Hospital Finances

John Pugh Excerpts

Tuesday 19th July 2011 Westminster Hall

[John Pugh (Southport) (LD)]

I could not help thinking on my way here, as I passed the scrum of photographers and reporters, “There are an awful lot of people. They can’t all be coming for the debate on hospital finances, however important it might be.” I apologise in advance to the Members present, who I know debated such themes extensively in the Committee that considered the Health and Social Care Bill. I can only say that I did not anticipate that today would turn out as it has. I wanted to flag up an important issue that I think will dominate next year’s headlines and to put some of my thoughts and concerns on record. I will not suggest that we could all go off quietly, have a cup of tea and discuss it in a genteel way, but if the Minister and the Opposition spokesman give adequate responses, we might curtail this debate before an hour and a half.

When I arrived in this place in 2001, one of the first people whom I met was another new MP, Dr Richard Taylor, a distinguished Member who had just won the Wyre Forest constituency somewhat unexpectedly. David Lock, an unfortunate colleague of yours, Mr Betts, had lost half his votes in the election simply by virtue of his stance on hospital reconfiguration. Since then, an axiom in this place has gone something like this: “If you back hospital changes and any sort of configuration, you lose; if you oppose hospital changes and any sort of configuration, you ordinarily win.” I certainly sat through many debates, somewhat better attended than this, on hospital configuration in many parts of England when I was part of the Liberal Democrat health team, and generally speaking, that has been the invariable subtext to the debate.

Offstage, away from the Commons arena, many groups were set up during the previous Parliament to defend their local hospitals in a variety of ways. An all-party group was set up on community hospitals, and another, of which I was a founding member, was set up on small hospitals. It is recognised that reconfiguration and change in the acute sector is ordinarily political dynamite. Understandably, this and previous Governments have wanted to keep the issue at arm’s length.

One way to do so is to suggest that it is all a matter of local decision making, although somehow it always comes back to the Secretary of State’s desk. Another way is to refer such matters to a reconfiguration panel, a device set up expressly to keep things off the Secretary of State’s desk. A third way is to claim that whatever change is in the offing is the result of extensive work by consultants—McKinsey is often involved. I have never found them particularly helpful myself, as ordinarily they suggest that hospitals solve their financial problems by simply doing less, meaning closing wards and so on. However the technique favoured by most Governments hitherto has been deferral: putting off the agony in the expectation that some other Secretary of State will have to pick up the ball and run with it. The current Secretary of State is a veteran of many hospital configuration debates, having been a health spokesman for his party for a long time.

That is the background to the issue. However, I suggest that the landscape is changing dramatically. First, there is a widely accepted view that more services should be delivered in the community, and, presumably, that fewer services should be delivered in the acute hospital sector. Many of the effects of the “any willing provider” policy and patient choice are already working their way through the system, leading to an increase in the deficit on the acute hospital side. Since the 2010 Budget, there is clearly a need across the health sector to find substantial savings, amounting in national terms to £20 billion.

Added to that is the chronic effect of private finance initiatives, which appear to be crippling many in the hospital sector. An investigation conducted by The Daily Telegraph found, for example, that one fifth of hospital trusts with active PFIs have closed casualty departments, while during the same period only 4% of hospitals without PFIs closed or proposed to close casualty departments. We can clearly see from the cases of some individual hospitals—I shall not name them here—that severe problems have been brought about chiefly, if not exclusively, by long-standing PFI debts. The Daily Telegraph investigation—we do not need to believe The Daily Telegraph, but this is what it says—found that

“Some PFI hospitals—built and run by private firms and effectively rented back to the state—will end up costing taxpayers more than 10 times their capital value.”

Much of that cost, of course, is picked up by the acute sector.

In addition, constant deferral has sometimes made problems more acute, which is particularly true in London. Further grief is generated, to some extent, by adjustments, not uninfluenced by the Department of Health, to the tariff for many acute services. Not long ago, primary care trusts were strapped for cash and acute hospitals were okay; to some extent, intervention in the tariff has changed that, and the acute sector could do absolutely nothing except remonstrate.

