The National Health Service

HL Deb 15 May 1991 vol 528 cc1653-92

5.30 p.m.

Lord Ennals rose to call attention to the state of the National Health Service and especially to the newly established NHS trusts; and to move for Papers.

The noble Lord said: My Lords, perhaps I may first say how delighted I am that so many noble Lords and Baronesses agreed to speak in the debate, many with much experience in the health service. I am especially looking forward to the maiden speech of the noble Lord, Lord Harmsworth. His record of social service commends him to us all and we look forward to what he has to say.

In the debate I shall not only call attention to the problems of the National Health Service, so widely shared in this country, but also will call upon the Government not to approve any more opted-out trusts until the public have spoken in a general election. So far as I am concerned, the sooner the better. There is no reason for delay. It will not be legislation that will hold us up. It will simply mean that the Government are frightened.

It is almost a quarter of a century since I first became a health Minister. In my view, the NHS is now in very grave danger. The people of Britain, who, because of an ageing population, increasingly rely on the National Health Service, should wake up to the fact that only their decision to bring about a change in the direction of our nation's affairs can rescue the service from terminal decline. Clearly, it is not safe in the hands of the party opposite. It is just four years since an under funding crisis led Mrs. Thatcher to set up her review and come up with a market-orientated solution which will eventually spell death to an already ailing service. NHS reforms conceived by her Right-wing advisers are a time bomb which will explode at some stage and damage both those who plotted her demise and the rest of the "yes men" also.

I shall examine the evidence. With a steadily ageing population making huge extra demands on the service, it is being squeezed of resources. Of course there have been additional funds provided by the taxpayer. Every year in every government that has been so because of the increasing demand. But the funds have been eaten up by the growth in demand, the cost of new technology and the rate of inflation. This year health authorities were given 6 per cent. extra to pay for costs which rose by 9 per cent. We see the results all around us in terms of bed closures. Even the day before yesterday in King's College Hospital 14 people lay on trolleys which were nine inches apart because no beds were available. That is a hospital which had substantial bed closures earlier in the year.

On several occasions in the past I have drawn attention to the 3,500 beds temporarily closed, supposedly to wipe away debts so as to allow the new systems to start with a clean slate. Inevitably waiting lists rose sharply as wards, operating theatres and consultants were put out of service. Waiting lists have reached almost 1 million, if Government statistics are to be believed. Britain is still way behind the United States and the rest of Europe in her share of GNP spent on health. Growth rate at the moment has dropped to virtually nothing but our percentage of GDP spent on the health service is not rising; it is falling. It is now down to 5.8 per cent., and that at a time when the National Association of Health Authorities and Trusts—not a pressure group but the health authorities themselves—recently estimated that there is an underfunding of the NHS of £4.5 billion.

However, the Government insist that underfunding is not the real problem. They claim that they have found the solution by introducing market forces into the NHS. We have all become purchasers and providers. They decided to bring in a new brand of business manager; to remove doctors and nurses from positions of power; to eliminate elected councillors. The Government said, "Let the entrepreneurs get their hands on the provision of patient care; break up the old relationships; let the hospitals opt out, they will find their feet as Sainsbury's and Marks & Spencer's have done for decades. The hospitals will survive if they will only move into the field of making profits. Let the: GPs become small businessmen able to buy better services for their patients".

When that was presented to the House of Lords —and another place—many of us said, "Watch out! Take it easy! Try out some of these notions. See how they work. Do not just impose it upon an uncertain nation. Trial and error is the best way". If we now look at the situation, we see that they plunged into untried schemes. We were not saying, "No change". We were prepared to see many sorts of change. We said that it would be irresponsible to open the floodgates without fully understanding what we were doing.

That was the message, not only from the people in this House and in another place, but from all the Royal medical colleges, from the British Medical Association, the Royal College of Nursing and from all the colleges in professions allied to medicine. Peers on all sides of the House said it; the all-party select committee in another place said it; and the public said it. But the Government took not a scrap of notice. They forced their Bill through both Houses with virtually no concessions to common sense. We are now beginning to see the results of their pigheadedness as the first 56 opted-out trusts face the real world, and as the GP budget holders use their new-found power to create a two-tier health service.

We are only six weeks into the scheme and what do we find? Ministers admit quite frankly that they do not know what is going on within the NHS trusts. Of course not. The Government say, "The NHS trusts are free to go their own way. The trusts and the budget holders are independent. It is not for us to breathe over their shoulders. Give the local people the opportunity of making decisions for themselves. The Government cannot give explanations; it is for local people to decide. We cannot intervene".

They cannot have it both ways. They cannot say that NHS trusts are still part of the health service and disagree with us that they have opted out of the NHS, and yet say that they accept no responsibility for what the trusts do with the funds provided for them. It was Ministers, including the Prime Minister, who launched this unseaworthy craft. They cannot now evade the responsibility of the results.

In succession the newly opted-out hospitals are cutting jobs and services-600 at Guy's and Lewisham, 10 per cent. of their overall budget; 300 in Bradford; announcements still to be made for Leeds General Infirmary, the Royal London Hospital and others. Ministers pretend that all that is to increase efficiency and that the patients will not suffer. That is simply not true. A recent document from Guy's Hospital spoke of inevitable reductions in direct patient care services". Professor David Levison warned that the proposed budget cuts of £320,000 in his department would require the immediate axeing of up to 20 technicians who match blood for operations. That will result in a 10 per cent. cut in the hospital's blood transfusion service which is already in a precarious situation. It cannot be said that no damage is going to be done to the services.

If Guy's can make such cuts without affecting patient services, one is bound to ask about the running of the hospital over recent years if there is so much slack that can now be taken up. How is it at this stage that it is necessary for Guy's to make these kinds of cuts in jobs and services? No doubt the noble Lord, Lord McColl, will tell us about that. We can only take a responsible attitude to the trusts and their programmes, and towards others whose plans are still to be announced, if we can see the business plans submitted to the Secretary of State before the decision to grant trust status was made.

Why should these documents be secret? Why should not every one of them be published either by the hospitals or services seeking to opt out or by the Secretary of State who received them and on whose submissions he no doubt reached his conclusions? I ask the Minister to say whether there is some reason for the current secrecy. It is time that we knew what is going on so we can face the facts.

Professor Stewart Cameron, Professor of Renal Medicine at Guy's, said that there had been, a massive loss of confidence in the trust executives among consultants".

He warned that medicine, surgery, psychiatric, obstetric and geriatric services will all be particularly hard hit. And what about the other 55 trusts? We have been informed that Coopers & Lybrand, a firm with great responsibility, carried out, at the taxpayers' expense, a study of the financial basis of all the applicants. It is said that only 12 were financially viable. I ask the Minister whether that is true. If so, why were decisions taken by the Secretary of State to proceed when the finances were in such a rocky state? The accountants' report should also be published. Why the secrecy? The report was paid for by the taxpayer in the interests of the taxpayer. Why should not the report be revealed to the taxpayer at this time?

The Government are constantly complaining that documents are leaked. In a democracy this kind of information should be made available to the public. We are entitled to demand that. I hope that the Government will give some explanation as to why there is such secrecy. Will the Minister please convey this anxiety to the Secretary of State? Before leaving the question of service trusts, I remind the House that cuts are not only being implemented in the new opt-out hospitals. A few days ago it was announced that 435 jobs, said to be across the board, were to go in the Charing Cross and Westminster Hospitals. They are hospitals which have served the welfare of Members of this House over many years. Those hospitals are part of a very disturbing and growing pattern in the reduction of facilities. I notice that three out of four health authorities have cut the number of long-stay beds for elderly people in the past three years. That is a section of the population which needs more help than any other. As waiting lists have lengthened, more and more beds lie empty and unused.

My noble friend Lord Mulley has drawn to my attention a letter dated 30th April received from Sir Robert Reid, the chairman of the West Lambeth Health Authority. In that letter he states: Three in-patient theatres and 184 additional beds could be brought into use if sufficient financial resources were made available. We calculate that capital expenditure of £300,000 and annual revenue expenditure of £5.9 million would be required for this".

From the time that the Government's plans were published, I have expressed my deep anxiety that the Government were driving the National Health Service into a two-tier service. It was always said that that was not the case. Yet we now begin to see more and more examples of that happening. The Watford General Hospital has promised the patients of fund-holding GP practices a shorter wait for both in-patient and out-patient appointments than for other patients. Doctors are rightly up in arms. The BMA has said that it would be unethical for consultants to see some patients quicker than others.

The Prime Minister's attitude to doctors is no better than that of his predecessor. At first he refused to meet them; then he said he would but that they would have to wait, and now they are accused of a party alliance with the Labour Party. The Prime Minister and Mr. Waldegrave fail to realise the degree of worry that there is in the country.

