HL Deb 29 April 1991 vol 528 cc491-503

3.45 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper)

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to a Private Notice Question which is being asked in another place on the business plans for National Health Service trusts:

"The prospectuses of the trusts were published last year. There were no secret business plans. The business plans, which are required to be returned to the National Health Service management executive in the early part of this year, are part of the arrangements for monitoring both National Health Service trusts and directly managed units by the National Health Service management executive. As management documents, they were never intended under the National Health Service and Community Care Act 1990 to be public documents. The annual report of each trust will of course be published.

"This leads me to a wider point about accountability. For the first time we now have a system in place where, through the contractual arrangements, hospitals will be fully accountable to the district health authorities for the quality and quantity of the services they provide for patients.

"Within this reformed system, my job is to ensure that patients have the access they need to comprehensive, free health care. I exercise this responsibility through a strengthened chain of accountability from districts through regions to the National Health Service management executive.

"With this degree of accountability for the provision of health care goes more delegated management freedom for the hospitals themselves, including directly managed units. It is not for governments to tell hospitals how to organise their services and how many staff to employ. That must be a matter for the hospitals themselves. In a service that employs over 1 million people, it would be ludicrous if Ministers or civil servants attempted to run the service from Whitehall.

"What I sought last year and will seek this year when examining trust applications, is a management team which will match in professionalism the professional standards of the doctors and nurses. For far too long we have had outstanding clinical professionalism allied to second-rate management systems. One cause of that over the years has been the political intervention in what are properly management decisions of which this pre-local elections row, stirred up by the Opposition parties, is a classic example.

"Turning to the situation in London, I have noted the comprehensive review of the hospital proposed by the new management at Guy's. I am pleased to note that it has given a number of undertakings: that patient care will not suffer; that compulsory redundancies will only be used as a last resort; that services in the local community will be protected; that quality of service is an over-riding objective. I am also pleased to be able to reassure the House that Lewisham and North Southwark Health Authority, in whose district Guy's Hospital is situated, believes that the contracts which it has let to Guy's, and to other hospitals, provide satisfactorily for the health needs of its resident population.

"I am also pleased to record that, in Bradford, no reduction in services or activity is planned by the trust. A reduction of 80 jobs has already been achieved mostly by natural wastage and early retirement. It is the judgment of the public health authorities in the city that some increase in emphasis in primary and community services is right for local people. It is likely that, in terms of staff numbers, any reductions in hospital staff would be offset by further increases in community nursing and in the resources available to GPs.

"The proposals put forward by these two trusts illustrate a fundamental point. Neither district health authorities nor hospital managers are any longer prepared to accept that, simply because a hospital has always provided a certain service in a certain way, it should necessarily continue to do so.

"The needs of the patients they serve are constantly changing. Leading hospitals like Guy's and Bradford need to respond to these changes. Hospitals that can adapt successfully to change will flourish and expand. That is what I believe we are beginning to see happen in Bradford and South-East London. And, as any savings made will go straight back into the health service, it will be the patient now and in the future who benefits.

"Labour has nothing to say on health. The Labour leader yesterday finally let the cat out of the bag: under Labour, there would be no more money for health. Labour has no proposals for dealing with the obvious managerial problems of the service: its sole interest is in playing party politics with it. Labour's behaviour over the past few days is the final proof, if any was needed, of that".

My Lords, that ends the Statement.

3.50 p.m.

Lord Ennals

My Lords, I am grateful to the Minister for repeating the Statement made by her right honourable friend in another place. I am amazed by the final sentence that the noble Baroness was obliged to repeat. She knows it is not true to say that Labour has no policy on the health service. She also knows that on the previous occasion when we debated the health service in this House, we on these Benches went to considerable trouble to impress upon the Minister the proposals that the party I represent had made on how we should look after the nation's health, not just next year but in the next 10 and 20 years. Those proposals were made after careful consideration and consultation. Therefore, I do not thank the noble Baroness for the kind of party political rubbish that she has repeated. However, I realise that she is not responsible for it: she is only repeating what her noble friend said.

