NHS (Private Sector)

Tom Blenkinsop Excerpts

Monday 16th January 2012 Commons Chamber

[Andy Burnham]

My hon. Friend raises an important issue. We have not had those safeguards; there has been no explanation from the Government of any safeguards that will be introduced under this liberal measure. This evening, we need to probe exactly what they have in mind. During the pause, they said that they would restrict any competition on price in the NHS, yet they are bringing forward a measure that would allow NHS facilities to be used for the treatment of private patients with no guarantee that the private sector would not try to undercut NHS tariffs. Those are precisely the questions that the Government have to answer.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Does my right hon. Friend agree that the fundamental change in the Bill is that the Government are imposing a new form, Monitor, which directly applies competition regulation in NHS delivery of services and undermines the principles and rules for co-operation and competition—PRCC—that arbitrate between commercial services and the NHS, which controlled the market?

[Andy Burnham]

That is exactly the point. The proposal has to be seen in the context of the health system the coalition Government want to create. They want a broken-down system where one hospital is pitted against another, where there is a duty on the Secretary of State to promote the autonomy of NHS organisations, so that they are out there on their own, having to stand or fall on their merits, with a clear incentive to drive up income gained through a relaxed private patient income cap. I shall come to that point in a moment.

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[Andy Burnham]

That is absolutely the point. The Government want to create an NHS where Ministers can no longer say what can or cannot be done, so we have GP practices, such as Haxby in York, sending letters to their patients saying, “We have decided that we are not going to fund your minor operations any more, but by the way, we are now providing those operations. Here’s our price list.” That is absolutely disgraceful, but it is a glimpse of the NHS that will emerge if the Health and Social Care Bill goes through. My hon. Friend is absolutely right: we must consider the wider context, within a system with competition at its heart and where every hospital is on its own and they are fighting each other. That is the context in which this 49% proposal needs to be considered. It represents a break with 63 years of NHS history and a “genie out of the bottle” moment. That is why we ask the House to reject it.

[Tom Blenkinsop]

My right hon. Friend is making a strong point. The Minister says that the cap was flexible during our term, but that was under principles and rules for co-operation and competition rulings. That meant that the servicing out of the contract was based on care quality. Unfortunately, the Bill does not have any area dealing with quality of care; it is purely about price. It is about allowing Monitor to apply the pure regulatory format of the Competition Commission as it exists in other utility markets.

[Andy Burnham]

My hon. Friend anticipates me. I shall come to precisely that point in a moment, and it will backs up his point that the Bill is akin to the privatisations of the 1980s.

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[Andy Burnham]

I do not know whether those questions were for me or for you, Mr Deputy Speaker, but let us assume that they were for me.

I introduced the NHS constitution, which enshrined for the first time the basic rights of NHS patients. I am proud to have done so, so I do not need any lectures from the hon. Gentleman about what we should do to improve health care in this country. I said in the motion that I am prepared to go back to my policy before the election in which we said that we would consider loosening the private patient cap. That is the policy that I have introduced to the House tonight. I am not prepared, however, to accept the wholesale abolition of that control to create a situation in which NHS hospitals can devote half their beds to private patients. If he is happy with that in his constituency, let him make the argument for it, but I am making an argument for a very different NHS from the one envisaged by Ministers.

[Tom Blenkinsop]

Is not the real question for the Government why on earth they have written the Competition Act 1998 into the Bill? Why have they written the Enterprise Act 2002 into it, and why have they allowed European competition law to create the haemorrhaging of a socially provided service under category B legislation? Why have they done that? What is the point? It can only be to loosen enterprise within the NHS for competitive purposes so that the private sector can come in.

[Andy Burnham]

My hon. Friend makes an important point. If the Bill was really about clinical commissioning, as the Government said at the beginning, and putting GPs in control, that could have been done through existing NHS structures. They could simply put clinical teams in charge of existing PCT structures. It could be done without any hassle or cost, but no, they completely broke down and rethought the whole system, because it was an ideological reform. Doctors oppose the measure, because they saw through the Bill, and saw it for what it was: a privatisation plan for the NHS.

