Health and Care Bill

Earl Howe Excerpts

Lords Hansard - Part 3 & Committee stage
Wednesday 26th January 2022 Lords Chamber

I therefore hope that, in responding, the Minister will be able to explain to the Committee why the provisions in the Bill have not taken account of these important points, and points of agreement and good practice. I hope that he will reflect on the fact that these amendments improve the Bill and will feel able to take them forward.

[Earl Howe (Con)]

I am grateful to the noble Lord, Lord Crisp, for bringing this debate before the Committee. I have listened to him and other noble Lords with care. Before I turn to the detail, it may be helpful if I explain the reason why Clause 54 is in the Bill.

Clause 54 originated as a legislative proposal made by NHS England and NHS Improvement to the Government in 2019. In making this recommendation, NHS England, under the leadership of the noble Lord, Lord Stevens, worked closely with representatives of the foundation trust sector. The key principle behind this clause is a recognition that the interests of the whole system should be prioritised in decisions about capital spending while also respecting the freedoms and accountabilities of NHS foundation trusts.

The noble Lord, Lord Crisp, asked whether it was our intention that the power in the clause would be a last resort—absolutely yes. Clause 54 is a reserve power to be used only in extreme circumstances to avert the risk of a foundation trust pursuing its own private capital objectives—if I can put it that way—that are not prioritised at a system level. I say to my noble friend Lord Lansley that that is the potential mischief that the clause is trying to address.

The control will operate in the context of the new NHS capital regime, introduced in 2020-21, at ICS area level with planning at a system level to take a holistic view of the local healthcare needs and balancing the allocated operational envelope for providers at that level. Having a power to set capital spending limits for NHS foundation trusts, as can already be done for NHS trusts, ensures an equitable distribution of capital to better enable the investments with highest priority and that achieve the greatest benefits for patients.

At this point I will push back, in the nicest possible way, at the noble Baroness, Lady Walmsley, about the actual level of capital spend. At the spending review 2021, capital spending was set to increase over the Parliament to £32.2 billion for the period from 2022-23 to 2024-25. That includes a £5.9 billion capital investment for the NHS to tackle the backlog of non-emergency procedures and modernise digital technology. As a result, the Department of Health and Social Care’s core capital budget will reach its highest real-terms level since 2010.

[Baroness Walmsley (LD)]

Governments always tell us how much money they have spent, but the question is always: has it met the demand? The money that the Minister has just mentioned is to try to cover the backlog of elective procedures; it does not cover the backlog of repairs.

[Earl Howe (Con)]

There will be money to address the backlog of repairs within that total.

Of course, it is our intention that a capital limit would be imposed by NHS England only if other ways of resolution had been unsuccessful. I will take the Committee through some of the detail, because it is important.

Amendments 188 to 192 would further restrict how the power can be applied. Amendment 188 would modify the clause by inserting “individual trust”. This modification is unnecessary because new Section 42B already ensures that an order relates to a single trust.

Amendment 191 would limit the order to one financial year, but, instead of that, the guidance prepared by NHS England will set out that any capital expenditure limits will apply to individual, named foundation trusts. We envisage that most will apply for the period of budget allocation, which is a single financial year.

Amendment 189 would insert steps that NHS England must take before applying the control and limit when an order may be made. The amendment also links the power with the capital planning function held by ICBs in new Section 14Z54. That plan may not always relate to a single financial year and can be amended in year; for example, for big capital projects, the plan could be set for several years, and in such a scenario it would be difficult to determine whether a foundation trust exceeded the plan in the early years. Amendment 189 would undermine the ability to impose the limit in a timely way and would mean that any limit could realistically be applied only when an overspend had already occurred or was committed to. That would risk funding being unfairly taken away from other areas.

Amendments 190 and 192 contain a requirement to lay a report before Parliament alongside a statutory instrument containing the order. That would cause significant delays in the power’s application. There is already a requirement in the Bill for NHS England to publish any orders which place a capital limit on a foundation trust and for guidance to set out the circumstances in which it is likely to impose a limit. We expect the guidance will also state that representations made by the trust will be published by NHS England.

As I mentioned, it is our strong view, supported by NHS England, that the powers and safeguards in the Bill create a proportionate and fair balance. These measures will ensure that if a foundation trust were actively to pursue capital expenditure that is not aligned with local priorities or affordable within local budgets, there is a means to prevent this as soon as possible.

[Lord Crisp (CB)]

I thank the Minister for that reply. I have one point to make and one question. My point is that an NHS foundation trust may cover an area that is bigger than one ICB, and some of the bigger ones obviously do, so it does not quite work in the way that the Minister talked about. My question, and it is my final question, is: will officials re-engage with NHS Providers on behalf of NHS foundation trusts to discuss this matter further in the light of what we are saying so forcefully to the Government about pragmatic solutions to find a way forward to achieve the right balance and what the Minister has said in his response?

[Earl Howe (Con)]

I had not quite finished the remarks I was going to make, so perhaps the noble Lord will bear with me. I was trying to say that the measures will ensure that there is certainty for all providers about their capital expenditure. It will also prevent the need unfairly to take planned funding away from other providers, such as NHS trusts, where NHS Improvement and, in future, NHS England, set routine capital expenditure limits just to keep expenditure within system control totals, or national capital limits when a foundation trust exceeds its capital limit. Operational detail of how capital expenditure limits are set is best dealt with, we think, in guidance, where we can ensure flexibility and future-proof the provision, rather than in the Bill.

I hope that those remarks are helpful and will persuade the noble Lord to withdraw his amendment this evening. I say to him, as I did at the start, that I have listened carefully to the points he has made in support of his amendments, and points made by other noble Lords, and I undertake to take these points away for further consideration between now and Report. I am aware that my officials are working closely with NHS Providers on a number of issues, and I very much hope that we can resolve any points of difference to everyone’s satisfaction.

[Lord Crisp (CB)]

I thank noble Lords who have spoken in support of the amendment, for the very clear message that has been given. I also thank the Minister for that reply and those final remarks about thinking about this further and discussing it as appropriate with NHS Providers. On that basis, I am very happy to withdraw my amendment.