Health and Care Bill

Lord Lansley Excerpts

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

[Lord Patel (CB)]

My Lords, I support all the amendments in the name of the noble Baroness, Lady Cumberlege. She introduced them very comprehensively and I agree with what she said. My noble friend Lord Stevens of Birmingham added to it, so much has already been said and I need to be extremely brief.

I concur with my noble friend Lord Stevens of Birmingham that outside bodies, including professional organisations in medicine, oppose these powers and that they will lead to more chaos rather than solving problems. As a clinician, I find the unchecked powers for Secretaries of State over local service reconfigurations that the Bill proposes astounding. Local service reconfigurations should be driven by clinical advice and expert assessment of what services are needed to meet the health needs of a local community with patient safety at the heart, as well as considerations about what resources are available in terms of workforce, infrastructure and the proximity of alternative services.

The powers in the Bill would allow the Secretary of State to initiate service changes without any consultation. How can any Secretary of State feel sufficiently qualified to be making unilateral judgments about what constitutes “safe”? The existing, largely successful, processes, which have already been mentioned, take account of clinical advice and the views of local communities in the final decision have been effective. The noble Baroness gave the example of Kent and Medway stroke services, which were held up by the Secretary of State, not by the consultation. I strongly support these amendments and I hope that the Minister will think about removing the provisions from the Bill.

[Lord Lansley (Con)]

My Lords, I shall be brief. I put my name to Clause 40 stand part, and I think that is the best way to go. I shall add one or two things. First, as Secretary of State, I asked the now noble Lord, Lord Ribeiro, to lead the independent reconfiguration panel, and I never had cause to regret doing so. Secondly, I can say something which other noble Lords cannot, because I am on this side, and I am hoping that we continue to have Conservative Secretaries of State for many years hence. They will be much better off if they do not do this. If the Government take Clause 40 out, they will equally not regret doing so.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I described at Second Reading, or at some point in a meeting with the Minister, an attempt to save Ministers from themselves. I do not understand why on earth the Government want to put this burden on them. The Government have set out an ambitious programme for reform of the NHS. Why put in a clause that guarantees that that reform will be stalled? We know that reconfigurations—most of us have experienced the issue locally, if not nationally—are very difficult. There is always local opposition, often from some leading consultants, and to get it through you have to be very determined. The noble Lord, Lord Warner is right; once Ministers can intervene at any point—for example, if an MP’s local services are threatened with an unpopular change—even in the Lords, the pressure on them to intervene can be huge.

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When the Bill receives Royal Assent and becomes an Act, it will be open season on the Minister and his colleagues. On any reconfiguration where the local MP is troubled, inevitably Ministers intervene, or they use the review device. Consider the issue of children’s heart transplants and the attempt over 20 years to rationalise it, and the utter failure of that approach; that is but one example of the kind of energy that you can get the moment Ministers have powers of intervention.

[Lord Lansley (Con)]

If anyone cares to look at it, it was also a very good illustration of the benefits of the Independent Reconfiguration Panel. Not only did it do something that Ministers could not do; it also did something that NHS management did not do. It is not that we are giving it back to the NHS to do what it likes—it genuinely does something independent.

[Lord Hunt of Kings Heath (Lab)]

Indeed, we have a rigorous process involving the overview and scrutiny committee, as has been said, plus an Independent Reconfiguration Panel. As the noble Lord, Lord Stevens, said, it is rather like the last debate: before us we have a set of amendments which seek to constrain the power of Ministers, and then an amendment which seeks to remove this power. I am clear that we should try to remove this power, and that this is the best course. It will be very interesting to hear from the Minister exactly why Ministers want to put this burden on them, and what benefit they can possibly see in it.

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These amendments would ensure that the stop-start model—removing permission and then reinstating permission—that many trusts such as Watford General Hospital face over years would be less capricious. It would give foundation trusts more assurance to long-term planning, avoid the high level of emergency repairs and need for temporary provision, and, above all, be a more transparent and fairer way to deliver capital expenditure. Without the 2019 agreement, we risk putting foundation trusts back in the parlous stop-start model.

