HC Deb 27 October 1997 vol 299 cc681-8

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

10 pm

Mr. Archie Norman (Tunbridge Wells)

I am grateful for this opportunity to raise the question of the West Kent and East Sussex NHS trust private finance initiative. I am also grateful for the attention of the Minister on this serious matter.

My purpose in calling for this Adjournment debate is to raise the extremely serious position of the future capital funding of the trust. The hospital, which is spread between two sites in my Tunbridge Wells constituency—one in Pembury and one in the centre of Tunbridge Wells—serves the surrounding area of Tonbridge, Sevenoaks, East Sussex and Kent, down to the south coast. Until the PFI review in June, the trust was working with its partners on a substantial proposal for rebuilding the hospital on a single site.

I want to be clear that my purpose tonight is not simply a case of constituency special pleading. Indeed, I do not advocate that we should immediately fund the PFI in Tunbridge Wells; nor is it ready to be funded. Rather, there appears to be an acute need in this case, which may be illustrative of other NHS trusts, for proper forward planning and a better long-term framework to enable the trust management to move forward and plan for the future investment that is urgently needed.

The effect of the cancellation of the PFI proposal is not just to abort any future capital work, but to plunge the whole hospital into a state of relative uncertainty, which obviously has an effect on the morale of clinicians and staff. That problem now needs to be addressed.

The hospital's position is untenable in the long term. The trust delivers a good standard of clinical service, but that is despite, not because of, the state of the facilities, which is extremely poor. We rely on the energy, good will, hard work and dedication of the doctors, nurses and management to overcome the impoverished state of our facilities.

The hospital suffers from being split between two sites, both of which are old and have been developed piecemeal over the years. The first site at Pembury was, ironically, originally built as a workhouse in the 1890s. It consists of long, Florence Nightingale-style wards with 24 to 28 beds, an open-plan format, limited privacy and inadequate medical support facilities. For example, oxygen is not piped into the facilities.

Many of the support and related facilities at Pembury are housed in wooden huts. The operating theatres were designed as a twin operating suite some 30 to 40 years ago. The Pembury site includes all the major radiology facilities as well as obstetrics, paediatrics, gynaecology and care for the elderly. The net result is that, every time a patient needs radiology or similar treatment, he has to be transferred between the two sites.

The Kent and Sussex site is in the heart of a very congested part of Tunbridge Wells. It was built around the site of an old tuberculosis hospital, and has been developed higgledy-piggledy over the years. It is poorly laid out. It contains the main accident and emergency facilities for the entire area and is therefore crucial not just for my constituency, but for the surrounding areas.

The effect of the dual site operation is to make the hospital more expensive to run, and also to hinder patient care. One can imagine that transferring patients in poor condition between hospitals, which can take half an hour or so, does not make any sense from a clinical point of view. It is expensive, and it is an unnecessary burden on the staff.

The general standard of the buildings is wholly inadequate for this day and age. On an aerial photograph, it looks like an industrial site. Shed-style buildings, wooden huts and warehouse roofing are simply not an acceptable standard for a modern hospital. Despite this, the staff manage, but it is important to note that there is an estimated £30 million backlog of capital maintenance, which is required to bring the facilities up to what are regarded as acceptable standards today.

Hon. Members will be aware that the capital maintenance allocation is related to turnover, not the state of the buildings. As a result, unless something is done, I fear that the situation at Kent and Sussex can only get worse.

Furthermore, the poor quality of the wards means that the trust is unable to provide patients with the privacy and dignity that they expect today. My constituents continually complain about the inadequate state of the wards and the fact that we have dual-sex wards with no privacy. Tunbridge Wells is—like it or not—the long-term location for accident and emergency and acute facilities. There is no alternative. The nearest hospital, in Maidstone, is far too far away to meet any standards of performance and service delivery on emergency facilities for constituents, particularly those living to the south.

The case for long-term investment, therefore, is very sound by any standards. There is simply no alternative. In my judgment, the PFI proposal should have been allowed to proceed to a state where it could have received mature consideration. It has, however, been turned down, but on technical grounds, not on grounds that can be weighed up as an economic case. In the long term, it will have to be revived.

The PFI was for £65 million to create 400 beds, which compares favourably with other PFIs that have been allowed to proceed. I believe that I am right in saying that the PFI for Dartford was for £120 million to create the same number of beds. The capital efficiency of the proposal was therefore very good. The revenue efficiency is also good, as there would be obvious revenue savings from consolidating a dual site.

Important landholdings would be released as a result of the PFI, because we currently occupy large acreages which are capable of being used for housing, or other uses. The economics of the proposal to rebuild the hospital on a single site is by any standards outstanding.