Let me give three examples that demonstrate why the Prime Minister has not lived up to his “no privatisation” claim. The first is a letter sent by the Department on 19 July last year to NHS and social care leaders entitled “Extending Choice of Provider”:

“The NHS is facing a period of significant transition and financial challenge. But this is not a reason to delay action to address patient demands for greater choice”.

It went on to require all PCT clusters and clinical commissioning groups to identify three community services by 31 October that would be subject to an “any qualified provider” tendering process. That is significant because it exposes the ideological agenda behind the Bill and explodes the myth that it is about putting doctors in charge. If that was the case, logic would demand that it should be for doctors to decide whether or not any underperforming services could benefit from open procurement. That mandating of compulsory competitive tendering, even before Parliament has given its consent to the Bill, reveals the real direction of the policy. We simply ask how that can possibly be consistent with the Prime Minister’s promise of no privatisation.

The second example is the Department's guidance document to CCGs entitled “Developing commissioning support: towards service excellence”. I shall quote from the beginning of the document, which gives a clear statement of intent:

“The NHS sector, which provides the majority of commissioning support now, needs to make the transition from statutory function to freestanding enterprise.”

It could not be clearer, which is why members of the British Medical Association council called the document a “smoking gun”, confirming their fears of a stealth privatisation. The document confirmed that the Government envisaged large-scale privatisation of services to support commissioning—jobs that are currently carried out by public servants. It puts into practice the comments made by Lord Howe on 7 September 2011 at the Laing and Buisson independent healthcare forum:

“The opening up of the NHS creates genuine opportunities for those of you who can offer high quality, convenient services that compete favourably with current NHS care. If you can do that then you can do well. But you know that won’t be easy, the NHS isn’t a place to earn a fast buck...they will not give up their patients easily”.

On commissioning, he said:

“Commissioning support is an absolutely critical area for CCGs. Some of it will come from the PCT staff who will migrate over to the groups but there will need to be all sorts of support at various levels…There will be big opportunities for the private sector here.”

With reference to that second example, I ask the Secretary of State how on earth is that policy consistent with the promise made by the Prime Minister and the Deputy Prime Minister of no privatisation?

That brings me to the third example, which we have discussed tonight. Just before the Christmas recess, the plan, which threatens to change the very character of our hospitals, was sneaked into the House of Lords. I do not seek to argue that that provision would change the NHS overnight, but in the context of a competitive NHS, where there is an obligation to promote the autonomy of hospitals, I believe that it would completely change the character of our hospitals and the way they think and function over time. The effect of a cap at this scale—a staggering 49%—means that hospitals could give equal priority to private patients. It sets the NHS and private sector in direct comparison with each other, and creates the conditions for an explosion of private work in NHS hospitals.

It is such a liberal provision that the Government’s amendment will have virtually the same impact as abolishing the cap completely, and it is a world away from the current situation. It fails to protect the interests of NHS patients by giving equal priority to other patients. Indeed, it creates a conflict of interest, as trusts could even seek to push patients into their private beds.

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[Mr Lansley]

My hon. Friend is absolutely right. That is precisely why on that basis, using the any qualified provider approach, the chief executive of the NHS can set out the ambition that a child who needs a wheelchair should get it in a day. In the past they would have to wait and then would not necessarily get the wheelchair they wanted, or in any reasonable time scale. This is about driving improvement and quality. Many NHS providers will respond positively to that and deliver the quality, but if they do not we ought to be in a position to believe that what really matters in the NHS is the quality of the service provided to patients. That used to be what the Labour party believed in, which I suppose was why its last manifesto, written when the right hon. Gentleman was Secretary of State, stated:

“Patients requiring elective care will have the right, in law, to choose from any provider who meets NHS standards of quality at NHS costs.”

That is a complete description of what we are setting out to do. It is a description of the any qualified provider policy and something that he has now completely abandoned, and he has abandoned patients in the process. It is absurd.

The objective of the Bill and of the Government is simple: continuously to improve care for patients and the health and well-being of people in this country, and that includes improving the health of the poorest fastest, and to ensure that everyone, regardless of who or where they are, enjoys health outcomes that are as good as the very best in the world. That is what we are setting out to do.

