Health and Social Care Bill

Stephen Dorrell Excerpts

Monday 31st January 2011 Commons Chamber

[John Healey]

The point made by my right hon. Friend the Member for South Shields is based on page 42 onwards of the Health Secretary’s impact assessment of the Bill, which mentions a premium for private providers of £14 per £100. The Bill allows the system to pay a premium and a bung to private sector providers.

[Mr Stephen Dorrell (Charnwood) (Con)]

Will the right hon. Gentleman now answer the question put to him by my right hon. Friend the Health Secretary? Does he agree or disagree with the maximum price tariff principle that was set out in December 2009 by the previous Labour Health Secretary?

[John Healey]

We operated an NHS with a set tariff, not a maximum tariff. In government, we operated an NHS in which price could not be the factor that drove decisions about what services patients received and by whom they were provided. My right hon. Friend the Member for South Shields is absolutely right to point out that the Bill will introduce price competition and the flexing of the price so that there is no longer a set tariff for treatments and patients but a maximum price that can be undercut by providers coming into the field. The Government will not talk about that.

The Prime Minister is not helping the Health Secretary, because the changes the Bill makes were not in his election manifesto, not on his election posters and not in his election speeches. I have the Conservative manifesto here. There is no mention of axing all limits on NHS hospitals treating private patients, so that NHS patients lose out; no talk or mention of undercutting on price, so that established NHS services are hit as new private companies cherry-pick easier patients and services; no mention of guaranteeing only selective hospital services, so that others can be closed and lost to local people without public consultation; and no mention of putting a new market regulator at the heart of the NHS with the principal job of promoting and enforcing competition. There is no mention in the Conservative manifesto of the biggest reorganisation of the NHS since it was set up more than 60 years ago. They did not tell people about their plans before the election and they promised not to introduce such measures in the coalition agreement after the election. There is no mandate from the election or the coalition agreement for this fundamental and far-reaching reorganisation. That is not a debating point, but a point of democratic principle.

--- Later in debate ---

[Mr Stephen Dorrell (Charnwood) (Con)]

I rise to support the Bill. The shadow Secretary of State started by saying that my right hon. Friend the Secretary of State struggled to explain his reasons for introducing the Bill, but I think that the shadow Secretary of State struggled to explain why he opposes it. He struggled from the moment that my hon. Friend the Member for Grantham and Stamford (Nick Boles) intervened to draw his attention to the fact that the Bill represents an evolution of policy that has been consistently developed by every Secretary of State since 1990, with a single exception in the form of the right hon. Member for Holborn and St Pancras (Frank Dobson), who sits on the Labour Back Benches. The question that the shadow Secretary of State has to answer is this.

[John Healey]

rose—

[Mr Dorrell]

Let me pose the question and I shall be delighted to give way. Which of the key themes does the right hon. Gentleman oppose? Is it the practice-based commissioning or the “any willing provider” model? Is it the introduction of private sector expertise into commissioning, which was first articulated in the world class commissioning programme, or is it the principle of the maximum tariff? Let me help him by quoting from the operating framework of 2009, to which my right hon. Friend the Secretary of State referred. It states:

“After 2010/11, we shall move to a position where national tariffs represent the maximum price payable to a commissioner, as opposed to the mandated price for a particular activity.”

With which of those four key policies does the right hon. Gentleman disagree?

[John Healey]

The right hon. Gentleman started by saying that the policies are an evolution. If that is the case, why did he say:

“I thought we were looking to develop existing institutions rather than starting again, and that appeared to be confirmed in the coalition agreement.”

[Mr Dorrell]

indicated assent.

[John Healey]

The right hon. Gentleman, who is nodding, went on:

“Then in July that approach was changed. That came as a surprise.”

