Private Finance Initiative

HC Deb 24 October 2000 vol 355 cc107-10

1. Sandra Gidley (Romsey)

What studies his Department has commissioned, undertaken or reviewed concerning the use of private finance within the NHS. [131847]

The Secretary of State for Health (Mr. Alan Milburn)

It is a very real pleasure, Mr. Speaker, to be the first Minister able to welcome you to your new official responsibilities. I am sure that you will discharge your responsibilities with your customary fairness and good humour—qualities which, even during Health questions, I hope will not be too sorely tested.

The greater use of private finance is helping to modernise the national health service, especially through the private finance initiative. The PFI can be given the go-ahead only when it demonstrates better value for money in comparison with the publicly funded alternative and provides improved facilities for the NHS. NHS trusts are required to monitor performance throughout the lifetime of the PFI contract.

Sandra Gidley

May I also be among the first to congratulate you, Mr. Speaker? I hope that your choice of clothing is an indication of a more modern approach to come. It is strange to be here; this is my first question.

Will the Secretary of State concede that the recent King's Fund report is the latest in a series of reports to suggest that local health needs, particularly bed capacity in PFI projects, are not being consistently met? Will he go further than reviewing individual projects, as promised by Ministers in another place? Will he undertake to review publicly all PFI hospital projects?

Mr. Milburn

I welcome the hon. Lady to her first Health Question Time. I am sorry that I will have to disappoint her by saying no, that will not be possible. The truth is that the PFI is providing much needed new hospitals in many parts of the country, sometimes in communities that have long campaigned for them. It is an efficient means of procuring new hospitals. Indeed, owing to the time and cost overruns associated with the old method, which tended to procure through Exchequer capital, the taxpayer ended up footing the bill for six hospitals and receiving only five in return. I do not know about Liberal Democrat economics, but that does not seem to make sense to me.

Mrs. Jackie Lawrence (Preseli Pembrokeshire)

I, too, congratulate you, Mr. Speaker.

Will my right hon. Friend the Secretary of State give an assurance that the private finance initiative will not threaten UK ambulance services? Will he consider establishing an inspection service for ambulance services, like those for police and fire authorities, so that we can be sure that the funding and performance of UK ambulance services are monitored and that there is an equitable service throughout the UK?

Mr. Milburn

I assure my hon. Friend that we already monitor the performance of individual ambulance service trusts; it is important that we do so. I can further assure her that, in future, we intend to move away from the PFI approach based purely on the procurement of an individual institution such as a new hospital. As she is aware, when we establish a new hospital in a community, it has implications for primary, community and social services, as well as for ambulance services. The NHS plan published in July sets out a new approach to procurement, whereby private finance will be extended into such areas and out of the purely acute sectors of the NHS.

Mr. Julian Brazier (Canterbury)

May I add my congratulations to you, Mr. Speaker, and, at the risk of embarrassing you, say as a Catholic that it is remarkable that we have our first Catholic Speaker?

Will the Secretary of State tell his officials to rule out private finance initiatives that involve substantial cuts being made to the number of acute beds in East Kent? I draw the right hon. Gentleman's attention to the fact that, even at the height of summer, there were patients on trolleys in offices and corridors in the Kent and Canterbury hospital and its two sister hospitals?

Mr. Milburn

There are problems in Kent and we keep the situation under review, but, in all candour, I have to say that many of the problems of pressure on parts of the NHS and of backlogs in repair, maintenance and new developments have not arisen suddenly and recently, but are the consequence of decades of under-investment in the NHS.

Rather than judging the Opposition on their rhetoric on such matters, we should judge them on their record. We know that, in their final year in office, revenue expenditure on the NHS fell in real terms. In addition, when the Conservative Government left office at the end of their last full Parliament, capital expenditure on the NHS was less than it had been at the beginning of that Parliament. The Conservatives have a record as long as your arm, Mr. Speaker—no wonder the Leader of the Opposition drinks to forget.

I can provide other facts and compare the Conservatives' record with ours. Capital spending has risen from £1.6 billion a year when we entered office to £2.8 billion a year this year; the biggest hospital building programme this country has ever seen is under way; and two new hospitals have already opened, with another to follow this year, seven more next year and nine the year after. There is a straightforward choice before the country: more investment in health with Labour, or less with the Conservatives.

Mr. Bob Blizzard (Waveney)

I, too, congratulate you, Mr. Speaker.

I welcome the new capital investment of £700,000 in the accident and emergency department of the James Paget hospital in my constituency, and the £2 million capital investment allocated for new renal, eye and skin services at that hospital. None the less, after the neglect of so many years, there is more to be done, so may I ask my right hon. Friend what additional capital investment can hospitals such as the James Paget hospital expect?

Mr. Milburn

We shall make announcements in due course on further capital and revenue allocations to health authorities. As my hon. Friend is aware, the extra investment we are now making provides the foundation for a real expansion of NHS services. Under the NHS plan, during the course of this decade, we expect to build 100 new hospitals and to modernise every accident and emergency department that needs it. In the next few years, there will be 250 new scanners and more beds, nurses and doctors in the system. We have achieved a lot, but we are the first to acknowledge that there is a lot more to do. We have a long way to go if we are to rectify the decades of under-investment over which Conservative Governments presided.

Rev. Martin Smyth (Belfast, South)

Mr. Speaker, as one whose first name is Martin, I congratulate you on your new office and assure you of my good wishes and those of my colleagues.

I acknowledge that we in Northern Ireland have in some ways benefited from the private finance initiative, but we want people to be empowered. Will the Department of Health consider the possibility of enabling purchasers of groceries and other products who do not want air miles to receive instead medical miles, which could allow more money to go into the health service, perhaps for their own treatment?

Mr. Milburn

That is what we want and it is happening, not only in England, but throughout the United Kingdom. As the hon. Gentleman knows, there is more money than ever before going into the NHS. Of course, that will not solve every money problem and there will continue to be pressures in the NHS—there will be pressures this winter and it would be foolish to pretend otherwise. However, there is a good reason for that: the problem facing the NHS today is no longer purely one of a shortage of cash; it is a problem of capacity. When we have not enough trained doctors and nurses, it is self-evident that it will take time to put that right. The question is, who is best placed to deal with those capacity problems? Are they best dealt with by a party that is committed to growth in the national health service, or by a party that is committed to cutback and closure in the NHS?