[Lord Lansley (Con)]

My Lords, I intervene briefly to say that I support the amendments in the name of the noble Lord, Lord Crisp. We are grateful to him for tabling them, and indeed for presenting them so very well.

I also rather enjoyed the opportunity from the noble Baroness, Lady Brinton, to think back to 2011, as I think it was, when I went to visit Watford General—I probably announced a new hospital then, but I cannot quite remember. She said the local connections were all funded by the local authority, and I seem to remember paying for the roundabout outside Watford General Hospital, because it was so instrumental to the process of the redevelopment. Anyway, that is by the way.

What I am really looking for from my noble friend on the Front Bench is to understand the mischief to which the Government’s proposals in Clause 54 are the remedy. Certainly, when I was Secretary of State—which is a long way back; we were not in deficit but we did not have a lot of money—the issue every year with the capital expenditure of FTs was that they always told us that they were going to spend a lot and then did not spend anything like as much. To account for that in the public accounting system, we had to make some heroic assumptions about how much less they would spend than they said they were going to spend.

It may be that the department is saying that the way we get round all this is to set very tight limits in the first place—to say where we think they are going and what we think they can spend. This, frankly, is a recipe for disaster for many trusts, because the reason they underspend is that there are so many difficulties in planning and executing capital expenditure projects.

I am trying to find out the purpose behind the Government taking such strong powers in relation to capital expenditure. I rather hope that they might see merit in the amendment from the noble Lord, Lord Crisp.

[Lord Stevens of Birmingham (CB)]

My Lords, I will be brief. In response to the noble Lord, Lord Lansley, in fairness, there is logic to the broad direction being set out by the Government here. As the financial health of foundation trusts improves, their ability to seek self-generated capital investment will, in all likelihood, be much higher, looking over the next four or five years, than it has been during the more constrained financial circumstances of prior years. So it is not unreasonable to have a set of measures in the Bill that would enable Ministers to ensure that the NHS sticks with the capital expenditure, voted for by Parliament, for the NHS in any given year; nor is it unreasonable on the part of the Government to seek to ensure that there is a mechanism by which that capital can be allocated fairly across the country according to need, rather than purely according to an individual institution’s ability to finance it.

All that being said, rather than this being a fundamental matter of principle in the way that our last two discussions have been, these amendments have a lot to commend them. They are entirely pragmatic and put the right safeguards around what should be only an emergency power. As the noble Lord, Lord Crisp, laid out, that was the basis on which a consensus was achieved back in 2019. It provides good incentives at trust level for sound financial management and, frankly, it provides a bit of a pressure release or a safety valve against an overly artificially constrained capital settlement in certain years or parts of the country.

I very much hope that, in the constructive spirit with which I think these amendments are being advanced, this is something that the Government might consider favourably.

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Debate on whether Clause 68 should stand part of the Bill.

[Lord Lansley (Con)]

I am sorry to interrupt when the Committee was making such good progress. This clause brings into effect Schedule 10 as an NHS payment scheme, which is to replace the national tariff. Unlike the debates that we have just had about Clauses 39 and 40, I have initiated this stand-part debate not to argue that we should simply take it out but because I simply do not understand yet what the precise differences are that the Government intend between the national tariff and the new payment scheme. I am trying to find out more about it in order that we stand some chance, not least at Report, of seeing whether there is a reason to amend or simply approve what the Government are proposing.

We could have a long debate about this but I am not proposing to do so. If I may, I am going to ask a few questions of my noble friend but do not expect to receive all the answers straight away. These are often things that are easy to put down and send to noble Lords, because we will then have a chance at this stage to think about them before Report.

I can see one obvious difference. In new Section 114A, inserted by Schedule 10, new paragraph (b) includes in the payment scheme provision for payments for public health functions under the NHS Act 2006, which is specifically excluded in the tariff. I can see a difference. Beyond that, I start to lose track of what the differences might be.