Some trusts are in serious trouble, and their problems cannot be eternally deferred. The problems of the South London Healthcare NHS Trust, for example, are critical. The other day—I am sure that the Minister will be familiar with this issue—I picked up a brochure distributed around Merseyside saying, “Save Whiston and St Helens hospital”. He might be surprised to know that it says that

“local politicians have been informed by Ministers in the Department of Health that plans are in place to privatise”

Whiston and St Helens hospitals.

[The Minister of State, Department of Health (Mr Simon Burns)]

As the hon. Gentleman is not an MP for that area, I will explain a bit of the background. One or two hon. Members are scaremongering among the local population. Despite repeated assurances from me and others, they will not accept that there is no intention, in any shape or form, to privatise Whiston or any other hospital.

[John Pugh]

To be fair to the Minister, I was using that case as an illustration not of what is afoot but of how such things become inflamed and distorted and how emotion tends to dominate, rather than facts.

[Mr Burns]

I certainly accept that, but will he join me in saying that hon. Members have a responsibility to be accurate about the true situation? Some hon. Members are prepared to put grubby party politics ahead of accuracy in their public accusations.

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[John Pugh]

I was handed this leaflet during a meeting on Sunday in Southport. A number of inaccuracies were expressed within the room, but I do not know how they were generated or who is chiefly responsible.

[Owen Smith (Pontypridd) (Lab)]

Does the hon. Gentleman also agree that the Minister could clear up today any uncertainty on the question whether failing trusts might be dealt with by privatising or franchising through privatisation? The Minister could tell us what Matthew Kershaw at the Department of Health meant the other day when he told the Health Service Journal that private franchises might be one way to consider dealing with failing trusts.

[John Pugh]

I am sure that the hon. Gentleman can ask his own questions when the time comes. The point that I am making, which could be made about several hospitals, is that financial trouble is not necessarily coupled with clinical trouble, as it is in the case of the hospital that I am discussing. Sometimes they go hand in hand, but in this particular case there is a clear pattern of good clinical delivery, which we all want to see sustained. However, most of us know, even if we do not want to name individual hospitals, that about 20 hospitals—17, 18 or 19 of them—will not be in good shape for foundation trust status, largely because of the financial problems that they currently face.

The issue is how we address these problems without the kind of collateral political damage that we saw in Kidderminster. The solution is not obvious. Mergers between different trusts do not always work well. Nigel Edwards, the previous chief executive of the NHS Confederation, said that no merger has ever done the trick of resolving the problem—not by itself anyway. Neither is it possible to do things and get away with it by shepherding other NHS custom in the direction of those hospitals that are financially challenged. I believe that that is the concern of hon. Members in Warrington apropos what may happen at Whiston. If the facility is PFI and expensive, there is an argument that that will be the one that is maintained. Indeed, the previous Government were accused of doing precisely that in connection with Burnley hospital, where Blackburn was the more expensive proposition in capital terms. I do not think that that is the way to do it.

I do not think we can go back to what used to be called brokerage, whereby basically some hospitals do well, some do badly and the strategic health authority comes along at the end of the year and masks the whole procedure by handing out money. That is a discredited tool that has long been dropped. Plenty of loans are available, however, which hospitals are sitting on and which they have to repay. A few years ago, under the previous Government, if a deficit was incurred, an equivalent amount was taken off the following year’s allowance, but, happily, that scenario no longer exists. This is not a situation in which immediate and obvious solutions exist.

To some extent, the modern view of the NHS—namely, that we need to encourage private autonomy to allow the strong to merge with or to acquire the weak, or to allow the weak to simply fail via a variety of different market adjustments—has some appreciable weaknesses, which I would like to discuss. If we let a hospital’s culture or ecology sort itself out as best it can in any particular area, we may find that at some point in time there will be a conflict with the Secretary of State’s duty to secure a comprehensive health service, because how it turns out might not actually do that. In crude terms, there are many situations in which we would take the view that we cannot let an acute hospital or a district general hospital fail.