I was in Monmouth over the weekend. I can confirm that there is real fear that if the Nevill Hall Hospital and the Royal Gwent Hospital opt out, the quality of care will fall. They are already suffering from cancelled operations and lengthening waiting lists. Those hospitals have great pride in their health service. These anxieties are found across the country. It will be highly irresponsible and wrong as we approach a general election and it is known that the Government are under such criticism to proceed to take more decisions before we have had the opportunity of assessing and studying the results of the first 56 trusts. I plead with the Government to listen to what is said in this debate and in the country. I beg to move for Papers.

5.47 p.m.

Lord Harmsworth

My Lords, I am aware that talking on this subject in a maiden speech, particularly after a former Secretary of State, is the equivalent of placing one's head in the lion's mouth. But I have an enduring interest in the subject, so appropriately introduced by the noble Lord, Lord Ennals, having once spent some valuable years in the Department of Health. I take heart from the fact that in a recent debate on the medical injuries' no fault system, almost the last speaker before the Minister said that he must be one of the few to speak who was neither a doctor nor a lawyer. I hope that your Lordships will not spurn another generalist's view.

I am very much a fan of the National Health Service. My family and I have used it almost exclusively all our lives. If anyone is in any doubt about its efficiency and the hard work put into it, he or she need only go to an out-patient's clinic at a London hospital and note how fast and accurately treatment is delivered in any particular specialty. I hesitate to use the words "conveyor belt" but it is with unerring precision and speed that a very large number of patients are cared for by the consultant's team.

But time moves on. The National Health Service must not become locked into a method of working which results in productivity increases based so heavily on manpower factors. Technology, particularly information technology, must be the keynote of the future. The key to treating successfully more and more patients in what must surely be a bottomless, or virtually bottomless, pit of demand, is mobility. I refer to the mobility of patients; mobility of medical records; mobility of information about queues; mobility of information itself; mobility of doctors, mobility of equipment if necessary, and mobility of money.

The National Health Service and Community Care Act 1990 does much to set up the right framework. For instance, I should like to see an NHS with a minimal number of kidney stone shattering machines strategically located, sufficient for the whole nation. Patients would travel to them. I should like to see patients travelling from a two-year queue for a hip replacement, even 300 miles, to a five-month queue elsewhere, despite any loss of therapeutic effect through the patient's family not being near. I should like to see regular and short trips by patients across RHA boundaries for treatment which is sooner provided next door. I should like to see some of the ancient concepts relating to confidentiality of medical records questioned if the effect will be to speed up mobility. I should like to see use made of information technology to hasten the passage of medical records from one region to another and to hasten information on areas of locally slack demand for certain otherwise heavily demanded treatment; and, possibly, in due course, see even trans-EC patient movement and movement of all other resources that are so necessary to the efficient handling of sometimes unpredictable requirements in health care.

In a maiden speech it is customary not to be controversial. I am conscious that I am in danger of overstepping the bounds. I have a deep respect for your Lordships' House. At two minutes past three on 1st November 1956 a young lad was ushered into a gallery above. It was the first time he had witnessed a debate in your Lordships' House—indeed, any debate in the Palace of Westminster. Almost exactly 48 hours beforehand, in another place, the Prime Minister had risen to make a Statement to the effect that British and French forces would intervene if within 12 hours Egyptian and Israeli forces had not withdrawn 10 miles each from the Suez Canal. The United Nations Security Council was informed. When on 1st November that year, just after midday, Lord Henderson rose to call attention to the Government's Statement, he did not know whether any fighting had taken place. Your Lordships had to debate the issue with scant knowledge even of the facts. Your Lordships left your visitor with a lasting impression of constructiveness in debate, manners, helpfulness, balance, expertise and an uncompromising intention to get things right.

The late Archbishop of Canterbury, Archbishop Fisher, had just risen to express the Church's position on the operation when your visitor arrived. He produced a masterly exposition in the circumstances. He did what your Lordships' House is renowned for. He produced an authoritative and definitive statement for the very interest he was there to represent, as did the Lord Chancellor—a very difficult job surely—and many ethers. Your visitor stands here today still as much impressed. He will transgress, he will err, he will fail to master his brief, but he will endeavour to contribute to the valuable work of your Lordships' House. I request nevertheless that you accord him the indulgences and help for which your Lordships are justly so very well known.

5.53 p.m.

Lord Hunter of Newington

My Lords, it is my great pleasure to be first to congratulate on behalf of the House the noble Lord, Lord Harmsworth, on his marvellous, balanced maiden speech. I have a personal reason, too. For seven years he and I worked for the same mistress—the Department of Health and Social Security—so I can guarantee that he understands government in great detail. I can also guarantee, from finding out about him, that he has a wide experience of affairs outside. In thinking of his maiden speech, I believe that the House will be impatient to hear his next speech. His key note was, "Let's get a move on". I hope—and I am sure the House hopes—that he will speak again very soon on this and other topics.

How many debates have there been on the National Health Service in the past three years? By cross-party agreement, every aspect has been looked at and views have been expressed; views in the main concerned with the future of the service rather than the more limited aspect of party objectives. I hope that this debate maintains that tradition.

With the approval of Parliament, as has been said, the great experiment began in April of this year. Mr. Kenneth Clarke, when he was Secretary of State, met the Select Committee on Science and Technology and said that: everything would be carefully monitored and made public. One must ask whether his successor has the same view and intention. There is vital information that must be shared, examined and understood. There is a strong case for saying that no further NHS trusts should be established until the reports are analysed and the full significance of the management board's paper of February 1991 examined.

Naturally one is particularly anxious about the proposals for trusts and the financing of general practice. However, one must say that the Government have met university teaching and research requests, including the decision to make some funds available to contribute to research overheads in non-teaching hospitals. In addition—and very importantly—teaching hospital trusts are required to protect the teaching function in their establishment order. The Secretary of State has reserve powers to protect the teaching function of the trusts.

However, a problem which has existed since the beginning of the National Health Service is the payment of overheads for medical research activities. As the University Grants Committee—now the Universities Funding Council—and the research councils—belong to the same department of government, an arrangement was made that the overheads of the Medical Research Council activities would be met from UGC funds. What has changed is the reduction in research council funding and the enormous increase in charitable funding. The charities have been concerned greatly in having to meet the overheads for research activities. I understand that the same problem is being faced in the United States.

The suggestion of a service increment for research was originally made by the Imperial Cancer Research Fund. I quote: medical charities expect the NHS to cover the service support of the research they carry out. In the opinion of all the major charities this expectation is seldom, if ever, fulfilled". The Government must address this urgent problem.

It seems that the public must be made aware of the fact that when they give money to charities for specific objectives, basic overheads and VAT are being met from their funds. There is a continuing anxiety with all the major charities that if the public understood this they would be reluctant to give funds as generously for research purposes. The Christie Hospital, Manchester, is likely to have to find £1.3 million to pay the VAT on the extension of its new research accommodation in the Patterson building. That is something one must think about.

I have said that we must wait to see the results of the new experiments in hospital and general practice funding which have begun. Perhaps June or July would be about the time to look at those results. One hopes that the vital information will be made available by the Government. However, there are other problems that can be usefully discussed. One of these is the relationship between the district health authorities and the family health service authorities. Should there not be one sub-regional authority to look after every aspect of the district, including nursing, pharmacy and other services? This would simplify the machinery between local government and the health service. There is another reason. I quote from the management board's paper of February 1991: Collaboration between the NHS agencies has been a long-standing aim. But integration goes wider than this and involves the active pursuit of high quality, seamless care at every level across the primary and secondary arms of the service. Until recently effective means of pursuing these goals had been lacking". During our debates it has become evident that in many situations it is cheaper to provide services outside hospital. For example, eye testing in a qualified optician's premises costs half what it would cost in a hospital. Moreover, the services of specialists in the eye clinic are increasingly focused on new therapies, transplants and laser treatments. If this is generally true then there should be a shift of diagnostic and treatment services from hospitals to secondary care centres and large group practices. The tradition of referring patients to hospital in many circumstances must change. Movement of staff of different categories must be made much easier and this would be so if there was a single authority. Anyone who has read the report of the Audit Commission on day surgery would realise that there are many surgical operations which could well be done outside hospitals in secondary care centres or practices where there are a few beds for overnight stay.

How do these proposals, if implemented, fit in with the service to patients proposed for hospital trusts and fund-holding practices? It seems that they would fit well with the second, but what of hospital trusts? It would seem more important to strengthen the supply side of the service. I originally welcomed the suggestion that hospital trusts should be created, but I now have some doubts. A more important thing to focus on in the first instance would be specialised aspects of the supply side. For example, the provision of special equipment and X-ray machines. Also I wonder whether it would be a natural reaction for the managers of a trust to try to preserve their hospitals' income and resources and therefore be reluctant to transfer specialist investigations or treatment to secondary care centres and practices. Having expressed my doubts, I seek the Minister's reassurance that my fears are unfounded.

6.1 p.m.