The motion states that the private sector already plays an important role in providing that care. Indeed, once upon a time the Labour party was in favour of it. The right hon. Gentleman said in May 2007:

“Now the private sector puts its capacity into the NHS for the benefit of NHS patients, which I think most people in this country would celebrate.”

Like my hon. Friends, I do not understand where he is coming from. The motion tries to face both ways, stating that Labour agrees with the private sector but also wants to have less of it. It agrees that the private sector can make a valuable contribution, but wants to stop it doing so. What matters to patients is the quality of care they receive, the experience of their care and the dignity and respect with which they are treated. Whether the hospital or community provider is operated by the NHS, a charity, a private company or a social enterprise is not the issue from the patient’s point of view. From our point of view, we should not make that the issue. The reason it will not matter is that, whoever is the provider of care, the values of the NHS—universal health care, paid for through general taxation, free and based on need, not ability to pay—will remain unchanged. No NHS patient pays for their care today; no patient will pay for their care in future under this Government. On that basis, I can absolutely restate what the Prime Minister said: under this Government and on our watch the NHS will not be privatised.

[Tom Blenkinsop]

With all due respect to the Secretary of State, I am afraid he cannot say that. We heard the excellent example of Whizz-Kidz, which is a fantastic organisation, but he cannot guarantee that it will get the contract, because Monitor, as we all know from the Bill, has primary control over who gets the service, and it will apply competition law, purely and simply. There is absolutely no guarantee that the third sector or co-operatives will get in, and in any case there is no guarantee that care quality will be applied in the decision.

[Mr Lansley]

Forgive me, Mr Deputy Speaker, but I hardly know where to start, given the degree of ignorance associated with that point. Monitor does not decide who gets the service; patients and commissioners do, and the clinical commissioning groups determine how they commission the services. Quality is absolutely at the heart of the Bill, and at the heart of how we structure the statutory duties of all organisations concerned, but the hon. Gentleman goes on about the application of competition law. Actually, there is no extension of competition law in the NHS and no extension of EU competition law as a consequence of the Bill; it simply enables the NHS to have a health-specific regulator so that the application of competition law and EU competition rules, in so far as they apply because the Bill does not change their application at all, is carried out by a health sector regulator.

Myth No. 2 is that the impact of a wider range of providers in the NHS will drive down the quality of care, but we will give patients more choice and more control over their health care. If people are given clear information about the quality of different providers, they will, with their doctors and nurses helping as their commissioners, choose the provider that is best for them, and the Health and Social Care Bill means that all providers will compete on the quality of their services, not on the prices that they charge.

There will be no incentive for doctors to encourage their patients to opt for the cheapest option, because there will be no cheapest option; there will only be the best-quality option.

[Tom Blenkinsop]

It will be Monitor’s option.

[Mr Lansley]

No, it is nothing to do with Monitor in those circumstances; those whom I have mentioned will make the choice.

The more choice there is, the more innovation there is, the more new ideas there are and the more pressure there is on all providers from all sectors constantly to raise their game for patients. The evidence supports that.

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[Mr Lansley]

The position is very clear, as the hon. Gentleman should know from the debates that we have had. Continuity of access to services through the NHS is one of the central responsibilities of commissioners and of Monitor. If there is any threat to the continuity of those services, they can step in and take measures to ensure that the services continue, including by agreeing funding beyond the tariff to make that happen. If the extension of any qualified provider could lead directly to the loss of access to essential services for patients, the commissioners and Monitor do not have to go down that path. They can make those judgments.

I caution the hon. Member for St Ives (Andrew George) about hanging his hat on the NHS as preferred provider. Before the last election, the right hon. Member for Leigh said that the NHS should be the preferred provider. His philosophy said that the NHS should be allowed to get it wrong twice before the private sector gets a look in. From the patient’s point of view it is, of course, a very cheerful thought that they will be surrendered to the policy of NHS as preferred provider.

Curiously, in March 2010, before the election and at the same time as he said that his policy was the NHS as preferred provider, the right hon. Gentleman published the “Principles and rules for cooperation and competition”, which he seems to be very fond of and which we are maintaining. That document stated:

“Commissioners must commission services from providers who are best placed to deliver the needs of their patients.”