Why was the PFI turned down? First, it did not meet the criteria, apart from anything else, for readiness—a fact of life, but not a reason, surely, for kicking it into touch indefinitely. Secondly, the service requirement was not sufficiently strongly demonstrated, because the surrounding population are reasonably healthy—but unless we can sustain the quality of service that we have managed in the past, they are unlikely to remain so. The hospital is a centre of excellence today, and deserves our support to remain so. If we are not prepared to invest in it, it will not remain so. Surely the Government's policy for the NHS is not to level down standards but to increase standards everywhere.

My fear is that, if a coherent investment plan is not developed, in the future there will be an obvious impact on morale—which there has been already—and a risk that our top physicians will migrate elsewhere. There is a risk that standards of care will deteriorate and it will not be possible to maintain and meet minimum standards of cleanliness, hygiene and clinical care.

There is also a risk to the economics, because, unless we have a plan, the temptation will be to invest in one site or another at the cost of meeting the long-term objectives. In other words, the costs will be wasted, because in the long term we want to consolidate on a single site. Today, it is simply not possible to ignore the deteriorating state of our buildings.

The Minister of State said in July: Today the Government is unlocking the PFI gridlock in the NHS". In June, he said: I wanted to be the Minister that got hospitals built, not the Minister that only promised them. Those are sentiments that I am sure we all share.

I fear, however, that, by selecting certain PFIs to go ahead and kicking the rest into touch, we may have deferred any sensible long-term planning for hospital building, particularly in this case. We have moved out of one gridlock into, potentially, another. Meanwhile, the hospital management are in a Catch-22 situation. They have been told not to invest in further developing the PFI proposal, so that has been shelved, and no more work can be done on developing the right proposal for the future of Tunbridge Wells.

I am also aware that the Minister said in July that it was not the end of the road for the schemes that had been turned down, but it is unclear today what can be done to revive them. According to a letter sent to me on 29 July, it was the intention to prioritise all future major acute sector projects according to the key criteria of health service needs.

The point about needs is that it is not just a question of today's needs; it is a question of future needs and future trends. We are talking about a long-term building project, and we are considering not what happens today, but what should happen in five or 10 years' time. The NHS trust needs to know that in order to prioritise what it does with its expected investment now. Currently, it is being left in the dark.

We fully recognise that health service expenditure must be prioritised, and that some schemes must be selected to go ahead. That is not the issue; the issue is what happens to schemes when there is an acute need for redevelopment, but they have been booted into the long grass for the time being.

The Government made a great commitment to the health service in their election manifesto. In the past few years, they have been highly critical of the last Government's record on health, and have made much play of the need to improve facilities and reduce waiting lists—which in Tunbridge Wells, incidentally, are in serious danger of lengthening again this winter; but that is another subject.

Now is the time to reassure hospitals such as the Kent and Sussex about their long-term future. That is really all we are looking for—a plan for the long term. That means not a stop-go on PFI schemes, but a coherent framework in which to plan, and some understanding of how schemes will be run and of the wherewithal to fund them and bring them to a state in which we can advocate them and make a proposal to the Government.

In short, I am asking the Minister to reassure us that he will look favourably on future plans for the redevelopment of the NHS trust, and to ensure that, in the months ahead, the trust is provided with clear guidance on the type of capital expenditure programme that will be allowed to enable single-site relocation in the long term.

In other words, are we to invest in both sites, or can we start concentrating on a single site in the knowledge that in the future a scheme will be supported? I also seek the Minister's reassurance that the NHS trust will be allowed to incur the expenditure necessary in the future to get a proposal into the state in which it can receive his blessing.

I believe that the issue is vital not just to my constituents, but to constituencies in surrounding areas and, I suspect, to other NHS trusts in a similar position. Proposals for redevelopment of the trust have not just my support, but the support of all the surrounding Members of Parliament, the community health council, the area health authority, the ambulance service, patients, local GPs—to many of whom I have spoken—and, of course, the borough and county councils.

Now is the time to provide clear directions for the future of a sensible, and indeed affordable, proposal. We do not want our PFI to be kicked into the long grass and to become stuck in the treacle of bureaucracy; we want firm direction and positive action, in the interests of all concerned.

10.13 pm
Sir Geoffrey Johnson Smith (Wealden)

rose—

Madam Speaker

Order. Has there been an agreement?

Sir Geoffrey Johnson Smith

Yes, Madam Speaker.

Madam Speaker

The Chair should always be informed.

Sir Geoffrey Johnson Smith

I apologise for that omission, Madam Speaker.

I congratulate my hon. Friend the Member for Tunbridge Wells (Mr. Norman) on raising this matter, and warmly support what he has said. My constituency abuts his, and the health authority that dominates the constituency pays some £5 million for special services from the hospitals to which he referred. There is clearly considerable collaboration between the health authorities concerned.