Baroness Fisher of Rednal

My Lords, I apologise to the House for arriving late in the debate. In fact, I have only just finished working in a committee upstairs. I should like to stress the secrecy which appertains throughout the National Health Service. As a result of the last reorganisation, we now have no local authority nominees on any of the boards. Therefore, we have businessmen elected to those boards. I always feel that the Government are very keen to talk about the businessmen, but they never even mention the businesswomen. Indeed, if one looks at the people who are appointed, I suppose that it will be seen that the majority of them are businessmen. However, we never know who these faceless people are. It is most difficult to find out. I enlisted the support of the Library which sent me a letter on the matter. It says: I am advised by the Department of Health, Regional Liaison division, that the best course for a member of the public wishing to ascertain the names of local health authority members would be to write directly to the authority concerned". Therefore, the fact that people are taking up public positions with no public accountability seems to me to suggest that there is no input from what we call the consumer or the patient. In other words, there is no way that we can get what we call a "direct consumer input" in the way that we used to when people were appointed who were not what we call "businessmen". These people are spending public money which is taxpayers' money, without any accountability; and, that type of accountability means that they are inaccessible to the general public.

The secrecy goes even further. I refer to the change in status for opting out. In a television programme last week, the Minister said, "I think that we are right this time". Of course, they thought that they were right about the community charge and about the testing of children at the age of seven. Let us hope that they are not right this time. However, we are getting restrictions in speech, so we are in fact getting more secrecy. For example, a consultant employed by the West Midlands health authority was asked to speak at a public meeting. She spoke about opting out. She now finds herself being faced with a disciplinary charge and will most likely lose her job. There was also a tutor nurse who was working in the northern part of the country who had to go to an industrial tribunal. He lost his job because he spoke out about what he thought were bad conditions in the hospital in which he worked. The situation is getting to the stage where secrecy is part of the Government's programme to ensure that opting out takes place. We all know what opting out means: it is the first step to privatisation.

I remember quite clearly when we were discussing water. The first thing we discussed was the businessmen who would be serving on the water authority. That was before any form of privatisation took place. However, we know full well that those men were put there so that they were ready for the privatisation five years later. I feel sure that that is the Government's main aim at present. These people, whom I call "the secret people" are there, plotting their way for the final privatisation.

Perhaps I may now deal with the West Midlands. There is great secrecy taking place in that area on what they call the "QE site"—that is, the Queen Elizabeth site. It has already been planned that the maternity hospital, the accident hospital and the women's hospital should go on to the site, together with the psychiatric hospitals. There is also now the leaked document—which has not been contradicted—which states that a step forward to opting out will be taken in the near future. If that happens, it will be the largest medical complex in Europe. It will mean that people in one part of the city of Birmingham will be travelling anything up to 15 miles to reach the site. It must be realised that travelling 15 miles with a sick child will not be great fun. Despite all the promises from the chairman of the region that such things would not happen, we now find—notwithstanding public protest and the newspapers taking up the challenge—that the whole matter is becoming very secret and we do not know what is happening. That is not what one would call serving the consumer. Moreover, it is not what one would call having direct consultations with the public, which the Government are so fond of telling us always happen.

In the time that I have left, I should like to stress something which we all fail to consider when we are discussing efficiencies in hospitals. I believe that we fail —and my noble friend on the Front Bench is constantly drawing our attention to this fact—to recognise the strains and stresses which nurses who carry out such a valuable job inside our hospitals are under. They are under such strains and stresses because of modern medicine, and because people stay in hospital for a much shorter time. People who are very seriously ill now go into hospitals which do not cater for what we call the "convalescent period" whereby someone stays in the ward where he is better able to look after himself and can very often look after a fellow patient. Operations are now much more severe. That means that patients need constant nursing and quite obviously, more often than not, that means greater care, attention and, of course, greater stress because on so many of the wards the people who are there will perhaps not be alive within a few weeks. We fail to take notice of that fact. Wards should be better staffed than they were in the past because of the present situation.

In conclusion, I believe that we are forgetting that the real business of hospitals is caring for patients. We know that people do not go into hospital just because they want to enjoy themselves; they go there because they are in pain and because they are suffering from a complaint. Therefore, they need that care. I am not suggesting that we should waste money on that care. Indeed, we must spend it wisely and according to the needs of the various localities. Of course, that will not be the same pattern in every health authority throughout Great Britain.

6.9 p.m.

Lord McColl of Dulwich

My Lords, I too congratulate the noble Lord, Lord Harmsworth, on his splendid speech. We hope that there are many more to come.

I always enjoy attending debates on the NHS because; I sometimes feel that I am hearing about life on another planet. I have just completed nine hours operating at Guy's Hospital, and after the debate I shall operate for another three or four hours. Perhaps I can assure your Lordships that Guy's Hospital is alive and doing extremely well and that the patients are happy, despite all the unscrupulous propaganda we hear.

A debate has been going on for over 100 years about the closure of beds and hospitals in London. In the 1970s, two important principles were introduced into the NHS with the agreement of all the political parties. The first was the introduction of cash limits into the. hospital service for the first time; and the second was the report of the Resource Allocation Working Party (RAWP) whereby resources would be more fairly distributed throughout the country, which inevitably meant less money for London hospitals. That was a fair and just policy because the population of central London had declined and had increased in the rest of the country. Understandably, it was an unpopular policy with London hospitals. They did not call it RAWP; they called it something else.

In addition to the problems caused by imposing cash limits and moving resources out of London, several other pressures were at work: the reasonable and legitimate drive to reduce the number of hours worked by the junior hospital staff and to have them working rotas which were no more arduous than one in three. There was the need to concentrate high technology in one or two appropriate hospitals in each district, and not to have it on every street corner. In some district health authorities there are as many as 11 hospitals. Clearly, all 11 cannot have high technology. It is needed in one only.

Given the fact that there was that remarkable political agreement on all those objectives, how can we achieve them, bearing in mind that 70 per cent. of the hospital budget is used on salaries? I am afraid that there is only one solution. There is one way only to achieve those objectives, and that is by reducing the number of staff and closing some London hospitals. The inevitable closure of beds and hospitals in London has always been distressing, but it has been made much worse and much more distressing by some unscrupulous politicians who have tried to make a cheap, short-term political gain out of other people's distress.

Guy's and Lewisham Hospitals' deficit this year is due partly to the fact that we worked too hard last year. The crazy way NHS finances are run means that if we work harder, we are penalised. We are not surprised that everyone is in favour of the Government reform which will allow money to follow patients so that the disincentive to work hard is removed. A further part of the deficit is due to the new system of nurse training which will be introduced nationally at the end of the century. The worst part of the increasing deficit was caused by self-inflicted wounds. The previous Administration employed more and more people instead of using the money wisely to treat patients and repair the fabric of the buildings. We now need to make up for that lack of maintenance.

We have heard a great deal about needing an army of accountants to put the reforms into effect. If one returns to 1974, Guy's Hospital finance department employed 30 people. In four years, that number had increased to 90. To be fair to the staff, none had any financial qualifications or was paid adequately. Many of them were bored to tears and felt demeaned because they had enough insight to know that they did not have a proper job. A few years after that, the number increased to 205—none of whom had any financial qualifications.

The good news now is that Guy's has a revolutionary form of management. It started six weeks ago. The revolutionary aspect of the management is that it makes decisions quickly and implements them without further ado. In planning to reduce the number of staff at Guy's, it is doing what we suggested 11 years ago. In the past, there were no mysteries in the NHS, only mysterious people.

We have heard a great deal of criticism of the trusts. It is said wrongly that the trusts are concerned only with profitable services and not with the needs of the local population and disadvantaged groups such as the elderly and handicapped. That is untrue. The Guy's and Lewisham trusts are reviewing every service and asking fundamental questions such as: is this service of a high quality? Is it relevant to the needs of our local population? How cost-effective is it? Are there some people who could do the job better? How relevant is the work to the needs of teaching and research? Not only are we asking those questions of ourselves, we are actively seeking the views of the local population, local general practitioners, the local community health councils and other community interests. After all that activity, we shall set out what the trusts' future should be. We shall be driven by the vision of producing for our local community the most relevant hospital and community services to match the needs and expectations for the next 10 or 20 years, and at a cost that is affordable by the taxpayer.

In the past, too much reliance has been placed on giving hospital staff jobs for life. That has been an excuse for not paying them properly. No one worth his salt needs a job for life. The labourers are worthy of their hire.

In conclusion, I should like to quote the chief executive of the West Lambeth Health Authority, a former nurse and general manager, and incidentally a member of the Labour Party. He said: For Labour to suggest that the old style district health authorities provided a sound basis for the management of the NHS is spurious to say the least. Decisions prior to the reforms were arrived at by a process of those who screamed the loudest"— I wonder to whom he is referring— and we have all witnessed various displays of shroud-waving. This was not a rational way of making difficult decisions and perhaps the key benefit from the NHS reforms will be the evolution of a system that will lead to rational and informed debate about how and why we use precious resources in our NHS".

6.18 p.m.

Lord Kirkhill

My Lords, in the hope that your Lordships may not be too disconcerted and even, in truth, if some are, I intend to direct attention to at least part of the position as it obtains in Scotland and more specifically as it obtains in Grampian region and especially the city of Aberdeen, which is my home town and where I live. I shall refer to Foresterhill Hospital, Aberdeen. In Scotland we are about one year behind England in relation to possible trust status. There are two proposals at the moment, one at Ayr and the other at Foresterhill.