Noble Lords

Right honourable friend!

Lord Ennals

I referred to the Minister's right honourable friend as her noble friend as he may be ennobled one day. It might have been better if the Secretary of State had come to the House of Commons on 1st April—that would, of course, have been April Fool's Day—because that was the day when the new arrangements came into operation. The Secretary of State should have come to the House to explain the implications of the new arrangements for the 58 hospitals and health services which, with his approval, had opted out. He should have come to the House rather than wait for a PNQ to be tabled by the Opposition to force him to make a Statement to the House. He has been forced to make a Statement to defend the loss of 600 jobs. That was done to cut costs in Guy's by 5 per cent. in the first year of operation. I hope we shall be informed how many other thousands of jobs are at stake in the next few months as the other 56 NHS trusts announce their plans for becoming profit-making hospitals.

The Secretary of State seems to be suggesting that the responsibility for this action is not really his. He claims that it is the responsibility solely of the health authorities. I wish to remind the Secretary of State and the Minister in this House that the responsibility for the provision of health services lies upon the Secretary of State on behalf of the Government. The Minister and the Secretary of State cannot have it both ways. The Secretary of State cannot say, "This is nothing to do with me, but I take credit for all the great things we are doing to improve the health of the nation".

It is not obvious that the best way to improve services is to cut costs and reduce staff. I note that Mrs. Virginia Bottomley stated in the press that, cuts to nurses, doctors and support staff demonstrated the Government's determination to ensure patients got the best deal". It is not self-evident that one has to reduce the numbers of doctors and nurses to achieve a better quality of health service. The Statement suggests that there has been some slack administration at Guy's and elsewhere which presents a challenge to the managers of the opted-out trusts. What has Guy's been up to in the past months and years to get itself into so serious a financial mess? We are entitled to ask what that distinguished surgeon at Guy's Hospital, the noble Lord, Lord McColl, has been up to in a hospital where so many jobs have to be cut in such a short period of time. I hope that the noble Lord's job is safe as he is a very distinguished surgeon.

I draw the attention of the Minister and the House to what is now happening and what was clearly prophesied when the legislation passed through the House of Commons and this House. We spent many hours debating and deliberating upon that legislation. Each one of the first line of 58 opted-out hospitals and health services was personally approved by the Secretary of State. The decision was forced through in the face of opposition from the medical profession, doctors, nurses, the public—expressed through opinion polls—the community and patients. I have a number of questions for the Minister which arise from the Statement she has been obliged to repeat.

Is it really the view of the Secretary of State that these major job cuts will lead to better services? What service changes will occur at Guy's? What specialist services will be cut and what effect will that have on the treatment of the mentally ill, the handicapped, the elderly and the chronically sick? Did the Secretary of State know that the announcement was to be made by Mr. Griffiths at the time it was made? Will the Minister now say what the prospects are for the remaining 56 NHS trusts and for the services they provide? Are we to expect the same proportions of job cuts as regards the other 56 self-governing NHS trusts? What kind of consultation has been carried out with the professions as regards services and job cuts? I know there was no consultation on the establishment of the NHS trusts but now that they have been established and jobs have been cut and services have been affected, will the Minister say what consultation has been carried out with the leaders of the medical, nursing and other professions?

Will the Minister confirm that the Coopers & Lybrand report stated that three-quarters of the applicants for trust status were already in debt due to underfunding? What notice did the Secretary of State take of that report? What about the massive number of bed closures imposed upon health authorities in 1990 arid 1991 to ensure that, regardless of the effect upon waiting lists, health authorities and trusts would enter the new age without debt? Will the Secretary of State now publish the Coopers & Lybrand report and the 58 business plans so that we may know the basis upon which he took his decisions? The Minister says that the documents were private. But surely we now want a more open service, not a more secret service.