[Mr Dorrell]

Indeed it did. I offered the right hon. Gentleman four consistent themes of policy. He accurately quoted my comments about a specific element of bureaucracy. One of the questions that the Select Committee addressed was why, since all these broad themes are so broadly supported, we went down the road of replacing the PCTs with the consortia. That is a question that the Select Committee said in its report had not been adequately explained, but that is a relatively minor question of bureaucratic presentation when compared with the broad themes of policy that were articulated in the debate by my hon. Friend the Member for Grantham and Stamford. Which of these key policies does Labour now wish to dissent from?

[Hugh Bayley]

rose—

[Mr Dorrell]

I give way to the hon. Gentleman, an expert on health policy from the Back Benches, who may able to answer the question that the shadow Secretary of State wishes to avoid.

[Hugh Bayley]

I wonder whether the Select Committee agrees that private contractors, where they are engaged, should be required to publish the same information about cost, quality and outcomes as NHS providers, to ensure a level playing field and real, true comparison.

[Mr Dorrell]

I have been here long enough not to presume to speak on behalf of a Select Committee on a question that the Select Committee has not addressed, but I think there would be broad support across the House for the principle that where the private sector provides a service to a public sector commissioner, the private sector provider should be accountable to that commissioner on precisely the same terms as the public sector provider. As my hon. Friend the Member for St Ives (Andrew George) mentioned in his intervention on the shadow Health Secretary, one of the problems about the independent sector treatment centre programme was exactly the point that the hon. Gentleman makes—the accountability expected of a private sector provider was different from the accountability expected of a public sector provider.

Therefore, I agree with the hon. Gentleman and hope that he can persuade his right hon. and hon. Friends on the Front Bench to endorse the principle of common accountability for public and private sector providers providing a service to a public sector commissioner. I see my right hon. and hon. Friends on the Government Front Bench endorsing the principle. I hope that I am not misrepresenting the way that they are reacting to the hon. Gentleman’s question.

This is a consistent set of themes. Why is it consistent? I want to move the debate on. The House of Commons loves debating structures in the national health service. The inference from what I have said so far might be that that means it is all business as usual—that what has gone on, with the exception of the period when the right hon. Member for Holborn and St Pancras was in charge, is a seamless development of policy since 1990.

However, the truth is that during the lifetime of this Parliament the national health service faces a genuinely unprecedented challenge, first articulated not by my right hon. Friend the Secretary of State in the present Government, but by the chief executive of the health service before the general election in May 2009, when he drew attention to the fact that demand for health care should be expected to continue to rise at roughly 4% per annum, as it has done throughout the recent history of the national health service. However, because of the budget deficit, we will not see the health budget continue to rise to absorb that rise in demand, in the way it has over the past decade.

Therefore, during the lifetime of this Parliament, we will have to see, in the national health service, a 4% efficiency gain four years running—something that not merely our health care system, but no other health care system in the world, has ever delivered. The Select Committee has referred to that as the Nicholson challenge, reflecting the fact that it was first articulated by the chief executive and endorsed by the previous Government. Again, this is a case of a shared agenda across the House of Commons.

Given the Budget deficit, the only way we can continue to meet the demand for high-quality health care, which we all want to see, is by delivering an unprecedented efficiency gain in the NHS for four years running. That is why I support the Bill. I support it because to my mind it is inconceivable that we can deliver such an efficiency gain without delivering more effectively than we have done yet on the ideas, which have been endorsed over the past 20 years, about greater clinical engagement in NHS commissioning, which I have been talking about. Commissioning cannot be successful if it is something that is done to doctors by managers; it must engage the whole clinical community. We must address the democratic deficit, because we cannot bring change on the scale that we need to deliver the efficiency gain without engaging local communities.

Finally, the NHS must also be a national service that is accountable through the commissioning consortia, the commissioning board and the Secretary of State to this House, because it is ultimately the taxpayers who pay for it. Those are the principles that were set out by the Health Committee, and it is those that we will seek to review as the Bill goes through Parliament.

--- Later in debate ---

[Hugh Bayley (York Central) (Lab)]

The Government White Paper said some sensible things: it promised to increase NHS spending in real terms, to improve patient choice, to devolve decision making, to reduce management costs and to hold doctors to account for their clinical outcomes. Indeed, the objectives are very similar to many of those of the former Labour Government. The problem, however, is that the Bill will undermine many of those good aspirations.