The present situation was briefly touched on by my noble friend Lord Ennals and the noble Lord, Lord Hunter of Newington. On 1st April throughout the health service the concept of an internal market was introduced—without, I consider, adequate consultation. Health boards are now district managed units, each consisting of a group of hospitals and services, usually geographically or specialty determined. The restructuring is based mainly on the work of Professor Enthoven, a distinguished American professor of health economics, which I do not dispute. In my view, it is an untried and untested experiment. I believe that it is likely to fail, basically because I hold to the position that hospitals are not supermarkets.

The health service has developed somewhat differently in Scotland, partly because of geography, but far more for historical, social and political reasons. I think it is generally accepted in the medical profession that the service is better. This is particularly true of the Grampian region which heads most tables for efficiency, economy and so on.

The consequences are that opting out at Foresterhill will be easier financially than, say, for Guy's because the financial basis at Foresterhill is rather more sound. I believe that the main, immediate result of opting out will therefore be that the carefully integrated service built up over the past 40 years will be disastrously fragmented. This untested, experimental form of management will have enormous power over patients, GPs and hospital staff. Instead of doctors co-operating, different units will be expected to compete. Since the trust must remain solvent, economy instead of quality will be the decisive factor. That is why in Aberdeen the senior doctors, junior doctors, nursing staff and all ancillary staff have made public their opposition to opting out.

Many members of the medical staff at Aberdeen genuinely fear the possible development of a two-tier system. They cite as an example of their reservations the proposal that a division of acute services should take place; that is, trust status at Foresterhill for the acute services but non-trust status for acute services, including psychiatry, geriatrics and so on, at Woodend hospital in Aberdeen. That is the beginning. Despite what people may say—other areas may be different—there is the beginning, at least in Aberdeen, of the possibility of a two-tier system coming into operation.

One of the declared intentions of trust status is to increase patient choice. But if health boards as purchasers have to make contracts with trusts for services, then GPs will be denied the freedom to refer patients outside those contracts. Professor Enthoven has stated that one of the defects of his scheme is the decrease in patient choice. That has already been admitted by one or two of the English hospitals which have opted out. There are also great fears that in a constricted financial climate, teaching and research will suffer. That is the experience of American hospitals which run on similar lines. Every other consideration is ignored when financial viability is made paramount.

One other fact not usually given sufficient consideration but significant for the future running of the service is the attitude of the staff. It is not merely that the medical staff, especially the consultants, can disrupt any imposed system simply by being less than enthusiastic in the execution of the detailed administration necessary. It is no accident that Grampian is considered to have the most efficient and cheapest service in Scotland. Some would say that it is a model of how the National Health Service should work. Over the past 40 years all grades of staff have worked in true co-operation. Why should this be so? I believe that in a trust status management would have to consider the possibilities of financial implications that had not been truly costed. Morale might begin to crumble. I merely pose that as a proposition. If it were to happen, it would be called lowering morale. But it would be tragic if the working spirit of a largely whole time service were lost. It may never be replaced.

A number of senior doctors working in Aberdeen today are from England. That is because there is little private practice in the Aberdeen area. The National Health Service works as it should whereas, in certain parts of England, it provides such a poor service that private practice is almost a necessity. I concede that point. A trust situation could bring about its most tragic effect of all in the Grampian health region as well as many other parts of Great Britain.

6.21 p.m.

Lord Nugent of Guildford

My Lords, at a time when the noble Lord, Lord Ennals, is attacking Her Majesty's Government for sabotaging the National Health Service, I thought it would be apposite to recall the origin of the health service organised after the White Paper incorporating the Beveridge Report in November 1942, Social Insurance and Allied Services. On page 11 of the report, which I have in my hand, it is laid down in paragraph XI that: Medical treatment covering all requirements will be provided for all citizens by a National Health Service organised under the Health Departments and post-medical rehabilitation treatment will be provided for all persons capable of profiting by it". The White Paper was adopted by the National Government of the day, led by Winston Churchill. A major part of the Government was, of course, Conservative. In 1948, when the Labour Government enacted in legislative form the health service, the Conservative Opposition did not, as is generally thought, oppose it. They moved a Reasoned Amendment. That may have been foolish because it has always been misunderstood.

However, we can declare today that our part in the parentage of the National Health Service continues to be as firm as ever. The current reforms are designed solely to improve the service for patients within the national resources available. The present expenditure on the health service, at 50 per cent. in real terms above the 1979 level, indicates that the Government are giving the National Health Service top priority and will continue to do so.

The National Health Service trust hospitals are under fire for creating a two-tier health system. I believe that that is totally unfounded. A hospital becoming a self-governing National Health Service trust will start by introducing resource management initiatives to the hospital which will so strengthen the management that the hospital can produce a reliable budget covering its whole operation. The important point was made by my noble friend Lord Harmsworth about information technology playing a large part in it. This will then be the basis for the hospital's finance for the coming year instead of the present theoretical formula which is now used.

At present, most active enterprising hospitals run out of money every year and are obliged to cut down activity and close beds in the latter part of the year, as my noble friend Lord McColl mentioned. However, the slow-coach hospitals end the year with an unspent financial surplus. This wasteful anomaly will disappear and the more patients a hospital treats, the more finance it will receive. That will be one of the major benefits of the NHS trust hospitals. What could be a greater improvement than that? I hope that when my noble friend replies to the debate, she will say how the programme is progressing.

The accusation has been made that a two-tier health service is being created by the introduction of fund holding practices. Again I believe that accusation does not rest upon a reality. The critical attack rests on the assumption that within the National Health Service there is somewhere a mastermind which directs the needs of each patient to the right doctor at the right time to receive the right treatment. Nothing could be further from reality. In reality we know that there is a huge workforce of a million men and women. They work away doing the best they can for the continuous stream of patients coming in. They treat the next patient who comes to hand on a very haphazard basis. The total output of their labours is enormous. In-patients are up 25 per cent. on the total of 1979. The number of day patients has nearly doubled. Last year 7.5 million patients were treated. That is a wonderful total.

One of the sad aspects of the political struggle is that the wonderful achievements of the health service are so often forgotten. However, the figures I have referred to are a credit to the dedicated workforce. It is inevitable that some patients will receive treatment without delay while others may wait for months. The new concept of GP budget holding practices, when it becomes universal, will go a long way to correct this hit and miss system. I can give an indication of how the budget holding practices will work from an experience I had three years ago. The verger of my village church, an elderly lady, was in acute pain from her hip. The date of her operation was 12 months hence. I felt that I should help her and I asked some of my friends to join me in putting up the money for her to have immediate treatment in a private hospital. The lady's GP agreed to her seeing another consultant surgeon and to her entering a private hospital where I had booked a bed for her.

On examination the surgeon found that her condition was so far advanced as to amount to an emergency. She also suffered from a heart condition. The surgeon arranged to operate on her immediately under the NHS. Within a few days she entered hospital and the operation was successfully carried out. That is a simple example of what a GP budget holder, with cash in his pocket, will be able to do when catering for an urgent case. He may shop around with other consultants and he may shop around for a bed with other hospitals outside the district. Finally he may try a private hospital which is usually prepared, if it is undergoing a slack period and has empty beds, to cut its rates for the NHS.

Naturally, the first tranche of the 300 practices which opted for fund holding status are conferring a benefit on their patients. However, that situation is only temporary. It will disappear as G.P. fund holding practices spread across the whole country and all will be able to share in the benefits of making supply equal more closely demand. That is what it is all about. The accusation that the budget holding practices are creating a two-tier health service is sheer moonshine.

6.33 p.m.

Lord Walton of Detchant

My Lords, I join with other speakers in congratulating the noble Lord, Lord Harmsworth, on his most erudite and enjoyable maiden speech. As I made clear in the debates on the health service Bill, I, unlike the noble Lord, Lord Ennals, and unlike the BMA, am not opposed in principle to the provision and establishment of hospital trusts nor to GP fund holding practices provided certain safeguards in their operation can be assured. I always enjoy listening to the sparkling and amusing erudition of the noble Lord, Lord McColl. However, I confess that there were occasions when listening to his speech—his description of that nirvana on the other side of the Thames—when I wondered whether I was living on a different planet from the one the noble Lord occupies.

The problem is that the safeguards we all seek are not in place and are not as yet fully operative. Hospital referrals by GPs are in danger of ossifying. Patients who in the past have been referred as of custom and of right to certain hospitals distant from their homes are now being told by certain general practitioners that they cannot go to those hospitals either because of managerial edict or because the fund holding practice cannot afford to send them there.