I am puzzled by one thing. Is it not rather sinister that the new trust manager, Mr. Peter Griffiths—he is an able man who is paid a salary of £90,000 a year with two cars, which is more than Mr. Duncan Nichol, the chief executive of the NHS, receives—revealed what the position was at Guy's on the eve of the Prime Minster's special summit? Was that a deliberate attempt to show the new-found independence of the trusts by cocking a snook at the Secretary of State? It must have been deeply embarrassing for the Secretary of State. Was the noble Lord, Lord McColl, consulted about the announcement when it was made? Does it not make a mockery of the flagship if the captain is not kept fully informed? I believe that damage to the National Health Service is being done and will continue to be done, and that the Government will live long enough to regret the decision they took to impose this measure not only upon Parliament but also upon the nation against its will.

Baroness Robson of Kiddington

My Lords, I thank the Minister for repeating the Statement. However, it is asking a bit much to expect us to believe that this problem has arisen as a result of a desire to improve services. In my view it is purely a financial exercise to balance the books at Guy's.

These are the largest cuts ever to have been made in one year in any authority in the NHS. It is unbelievable that a unit such as Guy's Hospital should need to save £6.8 million in one year. I have been given the reasons. There was an overspend of £1.7 million; there was a higher than expected out-turn in obstetrics; there was the cost of Project 2000; and there was higher than expected inflation. On top of that another £6 million will have to be saved for reinvestment.

Heads, of department were recently given until 17th May to produce cuts of £6.8 million. What jobs of all grades will go at Guy's? I am told that it is hoped to save £3 million on agency staff. How will that affect junior hospital doctors and the hours they have to work? Recently, we were finally able to reduce the hours of hospital doctors. I believe that that is in danger. Equally, the Government agreed that we needed an increase of 2 per cent. overall in the number of consultants. How does that fit in with the possible loss of consultants at Guy's?

My honourable friend the Member for Southwark and Bermondsey, in whose constituency Guy's is situated, visited the hospital this morning. He was informed that 60 to 65 per cent. of activity comes from the local health authority. It is therefore surprising that no local consultation on this matter took place, considering that it is an area of considerable deprivation which will have to bear the brunt of the savings. The inevitable conclusion is that all the unglamorous areas will suffer, such as those mentioned by the noble Lord, Lord Ennals.

Professor Stewart Cameron, professor of renal medicine, quoted in the Financial Times, states that when consultants voted in favour of a self-governing trust they were given to understand that the trust would begin life with a £1.5 million surplus, and not a £6.8 million overspend. He says: We must all of us feel, if not cheated, at least that we have been misled … How can we have any confidence in people who have made such a devastating mistake? In other words, the vote was taken on the basis of a false prospectus.

Yet Guy's is the hospital which has had a shadow board for a year and which had been assessing the impact of changes.

What worries me even more is that the Secretary of State, Mr. Waldegrave, in an interview on television, appeared unaware of the situation until this bombshell suddenly dropped in his lap. Was it not made clear in Guy's application for hospital trust status that it had this financial problem? It cannot have happened overnight.

We were told that reforms would lead to better care and increased choice for patients. Does the noble Baroness not agree that these large cuts cannot be made purely from increased efficiency? Services are bound to suffer. Under the new National Health Service and Community Care Act the Secretary of State has the right to dissolve a trust. Perhaps he should consider it carefully.

Baroness Hooper

My Lords, I am grateful to the noble Lord, Lord Ennals, and the noble Baroness, Lady Robson, for their comments on the Statement. As a preliminary perhaps I should say that the reason my right honourable friend did not go to the other place on 1st April to talk about the reforms was because he would have been on his own on that day since the House was in recess.

This is a subject on which we had considerable discussion during the progress of the National Health Service and Community Care Bill through this House last year. There was one aspect of our National Health Service upon which everybody agreed; namely, that some reform was necessary after 40 years of development. The reason for the reforms was to improve efficiency and to provide an even more effective service for the people of this country.

