HC Deb 03 December 2002 vol 395 cc749-52
11. Mr. Mark Prisk (Hertford and Stortford)

If he will make a statement on the financial and legal relationship between the Department of Health and foundation hospital trusts. [82627]

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

NHS foundation trusts will be part of the national health service but they will be owned and controlled by the local community, not by the Department of Health. This modern form of local public ownership will be spelled out in detail in a guide to NHS foundation trusts that I hope to publish before too long.

Mr. Prisk

Although we shall welcome that guidance note, the Secretary of State needs to be aware that many of my constituents are confused by the conflicting statements from Ministers on the issue. Will he provide a definitive answer today on financial matters in foundation hospitals—for example, borrowing—and explain to the House who will have the final say? Will it be his Department, the Treasury or the regulator, or will it be locally elected governors?

Mr. Milburn

The hon. Gentleman will have to wait for the guide—[Horn. MEMBERS: "Why?"] The hon. Gentleman would like a guide so I will give him a guide and a hint. He asked about local governance. As I told the House during the debate on the Queen's Speech, the membership of those organisations will be drawn from people in the local community served by the local hospital. Those members will be able to elect governors who will oversee the work of the hospital board. As a consequence, for the first time there will be a genuine form of local public ownership that will put the public at the heart of our key public service. It certainly will not be national state ownership. It will be a genuine form of local ownership.

NHS foundation trusts will be free to borrow; they may do so from the private markets and they will have access to public sector resources too. Decisions about their right to borrow will be based on an assessment of their ability to pay; that is not an assessment that I will be undertaking.

Mr. Andy Reed (Loughborough)

Although the proposals are relatively controversial, as I am sure that the Minister would agree, does he accept that the cooperative and mutual role could play a really positive part in delivering those hospitals, if they go ahead?

Mr. Milburn

My hon. Friend has made an extremely important point. Certainly for those on the Labour Benches—perhaps not those on the Conservative Benches—there is a well-established tradition of cooperation and mutualism, which is at the heart of the founding of our party and the wider Labour movement. In terms of their governance, those organisations will be firmly grounded in those traditions. They will be owned and run by members of the local community. Therefore, for the first time since 1948, there will be clear national standards and NHS hospitals, serving NHS patients, according to NHS principles. They will provide care, according to NHS standards and inspected by an NHS inspectorate, that is free and which is offered on the basis of need, not the ability to pay. The difference is that members of the local community served by the local hospital will have some say over the decisions that are taken by that local hospital. That is not a form of privatisation, which the Conservative party advocates; it is a genuine form of local public ownership.

Dr. Liam Fox (Woodspring)

On 7 August, the Secretary of State said: For some on the Centre Left the idea of transforming the public sector monopoly is heresy…In health, this means primary care trusts having control over budgets with explicit freedom to purchase care from the most appropriate provider—public, private or voluntary…And existing NHS hospitals should be able to become NHS foundation hospitals". I completely agree with him.

However, the Chancellor, in his Guardian tapes this week, said that there will be problems in health if you try to introduce market forces. There is no way markets work in health care. If they did, you would have this extreme power of the producer over the consumer. How can both those views be compatible?

Mr. Milburn

It is the hon. Gentleman who is fixated on market forces. Indeed, I think that one year he managed tell his party conference that, as an unreconstructed Thatcherite, he was wedded to the market inside the national health service. As I have explained to the hon. Gentleman, foundation hospitals have nothing to do with market forces, still less to do with privatisation. It is about public ownership. It is about ensuring that the local public, who are served by the local hospital, are at the heart of the governance of that local hospital: so no longer will the hospital be owned by Secretaries of State of whatever political persuasion. It will be owned and controlled by the local community.

Dr. Fox

Instead of treating us to philosophical gobbledegook, the Secretary of State would be more honest if he said that his view was right and that the Chancellor—the psychologically flawed, downgraded Chancellor—was wrong. But since he cannot answer the ideological questions, perhaps he can answer a practical one. He has told the House that three-star hospitals alone will become foundation hospitals. What happens if a three-star trust becomes a two-star trust during the transition period? Will the process be stopped? And once a hospital has become a foundation hospital, what then? Will it still be subject to the star rating or, once it reaches foundation status, will that no longer apply?

The Secretary of State needs to understand that he must give clear answers to practical questions, because there is a distinct impression that not only is the Cabinet at loggerheads on this, but that Ministers are making up the proposal as they go along.

Mr. Milburn

As for the rating, yes, NHS foundation trusts will be subject to the star rating system, just as every other part of the national health service will be, whether it is a primary care trust or other NHS trust. As for what would happen in the event of a three-star NHS foundation trust losing its three-star status, when the hon. Gentleman reads the guide he will see that the independent regulator whom we will appoint will have various intervention powers to deal with precisely those circumstances.

On the issue that the hon. Gentleman raised about only three-star trusts being allowed to become NHS foundation trusts, I should point out to him that there would be no arbitrary cap on the number of NHS foundation trusts. The more performance improves throughout the national health service, the more NHS foundation trusts we can have. But we have to start somewhere. We should start with those that have a proven track record of success. The hon. Gentleman might like to know that 40 per cent. of the current three-star trusts in the national health service come from the poorest parts of the country: places such as Doncaster, Sunderland, Hackney and Liverpool. So it will be a means not just of improving—

Mr. Speaker

Order.

Hugh Bayley (City of York)

If clinical outcomes and the quality of care in a foundation hospital decline markedly, will the guidance that the Secretary of State is issuing to the regulator include the possibility of the hospital losing its foundation status?

Mr. Milburn

Yes.