There is evidence of a 300 per cent. variation in costing for simple procedures as between different hospitals of comparable size and strength. Guy's may be shedding administrators but many other hospitals are having to recruit large numbers of additional accountants to work out the costing systems they have not been able to employ in the past. At the moment the administrative costs in the National Health Service are on average less than 6 per cent. of costs and in some of our hospitals they are as low as 4 per cent. That compares with 15 per cent. in the United States. My concern is that teaching hospitals are seen in many instances throughout the country to be losing out. Inevitably because of their teaching function for our future doctors and because of the research infrastructure that they are required to provide under the crumbling dual support system, they are more expensive to run than many local or regional hospitals.

Throughout the length and breadth of the country, and not just in trust hospitals, we hear of beds being closed, admissions being restricted and surgeons being restricted to one operating session a week. Recently the medical sub-committee of the Committee of Vice-Chancellors and Principals expressed grave concern about the effects upon the teaching of our medical students because in many teaching hospitals, and especially in London, there was a serious risk that because of reduced clinical facilities, standards would fall below the minimum standards required by the General Medical Council. Students can, of course, use regional hospitals more, and they will have to do so. Nevertheless, that concern is real and genuine. I am told that in one region no money was allocated in the regional budget for the post-graduate and vocational training of doctors. That is a clear responsibility of the region under the NHS legislation.

The Government agree with the profession that we need a consultant-led service and that many more consultants are needed. Report after report from the Royal colleges has shown that by a factor of two or three we have fewer consultants in virtually all specialties per unit of population than in any other developed country in the world. The director of R&D has recently issued his first press statement and the Secretary of State has agreed that we should move towards spending 1.5 per cent. of the NHS budget on research. That is excellent, but where will the additional money come from? We all agree that it is essential to cut the hours of work of our overstressed and overworked junior doctors, but again that will cost money.

I know that I shall be accused of producing tired old cliches and of producing the kind of argument that has been expanded recently—the noble Lord, Lord Ennals, mentioned this—by the National Association of Health Authorities and by the BMA. However, the fact remains that there is a money problem and this extent of underfunding is not an illusion. Many of the reforms are invaluable, but despite those reforms there is evidence that the Government's major increases in funding, from a very inadequate base, have never kept pace with inflation and have never fully supplemented salary increases which are much needed by NHS staff. My own secretary has worked with me for 32 years. She rose through the grades of shorthand typist and personal secretary and is now at the top of the general administration grade in the NHS. However, she is paid less than £11,000 per annum. Is it right that we should have exploited—as I believe we have—many dedicated members of staff by having such low salaries in the NHS? The nurses have been helped and I commend that as a major and important contribution to the NHS.

Health is a problem in which we are all concerned. The people who are drawing attention to the present state of the National Health Service and to the need for additional funds, however they are raised, whether by an index-linked income related health tax or some other mechanism, are not Left-wing demagogues. They are extremely responsible anxious people. There is a tide of mounting anxiety and concern about the present situation of our much cherished National Health Service among doctors, and among other health care professionals the length and breadth of this country, shared not just by the BMA but by the royal colleges and by the health authorities themselves.

I simply ask and implore the Government to take note of this concern and to pause, to assess the effects of their reforms, to work out the way in which they are being applied, to examine the mechanisms that are being used throughout the country, and then to act on the evidence that is presented to them.

Lord Cavendish of Furness

My Lords, before my noble friend rises, may I remind the House that we have spent four-and-a-half minutes too long on this debate. Perhaps noble Lords will keep within the seven minutes for the rest of the debate.

6.41 p.m.

Lord Skelmersdale

My Lords, with what a very fluent and very negative speech the noble Lord, Lord Ennals, opened this debate! All he was asking for was no more National Health Service trusts until after a general election. I heard no solutions to the undoubted problems of the health service which the noble Lord, Lord Walton, for example, and many others of your Lordships have mentioned. What a contrast then was the speech of my noble friend Lord Nugent; full of the solutions that this Government have up and running and the successes of the health service.

In emergency, we have the best health service that it is possible to devise, free at the point of use, speedy, medically superb. I believe that there is no criticism anywhere in the House of its emergency actions. What this debate is surely about is the vast mass of the operations of the health service, elective surgery and the activities of general practitioners; and, of course, how we fund that great behemoth which in Europe is second only in the number of its employees to the Russian Army.

Small wonder that this has become a matter of great debate politically, not only in tomorrow's by-election—is that, incidentally, why we are having this debate squeezed in today?—but in the general election which is to follow, because nothing better epitomises the great divide in British politics than the "nanny knows best" brigade of the opposition and the "let my people free" position of the Conservative party.

I was privileged to be a junior Minister in the department in 1987, very close to the beginning of the health service reforms. With the illness of my right honourable friend the then Secretary of State I was catapulted into rather more involvement with policy in this area than I expected. The Government had recognised some time earlier that all was not well with the National Health Service. The bethemoth had not changed with the times and, despite the management reforms proposed by my noble friend Lord Griffiths which were in place, it simply was not delivering the health care that it was capable of in an even way across the country.

Recognising a problem is one thing, producing an answer is quite another. In many quarters of the medical profession we were told that if we produced more money all would be well. But we had been, and did, and in 1987 found rather more than £1 billion extra over and above inflation for the National Health Service. The behemoth took a gulp, swallowed this vast dollop of cash, the inequalities continued and the great giant came up for more. Yes, I agree with all those who have been calling for more money for the health service—it is always needed for the health service and always will be—but this Government have done a remarkable job in producing what noble Lords who understand about racing would no doubt call a "treble".

Since 1979 the health service has received just over half as much again, after allowing for inflation, as it did then. The public sector debt has been almost cut in half, saving over £2½ billion a year in interest charges alone—money which could well be, and for all I know is, being put into the health service. Moreover, income tax has been cut from 33 per cent. to 25 per cent. Those are undeniable facts. All we have from the Labour Party is a promise—if I have it right and, of course, should it be elected—to give an unspecified extra sum if, and only if, over the lifetime of the next Parliament the economy grows. But I am getting side-tracked.

My noble friends gave, and will give, plenty of details about what is misunderstood about the reforms. My point is that these reforms came from thinking people within the health service itself, all of whom when given the opportunity came to my colleagues and myself with their remedies based on their experience. The House would do well to ponder long and hard over the excellent maiden speech of my noble friend Lord Harmsworth. One of these experts—my late and much lamented noble friend Lord Trafford—was, as we remember, for a short period a health Minister. I have no doubt that another of my experienced and noble friends will do likewise very soon.

The noble Lord, Lord Ennals, likes to sneer at self-governing hospitals: opted out, he calls them. I challenge him by asking what he thinks the great hospitals which became the special health authorities—the Maudsley, the Hammersmith, the Brompton and so on—were under his tenure of office but a form of self-governing hospital. Did they ever opt out of the NHS? Of course they did not. But it is true to say that they were bound by all sorts of petty restrictions and even had a special department in the Department of Health to look after them. There was a lot of freedom but not nearly as much as they needed.

Self-governing hospitals have evolved from that experience. They are being properly and locally managed for the first time in the history of the National Health Service. Some of them are finding that they have too many employees. What is new in that? Between 1986 and 1991 Barts has increased the number of patients being treated while at the same time cutting 1,000 jobs. It certainly was not a self-governing hospital during that time.

Next I turn to what I call self-governing GPs; those doctors' practices who have successfully applied to hold their own budgets and to use them as they see fit for the benefit of their patients. It is said that that, more than anything else, will lead to a two-tier health service. For emergency work that cannot happen. GP contracts with hospitals apply only to non-emergency work so no patient will be worse off.

However, having consulted the patient a doctor can, and I hope will, refuse to enter into a contract with a hospital which cannot deliver in elective surgery terms what is required. If the patient is prepared to have her varicose veins or whatever treated rather further away from home instead of waiting another six months in pain and possibly fear, why not? That is her choice. She should be allowed to exercise it and by doing so we shall see a levelling up, as my noble friend Lord McColl said. Hospital A will be concerned to see that it performs as well as hospital B; otherwise it simply will not get the contracts. That is what has been lacking in the National Health Service to date. If that is what the noble Lord, Lord Ennals, calls facing the real world, I am all for it.

In conclusion, I leave the House with this thought. If the health service reforms are so bad, why did I, intrinsically involved as I have been over the past four years, come home last weekend, open my post and discover an invitation to open a doctor's surgery?

6.48 p.m.

Lord Pitt of Hampstead

My Lords, I was looking at the television a few days ago and saw Mrs. Thatcher who was boasting about these health service reforms and comparing them to the community charge and the Government's policy on housing. I thought that was very interesting, because we all know about the community charge; and I certainly know, from my days as chairman of Shelter, that as a result of the Government's housing policy we have had the largest amount of homelessness that this country has ever known.

I just wondered about that in relation to the National Health Service, because in 1986 there were 876,000 patients on waiting lists; in 1990 there were 959,000; and yet in 1990 3,250 NHS beds were permanently closed and 4,400 were temporarily closed for financial reasons. Yet we are told, and the Prime Minister certainly insists on it, that the problems of the NHS are not those of insufficient resources, but are those of organisation. We have heard that already again tonight.