The tariff under the 2012 legislation allows not only for payments for episodes of care but for services to be bundled; it allows for year of care budgets; I think it allows for—I cannot see any reason why it does not, and certainly work was done to look at this—outcomes-based pricing; and it allows for local price agreements or national prices. Many of the things which, on the face of it, the new payment scheme is designed to allow, seem already to be allowed. What are the differences?

My first question to my noble friend is this. There is no reference in the new NHS payment scheme to what are effectively national prices, such as the national tariff—if we ignore the word “tariff” and remember that it includes the word “national”. To what extent is the new NHS payment scheme designed to do away with national payments or national prices? In new subsection (3), there is different provision for the same service by reference to different circumstances or areas. We could therefore have regional and local pricing set nationally. That, to me, is an innovation, though I am not sure whether or not it is intended.

Secondly, the national tariff made specific reference to non-discrimination between providers by reference to their status, including, specifically, not paying private providers more than could be paid for a public sector or NHS provider. This new payment scheme refers to different provision for different descriptions of providers. Is it intended that the power should be taken back to pay different amounts to private providers than are paid for public sector providers?

On the payment scheme, there is a very complicated subsection, subsequent to that, that talks about provision of services resulting in

“a fair level of pay for providers of those services”

and refers to differences in costs and services provided. What is intended by that? On differences in services provided, I can see, for example, that if a price is being paid to one provider for a routine service and another provider—which may often be the NHS provider—provides intensive care back-up, the fact that this back-up is available should be reflected in the price they are paid, because, inherently, they have to provide additional resources for it. Is that what is intended? Are other differences likely to result from this?

I then come to my final, and in a way most important, question. I have discussed the point about the Government appearing—the noble Lord told me I was wrong about this—to have abolished the purchaser-provider split. Maybe I was wrong, because here, under the rules that are to be set, we find that they

“may allow or require a price to be agreed between the commissioner and the provider of a service.”

Under all this, the purchaser-provider split has re-emerged, somewhere in Schedule 10. Is that what this means, and is it to be agreed by negotiation or by reference to some other mechanism? One of the fundamental issues about the national tariff was that it was intended to be a negotiated outcome between NHS England and NHS Improvement, on behalf of the commissioners on one side and providers on the other. Who is going to engage in these negotiations and who will be the court of appeal, as it were, in relation to that? What is intended by the Government?

I ask all these questions because we just do not know any of the answers—I certainly do not, but maybe I am missing something. If the Government can share further information about some of these points, that would help me to know whether we want to help speed the clause on its way, or interfere with amendments on Report. I move that the clause does not stand part of the Bill.

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[Lord Kamall (Con)]

I thank the noble Baroness and echo her gratitude to all the noble Lords who have turned up for this group of amendments.

Before I turn to specific amendments, it may be helpful to make a few general points about the new payment scheme and explain why this clause should stand part of the Bill. For many years, the national tariff improved access to services and drove up quality across the NHS. The new scheme will build on that success. NHS England will continue to make rules determining the price paid to a provider, by a commissioner, for healthcare services for the NHS, or for public health services commissioned on behalf of the Secretary of State. Also, expanding the powers to enable NHS England to set prices for public health services, such as maternity screening, will allow for seamless funding streams for different care episodes.

However, we need to update the NHS pricing systems to reflect the move towards a more integrated system focused on prevention, joint working and more care delivered in the community. This will support a move from a “payment by activity” approach, towards an approach that promotes integration and early intervention, while discouraging perverse incentives for patients to be treated in acute settings. It will allow flexibility over the current pricing scheme, and allow rules to set prices, formulas and factors that must be considered when determining the prices paid. I assure noble Lords that, when developing the scheme, NHS England will continue to consult any persons that it considers relevant, which will include ICBs, NHS trusts and foundation trusts, as well as trade unions and representative groups. I share the sentiments of the noble Lord, Lord Davies, about the valuable role that trade unions play in a free society.

