Health and Social Care Bill

Lord Davies of Stamford Excerpts

Wednesday 9th November 2011 Lords Chamber

I am, therefore, seeking an assurance from my noble friend that he will safeguard the spirit of liberation that is contained in this and related clauses. When he negotiates with noble Lords in seeking an agreement on the Secretary of State’s powers of intervention, I hope he will hold on to this very important principle: to allow managers to manage and to ensure that, although the democratic process takes place, we have enough safeguards to enable those who are really determined to make and implement decisions to do so. We must ensure that they will be much more free to put into place what they know is right on the ground, and that we do not lose that spirit.

[Lord Davies of Stamford]

My Lords, the first thing I want to say in the light of the Minister’s comments a moment ago is that of course I read his letter dated 7 November to my noble friend Lady Thornton, which was copied to a number of us. I think the Minister deserves considerable credit for it. I have no doubt at all that the letter was written in total good faith and was totally sincere. The Minister is trying to see if a compromise is possible: whether there is something that would be an improvement both to the existing text of the Bill and to the various amendments that have been put down. It is a creditable initiative on his part. I have tried in the past as a Minister myself to do things in that direction and I do not think the Minister should be penalised for that in any way.

Equally, as he said himself, the Minister does not want to inhibit the freedom of debate in any way this afternoon. It is very important that we express our views, because they can be taken into account when those informal consultations subsequently take place. If in fact his aim can be achieved and we can get something that we can all agree to, everybody should be happy. That is because we will be content that the Bill will be improved and the Government will find that they have a much easier ride on Report and Third Reading. If there is an agreed solution to this and other problems, I trust that the whole thing will go through Report and Third Reading like a dose of salts. Everybody could be satisfied with that outcome.

This group of amendments includes a clause stand part debate, and this clause raises two very important issues. First, I do not think that micromanagement is ever a good idea. You cannot run a business on that basis; when running a business you must appoint the best people you can find and let them get on with the job. It is exactly the same thing in respect of the armed services. Micromanagement is always a mistake in running or managing any human institution. That pretty much goes without saying.

The problem is that good management sometimes needs the ability to intervene very rapidly in a crisis, when things are going wrong. You cannot allow yourself—if you are going to have a well managed organisation—to be inhibited by bureaucratic procedures or rules from taking the necessary action to make sure that things are set right on the front line. That is probably more important for the NHS than any other human institution I can think of, because, literally, the activities of the NHS are a matter of life and death. Of course, that happens to be true of the armed services as well, but there are not many institutions of which that is true. The general principle is there.

My first point is that many of us are worried that, if the Bill is passed, there will be insufficient ability by the Secretary of State to take that necessary action, perhaps very dramatically, in a crisis. That is a matter of deep concern. There is of course—and I hope I do not offend either the noble Earl or others on the other side of the House by saying this; they know this perfectly well—a real concern out there in the public that the reason why the Bill has been drafted this way and why the Secretary of State’s powers have appeared to have been, or some people feel they are being, emasculated, and the reason why autonomy is being emphasised, is that the Government think there is going to be a crisis in the NHS. The Government are not going to be funding the NHS at the same rate as the last Government did.

I accept that a lot of the money that we spent was not spent with enormously good value and probably too much was spent on paying more for inputs—perhaps excessive pay rises—rather than buying new outputs. A lot was spent on bureaucracy. Nevertheless, the bulk of it was spent immensely usefully. It was an incredible achievement to get maximum waiting times down from 18 months to 18 weeks. There is a general feeling out there that that progress is not going to be sustained and that this Government are not going to be committed to funding the NHS in the same way. They are trying to make savings of £15 billion to £20 billion, we hear. There is going to be a crisis and some nasty news coming through; hospitals are going to be closed and so forth. At that point, the Secretary of State is going to be able to turn round, because of the effect of this Bill if it becomes an Act, and say, “Don’t talk to me—it’s not my responsibility. Go and talk to the national Commissioning Board or your local clinical commissioning group. Go and talk to anybody. Don’t talk to me”.

We have that already. I am a total supporter of the independence of the Bank of England. I refused to vote with my then party, the Tory party, when it opposed that independence. However, an inevitable consequence of making the Bank of England independent is that when we have questions here on monetary matters, the Minister who is responding—quite normally and naturally—says, “Don’t talk to me about it, go and talk to the governor or the Monetary Policy Committee. Don’t talk to me”. We do not want that situation to arise in relation to the NHS. That is the issue raised by this particular clause.

Secondly, I do not think that micromanagement or political management is actually the real problem in the NHS. I am sure there has been unfortunate political intervention and interference over the history of the NHS, and there is no doubt that is the case, but that is not the real problem. The actual, fatal tendency of the NHS—the besetting sin, if I can use a theological concept—is something quite different. Its fatal tendency is bureaucratic or producer capture: the tendency of any organisation that is in a monopolistic position to be run for the convenience and in the interests of those who are providing the service, whether doctors, nurses, managers or whatever. That is the problem we should really be addressing.

However, I am awfully afraid that the way this clause is drafted at present, far from acting as a barrier or corrective to that unfortunate tendency, may actually reinforce it. The text we have before us says that any person,

“exercising functions in relation to the health service”—

must be,

“free to exercise those functions or provide those services in the manner that it considers most appropriate”.

That seems almost an invitation to bureaucratic or producer capture.

I am not actually sure, with great respect to my noble friend Lord Warner—whose knowledge in this area I greatly admire—that his amendment fully addresses that. The amendment says,

“leave out ‘manner that it considers most appropriate’ and insert ‘interests of the health service’”.

That is a little ambiguous—the interests of the health service could indeed be what I define as the producer interest of the health service. I would much rather that it said “in the interests of the patient”, or “according to the principles of the NHS”. That would be clearer and would address the point that I am making.

Something needs to be done to redress the balance against this fatal tendency for the NHS to be run in the interests of producers, where the patient simply sits in line and then is grateful for what he or she receives. That is a culture we want to oppose and against which we must introduce long-term, structural, corrective mechanisms. That is a vital task for anybody framing a Bill to manage the future of the NHS.