The Government, having come to that conclusion, have introduced their NHS reforms which will make the situation worse. I find it difficult to understand. I hear from commentators on both sides of the Atlantic that the effect of the NHS reforms will be to make British medicine more like that practised in America. I find that difficult to take. I find it difficult to understand why we should wish to emulate a system in which, although one in five Americans receives little or no medical care, the United States pays three times as much on health care as the United Kingdom. I cannot understand why intelligent people want to emulate that system. Moreover, an American doctor is reported to have said: In the USA, doctors are paid to do more. In England they are paid to do less. I feel safer in England". American doctors who know both systems agree that the NHS has strengths which most informed Americans admire. The system is fairer, everyone gets a doctor free of charge and nearly everyone stands in the same queue.

The NHS now spends little on administration. The noble Lord, Lord Walton, referred to the increase in administrative costs that will follow the internal market. The Government continue to claim, as did the noble Lord, Lord Skelmersdale, that we shall not have a two-tier service; but if some GPs have budgets and others have to rely on contracts made with the district health authority, it is a two-tier service. The doctor's duty is to do the best for his patient. If he is a budget holder, he seeks the best value for the money that he spends. That value is not necessarily the best if it is the cheapest. On occasion he may be prepared to pay a great deal more in order to have the patient treated more quickly. The GP who does not have that budget does not have that lever.

There is therefore no point in saying that it is not a two-tier service. It is a two-tier service. There are two different methods. As your Lordships may remember, I once said in this Chamber that, if the reforms come into play, it is the GPs' duty to become budget holders. They will then have the best means of helping their patients. I was pleased to hear that the noble Lord, Lord Nugent, recognises that point and accepts that it is so at the moment, but it will not be so when all GPs are budget holders. The same holds good for the hospital service. It will only be a one-tier service when either all hospitals opt out or none of them does. One needs to face the issue squarely.

The noble Lord, Lord Skelmersdale, mentioned the question of under-funding. That is still the main issue. We spend a smaller percentage of our GDP on health than any comparable country. One per cent. of our GDP would be £5.4 billion at current market prices. The BMA has asked the Government to put £6 billion more into the National Health Service which would mean increasing our GDP by 1.1 per cent. That still keeps us very much below France and Germany and, as I said earlier, far below the United States. I hope that the BMA will meet the Prime Minister soon. I hope that he will then agree that the service is under-funded and that he will increase funding and agree to delay the developments regarding the NHS trusts until there is a proper review of those hospitals that have opted out.

6.54 p.m.

Baroness Cumberlege

My Lords, I should like to thank the noble Lord, Lord Ennals, for initiating another debate, and we have had the opportunity tonight to hear the excellent maiden speech of the noble Lord, Lord Harmsworth. It also gives me an opportunity to report on the first returns from the reforms in my region.

In South-West Thames region we have 13 district health authorities acting as commissioning agents; seven trusts that have been established since 1st April; and 22 GP fund-holding practices. I agree with my noble friend Lord Nugent that it is the GPs who are the shakers and the movers, setting a spanking pace in the new reforms. I find that very encouraging because I remember that just a year ago many of those GPs were threatening to resign from the National Health Service, but it is now the GP fund-holding practices which are spearheading the reforms. With surgical precision they are slicing through the red tape, challenging out-dated clinical practices and, I am sorry to say, the arrogance that is still around in NHS hospitals.

It is no good for hospitals, however great their pasts, to rest on their laurels. It is not their history or claims of excellence which will determine their futures, but delivery. That delivery must be based not only on up-dated clinical skills but on an awareness of changing social trends and people's expectations. One of the most beautiful liners that was ever built was the Queen Mary; but she became obsolete in the face of jumbo jets and Concorde. I fear that, if the great, proud flagship hospitals do not respond to changing needs, they too will sink without trace. I do not want that to happen.

In one of those hospitals a GP referral letter marked "Urgent" takes 17 days to process before the patient receives a date for his appointment. Fund-holding GPs in Wandsworth have rejected that poor service and have negotiated with a neighbouring trust hospital for every patient in an urgent case to be given an appointment in five days. That is not queue- barging; it is a tightening up of administration. Throughout the region, GP fund-holders are rejecting draughty, dingy, depressing out-patient departments in inaccessible hospitals. Instead, they are successfully negotiating with top-rate consultants to hold out-patient sessions in their own surgeries and health centres where we know patients feel much more comfortable and at ease in familiar surroundings. In Wandsworth, when patients request to have day case treatment and it is medically right, GPs stipulate that treatment must be on a day case basis. That is right. Who knows the person, the family, the home support, the living conditions—or the budgie!—better? Is it the family doctor or a hospital consultant? It is surprising that it is now not specialists but GPs who are driving forward day case surgery.

Before 1st April, Dr. Howard Freeman had to wait six months before a patient in need of psychotherapy received treatment. For people in a state of mental anguish or depression, six months is a long time. Today that patient can receive treatment tomorrow because the fund-holding practice has used its savings to employ a full-time psychotherapist and is about to employ a second with money saved from the practice. The GPs are setting local priorities locally so that they match the needs of the local people. Dr. Hughes, a GP in Merstham, has cut the waiting time for physiotherapy by a third. He has negotiated an agreement whereby East Surrey Hospital provides two sessions per week in his premises at no extra cost to the hospital Other practices are carrying out their own ECGs, so people with heart problems, anxious and in discomfort, learn the results immediately. I read recently that a fund-holding practice in Essex has negotiated with the Royal London Hospital Trust for a consultant cardiologist to see patients in his Harley Street rooms. That is fascinating. We hear a great deal about a two-tier service and such fears have been expressed tonight. However, that example represents a most remarkable erosion of the two-tier service, with NHS patients experiencing the comfort and luxury of Harley Street consulting rooms.

I have tried to give some examples tonight. If that constitutes a two-tier service, then I want that for everyone—I want every GP practice to become a fund holder.

I turn now to the trusts. Much has been said about loss of jobs. In Epsom the trust appointed a third additional ENT surgeon last week. Today it is advertising for a fourth, to work as and when needed. That is very interesting. It is also advertising for a second urology consultant. The St. Helier trust is taking on another 30 medical, paramedical and nursing staff to expand neonatal intensive care. Kingston Hospital Trust is developing a new initiative, a patient hotel. Its advertisement has attracted between 50 and 60 applicants keen to work in an NHS trust.

Noble Lords may think that car parking has little to do with health care, but in nearly every patient satisfaction survey it comes top of people's worries. Epsom trust has just built an additional 100 spaces, at 10 per cent. of the cost. Why? Because the chairman has mobilized local firms to co-operate and give generously.

The community trusts in my region tell a similar story. They rejoice in their new-found freedom. They are able to make minor building improvements, released from the beck and call of the district capital budget's annual squeeze. They can negotiate with confidence with other agencies, social services and the like, in the knowledge that what the board agrees is final. There is no buck-passing up the line, no delay and frustration as a perfectly good decision is questioned yet again. The Homewood trust in Chertsey has already introduced patient menu choice for the first time in a long-stay hospital. It has turned patients' eating areas from canteens to dining rooms and refurbished a bathroom and toilet area. It is about to introduce a ballet company to work with occupational therapists. I could go on and on, but I cannot because the time is running out.

I want to finish by saying that I know that I have given a surfeit of war stories. I have tried to be specific, but what I cannot convey is the spirit in those trusts. It has to be experienced to be believed—the excitement, the innovation, the energy, and above all the teamwork. I shall make an offer to the noble Lord, Lord Ennals an offer that he cannot refuse. That is, come with me, out on manoeuvres, to experience the new NHS, witness what is happening, meet the people and above all, talk to the patients. I promise him that it will be more exciting and more rewarding than a trip to the Bahamas. I hope that he will come with me.

7.2 p.m.

Lord Rea

My Lords, my speech will have to be decimated because of the lack of time, and it will need to be further decimated because I need to say a few words in answer to the noble Baroness who has just spoken. I speak as a GP who is not a fund holder. I am able to say that in our practice we already have a great many of the advantages which she attaches to fund-holding practices. We can carry out electrocardiographs on the premises. We have a psychotherapy service. It is not possible to provide those services only if one is a GP fund holder.

I had intended to say a little about the GP contract, which is claimed as a success by the Government because a high percentage of targets have been achieved. However, the Government do not realise that many GPs in inner city areas are finding it quite impossible to hit those targets because of the high mobility of the population.

In a recent speech to the Royal College of General Practitioners the Secretary of State did not wax lyrical about the success of the contract. Instead he said that in July he might be able to make some changes in response to discussions that he had held. I hope that he will, and that the changes are beneficial. That would prove that he is a listening Minister. It is a pity that his predecessor did not listen in the first place.

This Government have said that they are very concerned about health promotion. I should like to ask the noble Baroness what is happening to the health promotion units. I do not mean health promotion via the Family Health Service Authorities in general practice, but the health promotion units which used to be part of district health authorities. They are now in limbo. They do not know whether they belong to the purchasing arm or the providing arm of health authorities. I have heard that many of them are very worried about their future. Can the noble Baroness say that that matter is receiving early departmental consideration?