Health spending is, as we know, falling because the amount by which the Government increased the NHS budget is lower than the rate of inflation. [Interruption.] For my health authority, it is 0.3% lower than the rate of inflation. Patient choice will remain limited to where GPs choose to commission services. Centralising many services under the NHS commissioning board—a new layer of bureaucracy—means that NHS dentistry, community pharmacy, optometry services, regional and sub-regional specialties and, indeed, some more complicated local services will be commissioned at national level by that board rather than at local level by a primary care trust, as in the past, or by a commissioning consortium in future.

I am sure that the Government will try to reduce NHS management costs. Every Government since the creation of the NHS have sought to do so, but this Government need to explain how creating 500 or 600 commissioning consortia—each with the skills to commission services—will cost less than the 150 PCTs that currently do the job. They are likely to lose economies of scale and the decisions taken could well lead to the fragmentation of some services such as dermatology or pathology. Such services are currently commissioned by a PCT for the whole PCT area, but in future could be commissioned in three or four different ways by different consortia. Small, less well resourced GP commissioning consortia will, I believe, be less effective than PCTs and strategic health authorities in controlling the costs of powerful hospital foundation trusts.

The Government are right to stress the importance of measuring clinical effectiveness and outcomes, but that makes it extraordinary that they have put primary care in the driving seat. We know a lot about the work of hospital doctors from the hospital episode statistics, but there are no national data on GP consultation rates or the thresholds they employ before they intervene with treatment or on GP outcomes, yet GPs are being put in charge of demanding this from everybody else.

Running through the Bill is the idea that transparency and accountability will drive up performance, so here are some questions to the Minister, which I hope he will address in his concluding speech. The Bill is designed to reduce health inequalities, yet there are enormous inequalities in GP services. Some GPs are very good; others less so. There are differences in their prescribing and referral rates, so how are the Government going to measure GPs’ clinical performance? How will a GP commissioning consortium hold erring GP practices to account? What sanctions will be employed?

How will patients hold their GPs to account for their commissioning decisions? We are, of course, familiar with GPs being sued for bad clinical decisions, which is why they take out medical insurance and have to pay increasingly more for it each year. Will patients sue their GPs for bad commissioning decisions? How will the consortia hold hospitals to account?

How much will the GP commissioning consortia receive in management allowance per patient, because the Government’s success in making administrative savings will depend on that? What sanctions will be imposed on a GP commissioning consortium to ensure that it commissions effectively and uses a good evidence base for its decisions?

The Government tell us that PCT deficits will be written off before the consortia take over, but what help will the commissioning consortia get in areas such as mine where there has been a difficult structural deficit—brought into balance by the previous Labour Government, but out of balance once again under the new Administration—to stop them falling into deficit? What will happen if they do go into deficit? Will their budgets and the services they provide to patients be cut as a result?

[Mr Dorrell]

The hon. Gentleman is making a thoughtful speech and asking, if I may say so, some very good questions, with all of which I agree. There is an implication behind his speech, however, which is that if all those questions can be answered, as I hope and believe they can, he will support the Government’s policy. Is that implication correct?

[Hugh Bayley]

If I were convinced that they could be answered, I would indeed support the Government, but unfortunately I am far from convinced that it is the case.

Let us take another issue. The Government are providing a lesser increase in funding to the NHS this year, which amounts to a cut in real terms when the rate of inflation is taken into account. They think they will get away with this because the NHS staff wage bill is being frozen for a two-year period. What thought have they given to the wage bounce that will inevitably come in two years’ time? There will be enormous wage pressure on the NHS budget; are the Government intending to increase it significantly at that time?

[Mr Dorrell]

I am anxious to provide the hon. Gentleman with extra minutes so that he can tell us whether he approves, in principle, of the idea of practice-based commissioning, which was originally introduced by the previous Government?