The problem, however, persists and our failure as politicians to address it in a mature, sensible way has been subject to a fair amount of criticism. I refer hon. Members to an article in The Times initiated by comments made by Dr Peter Carter of the Royal College of Nursing, who said:

“In our metropolitan areas we have far too many acute hospitals. That’s a drain on the system and it has got to change”.

Dr Carter, of course, represents the nurses. He went on:

“People are going to have to be brave to make these decisions. Some of those hospitals that we have known and loved, and which were performing appropriately in their day, are no longer appropriate.”

In the same article in The Times on 17 June, Chris Ham from the King’s Fund—we know him well—said:

“For too long politicians have not been willing to show the leadership that the health service needs.”

That is a kind of allegation of almost wilful political inertia, which in the view of those experts seems to be compounding the problem.

Politicians are subject to a twofold accusation. The first is of being inert, cowardly and fearful, and the other is that they agree to certain things in private, but take a completely different stance in public. Under the previous Government, we saw the spectacle of one Minister proposing and supporting radical upheaval in the NHS, while another, the right hon. Member for Salford and Eccles (Hazel Blears), opposed it. Similar points are made by many think-tanks, which do not need to get their hands dirty with the business of reconfiguration.

[Owen Smith]

In a similar vein, does the hon. Gentleman agree that, before the last election, it was less than helpful to see the current Secretary of State standing outside various hospitals with a placard protesting that they would not close on his watch?

[John Pugh]

I have direct experience of the Secretary of State coming to my constituency to support his own party’s candidate and taking the same stance as me on the local configuration issue. He has ample experience of that. To be fair, the Secretary of State has told me that doctors are not necessarily completely blameless. Apparently, some doctors say privately that certain things need to be done, but they are not prepared to attend public meetings to say so, which is understandable. Certainly, some people in the clinical community will propose a reconfiguration, while others will oppose it—often citing differing clinical evidence.

To pull things together, the reality is that this is a tricky problem and solving it by central diktat or dirigisme is attractive only to think-tanks, never to politicians or people who have to work in real time in the NHS. It is probably also insufficient to simply set tests or parameters and let the thing unfold, if we want to end up with a comprehensive service in all areas. The Government are never quite out of the equation, however much they might wish to exit and leave it to the health economy to sort itself out. They are not a bit player in any sense. Hitherto, but maybe not henceforward, they have influenced the tariff, which has an immediate effect on the viability of hospitals. They have subsidised acute sector competition and opened access to alternative providers, all of which impact directly on the acute sector.

More importantly, the Government’s drive—this is accepted as the drive of not only this Government, but the previous Government—to make NHS providers autonomous has reduced opportunities to cut costs across the whole acute sector. I will give three straightforward examples. A lot of NHS property is essentially dormant and not needed at present, and companies would manage it to better revenue and capital effect on the budget. These companies, however, deal in property portfolios, not in isolated plots of land held by an individual hospital. Properly managing the dormant and surplus estates of the NHS is an extraordinarily good way of benefiting the acute sector, but it is difficult to progress when the acute sector is divided into specific, autonomous and relatively small units.

Similarly, we would all regard savings in procurement in the acute sector as relatively painless. If we can, it would be far easier to make savings in procurement rather than in staffing or in actual services, which are more painful to progress.

The recent National Audit Office report established that the autonomy that hospitals individually possess militates to some extent against them making some of the savings that we clearly would wish them to find. I shall read briefly a couple of sections from the NAO report:

“The local control of procurement decisions and budgets in the NHS contrasts with the direction that is being taken for central government procurement.”