The matter is of some urgency because budgets have to be fixed now and many of the units are not sure whether the local health authorities will buy their services. I believe that they should be linked into the purchaser side of health authorities because of their traditional and vital link with the practice of public health.

It could be said that the difficulties in the early stages of the operation of the National Health Service and Community Care Act are teething troubles. However, as a GP with a great deal of experience of paediatrics I have learnt that so-called teething problems in babies are seldom due to erupting teeth. In nearly every case the explanation is an infection, major or minor, which is affecting the child's whole body and making it uncomfortable. Luckily babies have immune systems which in 95 per cent. of cases put the matter to rights quite rapidly. I am not so sure —are other noble Lords?—that we can say the same of the National Health Service and its problems. The new NHS Act has suppressed the immune system of the NHS by removing its democratic accountability at all levels and replacing most non-executive members with appointees who may know a lot about business and accountancy but less about health matters.

Other damage has been done to the body of that hardworking beast of burden, the NHS. I do not need to go into details because other noble Lords have brought them forward. I shall make only one point about GP fund holders. It must surely be unjust that a patient can obtain an earlier appointment or admission simply because he is registered with a GP who has become a budget holder. It is difficult for a patient to transfer to a doctor with a budget. For one thing his practice may have a monopoly in an area or the patient may live in a different area. Believe me, that is true.

To conclude—and I shall end a little before my time is up in order to make life easier for everybody—perhaps I may make a plea. While we are so uncertain of the effects of general practice fund holding and hospital trusts, can there not be a moratorium, as my noble friend has asked, before new ones are created? Last year in this House we failed to persuade the Government to agree to a full scientific evaluation of the proposed changes to the National Health Service. The Government were much too keen to press ahead countrywide. Now we have a second opportunity to evaluate those trusts and GP fund holders in the first wave. It may be that they will be shown to work on one tier, or on two. Maybe they will not work. I urge a slogan, which I borrow from the American Revolution: "No Proliferation without Evaluation". Let us try to assess the effect of the major operation already carried out on the body of the National Health Service before we subject it to further surgery.

7.8 p.m.

Baroness Seccombe

My Lords, I, too, thank the noble Lord, Lord Ennals, for initiating this debate and giving us the opportunity to consider the state of the National Health Service, a service which we all care for so much.

This Government have an excellent record on the health service. Overall spending is up from £8 billion in 1978–79 to £32 billion this current year—an increase of over 50 per cent. in real terms. The average family of four now spends £44 a week on the NHS compared with £11 in 1978. During those 12 years we have seen the largest building programme in the history of the NHS. Five hundred hospital schemes, each costing over £1 million, have been completed and another 400 are at various stages of completion. All that has meant significant increases in patient care. Over 30,000 more patients are treated every week in the health service hospitals than in 1978. I hope that noble Lords will forgive me if I repeat that figure because I believe it is truly incredible—an extra 30,000 more patients are treated each week.

Over the 12 years as both resources and medical knowledge have increased, there have been considerable improvements in the range of treatments to patients. Transplant surgery is now much more common. We have more patients with a successful kidney transport in this country than in any other European country.

There have been some important developments affecting our children. The infant mortality rates have almost halved since 1978. Damaged heart valves can now be repaired or even replaced. That means that many babies born with heart defects, whose chances of survival only 10 or 20 years ago were very slim, are now able to receive life saving treatment.

In many areas we lead the field. For example, we are the first country in the European Community to have a nationwide call and recall scheme for both breast and cervical cancer screening. All eligible women between 50 and 64 will have been invited for screening by the end of next year.

Such measures help to make the NHS a health service rather than a sickness service and so fulfil the vision of its founders. So too does all the preventive medicine provided for our children. An increasing number of them are now protected against diphtheria, tetanus, polio and whooping cough. Four out of five GPs have reached their immunisation and vaccination targets.

The NHS is in a good state—a very good state. As medical research pushes forward the frontiers of knowledge and makes yesterday's miracle operation today's routine operation, naturally the NHS requires more resources. Patients, quite rightly, expect the best possible service from it. But they want the NHS to be tailored to their needs, and not to have to adapt themselves to what it offers. The Government are spending, and will continue to spend, a lot on the health service. However, resources are not infinite. The very real demands and needs mean that the best possible use must be made of every pound put into it so that the maximum amount of money is targeted into its real objective— patient care— and the minimum amount possible sidetracked into administration and bureaucracy.

Those are the objectives behind the new NHS trusts. Prime among the criteria which must be fulfilled before a trust can be set up, is increased benefits and improved quality of service for patients. The trusts will be opting out of the bureaucracy and opting into a closer relationship with the local community and a greater awareness of its needs.

A host of benefits is already appearing from the 57 hospitals and units which have been established as trusts. Those benefits include specific commitments to reduce waiting times; expanded clinical services and new specialty units; opening hours which reflect the needs of working people; and closer co-operation with GPs. Those factors all reflect more concern for the patients.

The nature of the health service reforms means that for the first time hospitals can look ahead knowing what services are required and the budget that is available to meet them. That may mean some tough decisions— about jobs, for example— but they will be taken in the context of long-term management and not as panic measures. The whole perspective of the health service will be changing to concentrate on the needs of the patients.

As I aid earlier, the National Health Service is in good shape. The newly formed trusts and other reforms will make it even better. It is a service which we cherish and one whose benefits we must all work to maintain and enhance.

7.15 p.m.

The Countess of Mar

My Lords, like many others, I am saddened that the National Health Service has once again become a party political football. What must the current furore have done to the morale of patients and NHS staff? Patients must feel particularly let down. After all, the White Paper which led to all the recent changes was subtitled, Working for Patients. Those who are fortunate enough to have a fund-holding GP may feel secure in the knowledge that their GP will be able to purchase a superior service for them. After all, was not the introduction of trusts and fund holding intended to streamline the provision of health care? Those who remain with non-fund-holding GPs may not feel quite so secure.

Many of us may be reluctant to admit it, but we all know that money talks. In all walks of life an individual who has, as they say, "the cash up front" can purchase for himself or herself a better quality of goods and services. Until recently that was not the case with the NHS. All patients were treated according to the priority of their clinical condition and not because they had more money or were more important than another patient. Now, true to the philosophy of the present Administration, it is money which counts and not necessarily the patient. Those patients who cannot afford to purchase private medical treatment will, if they have any sense, wish to join the practice of a fund-holding GP so that they can obtain priority over other NHS patients. They are not necessarily greedy or selfish. Anyone who is sick or in pain will naturally wish to take the quickest route to recovery.

No matter what opinion we may have of our own importance, I do not believe that when it comes to a question of physical or mental health anyone has the right to decree that one individual is more important or of greater value to society than another. There is but one question: is the condition of the patient such that he must be attended to immediately; or can he or she wait to be seen by a consultant and possibly for admission to hospital? Hitherto it has been well understood, both within and outside the service, that that is the basis upon which patients are dealt with.

Sadly, the introduction of trust hospitals and fund-holding GPs seems to be changing that practice. Every day there are fresh reports of incentives being given by hospitals to GPs, and by GPs to hospitals, to expedite the treatment of some patients, though I suspect that it is in a minority of cases only that money comes before the needs of the patient. I shall be grateful if the Minister will confirm that all NHS patients will be treated according to the urgency of their clinical need; and that the benefits which are expected to accrue to patients of fund-holding GPs who are treated in trust hospitals will apply to all other NHS patients.

I fully understand the desire for efficiency and the need for economy. When I worked for the NHS in the 1960s I was often appalled by the extravagance within the small hospital in which I worked. I was equally appalled by the enormous increase in administrative staff which occurred after the 1974 reorganisation, so graphically described by the noble Lord, Lord McColl of Dulwich. Administrators and clerks seemed to breed like rabbits. Much of the extravagance in the clinical area has been eliminated over the past 15 years. Indeed, some would say that the pendulum has swung too far in the direction of parsimony. There is no indication that such economy is applied generally to the administration of the NHS. Unless the current army of clerks and administrators is grossly under-employed at present, the new arrangements will surely set the rabbits off in another orgy of breeding. It will be a long time before all hospitals are in a position to do what is to be done at Guy's Hospital; and it can only mean that less money will be available for direct patient care.

I cannot resist quoting a letter published in the BMJ of 11th May 1991. It is from a Mr. Alan G. Cox. It states: South Western Regional Health Authority has proposed that a booked admissions system should be used for non-emergency surgery. The system's description as revolutionary presumably implies another spin of that old fashioned invention— the wheel. I cannot be the only consultant who has used such a system before. Mine ran successfully from 1970 onwards at Northwick Park Hospital. It was much appreciated by the patients and was adopted by my colleagues. With only occasional hiccups due to such crises as red alerts it lasted uninterruptedly until the upheaval of 1987ߝ8 when the cash crisis led to closures of beds which totally destroyed any planning of admissions and ruined my system. The hardware used was a series of hard backed exercise books, and the software could be described as ICCS + SK — standing for intracranial common sense plus surgical knowledge. I estimate that the total cost for the whole package over 20 years was about £12.50 in real terms". Perhaps some enterprising person in the noble Baroness's department will take a leave out of Mr. Cox's exercise books.