I understand that, when we are considering questions of adjustment, financial matters—although important—must not be the overriding consideration. As my hon. Friend recognised, important services are involved, providing important treatments that can benefit my constituents because the hospitals are so close to them. If we were not to have this relationship, and services were moved to Maidstone, it would put an unbearable burden on my constituents, who would have to travel 30 or more miles to the district hospitals on the south coast.

10.14 pm
The Minister of State, Department of Health (Mr. Alan Milburn)

I congratulate the hon. Member for Tunbridge Wells (Mr. Norman) on his first speech in the House on health matters. The right hon. Member for Wealden (Sir G. Johnson Smith) gave him ample support. I welcome the hon. Gentleman's interest in the Government's programme to renew the national health service. I share his concern that the citizens of Tunbridge Wells—and, indeed, of every other constituency—should enjoy the best health care, delivered in the best facilities by the best clinicians. That is what the NHS sets out to deliver, and what the Government are determined to secure.

I also pay tribute to the staff of the hon. Gentleman's two local hospitals—one on the outskirts of town and the other in the centre—who deliver high-quality care, sometimes in difficult circumstances.

The hon. Gentleman has raised with me tonight and in correspondence his concern about the fact that the project to rationalise services of the Kent and Sussex Weald trust on to a single site at Pembury was not prioritised as a PFI project in July. I understand the hon. Gentleman's concerns, but it may be helpful if I briefly explain to the House precisely why prioritisation of PFI schemes was considered necessary, how schemes were chosen, and the implications for those such as Kent and Sussex that were not prioritised. I know that he wants to look to the future rather than rake over the past, but it is important that I address the issues that he has raised.

When the Government took office, we inherited from the previous Administration what I can only describe as a fantasy hospital building programme. Scores of hospital developments were trumpeted, with, as I remember well, capital values the size of telephone numbers and start dates that we were continually promised were just around the corner. We had been promised project signings at the rate of one a month. Unfortunately, not a single project materialised. Despite the promises of jam tomorrow, not a single hospital was built through the PFI process under the previous Administration.

The previous Government's overblown optimism about their hospital building programme was not matched by the private sector, which had invested much time and money in developing proposals that seemed to be going nowhere. There was confusion about the rules, uncertainty about the legislation, and an impossibly large number of potential schemes to manage and deliver.

The Government were elected on a mandate to sort out the mess that PFI had become. It was never going to be an overnight job, and the work continues today. I hope that the hon. Gentleman will acknowledge that we have made enormous progress. On taking office, the Paymaster General appointed Mr. Malcolm Bates to review the operation of PFI right across government, and he accepted every one of Mr. Bates's subsequent recommendations.

Meanwhile, the Department of Health undertook its own review. It was clear that, as a matter of priority, we had to secure the market for PFI, and we set about doing that in two ways. We prioritised the 43 major acute schemes in the pipeline, and we enacted legislation to clarify the powers of trusts to enter into PFI contracts.

As the hon. Gentleman rightly said, on 3 July I announced the outcome of prioritisation. I was able to announce 14 major new hospital schemes with a total capital value of £1,300 million: the biggest new hospital building programme in the history of the national health service. That unlocked the gridlock. Most importantly, it secured the confidence of the private and public sectors in the ability of public-private partnerships to benefit patients by providing new services on the ground. That confidence was given a further boost on 14 July when the National Health Service (Private Finance) Act 1997 entered the statute book. The Government promise was delivered. Just a few weeks ago I was proud to be able to visit the Darenth Park project at Dartford and Gravesham. The trust there already has the builders at work and ahead of schedule. I have no doubt that the concrete proof there will be replicated throughout the country as schemes are brought to fruition.

I am pleased to note that the bond that has been used to finance a new hospital for the people of Carlisle, the first NHS/PFI scheme to be funded through the capital markets, will be launched tomorrow. I fully expect work to begin on that scheme by the beginning of next month.

Mr. Eric Martlew (Carlisle)

I invite the Minister to visit Carlisle when building work starts on the hospital. We have a split site, and we have been working for 20 years for a new hospital. The Minister's news will be welcomed in my constituency.

Mr. Milburn

I pay tribute to my hon. Friend for being at the forefront of the local campaign to secure a new hospital for Carlisle. That long campaign has had a rich reward in the new development, and I should be delighted to accept his invitation to see progress when building starts.

In the context of Kent and Sussex Weald, I draw no comfort from the fact that many schemes have had to be stood down. I have no doubt that there is a demonstrable health service need for such schemes, and that the NHS would be improved if the projects were given the go-ahead. If it had been possible to deliver all 43 projects, I would have delivered them, particularly if that could have been done at an affordable price. However, I am afraid that arguments continued to rage in the constituency of the hon. Member for Tunbridge Wells about the affordability of the scheme in the lead-up to the prioritisation exercise.