The National Health Service trusts have been created in order to give the service greater flexibility in dealing with problems, particularly some of the inherited financial problems. The various trusts up and down the country are enthusiastically tackling the challenges that face them. When I say that, I am not talking only about the management team. I have now had the opportunity to visit a number of trusts, both at the time when and since the reforms were introduced. There can be no doubt that throughout the service in the individual units there is considerable enthusiasm for the new approach.

Furthermore, when we talk about the job losses announced recently and the example quoted by both the noble Lord, Lord Ennals and the noble Baroness, Lady Robson, of some 600 jobs across the board at Guy's and Lewisham, it must be remembered that that is out of a total of some 8,000 employees. In that context I do not believe that the job of my noble friend Lord McColl is in any way at risk.

It has been said, but clearly needs to be said again, that the responsibility for providing for the needs of the local population lies with the district health authority. It is for the district health authority to contract with National Health Service trusts, its own directly managed hospital units, the private sector, or with hospitals in other districts which may provide certain specialist services so that all the needs of the local population are met. The decisions that have been taken at both Guy's and Bradford have been reached after the trusts have assessed the contracts into which they entered with their district health authorities. In line with the whole object of the exercise in introducing the contracting principle, they have assessed their obligation to meet the districts' needs over the period of the coming year and are taking the necessary action to meet that obligation.

I turn now to some of the specific questions raised in the course of the contributions made by the noble Lord, Lord Ennals, and the noble Baroness, Lady Robson. The noble Lord, Lord Ennals, asked whether it is the view of my right honourable friend the Secretary of State that major job cuts will lead to better services. I can do no better than to quote Robin Stott, the medical director of the trust, and Cyril Chantler, dean of the medical school, who said: If the trust is to succeed in garnering resources to pay for a large backlog in the maintenance of our premises, accrue funds for new capital developments, meet the increased costs of an ambitious nurse training programme"—

which are the facts which the noble Baroness quoted— and redeploy resources into new areas we must first rein back on inappropriate current expenditure. Any review of current clinical and administrative services must therefore consider their quality, relevance and especially their appropriateness to the future needs of the community we serve, the mental health services we provide and the needs of our medical and dental school". I was asked why we did not publish the auditors' report of the trust applications. The reports received from Coopers & Lybrand Deloitte were not audit reports but management consultant reports on financial viability and information systems. They draw heavily on financial projections and business plans prepared by the trusts which are themselves confidential. Confidentiality is required as the trusts are now in a competitive market and would not always wish their detailed plans to be made available to competitors, just as the Opposition do not wish to make us aware of their detailed financial plans for the health service. Like all such reports, the financial appraisals must also be confidential so that the consultants are free to express frank opinions.

It was suggested that we had allowed hospitals with financial problems to become trusts. As I said, in many cases the financial challenges facing units applying to be trusts would be the same whether they became trusts or remained directly managed. In those circumstances, it was important to look not only at the financial aspects of the matter but at the quality of the management team and its ability to meet the challenges. Where management was strong, it was perfectly reasonable to establish the unit as a trust. In some cases, trust status improved the ability to deal with financial problems which, as I said, was the very reason why trusts were established.

Both the noble Lord, Lord Ennals, and the noble Baroness, Lady Robson, asked which services would be cut and what would be the effect on the mentally ill, the chronically sick and so on. I understand that the trust management in the two trusts that have been specifically quoted are still working on the detail of the financial measures that they will take but they are committed to maintaining services in line with the contracts that purchasers have placed with them. That goes for all the other trusts throughout the country.

I was asked whether the Secretary of State knew that the statement would be made on Friday, on the eve of the Chequers summit. The answer to that is, no. It was a management decision. Guy's and Lewisham have not been secretive in this matter. They have chosen to be explicit about their strategy and to manage themselves efficiently and effectively, living within their means and providing the highest quality of service. That is not only what we all want but what the patients and people in need of treatment throughout the country also want.

