Private Finance Initiative Hospitals

Graham Stringer Excerpts

Wednesday 4th May 2011 Westminster Hall

[Derek Twigg]

I will say more about the St Helens and Knowsley Teaching Hospitals NHS Trust a little later, but I have a lifelong relationship with the Whiston hospital, which is used by many thousands of my constituents. As I said, my right hon. Friend the Member for Knowsley, my hon. Friend the Member for St Helens North and I work very closely on issues relating to it, as neighbouring MPs.

I congratulate the hospital on delivering the PFI six months ahead of time and to an excellent standard. The chief executive, the board and the staff have done an outstanding job. The many medical staff, support staff and ancillary staff do an amazing job, and the hospital has the highest reputation, but I will talk specifically about the hospital in more detail later.

It is important to understand the use of PFIs, what was required and what was achieved. In 1997, after 18 years of Conservative disinvestment in the NHS, the service was in crisis: 1 million people were on waiting lists, hospitals were in disrepair, staff felt undervalued and buildings had been neglected. As my hon. Friends will confirm, people regularly complained to us in 1997 and thereafter—my right hon. Friend will say that they were complaining before then—about waiting more than two years to have an operation or even to be seen by a specialist in some instances. It is important to make that point.

The Labour Government made a firm commitment to improve, support and protect the NHS. In government, we did what was necessary to turn it from an organisation that was struggling for survival into the world-class and world-leading service it is today. It is important to make that point about the improvements made under the previous Labour Government, which included achieving the lowest waiting times, the highest public satisfaction, a two-week turnaround to see a specialist, a massive decrease in the number of those dying early from heart disease and cancer, and improved facilities. In the context of PFI, investment in the NHS is important.

As my hon. Friend said, 114 new hospitals were built over Labour’s 13 years in government to replace the existing ageing and neglected infrastructure. In 1997, half the NHS estate dated from before 1948; in 2010, that figure was down to about 20%. That rapid modernisation was unprecedented, but vital to the regeneration of the NHS, and PFIs played an important part in making that possible. They made possible the move from the previous workhouse-style provision of health care to a modern, technically advanced health care system for the 21st century. [Interruption.] The Minister tuts, but an old workhouse building was still being used on the Whiston site at the time. In fact, back in the 19th century, one of my distant relatives died in that building when it was still a workhouse, so it was a workhouse and it was used for health care. Now, we have a modern hospital to replace it. It is important to make that contrast, as my hon. Friend did.

[Graham Stringer (Blackley and Broughton) (Lab)]

Even with the massive investment and improvement under the previous Labour Government, my local hospital is still 60% a Victorian workhouse, and we need more. [Laughter.] The Minister laughs, but I mean that we need more investment, not more workhouses. Does the shadow Minister agree that although PFI was incredibly valuable in bringing that expansion about, it had two fundamental flaws? In a pragmatic way, it relied on the private sector being more efficient than the public sector to recover the higher borrowing costs, but that has not happened in many cases, because of the strict configuration of the contracts. Secondly, when the private sector is involved—I am not totally against that—we have the secrecy that my hon. Friend the Member for St Helens North (Mr Watts) mentioned. There are commercial interests, which is bad when public money is being used for the public good, because we cannot find out what is going on.

[Derek Twigg]

I totally understand my hon. Friend’s concerns. As regards his local hospital, he will realise that I never said that every hospital was modernised and improved. The issue now is how they will be modernised and improved under this Government, and I will return to that because we need to know from the Minister today what the Secretary of State’s and the Prime Minister’s plans are for modernising our NHS estate. The massive improvement under the previous Labour Government was unprecedented, but my hon. Friend is right that there were concerns. Not everybody supported PFIs, and there were issues, which I will come to later. My hon. Friend raises an important point.

It should be remembered that PFIs were also used under the previous Conservative Government. As noted in the Public Accounts Committee report entitled “PFI in Housing and Hospitals”, which was published on 18 January,

“PFI has delivered many new hospitals and homes which might otherwise not have been delivered”.

It is also important to note that the report’s summary says that hospitals are mostly

“receiving the services expected at the point contracts were signed and are generally being well managed.”

Again, I accept there were some problems, but the Public Accounts Committee recognised that they were generally well managed. Labour not only invested in the NHS, we invested in protecting its future. The contracted maintenance of buildings under the PFI agreements will ensure that the standard of NHS buildings will be as high in 30 years as it is today. The present generation is only the custodian of the NHS. Future generations are its owners, and PFI agreements will ensure that they are served by the same exceptional standard of facilities as today. That is an important point.

