HC Deb 14 May 1985 vol 79 cc162-4
8. Mr. Campbell-Savours

asked the Secretary of State for Social Services what estimates he has made about the effect on the budgets of regional health authorities of the introduction of privatisation.

Mr. Kenneth Clarke

None, Sir. All savings derived from competitive tendering will be retained by health authorities and used to improve their services to patients.

Mr. Campbell-Savours

Are not all of those savings being made on the backs of National Health Service workers by cutting their wages? Is it not immoral for the Minister to instruct the West Cumbria district health authority to vary its standing orders in such a way as to secure wage cuts? Is he aware that many members of that district health authority believe that such action is morally indefensible and that it simply cannot be done by means of a resolution?

Mr. Clarke

The savings are being made by better management of the services and by reducing costs to an acceptable level. Failure to do that can only be at the expense of patients and patient services. I understand that West Cumbria has made a commendable proposal, whereby its in-house service will save about £100,000 each year. That is a good bid, which should be compared with what reputable contractors can make in order to examine whether greater savings can be made. Other health authorities are saving almost £500,000, or more, on their services, and that is £500,000 that can be spent extremely well by the health authorities concerned.

Mrs. Jill Knight

Is it not the case that private contractors usually effect savings of about 20 per cent. by means of greater productivity and increased efficiency, which surely must mean that more money is available to be spent on patients? Will my right hon. and learned Friend therefore resist those who seek to let expensive sleeping dogs lie and instead continue to pursue his present policies?

Mr. Clarke

I shall certainly take my hon. Friend's sensible advice. It is pointless deliberately to put up the cost of cleaning, cooking and laundry at the expense of patient services. Despite all the controversy about a number of contracts, there are hospitals that have found a marked improvement in the standard of those services when they have gone out to good and reputable contractors.

Mr. Tony Lloyd

Is the Minister aware that the North-West regional health authority recently wrote to the Trafford district health authority telling it that if it did not withdraw the fair wages clause in its privatisation contract it would not pass on to it some £70,000 which should have been made available for the elderly and severely mentally infirm and, more importantly, to deal with the drug abuse problem, a programme which the Government have been emphasising? This is clearly a case of blackmail. Will the Minister condemn that and tell the regional health authority to give that money to Trafford, or does he condone such an action?

Mr. Clarke

Off the cuff, I cannot remember the precise details of Trafford's proposed tender documents, but where the so-called fair wages clauses are being insisted upon they tend to involve a combination of pay terms and conditions, sickness benefit, holiday and pension entitlement, trade union rights and so on. That is an absurd attempt by health authorities to intervene in negotiations between private contractors in their areas and their employees. If a district health authority insists on proceeding on a wastrel basis, a regional health authority is entitled to consider whether that health authority should have the difference made up, usually at the expense of other districts in the same region, which carry out the policy sensibly.

Mr. Carter-Jones

Is the Minister aware that there is a disagreement about privatisation in Salford? Will he give a firm undertaking to the House that he will not be involved in any disproportionate cuts in the allocation to Salford as a result of that dispute?

Mr. Clarke

The hon. Gentleman may not be aware that the Salford district health authority has, I am glad to say, resolved to follow the Government's tendering policy. I am sure that the patients of Salford and the service there will benefit as a result.

Mr. Dickens

Are there not many hidden benefits from privatisation within the NHS? Is it not amazing how hospitals all over Britain have rushed to put their house in order in their laundries, kitchens, transport services and other areas because the very mention of privatisation has crystallised their thinking about efficiency within the Health Service in their desire to prove that they are as competitive as private enterprise, which, of course, they are not?

Mr. Clarke

The benefits are not that hidden. So far, savings of about £13 million have resulted from the tendering exercise, and that is being spent on patient services. But the process has only just begun and we expect substantial benefits to come to the NHS when all authorities have made proper progress in implementing the policy.

Mr. Meadowcroft

What co-ordination is there in the Department of Health and Social Security to ascertain the transfer costs of low-paid workers from one part of the DHSS to another? Is it not the case that there is no saving whatever simply because the cost of low-paid workers is transferred under social security either through family income supplement or unemployment benefit?

Mr. Clarke

A standard pattern is for most employees who already work for the in-house service to be taken on as employees by the contractor who wins the contract if it goes outside. If the hon. Gentleman is trying to say that somehow family income supplement claims wipe out the benefit to the Health Service, his mathematics are way out.

Mr. Meacher

Is the Minister aware that, whatever profits privatisation is producing, it is also worsening standards of care in the NHS? Is he aware that a hip operation on a woman in her sixties had to be cancelled last month at Addenbrooke's, Cambridge, when blood and bone was found on the floor because the private contractors, Office Cleaning Services, failed to clean the theatre after the previous day's operation, and that such examples are frequent? How does he justify the fact that the level of cross-infection in hospitals has now reached the record level of 9 per cent., which it has never been anywhere near before, and is undoubtedly due partly to the squalid standards of much privatised cleaning?

Mr. Clarke

A great deal of scandalous propaganda is going on in support of vested interests, largely in the trade union labour movement, which wishes to keep cleaning costs up. The example that the hon. Gentleman quotes is entirely untrue in the way that he has given it. The blood and bone dust found at Addenbrooke's was found m a part of the hospital not included in the specifications of the outside cleaners. A great deal has been made of it, when in fact the fault cannot be laid at the door of the outside contractors. There is no intrinsic reason why the service should be better whether the employees are employed in-house or by a contractor. It does not make any difference to the standard of service whether they are in the union or not. What matters is good management to produce a cost-effective service of the right standards. Many health authorities find it easier to get the standards of outside contractors improved than to cope with the low standards of some in-house cleaners, when bad management over the years has allowed standards to decline.