It also stated:

“Commissioners and providers must not take any actions which restrict choice against patients’ and taxpayers’ interests.”

The reason that the right hon. Gentleman published that document was that he knew that the policy of NHS as preferred provider was already going to be the subject of a legal challenge and that it would not survive that challenge. That is why he restated exactly the principles of co-operation and competition that we intend to incorporate directly and without amendment into the way in which Monitor does its job.

[Tom Blenkinsop]

Will the Secretary of State give way?

[Mr Lansley]

No, I am going to move on. There has to be time for people to contribute to the debate, so I do not want to go on for too long.

The Health and Social Care Bill will, for the first time, ensure that private and voluntary sector organisations have to meet the same exacting standards and be regulated in exactly the same way as NHS organisations when they provide NHS services. Because that extends to any organisation providing NHS services, whether it be private or voluntary, it is disingenuous at best and possibly disreputable for the right hon. Member for Leigh to draw any comparison with the PIP breast implants scandal. There is no comparison between the position of a private company working in the private sector providing private services and the role of a private company operating inside the NHS under NHS controls. He knows that there is no comparison. In the NHS, the patient will be wholly protected. It is our intention to ensure for the first time—this did not happen under the Labour Government—that when a private sector provider operates in the NHS, it has to provide equivalent indemnities to its patients as would be provided through the NHS. That did not happen when the independent sector treatment centres and other things were brought in. There will be better protection. The private sector operating outside the NHS is a different matter.

Myth No. 3 is that raising the cap on private income will lead to a worse deal for patients. The paradigm example is the Royal Marsden NHS Foundation Trust. Its private patient cap is set at 31%. That is because in 2002, 31% of its income was derived from private sources and that was the basis on which it became a foundation trust in 2004. Its current private patient income is 25.8% of its total income. The fact that it has a cap does not mean that it goes up to it. In fact, its private patient level has come down slightly. The effect of setting the cap at 10%, as suggested by the right hon. Member for Leigh, would be to take about a fifth out of the income of the Royal Marsden. The Royal Marsden, like Great Ormond Street, is a classic example of how having a thriving private income from research, joint ventures and patients coming from overseas can get a hospital to a place where it can also consistently be recorded as one of the most excellent hospitals in the NHS, where NHS patients get the best care. It has on one hand the highest level of private patient activity—or, strictly speaking, private income—and on the other hand the highest standard of NHS care. The two things are entirely compatible.

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[Mr Lansley]

No.

We are giving foundation trusts freedom to generate revenue from other sources that can be invested directly into the NHS. When Moorfields, for example, sets up a clinic in the middle east in a joint venture, should we say, “No, you’re not allowed to do that, because it might imperil your ability to support NHS patients”? Actually, it will help their ability to do so, with NHS Global encouraging the NHS.

I believe in the NHS and in the ability of NHS hospitals and providers, which in the past have had their horizons limited, to move beyond those horizons and deliver much better care. That can include turning them into international providers of choice in joint ventures across the world, and even joint ventures in this country, whether in research or the provision of additional services. However, as I explained to the right hon. Member for Leigh in an intervention, under the Health and Social Care Bill the principal purpose of any foundation trust will be the provision of NHS services. Doing anything that would be to the detriment of its provision of NHS services would be unlawful. Foundation trusts cannot cross-subsidise from NHS services into private services.

[Tom Blenkinsop]

Will the Secretary of State give way?

[Mr Lansley]

No.

Individual staff in the NHS have a duty not to allow their private activity to be to the detriment of their NHS activity. Foundation trusts will have an obligation to be transparent in accounting for the two sources of income, and they will have an obligation to report at their general meeting how they have used their private income to benefit their NHS patients.

I am afraid that what the right hon. Member for Leigh says is a tissue of nonsense. The 49% amendment was introduced only to make it abundantly clear that if the principal purpose of a foundation trust is the provision of NHS services, by extension that would not be consistent with the balance of its activity being private rather than NHS activity—hence 49%. There is no specific intention that NHS foundation trusts should increase their private income to any specific degree.