I was also asked about bed closures imposed on health authorities and future National Health Service trusts in the current year. We have established on previous occasions that beds can be closed for all kinds of reasons; for example, as a planned rationalisation or to improve services in other parts of a district. What really matters is the level of patient care. Activity levels have increased steadily in recent years. I understand that it was suggested in the Financial Times by my noble friend Lord McColl—I have not had an opportunity to corroborate the statement, but perhaps my noble friend will take the opportunity to do so this afternoon—that, in making considerable financial savings in his unit at Guy's, he was at the same time able to increase the service provided by up to or over 5 per cent.

I was asked about the prospects for the remaining 56 trusts and their services. I have already dealt with the question of whether there will be cuts or decisions made in other trusts. I should reiterate that all trusts and directly managed units will need to review their services to ensure that they meet the requirements of their purchasers. That may mean increases in some areas and decreases in others, but overall the reforms will ensure more appropriate patient care of high quality in the long term.

As to the question of consultation with the professions about services and the recent announcements, it is for the trust management itself to decide what consultation among staff is required. As all senior staff are involved in management at Guy's, they have no doubt been able to contribute to the budget-setting process. National Health Service staff are covered in terms of redundancies by the Employment Protection (Consolidation) Act which requires employers to undertake consultation on redundancies at least 90 days before the first redundancy if over 100 redundancies are planned and at least 30 days before the first redundancy if fewer than 100 redundancies are planned.

The noble Baroness said that that situation could not have arisen overnight. It did not, and neither will the cuts and job losses occur overnight. Bradford has already stated that it is talking about phasing those job losses over three years. I understand that at Guy's and Lewisham the period planned is the full financial year and that it is not thought necessary to create redundancies in those circumstances.

I hope that I have responded to the many questions that were raised.

4.18 p.m.

Lord McColl of Dulwich

My Lords, does my noble friend agree that the £6.8 million that we have to find at Guy's, is made up of a number of items? First, there is the £2 million overspend last year because we treated more patients. Under the old regime, the more patients you treat, the more you are penalised. That is the basis, of the Government reforms which have been supported by the Labour Party; namely, that money should follow patients so that the more patients you treat, the more money will come into the hospital. That lesion will therefore be corrected soon.

Secondly, we have unavoidable commitments because of the increase in the birth rate. Presumably even the noble Lord, Lord Ennals, will not hold the trust at Guy's responsible for that. Thirdly, we have important changes in nurse training arrangements which will be very expensive in the short term. Finally, we had to set aside some 1 per cent. for inflation assumptions.

What has happened at Guy's is unique in the annals of the National Health Service. Within a week or two of the new trust board taking office it quickly assessed the situation and decided to make and implement a decision. We have never previously had decisions like that. Usually, dilly-dallying went on for most of the year and the management was finally forced into making a decision and had to make a crisis announcement. The only option open then was to close large numbers of beds. The trust has said, "Let us make the decision and take action now because then we shall be able to reduce staff gradually and make the necessary savings so that patients will not suffer at the end of the year".

Does my noble friend agree that the costs of London hospitals are far in excess of those outside London and that the costs within London also vary enormously? If we reduce our cost per patient more money will be available to treat more patients, which is what we are trying to do.

Does my noble friend further agree that if one were to ask hospitals outside London whether their hearts are bleeding for Guy's because it has to live within its financial constraints, the answer would be, "not at all?" Hospitals outside London have said for years that London has had too much spent on its hospitals. So there is no support there.

Finally, although people ask for yet more money to be spent on the National Health Service—I understand that the BMA is asking for 17 per cent. More—the question remains for anywhere in the United Kingdom which already has 17 per cent. more: has it done any good? Scotland has 24 per cent. more per head of population spent on the health service and has health authorities which are more overspent than any in England. As a Scot I regret to say that the health of the Scots is no better than that of the English as a result of that additional expenditure.