I turn briefly to the points made by my noble friend Lord Lansley. On regional variation, the NHS payment scheme will encourage commissioners and providers within an integrated board area to work together to agree prices that are in line with the rules set out in the scheme. To date, only one provider has applied successfully for local modification, and closer working within ICBs should remove the need for disputes. On paying different providers differently, there may be scenarios where it is appropriate to pay non-NHS providers different prices from those paid to NHS providers, to take into account differences, different starting costs or a different range of services provided. There may also be cases where the financial regimes of different providers make it appropriate to set different prices or pricing rules. When setting any prices, NHS England will aim to ensure that prices paid represent a fair level of pay for the providers of those services, as well as fair pay between providers of similar services. We will not introduce competition on price rather than quality. We hope that these changes will increase the flexibility and reduce transactional bureaucracy at the ICP level.

I must disagree with the proposal in Amendment 199. While the Secretary of State will remain responsible for setting out overall funding for NHS England, NHS England, alongside Monitor, has set the rules successfully since 2013. I cannot see the benefit of this duty being transferred to the Secretary of State, beyond separating it further from those making operational decisions in the system. Following that logic, we must also reject Amendment 202A. However, I assure noble Lords that the payment scheme will be published in the usual way, and your Lordships will of course be able to table Questions, secure debates, hold us accountable and ensure that the mechanism is scrutinised.

I turn to Amendments 201B and 201C. As part of the broad consultation duties, we expect NHS England to work closely with trade unions and staff representative bodies, such as the Social Partnership Forum, NHS Providers, the Healthcare Financial Management Association and all the royal colleges, when developing the national tariff.

On Amendment 200, I assure your Lordships that the NHS payment scheme will be published by NHS England following consultation. The Secretary of State will also have the general power to require NHS England to share the NHS payment scheme before publication, not to publish a payment scheme without approval, and to share the contents of the scheme should that be necessary.

On Amendment 201A, in setting the rules for the payment scheme, NHS England will of course want commissioners to consider staff pay, pensions and terms and conditions. NHS England will continue to take account of cost growth arising from uplifts to Agenda for Change. New Section 114C makes it clear that, before publishing the payment scheme, NHS England must consult any person that it thinks appropriate. Again, in practice we expect this to include representative bodies and trade unions. NHS England must also provide an impact assessment of the proposed scheme.

I hope I can reassure noble Lords that the department and NHS England remain committed to Agenda for Change. Independent providers will remain free to develop and adopt the terms and conditions of employment, including pay, that best help them attract and keep the staff they need. However, we expect that good employers would set wage rates that reflected the skills of their staff.

On Amendment 202, it is right that the commissioners and providers of NHS services should be able to make representations and, if they feel it necessary, object to pricing mechanisms set by NHS England in the payment scheme. That is why we have retained the duties to consult commissioners and providers. We have also retained the ability for ICBs and providers to make representations and to formally object in response to consultations on the NHS payment scheme, as they can with the national tariff.

The current prescribed thresholds are set by the National Health Service (Licensing and Pricing) (Amendment) Regulations 2015, and the current objection thresholds since 2015 have been set at 66%. My department consulted on these thresholds in 2015 and it remains the Government’s view that they are proportionate, preventing the delay of future payment scheme publications and giving the NHS the certainty that it needs to plan for future financial years.

If I have not answered all the questions from my noble friend Lord Lansley and others, I ask noble Lords to remind me and I will write to them. This has been a very important discussion—as we can see by the attendance—and I hope I have given enough reassurance to noble Lords for them not to move their amendments and have explained why the clause should stand part of the Bill.

[Lord Lansley (Con)]

My Lords, I am most grateful for the Minister’s response to that short debate and for the other contributions. I shall certainly look at the Court of Appeal judgment—was it the Court of Appeal? —and try to work through precisely where the problems are. There are two ways of dealings with this issue. One is to scrap the national tariff and put in a new payment scheme. The other is to start with the national tariff and ask what the problems are and how we are going to deal with them, and I would quite like to work that through.

We may come back to this because there is an issue about how far the payment scheme is a national payment scheme and how far it becomes a local and varied one. That is a very interesting question, as is the way in which discrimination between providers may be implemented and for what purposes.

For the moment, though, I am very grateful to my noble friend for his response and for his promise to follow up on issues.

Clause 68 agreed.