It points out that Sir Philip Green has saved appreciable amounts of money across central Government by achieving large-scale efficiencies in procurement. The report goes on to state that

“this approach does not apply to the NHS which operates as a discrete sector, increasingly driven by a regulated market approach, in which the government does not control providers such as hospital trusts. Central government, by contrast, operates as a single body of departments where consistent and collaborative procurement arrangements can be pursued.”

If we read the report and analyse the net effect of that, we realise that NHS hospital trusts pay widely varying prices for the same thing. The NAO report gives examples of hugely different procurement exercises that have resulted in very strange outcomes. It states that

“the 61 trusts in our dataset issued more than 1,000 orders each per year for A4 paper alone.”

It points out that procuring on a scale greater than individual trusts will have benefits. I know that there are procurement hubs and so on, but essentially, as the NAO analyses the problem, it thinks that the current NHS structure means that we are missing out on across-the-board savings within the acute sector. It concludes by saying:

“We estimate that if hospital trusts were to amalgamate small, ad-hoc orders into larger, less frequent ones, rationalise and standardise product choices and strike committed volume deals across multiple trusts, they could make overall savings of at least £500 million, around 10 per cent of the total NHS consumables expenditure”.

[Owen Smith]

Does the hon. Gentleman agree that having listened to or sat through, as I did, 40-odd sittings on the Health and Social Care Bill, it is precisely such fragmentation that we are worried will get worse and will be compounded by the Bill’s measures? Is he concerned that the sort of centrally planned savings that he describes as being achieved through procurement will be forgone?

[John Pugh]

The scenario that the NAO and I have described was actually created by the advent of foundation trusts and the architecture put in the place by the previous Government as much as by anything that the Bill might do. The Bill will not substantially worsen the opportunities for savings. However, we might wish to consider the following issue in the context of the Bill. The NAO states:

“Given the scale of the potential savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold trusts directly to account to Parliament for their procurement practices.”

That is a perfectly valid point. It is not a political point; if anything, it is a housekeeping point.

The NAO has produced another recent report entitled “Managing High Value Equipment in the NHS in England”. We are talking here about things such as MRI scanners that cost millions of pounds. The NAO points out that, in reducing the costs of high-value equipment and maintenance, it is far preferable if the whole exercise is strategically planned, rather than planned within each individual trust. It concludes that

“the planning, procurement, and use of high value equipment is not achieving value for money across all NHS trusts.”

In other words, NHS trusts are looking after themselves, rather than considering whether there is spare capacity in the equipment of a neighbouring trust, simply because they are, by and large, poised in a competitive relationship. Already the drive to secure quality, innovation, productivity and prevention savings and the rationalisation that follows from that is being hampered—if not blocked—by a degree of obduracy from the foundation trusts, who are looking after themselves rather than the whole health economy. The drive to secure such savings is also being hampered to some extent by the need to satisfy competition requirements, which I should say, in case the hon. Member for Pontypridd (Owen Smith) is going to intervene, were already in place.

I have given the example of Merseyside where centralising pathology, which is a wholly sensible thing to do, has had to get over the hurdle of impressing the co-operation and collaboration panel. It was apparently satisfied when it discovered that pathology could be obtained in Wigan. That was enough competition and was okay. However, the fact that those involved had to get over that hurdle delayed the savings and some of their impact. I pause for a second to ask hon. Members to speculate about something. If Marks & Spencer behaved in exactly the same way with regard to all its separate stores, we would consider that to be an imbecilic business practice. There is no reason why we should not query it when we see it within the NHS.

[Owen Smith]

I have a great deal of respect for the hon. Gentleman, but does he not agree that it is slightly ironic that he should be making this argument now, given that Opposition Members consistently argued throughout the passage of the Health and Social Care Bill that the sort of fragmentation he is talking about will get worse once we get rid of all strategic planning at a regional and national level? If we get rid of strategic health authorities and primary care trusts, that will be a major problem and will compound the issues he is talking about.