Baroness Hooper

My Lords, my noble friend makes important points from his personal and detailed knowledge of the situation. I should like to emphasise that not only at Guy's but throughout the National Health Service more patients have been treated. That is a trend that we want to ensure continues. We want more patients to be treated and the quality of the treatment to be improved.

There can be no doubt that money following the patient and planning over the year to avoid the crisis management to which my noble friend referred form an important element of the future improvement of the service. As for the statement made by Guy's, criticised as it may be at this moment, no one can deny that it is a clear statement. We all know where we are and can plan accordingly. The planning carried out by the district health authority is vital to ensure that the health needs of the district are met. The reforms have been in place for less than a month. We certainly need to see how they progress before any judgments are made. We are not in the business of making instant, overnight judgments.

Lord Stoddart of Swindon

My Lords, is the noble Baroness aware that I for one agree very much that the National Health Service should not be a service about which there is a great deal of party politicking? I am well aware of that. Indeed, I have always believed that it is a great national service and that party politics should not feature greatly in it. But the present Government introduced party politics into the whole business when they decided to alter the basis of the National Health Service without proper consultation either with other political parties or with the wide range of staff which works in the National Health Service. That is why we as an Opposition are entitled —as are parties other than those on the Opposition Benches—to be highly critical of the way in which the Government have handled the whole business of introducing self-governing hospital trusts.

There were inefficiencies in the National Health Service. Nobody doubts that for one moment. However, the best way to have dealt with them was on the basis of consultation and co-operation and not imposition. That is why the Government have got themselves into the present state.

The noble Baroness said that London had too much money spent on its health service. Can she produce the evidence? Were Londoners told that in no uncertain terms before the Government set up the self-governing trusts? I feel quite sure that had they been told there would have been a great outcry. Can she tell us how many more redundancies in how many more hospitals up and down the country—in various parts of the land, such as Reading, Swindon, Exeter and in Scotland and Wales—there will be?

Finally, what does she think will be the future for self-governing hospitals' status if the people working in those hospitals realise that by voting for self-governing status they are voting themselves out of a job?

Baroness Hooper

My Lords, from the publication of the White Papers through the passage of the Bill to the acceptance of the National Health Service and Community Care Act, I should have thought that there was ample opportunity for everybody concerned to make their views clearly known. They certainly did so, as I am all too well aware. Furthermore, we are moving on from that position to consider a health strategy which will further benefit the health needs of this country. It was in that spirit that on Saturday at the seminar at Chequers the Prime Minister and leading lights in the medical and health fields discussed that serious subject in the context of the implementation of the reforms.

I do not believe that I said that London had too much money spent on it. The population of central London has fallen substantially, particularly relative to surrounding areas, since many of its hospitals were originally built. It is right and proper that London's share of National Health Service funding should reflect the fact that there has been a movement of population and that new units and services have been built out of central London. Health spending per head in London is still significantly higher than in other parts of the country. I believe that that is the gist of what I said—if not the exact words—and that it was misconstrued.

As to the adequacy or otherwise of consultation, all applications for trust status were subject to a statutory consultation period of three months. Everyone was given the opportunity to comment and all such comments were taken into consideration when the Secretary of State made his decisions. As I said, the decisions were not made on one set of factors—not just on the financial resources of a potential trust—but on factors including the strength of the management team and indeed the reactions to the consultation.

The Earl of Onslow

My Lords, is it not fair to recognise that Her Majesty's Government have increased the numbers of doctors and nurses quite substantially since 1979? Is it not also true that when my right honourable friend the Member for Finchley was Prime Minister and First Lord of the Treasury she used to say that the National Health Service was the greatest employer other than the Indian railways or the Chinese army? Therefore, is it not also true to say that there must be in such bodies some fat that can be got rid of to make the service more efficient? It is efficiency to patients which is necessary rather than the number of jobs created or lost. It is fascinating to hear Members on the other side of your Lordships' House saying, "Isn't it disgraceful about job losses?" The National Health Service is not there as an employment agency. It is there to cure you and me of bunions or let us die in peace of cancer. It is not a jobs agency. The sooner that that is realised the better.

