HC Deb 23 January 1981 vol 997 cc612-20

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]

2.31 pm
Mr. Frank Dobson (Holborn and St. Pancras, South)

I am grateful for the opportunity of this Adjournment debate to draw attention to an important proposition affecting my constituency which, if it went through, would set a precedent having unfortunate implications for the National Health Service in the rest of the country.

The proposal to which I draw attention has been prepared in what can only be described as secrecy by the special trustees of University College hospital. It would involve their obtaining control of land next to University College hospital which was bought to build an extension to the hospital. The trustees would like to hand over control of that land to a private profit-making hospital on the site next to University College hospital. In exchange for this gift of public property to the private sector, the private company would undertake to build operating theatres for the National Health Service side of the University College hospital.

I am opposed to this proposition on principle, because I am opposed to private medicine. I go further than many of my right hon. and hon. Friends in that I do not just believe that there should not be any private beds in the NHSS. I believe that there should not be any private beds at all. In my view, the only touchstone for deciding whether anyone should get medical or surgical treatment is that person's need for it and not whether he can pay for it. I object to the concept of one health service for the rich and another one for the rest of us.

But I also oppose the proposition on practical grounds. First, the proposition for 112 acute private beds in central London is not related to local needs. The NHS says that there should be a reduction in the number of acute beds in central London. I quote from the document which the special trustees of University College hospital produced in support of their proposition. It reads: In Central London the local population has considerably less bearing than elsewhere in the country on the demand for private medicine. It may be thought that that is a bit of gobbledegook, but in the context of the document all it means is "We cannot rustle up enough trade for our private hospital in central London, so it will have to serve a much wider area and people coming from abroad." I do not think that there is any question of it serving the locality.

It is interesting to note that it is recognised by the hospital authorities in their document that the private wing of University College hospital is suffering a lack of demand for its beds. Many of them stand empty at the expense of the National Health Service. So, again, there is no indication of any local demand for the proposed 112-bed hospital.

My further practical objection is that if the proposal went through, this private hospital would be nothing but a parasite on the National Health Service. In their document its supporters say: The private sector would gain a high quality new private hospital, with the back-up availability of the full resources of a major teaching hospital. They then have the cheek to suggest that their private hospital would be an independent hospital. It would in fact be totally dependent on the existence of UCH next door. They go on: For a private hospital, the availability of sophisticated supporting services and skilled staff within UCH would provide a range and quality of services which are not generally available in private hospitals and which could probably not be satisfactorily provided by other means. Therefore, one of the main attractions of this private proposition is that the hospital would be next door to a free service being provided for the privileged from the NHS facilities, for which the taxpayer pays, at UCH.

Another parasitical aspect is that this hospital, if built, would actually damage the service provided at UCH because it would attract from that hospital nursing and ancillary staff who are vital to its function and to the provision of a decent service in that area.

I do not invent that statement. I should like to quote from the representations by the Camden and Islington area health authority in 1979 about a proposal to extend the private Wellington hospital on a site in St. John's Wood, almost three miles from UCH. Of that proposal, to provide roughly the same number of beds as are now proposed at UCH, the area administrator said: My Authority consider that the creation of this number of posts in a private hospital would to a significant extent interfere with its ability to provide services on behalf of the Secretary of State within the NHS for the patients in the Authority's hospitals. The new hospital would increase competition for the limited number of trained staff available and, by virtue of the Wellington's ability to bargain in the market place, it would succeed in recruiting staff to the detriment of the NHS hospitals. My area is experiencing great difficulty in recruiting trained nursing staff. The Wellington will not be training nurses and so would not be contributing to the pool of staff available. We also experience difficulties in the recruitment of radiographers, physiotherapists and most paramedical staff. We further experience difficulties in recruiting domestic staff. He went on: As a consequence, the new hospital would to a significant extent operate to the disadvantage of persons seeking access to NHS hospitals, because the shortage of staff may reduce the availability of existing facilities; particularly in-patient facilities. It is my job to represent the interests of the people in my area and around about, who will be seeking the NHS facilities. Those quotations clearly show, that the service provided by UCH would be damaged. If that statement by the area administrator about the Wellington hospital, nearly three miles way, were true, how much more true would it be of a 112-bed private hospital slap-bang next door to the UCH?

A further practical objection to this proposition is that, even if it were acceptable in principle, even if it did not have this disadvantageous effect on the standard of service likely to be provided at the NHS hospital next door, it is a very poor bargain. I rely on figures provided by the promoters of the scheme, who estimate that it would cost over £2 million to provide the operating theatres for the NHS. It is also said in the same document that if a 95 per cent. bed ratio were achieved in the new hospital it would make £2 million in its first year of operation. This private profit-making group is therefore doing no more than forgo one year's profit in return for being given public land to exploit in the area.