I have no apologies about the outcome of prioritising, because not all the schemes could have been delivered. A preferred bidder had not even been selected for Kent and Sussex Weald when prioritisation took place. As I think the hon. Member knows, more generally, resources were spread too thinly, expertise was lacking, and precious NHS cash was spent trying to breathe life into schemes that were just not ready.

The NHS spent a total of £30 million in management consultancy fees alone desperately trying to get PFI schemes off the ground, and there was not a single hospital project to show for it. I was not prepared to allow that waste to continue. Instead, we took the decision to prioritise on the basis of three criteria: health service need, project status and PFI-ability. We did that openly and objectively, and the results were published in full. Again I make no apology for that, because in my view health service need should always be the key determinant in progressing NHS schemes.

The hon. Member for Tunbridge Wells was right to point to the advantages that would have accrued to the Kent and Sussex Weald trust if its project had been prioritised. As he rightly said, the trust currently operates on a split site—on the outskirts of Tunbridge Wells and in the centre of town—and the operational and training difficulties that that creates have been well documented. He alluded to them.

It is perhaps a sad indictment of the recent history of the NHS and of the hon. Member's party's mismanagement of it that in terms of health service need, Kent and Sussex Weald, despite pressing needs, was a considerable way down the list and below other potential projects whose need was greater. For health service need, Kent and Sussex Weald scored three out of a possible five where five represents greatest need. In the categories of PFI status and PFI-ability, the project scored only one out of five and nought out of five respectively. It was therefore considered extremely unlikely to reach financial close within 18 months, not least because the support of local health care commissioners was likely to depend on a more affordable, and therefore restructured, proposal.

The question then, as the hon. Gentleman rightly said, is what happens to the schemes that were not prioritised for the first PFI wave. The answer is that schemes that were not prioritised for the first wave are eligible for consideration by the capital prioritisation advisory group within the NHS executive. The group will consider the merits of eligible schemes, including, specifically, their health service need. In future, the key determinant of where capital projects take place in the NHS will be a simple one: whether those projects are most needed.

As configured under the previous Government, the PFI system did not take NHS need into account as the key determinant of where capital projects were to be developed. Instead, the philosophy of "let a thousand flowers bloom" meant that a thousand flowers did not bloom. Unfortunately, no flowers bloomed. Instead, the NHS wasted precious resources, precious time and precious skill trying to conjure schemes out of nowhere. The consequences were clear for all people to see: it failed. This prioritisation exercise, where NHS need will be the determining driver, will ensure that the most needed capital developments take place quickly.

I hope that the hon. Gentleman will support that approach. He asked for sensible long-term planning, and that is what he will get through this route. The group will work closely with the Treasury task force in making its recommendations, and it will be for Ministers ultimately to decide which schemes should go ahead. Work is already under way to prepare for scheme selection, and I expect to be able to announce the next tranche of PFI schemes in the spring.

The hon. Gentleman asked what the best thing to do was. The best thing to do for his trust, for himself and for the right hon. Member for Wealden is to alert the regional office to the needs of their constituents, and to try to persuade the office that this is a much needed scheme. The office may therefore decide that this is the sort of project that it would like advanced for national prioritisation.

The benefits will be clear for all. In particular, the private sector will know that schemes selected on that basis have every prospect of success. We anticipate considerable competition to deliver them. Needless to say, the bid that succeeds will be the one that offers best quality and value for money. Those schemes that are not considered PFI-able—and there may be some—may be considered for available public sector capital.

I do not expect the hon. Gentleman to agree that his local trust should not have been prioritised, but I hope that he will acknowledge that, since the announcement on 3 July, the trust's perspective has changed. The fact that the trust did not appeal against my decision when it could have done is a sure sign of its realism about the poor status of its previous PFI bid.

More positively, and looking to the future, I understand that the trust is now working on a collaborative agenda with Mid-Kent Healthcare NHS trust, and that it is likely that any future project proposal will take account of collaboration on site strategy, and possibly involve all three major sites—at Maidstone, Pembury, and Kent and Sussex. I have no doubt that, if a successful partnership can be forged to effect a strategy for the whole region, the hon. Gentleman's constituents can only benefit.

The Government also believe in co-operation and in partnership. We will continue to pursue our successful strategy of public-private partnerships, of which the PFI is one model. Our review of the PFI in the NHS continues, with a review of the procurement process and of the PFI product. We want deals to be quicker, better value for money, high quality, even more innovative, but, most of all, driven by that key determinant of NHS need. The NHS, taxpayers and, most important, local patients will benefit from that approach. I look forward to receiving the full support of the hon. Gentleman and of the right hon. Member for Wealden in that endeavour.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.