Baroness Hooper

My Lords, I am grateful to my noble friend for reminding the House that there are more nurses and more doctors than ever before. More people are being treated than ever before. The workforce of the National Health Service is some one million. As I attempted to set in context, the 600 job losses which may take place—not necessarily take place but currently estimated may take place—over the coming year at Guy's, should be seen in the context of the very large total workforce of some 8,000.

Furthermore, partly as a result of amendments—even those made in your Lordships' House—there is no doubt that we are taking very seriously the whole question of evaluation and monitoring of the reforms. As we have always said, these are evolutionary, and if and when it is necessary to improve upon the framework that we have already set in place we shall have no hesitation in doing so.

4.30 p.m.

Lord Wallace of Coslany

My Lords, is the noble Baroness aware that I am perhaps one of the few people left who fought and worked in the House of Commons for the inauguration of the health service? I regret that we have now reached the stage when the health service is in a very bad state, being treated mainly as a supermarket.

There is a personal matter that worries me very much. The noble Lord, Lord McColl, may know something about this. I am a keen supporter of Queen Mary's, Sidcup, which is heavily overspent as a result of having dealt with so many patients. Unfortunately, that hospital does not have an ENT department, and never has had. Those services are provided by Lewisham. The consultant there—an excellent man—comes to Sidcup, and then his patients who have to be operated on go to Lewisham. It so happens that I was one of those on 26th March when the noble Lord was operating there.

What will happen? Will that service be cut? Will it continue? Will the Lewisham area authority charge Queen Mary's for the service? If Queen Mary's does not have the money, what will happen? This is but one of many problems, and no doubt noble Lords know of others. Something must be done about such a serious matter.

Baroness Hooper

My Lords, allow me to congratulate the noble Lord, Lord Wallace, on his success in getting the National Health Service up and running in spite of the widespread opposition which, as he must remember, it had to meet from the medical profession in particular at the time.

I should like to take the opportunity of emphasising that the attempts we are making with these reforms are nut to turn the National Health Service into a business but simply to make it more businesslike. I cannot imagine that the noble Lord would wish to dispute the propriety of doing that.

As For the specific example of Queen Mary's Hospital which he quoted, obviously I shall take the opportunity to look into the matter, but it is clear from the arrangements that we have set in place that what should happen is that a district assesses the needs of its particular population and enters into the appropriate contracts with the appropriate hospitals. That is what we are doing, serving the needs of the local population, not keeping people in jobs unnecessarily.

The Lord Chancellor

My Lords, I propose to call Amendment No. 36.

Lord Sefton of Garston

My Lords, I was assured by the Leader of the House last week that we were allowed. 20 minutes for questions after the main speaker.

Lord Simon of Glaisdale

My Lords, I hope I am in order in moving the amendment, which I think has been called.

Lord Cavendish of Furness

My Lords, I think that the noble Lord opposite is right about the 20 minutes.

Lord Sefton of Garston

My Lords, will the noble Baroness tell us whether the department received any representations from the management of Guy's before the public announcement about the dire straits of their finances, which led the management later to decide to get rid of 600 jobs? Can we have an assurance from the Minister that, unlike in other privatised industries, savings made by the dismissal of those 600 people will not result in higher salaries for those in the top grade?

Baroness Hooper

My Lords, we are talking about a service which is still a public National Health Service. There is no question of privatisation as the noble Lord wishes to imply.

We have said on many occasions that the object of setting up National Health Service trusts, with the additional freedoms which they have as compared with the directly managed units in being responsible for running their own affairs, is to improve services. We want to see that working. We shall not interfere in the way that the noble Lord has suggested. In making a decision to set up all the trusts we took into account both the financial circumstances of which we were aware and the strength of the management team which we believed could put those financial difficulties right.