I accept that the people at University College hospital and the administrators find themselves in a cruel dilemma because they have been trying unsuccessfully to get decent and adequate operating theatres for many years. They need them if the hospital is to remain one of Britain's premier teaching hospitals. However, I criticise the hospital and other people in the area for having conducted a bureaucratic campaign to secure the necessary funds to provide the new theatres or improve the existing ones. It has all been done, by and large, by way of changes in area plans, changes in district plans and private letters to the DHSS.

If we contrast the efforts that have been made to get these theatres with the highly effective much publicised efforts of the Westminster hospital medical school to remain in existence, with marches of doctors and nurses and much-publicised campaigns, we can criticise those at University College hospital for not having tried hard enough to get the operating theatres they need. I hope that they will go for that alternative.

The real culprit, however, will shortly be rising to reply to this debate. Of course, the Minister's colleagues are also to blame. University College hospital needs not theatres by courtesy of a damaging parasite living next door but £2 million▀×or possibly less because it does not need eight operating theatres to provide the necessary facilities—from the NHS. That money is not available for a number of reasons. First, there is the stupid RAWP formula introduced by my party with a view to shifting medical and surgical resources out of London. The result has been to damage health services in London with practically no benefit to people living elsewhere in the country.

There is also the regional RAWP formula which shifts facilities in the inner area to the outer part of the North-East Thames region, and that is similarly damaging and stupid. But the prime reason is that the Government are not providing enough money for the Health Service. We are told constantly that the country cannot afford more for the NHS. However, the British Medical Association, not a notorious knocker of the Government or a contributor of funds to the Labour Party, as far as I know, or anything of that sort, said in a letter to me about the project: More resources must be devoted to the National Health Service not just to keep the Service ticking over but to enable health authorities to replace our large stock of out-of-date hospital buildings, many of which were built in the last century. That is a perfect description of University College hospital. Much of its amenities need replacing using NHS funds.

I want the Minister to say—although I doubt that he will—that he and his colleagues will not countenance the proposition being made for this private hospital. Secondly, I want him to say that the funds will be made available to provide the much-needed operating theatres at University College hospital as part of the NHS. It is worth noting that in the Conservative manifesto for the 1979 general election there was a specific pledge that the Tories would not reduce funds available to the NHS.

That pledge has not been broken completely. The Government have not reduced the funds, but the increase in VAT in the June 1979 Budget took away £45 million in the first year and £60 million in the second year. That money has moved out of the Health Service as a result of the Government"s decisions, so they have in effect, reduced the amount of money that is devoted to the Health Service.

I ask the Minister to acknowledge that it is necessary to uphold his party"s election manifesto pledges and to ensure that at least £2 million of the £45 million to £60 million that needs to be put back into the Health Service to keep that promise will be devoted to new theatres at University College hospital so that there will be no reason for the objectionable parasite next door to go forward.

2.45 pm
The Under-Secretary of State for Health and Social Security (Sir George Young)

I am glad that the Member for Holborn and St. Pancras, South (Mr. Dobson) raised this issue, since he has provided an opportunity to debate an important aspect of Government social policy—the merits of co-operation between the National Health Service and the independent sector—and to correct certain misleading statements on the University College hospital proposal that have appeared in the Press in the past three weeks, including statements attributed to the hon Gentleman.

The matter has generated an extraordinary degree of heat. The Daily Telegraph reported on 5 January that the plan had "aroused the fury" of the hon Gentleman. He was quoted as saying that it was scandalous to provide facilities for fee-paying patients on land intended to benefit NHS patients and that "the proposition is disgraceful" It was: amazing in its audacity, and if carried out would represent a landmark in potential profiteering out of public assets". He reiterated much of that in his speech today.

I should like to divide my comments—as did the hon Member—between the principle of broad co-operation between the NHS and the independent sector, and the particular issue that he has raised. I hope to show that his views represent a triumph of political dogma over common sense. He does not speak for the majority of trade unionists or labour voters. He conceded graciously at the beginning of his remarks that he did not even have the support of the majority of his hon Friends. All the opinion polls show that the general public do not share his dogmatic approach to the independent sector of medicine. I also hope to show that his philosophy is against the best interests of the NHS and those who look to it for treatment.

Before I deal specifically with the UCH proposal I should like to say a few words about our general policy on the relationship between the NHS and the private medical sector. The House will know from the many debates on the Health Service that the encouragement of private health care has been an important part of our policy since we returned to office. We have explained many times why we wish to encourage private care and why this poses no threat to the NHS—indeed the reverse.

I shall restate briefly our basic principles. They are quite simple, and they combine principle with sound common sense. The principle is that we believe that there is absolutely nothing wrong with private medicine. If people are free to spend their money on beer and cigarettes, they should be free to spend it on health care.