[John Pugh]

I am not wholly convinced that we will get rid of that level of planning. Instead, it will go through another avatar or incarnation and reappear as a subset of the national commissioning board’s activities. That organisation is rapidly developing regional tentacles, some of which look very similar to parts of the strategic health authorities. Yes, there is the need for some strategic look at how savings are to be achieved if we are going to make savings across the acute sectors; otherwise, we are missing some very soft savings in times of severe financial restraint. It is not me saying that; it is those people who have looked at the matter in the greatest depth—in this case, the NAO.

However, one cannot roll back the clock; we are where we are. I suspect that there will be a fair amount of merging among trusts so, perhaps with the evolution of super-trusts, we will get real economies of scale. The key question I ask and the reason behind this debate is: what can the Government actually do to manage this process of change, given that all the financial information coming our way now and next year will illustrate that there will be change and that significant problems need to be addressed in London and other parts of the country? The way I see it is this. There is a yawning gap between what the public would like to see and what hospital administrators consider to be financially expedient or workable, and what doctors see as clinically desirable. There is sometimes a tendency to confound the two. I have seen many cases for change based on financial expediency that are represented as cases about promoting a clinically desirable framework. That has always created a degree of cynicism on the part of the public, who see the money rather than the clinical needs of the services driving change.

Financial expediency and clinical desirability are different. None the less, they are both forces that we can do nothing specific about as they stand. Those forces are driving change even though the public, particularly in London, are probably reluctant to accommodate that. One very bad way of resolving such a dilemma—and it will be a difficult dilemma for whoever has to deal with it—is simply to do the politically expedient thing and work out which option loses fewest votes. That does not necessarily produce anything like a desirable situation and it creates a lot of bitterness, particularly if political leverage is used to benefit candidates of one or another party, however tempting that may be.

To make a positive suggestion for a way forward, I accept that this is a very difficult environment, and one that is only going to get more difficult, but I would like to draw attention to what I have picked up in most of the debates I have had, in this Chamber and elsewhere, on reconfiguration, often in parts of the world that I was not directly informed about. In those debates—I remember a well-attended debate, with many Conservative hon. Members, about reconfiguration in the Watford area—the fundamental issue that crops up time and again is access. People spend far more time talking about the way to the service than about the shape of the service—far more time talking about traffic than about clinical processes. We have to draw a lesson from that.

It seems fairly straightforward that people who have serious life-threatening diseases have one primary consideration, which is to get the best conceivable service they can to save their life. Recognising that, they will go to where that best service is. For example, in my constituency of Southport people who contract cancer often have to travel to Clatterbridge hospital in the Wirral for some of the specialist cancer services that are not available in Southport. Although they would rather have those services on the doorstep, they would sooner have the best conceivable service. On the other hand, asking people who are travelling for very complex, life-critical services to also travel in order to get triage should they have some mishap, or to travel if they want to do something very ordinary like give birth to a baby, or if they want to attend a clinic, or if they want to get their chronic condition attended to or assessed, or if they want some sort of initial diagnosis of their symptoms, or if they want a routine stay in hospital, then to suggest that they should not go local, that they should travel further, creates uproar. Frankly, if they are asked to travel further than other people and prolong an anxious journey, or encounter some tortuous route, that will enrage them significantly.

A lot of debates about hospital reconfiguration in this place have been about the fears of one community about the basic, simple services for which they will unfairly be made to travel further than other people—fears that, in a sense, they have been rejected and that some other community has been selected to have services on its doorstep. The tendency of many people in the health service is to think that that is an issue, but not a health issue—the Department of Health does not do highways.

