are concerned about whether the Government will listen excessively to those who make the greatest noise among some of the vested interests that the Bill tries to tackle? Is he aware that many people wish to look at the Bill forensically to make sure that changes in commissioning lead to more competent commissioners, something we have not achieved in the past: that we start to dismantle some of the barriers to entry in order to create more diverse providers; and that we look very seriously at the pricing system to make sure that it does not just put money into the pockets of acute hospitals, but brings more care closer to home?

[Earl Howe]

I am grateful to the noble Lord, Lord Warner, whose book, I may say—without indicating that I am in receipt of a commission for saying so—deserves reading by every thinking healthcare commentator. He is right, of course; we need to ensure that the vision that I think is shared by many in this House, regardless of party, can be successfully implemented. I recognise the implication of his question, which is that this House is eminently capable of examining the Bill forensically. When it comes to us I have no doubt that we will do that however long it takes, and I look forward to that. However, it would be a rather cloth-eared Government who were insensitive to the voices that have been heard in recent days outside this Chamber and another place. We need to dispel many of the misunderstandings that exist as well as address some of the genuine misgivings that people have. It is right that, without losing too much momentum in the process, we take these few weeks to do just that.

[Lord Ribeiro]

My Lords, I thank my noble friend for repeating the Statement. The health reforms are necessary because they address the complexity and cost of medical care, which are growing daily as our population also grows. Our elderly population is growing simply because of the improvements in healthcare over the past few years. Here I acknowledge the unprecedented funding provided by the previous Government to stimulate the health service in its development. This Government have agreed to enhance that funding.

The noble Lord, Lord Darzi, signalled a change from process management to service delivery based on quality. This Government have accepted the challenge to pursue a quality agenda, knowing that, although quality care is costly, at the end of the day—particularly in my speciality, surgery—there is no question that good quality care, particularly the use of minimally invasive surgery, leads to early discharges of patients and better outcomes. I hope that this principle of quality is something that the Government will pursue. Is it my noble friend’s intention that the emphasis in health reforms should remain on quality outcomes being the bedrock of the reforms?

[Earl Howe]

I can reassure my noble friend Lord Ribeiro instantly on that. He will know, I am sure, that the acronym that was coined by the previous Government, QIPP, which stands for “quality, innovation, prevention and productivity”, is symbolic of a whole series of workstreams not just in the Department of Health but throughout the health service to ensure that quality is maintained and enhanced in the service. Unless we deliver higher quality to patients, the service will not be sustainable. Some people say that higher quality care costs more money but, as my noble friend will know from his own craft speciality, the better the care that you deliver the less costly it often is because care that is delivered in a substandard way often results in unintended consequences, such as patients returning to hospital with complications. We need to drive safe care and right care in the system.

Many of the levers that we have to improve quality are not in the Health and Social Care Bill at all—for example, the need to roll out the information agenda, without which there can be little transparency of quality. Those activities are being pursued with energy and drive in my department.

[Lord Beecham]

My Lords—

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[Lord Beecham]

My Lords, months after the Bill was launched upon an unsuspecting world—including, apparently, the Prime Minister—it seems to have been admitted to the fracture clinic if not to the intensive care ward. A number of questions arise from the Statement itself. For example, the Statement says:

“Some services, like A&E or major trauma, clearly will never be based on competition”.

Is not the implication that other services will be based on competition? Will the Minister comment on the predominant role of Monitor as a promoter of competition, as opposed to being simply an economic regulator?

On the GP commissioning groups or consortia, will the Government look again at the composition of those groups as well as their degree of local accountability? Will he also look at the powers of the health and well-being boards? Does he have any views about those in addition to the question of their composition?

As for the NHS being in a healthy financial position, does the Minister have any comment on tonight’s story in the Evening Standard about people who were made redundant last Friday having to be re-engaged by PCTs and other organisations, at considerable cost to the NHS?

[Earl Howe]

My Lords, those who have been re-engaged by the health service, having taken redundancy or early retirement, will forfeit their redundancy pay because there is a clawback arrangement in force, as I told the House the other day.

The noble Lord asked a number of questions. I want to be very brief because I am aware that the noble Baroness, Lady Masham, wants to get in before the time is up. Monitor was described as a promoter of competition. Expressed in stark terms like that, it sounds as though its job will be to go around drumming up competition where there is none already. That is not a correct reading of its functions; it is there to bear down on anti-competitive conduct and to ensure fair competition. The composition of consortia is a concern that we have heard about, and we will listen to that concern. It is now up to the pathfinder consortium to think about this kind of question. The early implementers of health and well-being boards are starting to think about those powers and how they can be used and we will listen to whatever they have to tell us.

[Baroness Masham of Ilton]

My Lords, is the Minister aware that patients very often cannot get an appointment with the GP of their choice so there is no continuity? If GPs have to undertake administration on the consortia, will this not get worse? Would it not be better if the consortia consisted of a mixture of GPs, specialists, nurses, administrators and patients? Working together would surely be better than working in conflict.

[Earl Howe]

The noble Baroness is absolutely right about working together, and our vision for good, clinically led commissioning is that all clinicians, not just GPs but everyone with a stake in the patient pathway, should join together and determine what good care looks like. However, she is mistaken in her first assumption. We are not asking thousands of GPs to become administrators. It will take only a very few to took after the commissioning of care in consortia, and the administration will be taken care of by management employed by the consortia.