There is no reason why the private sector—or the NHS under the pay bed system—should not provide facilities to meet this demand. Indeed, that principle was enshrined in the Health Services Act 1976, passed by the Labour Government. During the Committee stage of that Bill Mrs. Barbara Castle stated: I believe that it would be intolerable in a democratic society to prevent people buying private medical care if they felt it was an essential part of their personal interest."—[Official Report, Standing Committee D, 18 May 1976, c. 38.] I wholeheartedly agree with those sentiments.

True, it had been Mrs. Castle's intention to phase our private practice from the NHS, but even here the reality differed. The 1976 Act guaranteed private patients continued access to NHS hospitals for highly specialised treatment, and the Goodman agreement ensured that in areas where there were no private hospitals pay beds would remain indefinitely.

I acknowledge that not everyone can afford private treatment, but it is by no means limited to what the hon Gentleman called the "rich". Hon. Members may have seen from press reports that about 3.6 million people, or 6.4 per cent. Of the population, are now covered by private health insurance, the numbers grew by over 27 per cent. in 1980. I appreciate that it is a cause of grave embarrassment to the hon. Gentleman that insurance is not limited to the "rich". I recall watching London Weekend television last Friday, which showed a number of fireman—certainly not rich—stating openly and with conviction why they felt it right to make provision for themselves and their families. Also, of course, Frank Chapple has negotiated for his members an agreement that secures access to private treatment in illness. Opinion polls have shown that many other trade union members would welcome similar benefits.

But of course, even those who cannot afford private treatment benefit from the fact that others do. This brings me to my point about common sense, the development of private facilities draws on other sources of finance and it increases the total provision of health car in the country, that is what really matters. This can relieve pressure on hard-pressed NHS services, thus helping to improve the service for those who do not wish or cannot afford to seek non-NHS care.

No country has found a way of matching the supply of health care with demand—the one infinite, the other finite. With new advances and increasing numbers of elderly people, the gap gets wider, the private sector can help bridge that gap either directly or by allowing the NHS to divert resources to other areas. Therefore, we wish to see a thriving private sector.

The hon. Member chose the negative approach, and so did his party. The NHS was told to turn its back on the private sector—no co-operation no communication, was the rule. Having inadvertently instigated a boom in the development of the private sector through their pay bed policy, they compounded this by adopting a policy of separate development that could have been expressly designed to create the two-tier health care system that the hon. Member has criticised and which both he and I wish to avoid.

We, of course, welcome the development of more private facilities, but we do not believe that this should be done in isolation from the NHS. We are keen to see full co-operation and partnership between the two sectors so that best use can be made of scarce resources.

Mr. Dobson

Will the hon. Gentleman give way?

Sir George Young

I wonder whether I may make slightly more progress. If there is time at the end of my speech, I shall gladly give way to the hon. Gentleman.

We want to see greater use of private facilities. I quote from a draft circular that we sent out last year: Facilities used in this way"— that is, private facilities— have proved an invaluable supplement to the local NHS facilities and in many cases the private institution is an integral part of the local NHS… These facilities are part of the health care resources of this country and the Secretary of State is keen to encourage increased use of them by NHS authorities wherever they can contribute economically and effectively to the care of NHS patients. I defy anyone to argue that that is not common sense. Where it is possible to use these facilities, the NHS should use them. It is a waste if the NHS spurns the use of the resources of the private sector. If the two sectors can work together in this sort of way, nothing will be wasted and there will be no senseless duplication.

That is the background against which the University College hospital proposal has to be considered. If one starts, as the hon. Member did, from the proposition that there must be no co-operation but, rather, a sort of medical apartheid between the NHS and the private sector, then of course one will see little merit in this sort of joint venture. The trouble is that that sort of approach backfires on the NHS: it misses out on opportunities for co-operation and joint schemes where the NHS stands to gain. We have no objection in principle to this sort of joint scheme. The debate has to be about the balance of advantage and disadvantage.

The document referred to by the hon. Gentleman is the report of a feasibility study for an independent hospital project on vacant National Health Service land known as the "Odeon Site" at the UCH. The study was commissioned by the special trustees of the University College hospital and Private Patients Plan to examine the architectural feasibility and financial implications of developing the site. The report was recently published in order to attract private investment capital, andl although copies have been widely circulated, the area health authority, which is primarily responsible for planning health services in the area, has not received a formal proposal, nor has it been involved in the project.

As one would expect, the report makes out a plausible case for a new private hospital in this area and demonstrates the feasibiblity and costs of building it in the Odeon site. But it also goes further and discusses the impact of the development on existing NHS hospitals in the district and the existing private patients wing at the UCH. It also makes out a case for co-operation between the private hospital company and the NHS which would mean the lease—not a gift, as the hon. Gentleman said—of the Odeon site at a peppercorn rent for development in exchange for the provision of new operating theatres for NHS use—new operating theatres that the NHS would not otherwise have. For these reasons, the AHA would have to consider the proposal if the plan were to be pursued.