I can give a classic example of that in my constituency. There are two hospitals in my local trust—one in Southport and one in Ormskirk. The services were configured, I think largely for political reasons, in a rather strange pattern. A and E for adults is in one hospital, and A and E for children is in another. Theoretically, if there is a car crash with both parents and children involved, they would go off in different directions. That strikes many people as almost perverse. When people in Southport, complain very vocally and emphatically, as they still do, about having to traipse over to Ormskirk even for the most minor ailment affecting a child, they have a legitimate grievance. I have to say that that appeared to be a grievance that was shared by the Secretary of State. When he was campaigning for the Conservative candidate in my constituency, he agreed with me on precisely that point. If one reads the fine print of the Shields report, which did that configuration, one finds a very short sentence saying, in effect, “this is a fine configuration which I, Professor Shields, medical man, wish to stand by.” He treats the weakness—that there is a long and tortuous road between the two communities—as though that really was outwith the particular suggestions that were being made.

I recall similar issues with regard to the debate that we had about hospitals in the Watford area. People said that the configuration had not recognised the fact, unbeknownst to the health authorities, that it may have been possible to get from one part of the community to another at 10 o’clock or mid-afternoon, but not at peak time. That would not work or be satisfactory for the people who would have to negotiate dense traffic and no direct road. I looked at the Secretary of State’s four tests for acceptable configuration. They show progress in the right direction, but the one thing that they did not mention was physical access and time taken in access to health services.

In conclusion, I would like to make a positive suggestion. When we think about configuration, we need to lay down access standards that offer some kind of basis of what people can rationally, reasonably expect: to test proposals coming forward against access standards; to ensure that access is, as far as we can get it, fair for all; to have goals for access that allow for variations in people’s condition, whether life-critical or standard; to allow to some extent for differences in rural and urban environments; and to allow even for factors such as population density. People in London would be flattered, to some extent, by the picture they see of access arrangements in London. They probably feel that they are not as good as they might be, but in comparison with rural environments they are markedly different.

If the Department of Health could take access seriously, then the huge political problems that are on the horizon, and not very far on the horizon, can be resolved in a less politically contentious way. We could then convince people that some of the reconfiguration that may have to be done is fair, if not welcome. Until we do that, we are going to get into precisely the same territory as Dr Taylor and David Lock in Kidderminster. It is the failure on the part of the NHS, I guess, to talk to the department of highways and the Department for Transport effectively. It is a failure to take into account what it means for the ordinary patient, and how it looks from the ordinary patient’s point of view, that really makes these difficult issues absolutely explosive.

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[Owen Smith]

I am not sure that I am the most celebrated politician being asked to apologise today. I do not need to apologise and do not feel that I am holed below the Plimsoll line, because clearly a very different future scenario is being painted as a result of the changes that the Minister and the Government are pushing through in the Bill. Our grave concern is that the local populace, politicians, and, indeed, Parliament, will have far less control over and insight into what different parts of the NHS will be doing after they are afforded that much greater autonomy. Of course, there will also, ultimately, be a far greater ingress of private companies into the NHS at many levels.

[John Pugh]

Does the hon. Gentleman accept that his argument is an argument for all seasons? He can use it whenever he criticises the Government for something and then finds out that his party’s Government have done it; so he has rendered himself undefeatable in argument, but somewhat meaningless.

[Owen Smith]

I would love to be undefeatable in argument, but I am not sure whether that is true. However, I will add one thing before I move on. I did not say—this is the principal reason why I do not need to apologise to the Minister—that the idea of a private company coming in and running an NHS service should never be countenanced. I suggested that in the world envisaged in the Health and Social Care Bill, where there will be a significant increase at many levels in the number of private sector providers in the NHS, there is an immediate local concern, in addition to the far more substantive problems of competition law becoming the norm for organising the NHS and, crucially, dismantling it. The local concern is that there will be less control over a greater proportion of the NHS, once we have more private providers. That clear concern is widely felt across the House and outside it.

