NHS: Health and Social Care Act 2012

Lord Lansley Excerpts

Thursday 8th September 2016 Lords Chamber

[Lord Lansley (Con)]

My Lords, I am sure that we are grateful to the noble Viscount for initiating the debate. I hope that the debate will be more directed towards the future of the National Health Service, its sustainability and how it can achieve improving quality. I do not, therefore, propose to examine in detail the many assertions made in the noble Viscount’s speech, but I put on record that I think there were many errors in what he had to say about the past.

On one particular point, from my personal point of view, I will just say this. As the Conservative Party’s lead spokesman on health for more than nine years, I am proud that, with David Cameron’s active support, we made it very clear that we would not at any point countenance a shift away from the NHS as a comprehensive, universal service, available free at the point of use and funded out of general taxation. I am also proud that, in the midst of the financial imperatives that we faced in 2010, he and I, together with our Liberal Democrat colleagues in coalition, gave the NHS the priority that it needed and increased its budget in real terms through the last Parliament.

What did the Health and Social Care Act set out to do? It was and has been a structural change. It was founded on a set of principles that were not new to the National Health Service at all. Over the preceding 20 years, pretty much every Secretary of State agreed, with the exception of Frank Dobson—the noble Viscount in his speech was at least even-handed in condemning past Labour Governments and coalitions as well as the Conservative Party—that we needed to devolve responsibility within the National Health Service, to give greater freedoms to providers to promote patient choice and indeed to be very clear about the distinction between the commissioning function and the provider function. I make no bones about the fact that it is designed to create a stronger commissioning structure. Where I agree with the noble Viscount is that that is as yet an unfinished task.

There is a constant pressure within the National Health Service for the providers to control the structure of activity and for commissioners, not independently, to use their budgetary and statutory powers to determine what is in the best interests of patients. That actually is what is in the Bill. It does not say that there has to be compulsory competitive tendering. It does not tell the commissioners how they should go about it in terms of the use or otherwise of competition. What it says is that they have to use their powers in order to deliver what is in the best interests of patients, and if there is something that does not involve competition, they are entirely at liberty under the statute to do exactly that.

Secondly, what did the Health and Social Care Act not do? It did not introduce competition. There is a reason why the noble Viscount referred to 2006 as the starting point for his analysis of private sector activity on outsourcing in the National Health Service. It was in 2006 that the previous Labour Government introduced it. PFI is the largest element of privatisation, and there is nothing in the 2012 Act that requires any extension of privatisation. On the contrary, it did away with the past Labour Government’s ability under the law to discriminate in favour of the private sector. There is no potential to do that. The only reason why any commissioner should use the private sector is because it would provide a better service and at a lower cost. Actually, we shifted the structure of “any qualified provider”—which is not in the Act—from a cost basis to a quality basis; it has to provide a better quality and they are on the same tariffs.

What the Act also did not do is create deficits in the National Health Service. I am proud of the fact that, in the three years during which I was responsible for the financial situation in the National Health Service, it was in surplus all that time and, indeed, not on a declining trend. The number of trusts in deficit in 2013-14 was proportionately the same as in 2009-10. There are subsequent reasons why the NHS has shifted into financial deficit. It is partly to do with the Francis report, which came after I ceased to be Secretary of State. It is not that it was not a good report, but the response to it focused on the extension of staffing and measuring staffing, with the consequent impact on agency costs not least, rather than a focus on outcomes. I am proud of the fact that the outcomes framework for the National Health Service and a focus on quality and outcomes were at the heart of the reform process—and should be, and often still is not. Too often, the debate about the National Health Service is completely obsessed with inputs and activity levels, and far too little focused on outcomes. We have an outcomes framework and we should focus on it.

What do we need to do in the future? We should not, in my view, revert to monopoly. Sustainability and transformation plans, while they are rightly the product of collective and collaborative working, should not attempt to create monopolistic structures in the NHS because a monopoly in the NHS would do exactly the same thing as it does anywhere, which is to pretend, through offering short-term benefits, to provide long-term benefits but actually to entrench provider interests as opposed to the patient interests. We should not restrict choice and we should not end clinical commissioning. We should not allow the commissioning function and the provider function to be submerged into one organisation; they are distinct and separate, and the conflict of role between those two should not be confused. As to sustainability and transformation plans, we should not allow them to become what they were back in 2006, when there were substantial deficits, albeit at a time of rising resources. We should not allow them to be an effort to try to constrain demand by restricting supply, which is what tended to happen back in those days.

What we need is more integration, and the Act led, through health and well-being boards and the role of local government and its ancillary additional functions on public health, to a real opportunity for greater integration. The commissioning function should involve local government and the NHS very much working together. One of the principal reasons for the deficits is the lack of reform in social care, and we should implement Dilnot. As I have said in this House, there were reasons why it was not done, which I do not accept. It should have been done, it still must be done and it should form part of an input to social care.

Finally, we must acknowledge the necessity for the NHS to have the resources it needs for the future. Time does not permit me to explain all that, but we never would have anticipated in 2010 that we would go for a full decade with a less than 1% real-terms increase year by year. We have to accept that the sustainability of the NHS requires resources for the NHS and for social care on a scale that is not presently anticipated in the current spending review.