We attach great importance to the planning and decision-making roles of health authorities at local level and we are taking steps to strengthen that capacity by restructuring the NHS to create more effective district health authorities next year, that is another good reason why the scheme will have to be studied closely by the health authorities. They are required to take full account of the potentialities of NHS land as an asset and to secure its most economical and advantageous use, they are expected to assess the potentialities of existing NHS land with a view to securing the maximum possible return from the resources that it offers, including the additional capital income from sale proceeds and not to retain land against remote contingencies or as an investment, but to release any land surplus to NHS current or planned development meeds for community or other use.

I must make it clear that neither the Camden and Islington area health authority nor the North-East Thames regional health authority nor my Department have received a formal proposal to consider. As the hon. Gentleman knows, on 5 January the area health authority discussed the report, which had been distributed to authority members, but took the view that it was not called upon to make any decision. It thought the issue was best left for the new district health authority to consider after its creation next year. It seems to me that there is nothing to be gained by delay. If the sponsors of the scheme wish to pursue it, I would urge them to put a formal proposal to the area health authority as soon as possible.

When the health authorities consider the matter, I expect them to do so in a positive and flexible manner, consistent with the proper management of NHS property and resources. There are aspects of the scheme that are imaginative, attractive and of potential benefit to the NHS, not to mention the employment that would be created by a building contract worth £9.6 million and the subsequent employment for Londoners in the completed development. The potential benefits to the NHS include the provision of modern operating theatres, conveniently sited; the opportunity to rationalise existing services; and the use of land that might otherwise lie idle. In addition, it would involve the conversion of the existing private wing for other NHS uses. I should have thought that the hon. Gentleman might support that aspect of the proposal, which will phase out private beds from an NHS hospital. The hon. Gentleman made some remarks about public expenditure. In the forthcoming year we shall adhere to the expenditure plans that we inherited from the previous Administration, including full compensation for inflation and VAT. In the recent veyry difficult decisions that we had to take at the end of Nevember, we exempted the NHS from cutbacks in public expenditure, that is an indication of the that we attach to it.

The pros and cons of all NHS developments—the cost effectiveness, the balance of advantage and disadvantage—have to be carefully weighed. A scheme that involves co-operation and partnership with the private sector is no different. Of course, the costs and benefits to the NHS must be carefully considered. The scheme that the hon. Gentleman described, and that is described in the feasibility study, is complex, and must be subjected to a proper economic appraisal. On the particular question of the lease of the land on concessionary terms, I can assure the House that there are adequate procedures to ensure that the public interest is safeguarded. In this particular case, if the health authorities and the DHSS thought that the project should go ahead, special authorisation would be necessary and that would involve discussions with the Treasury, and the laying of a report before this House for a specified period—to allow time for objections—prior to authorisation.

We should insist that any proposals for a concessionary lease would be based on the fact that any financial loss to the NHS would at least be matched by equivalent financial benefit. Obviously, where a commercial development is involved, one would have to look very carefully at the case for a concession, although consideration of such concessions is not precluded if an equivalent financial or other benefit to the NHS can be demonstrated.

The hon Gentleman mentioned the Resource Allocation Working Party. RAWP concerns the redistribution of wealth and I should have thought that the hon. Gentleman might support that. I have had to reply to many Adjournment debates on the Health Service from hon. Members who represent constituencies outside London. If the hon. Gentleman were to tell them what he has just said about the assets of the Health Service in London, he would get very short shrift.

Hon. Members may appreciate from this brief debate that the issues involved are very complex and that the scheme is potentially exciting. We must be careful to weigh the benefit that could accrue to the NHS and to the community in general, against the cost to the NHS in terms of the possible loss of capital or income from the sale or leasing of the Odeon site, equipping the new theatres, loss of income from the existing private patients' wing and so on. Because of the complexity of the issues and the public interest that is being shown, my Department asked the North-East Thames regional health authority for its views on the subject. It replied that it would look at every sensible proposition for the beneficial development of its assets intirely on the individual merits of each case.

One has to approach propositions of this nature with an open mind if one is to arrive at the right decision. To say that the NHS, and the NHS alone, should provide health care, that this site must remain unused, that the opportunity to rationalise and improve NHS facilities must be lost and that the chance to build and to provide extra health care and extra jobs must be set aside, is not the right approach. The hon. Gentleman's rather blinkered attitude prevents him from looking at the broader issues involved. If he were to take his blinkers off and look around, he would see that this proposition is of benefit to the NHS and is well worth pursuing.

Question put and agreed to.

Adjourned accordingly at Three o'clock.