The hon. Member for Southport touched on how NHS bureaucracy allows tough decisions to be taken. He talked about politicians not being prepared to take tough decisions, and about the NHS’s own clinicians, bureaucrats and managers being unable to do so. That needs to be recognised, because there are difficulties with an organisation as big, and arguably as unwieldy, as the NHS, with so many different moving parts and so many different agendas in play. However, as to the labyrinthine bureaucracy that the Health and Social Care Bill will create, with the welter of new organisations—the national commissioning board at national and local levels, consortia, senates, clinical networks in addition to the ones that we currently have, health and wellbeing boards, HealthWatch, the Office of Fair Trading and the Competition Commission—it is beyond this simple politician to see how that much more complex architecture will facilitate easier decision making in the NHS about tough reconfigurations. I just cannot see how it will get easier with far more complex architecture.

I thought that the hon. Member for Southport talked interestingly about how, at a more aggregate level, one might imagine better ways to manage what he called the “dormant surplus estate” of the NHS, which is an interesting point. There are ways in which dormant bits of hospitals and dormant land could be better managed. I have grave concerns about the world that I envisage will pertain in several years, if the Bill unfortunately passes, in which different parts of the NHS will have much greater autonomy in making those decisions, and there will be a much greater risk that the motivation behind them will be financial as opposed to clinical. I find it impossible to believe that the likelihood of aggregated strategic decision making in respect of that estate will be improved by allowing the NHS to break up, as I fear it will. The National Audit Office report that the hon. Gentleman prayed in aid was not on precisely that territory, but it pointed to a risk that always attends autonomy—that it results in less strategic decision making, because decisions are made at a more micro level. That risk clearly attended foundation trusts, and it will get worse, not better, under the Bill.

Lastly, the Minister has talked about clinicians sitting at the heart of the decision-making process. Again, I use the analogy of a labyrinth in the NHS; I cannot see how in that new labyrinth clinicians will be at the heart of decision making. It is a labyrinth that would challenge Theseus, let alone the NHS. Those clinicians will be in the maze with many bureaucrats, some of them perhaps rebadged and shifted from primary care trusts and strategic health authorities into consortia, the NCB or the NCB’s regional arms, and some perhaps from BUPA, Assura Medical or one of the other bodies that will no doubt help to manage commissioning for consortia, and, potentially, for acute care.

In reality, the previous Government funded the NHS from a point where it was on its knees. They tripled the funding of the NHS, radically increased capital spending and raised some of the issues that the hon. Member for Southport has mentioned about the private finance initiative—we could have a long debate about that and how we should reconsider some of those capital projects.

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[John Pugh]

The hon. Gentleman is right to say that competition is not a panacea for developing efficiency in all places, but nor was the Darzi prescription, which he has just mentioned and which was written in the same way for everyone throughout the land. My own constituency ended up with a Darzi clinic, which was in the community but actually further away for more people in Southport than the district general hospital—we are now struggling to fill it and to find a use for it. Although I accept that competition is not a universal panacea, there is a problem with top-down prescription.

[Owen Smith]

Darzi was not only about polyclinics—that they were the principal prescription that he came up with is one of the myths. There was a much broader agenda in play which, as I have said, was about integration and pushing more services into primary care, although not necessarily into polyclinics. All I was suggesting was that the Government could legitimately have pointed to that area as a legacy of the previous Government that they could have picked up and run with—one they could have made significant inroads on in the past year. Instead, they have misrepresented the direction of travel as one wholly driven by a belief in market forces, as the ultimate way to get efficiency in the NHS. That is what led to this wasted year.

Finally, I entirely agree that politicians need to be a lot braver about the NHS. Politicians of all stripes need to take difficult decisions about how services must be restructured and reorganised for the 21st century. The way to go about it is not the Government’s method, whereby they abdicate a greater degree of responsibility for the NHS—pushing it, at arm’s length, to the NCB and others, including the private sector. Nor is it wise for the current Government to have come into office with so many hospitals able to parade a photo of the current Secretary of State or local Tory MPs holding placards saying, “We will not allow this service or that hospital to close.” That was not wise, and it might have sown false hope for some hospitals, which I suspect that the Government will come to rue in future.