The system is not perfect, but at least it guarantees the maintenance of the buildings over a 30 to 35 year contract period. We all know that, with financial pressures, funding was cut for maintenance. Rather than being a one-off, that became a regular occurrence. That is why we found hospitals in the state they were in 1997—for which we, too, had some responsibility, as we had been in government for various periods before then. The fact was that there was massive under-investment, which was exacerbated by the Thatcher Government.

Under Labour, PFIs gave private sector partners responsibility for the completion of large infrastructure projects. A crucial point—of importance to my hon. Friend the Member for Blackley and Broughton (Graham Stringer)—is that accountability for services and the satisfactory completion of such projects remained in the public sector. That meant that the Government were still accountable to the people and Parliament for improving services to patients.

The PFI arrangement is a tool; it is a method that can be used badly or well. It would be disingenuous, as I said to my hon. Friend, to suggest that we were all in favour of PFIs when we were in government. It is important to be frank and honest and acknowledge that. There are strong views opposed to PFIs—it would be wrong to suggest otherwise with regard to some schemes. What we can be sure of is that, under Labour, the PFIs formed part of a carefully managed NHS in which the private sector could play a limited role. Sadly, under the Government’s current reforms, that will no longer be the case. The Government continue to rush through their NHS reorganisation; despite the so-called pause, work is still going on, without sufficient evidence or consultation on its true effect. Pressure has been relentlessly piled on to the NHS and foundation trusts, with insufficient consideration for the future. Through these costly, unwise and unwarranted reforms, spending cuts and efficiency savings, the Government are showing once again that they cannot be trusted on the NHS.

My hon. Friend the Member for St Helens North and my right hon. Friend the Member for Knowsley highlighted the issues surrounding the St Helens and Knowsley Teaching Hospitals NHS Trust, with which they have had a long association. However, it is important to repeat some of the things they said. This trust has a strong track record of high performance, achieving three stars and consecutive double excellent ratings from the Care Quality Commission. That high standard of care has been maintained: in 2010, it was the only acute trust in the country to perform above the national average in every indicator of quality of services and care in the CQC assessment. Therefore, I believe it could be described as the nation’s top-performing hospital. In addition, the trust achieved the maximum overall score in the auditors’ local evaluation for the use of its resources, for the fourth year running, acknowledging the trust’s excellent financial management.

Therefore, the trust performs to an excellent standard, not only in services and hygiene, but in financial management. The benefits of the PFI scheme for the hospital have been tremendous—more than 80% of the accommodation is new build on two sites, to which my right hon. and hon. Friends have referred; there has been capital investment of £350 million, with a 35-year concessionary period; radiology imaging equipment through a managed equipment services has been provided by GE Medical Systems; and hard and soft facilities management services, including catering, domestic estates, grounds, gardens and so on, have been provided. An important point for the Minister is that there is also 50% single room provision, with en suite facilities, as per Department of Health guidance. That is important in meeting both what we wanted and what the Government have said in respect of single-sex wards.

In 2009, the Secretary of State for Health, who was then the shadow Secretary of State, said this in an interview on Mumsnet about the pledge regarding single-sex rooms:

“This pledge will be delivered as part of our plans to provide 45,000 more single rooms in the NHS.”

Funnily enough, that pledge was dropped, and we have heard no more about it. I am interested to know, in the context of any PFI plans or hospital building programmes that the Minister has to comment on, whether there are plans to increase the number of single rooms, which is an important part of improvements in the NHS. I look forward to hearing any details that the Minister might give us.

My hon. Friend the Member for St Helens North, backed up by my right hon. Friend the Member for Knowsley, made some important points about secret documents. One has now been put into the public domain, though not officially, but we have not been able to see the other one. The Minister must answer who suggested as an option that a private sector provider could be brought in to manage this specific trust, and perhaps other trusts. Who suggested that that was the case? I understand that the trust board rejected that option and would only deal with it if directed to do so by the NHS, whether that involved the strategic health authority or the Department. I understand that that was the case. Will the Minister clarify that important point? I understand that one reason why the trust board would not accept the option of voluntarily considering a private sector provider coming to run it was a concern for patient safety. The cuts it was being asked to make to get to foundation trust status were too great and, in its opinion, were threatening patient safety. Will the Minister tell us whether that was the case?

What part of the NHS would suggest that option for a hospital that has achieved a double excellent rating, that has excellent financial management, that has been well run for years, that has a brilliant chief executive and management board, that has a committed staff and that has the support of the community? What person in their right mind would suggest a private sector provider? How could a private sector provider run it better than a double excellent rating?