As patron of the Dispensing Doctors' Association I have a particular interest in the provision of health care for patients living in rural areas. Under the present arrangements doctors who practise in country areas feel disadvantaged and vulnerable. They are unlikely to be able to become fund holders at least for many years and therefore are unable to compete with their colleagues in urban areas. Their patients will have no choice but to attend the hospital which has a contract with their local health authority.

Some patients who live on the periphery of urban areas may be able to choose to register with a larger practice in order to benefit from the wide choice offered. This will leave rural GPs who, because of the static nature of their population unlike the constantly-moving population of inner-city GPs, are unable to increase the size of their lists. They have no option but to offer the most basic service as their incomes decline disproportionately. In the longer term, closure of rural surgeries may result, leaving patients in remote areas with the dubious choice of travelling long distances to reach urban practices or having no medical cover.

The current reliance upon numbers for incomes makes it very difficult for the rural GP to provide facilities for minor surgeries and clinics which would boost his income. While most country people have the stoicism to accept that, it would be unreasonable to expect them to forgo all services. It is essential that the dispensing income of rural GPs is maintained and that these practices remain viable. Will the Minister say what is being done to protect and promote services in rural areas? I realise that it may be difficult in the context of her speech, but perhaps she will write to me.

I wish to make one small point. Has the Minister read about the practice of the Yorkshire Health Authority? I have run out of time so I shall sit down.

7.23 p.m.

Baroness Eccles of Moulton

My Lords, I too congratulate my noble friend Lord Harmsworth on his most informative and interesting maiden speech. I thank the noble Lord, Lord Ennals, for initiating a debate on such an important subject. It gives me the opportunity to report on progress within a health authority which has a general hospital applying for trust status in the second wave.

A keystone to the reforms is the emphasis on assessing the health needs of the population in order that resources can then be deployed more efficiently. The purchaser— that is, the district health authority or the GP fund holder— works out where the priorities lie for the population and then places contracts with hospitals and other provider units accordingly. The health needs assessment will be underpinned by funding calculated on a weighted per capita basis. The previous method of allocating resources, based on funding existing facilities, was an imprecise science by comparison. As a result we now have a much tighter approach to matching needs with the resources available to meet them than has previously existed in the life of the NHS. That in itself gives meaning to the reforms.

It has been accepted and indeed welcomed in enough hospital clinical departments and GP practices that greater financial responsibility made possible by greater access to relevant information is not only workable but also effective. Do we really want to return to a time when the senior members of the profession are responsible only for clinical decisions, playing no part in the decisions about how the resources are allocated?

I was distressed by the suggestions that there should be a delay in progress towards second wave trusts. I do not fully understand the reasons for those suggestions. Such delay would be a great mistake. Ealing General Hospital has a challenging and exciting atmosphere that did not exist before it started down the trust road. Nurse managers on wards are taking a close interest in their business plans. They are evaluating the equipment used on the wards for cost effectiveness and are negotiating with doctors over the choice of the most appropriate supplies. They are taking a greater interest in how the nurse training budget is used and are discouraging staff from attending courses which are not connected with the patients for whom they care.

Doctors and managers are working closely together on a corporate strategy for all departments. No longer can one clinical department attempt to go it alone asking for what others might consider to be a disproportionate share of the funds. Such decisions are now shared and are taken by all the consultants and managers concerned. It is heartening to experience the spirit of enthusiasm and excitement at the prospect of being accepted as a trust hospital next April.

It is accepted that there will be a tough running-in period and that time will be needed to achieve all the standards wished for. However, those involved would appreciate support and encouragement from outside the service. When I see such enthusiasm and optimism I wonder whether the lack of enthusiasm in other places arises from a degree of conservatism and resistance to change which feeds on the anxieties that can surround a brave attempt at something new.

Perhaps the time has come when the NHS should cease to attract so much attention through party political debate. That gives rise to needless anxiety and concern among patients and staff. Of course the NHS will always be high on the political agenda. However, a bipartisan or non-partisan approach to a service which is free to all, which needs to make the best use of its resources, which is staffed by dedicated and hard working people doing a difficult and demanding job and, above all, which exists to heal, comfort and support the population, is the best way to serve the public.

I do not need to remind noble Lords that the new style health authorities have been in existence since last September. The new purchaser-provider funding arrangements came into effect in April and the first wave trusts were born at the same time. There will always be criticism of detail. But is it right to criticise attempts to achieve advances in the service as a whole? It is unhelpful and premature to keep saying that the reforms are not working. It is high time to give them a welcome and to give the service the opportunity to make them a success.

7.28 p.m.

Bareness Robson of Kiddington

My Lords, whenever we debate the National Health Service it is obvious that Members on all sides of the House have a great love for the service and wish to see it progress and improve. I wish that we could attempt to avoid the use of emotional terms. I hate the phrase "opting out". It is a n emotional phrase and it is the wrong terminology for what is happening. I equally dislike the claim that the new system is all about increased patient choice. That too is untrue. We must try to keep to logic and truth.

When I was in the position in which the noble Baroness, Lady Cumberlege, now finds herself, patient choice existed. It has always existed; every general practitioner could send his patients to any hospital. The problem was that the financial arrangements were wrong and the money did not follow the patient. The accounting and control of finances by the chairman of a London Thames region were more difficult than under the present system.

It has been said that there is choice as long as there are fund-holding practices. We agree that that is so. A fund-holding practice can choose. The problem is that we shall never achieve 100 per cent. fund-holding practices in this country. Some practices in rural areas are too small to become fund-holding practices. Those will always have to rely on whatever contracts the district health authority has made.

I know that district health authorities are setting aside certain contingency funds to cover the referrals from non-fund-holding general practitioners. However, those sums are a pittance. They will not cover more than two or three operations at a hospital. Apart from having to pay for that, the contingency sums will also be used for expensive drugs, and complications arising from treatment, and treatment for homeless patients. Therefore, there will be a tremendous call on those special contingency funds.

I believe also that we should consider, if we could achieve 100 per cent. fund-holding practices, the kind of administrative increase which would be necessary in every hospital. They would not have to make a contract only with a district health authority, but would have to make a separate contract with each fund-holding practice and that could turn out to be 40, 60 or 100. Therefore, that would increase administrative costs. I am not necessarily condemning it for that reason but we should bear it in mind.

What worries me most of all is a subject introduced by the noble Lord, Lord Walton of Detchant; that is, medical education. He referred to the medical committee of the Universities Funding Council which after meeting with the universities and NHS officers from every medical school in the country expressed anxiety that the new funding arrangements would make it more difficult for some teaching hospitals in larger conurbations to remain financially viable.

St. Mary's Hospital in central London has too few beds at present to allow students to follow two patients per week, which is the university's requirement. London is a very special, difficult problem because of its dwindling population. Therefore, we must realise that one or more of the university hospitals is expected to become insolvent and will probably disappear.

I am anxious because unless that is planned, that could happen in an arbitrary manner and not as a result of deliberate decisions to reduce the number in London. It could result in a number of the university hospitals becoming non-viable and functioning in a manner not conducive to good medical education.

A Coopers & Lybrand report was referred to by another noble Lord. That states: A number of hospitals could easily find themselves in this position and to some degree it would be a matter of chance which ones would be most seriously affected. It is not obvious that any closures forced would be the most appropriate". We should concentrate on that because unless we have and keep the wonderful medical education which we have in this country, the NHS will not be the same organisation.

I admit that there were many good features in the Government's original White Paper proposals. I have already welcomed the fact that money should follow the patient. I believe in devolving management to hospital level. However, that could have been carried out without the major reorganisation which has taken place. I join with those people who asked the Government not to go on with the next batch of hospital trusts. Could we not look on the present 56 trusts as the pilot scheme for which we asked, learn from that and then proceed in the future?

7.35 p.m.

Lord Carter

My Lords, the House is grateful to my noble friend Lord Ennals for tabling this Motion for debate. We have had a good debate with many notable speeches, none more notable than the maiden speech of the noble Lord, Lord Harmsworth, particularly as he kept to his allotted time.

Everybody is always concerned about the health service. The Government must be acutely aware by now of the accuracy of the dictum of Nye Bevan that the sound of a bedpan being dropped in a hospital ward resounds through the corridors of Westminster. The central problem of the health service was summed up only last week by Mrs. Virginia Bottomley, the Minister for Health, when she addressed a conference of the Office of Public Management. She said: We must accept that there is a limit to the number of major strategic changes which can be achieved at once. What is more, the impact of one change on another needs to be fully thought through and understood in the NHS. In that context, I remind your Lordships that this is the fourth major reorganisation of the health service conducted by Conservative governments.

It seems a pity that the Government are determined to ignore the wise words of Mrs. Bottomley. During the NHS reform Act the Government resisted all attempts to have a trial run of the reforms in one or two areas. They ignored independent advice regarding financial viability as regards the majority of the first wave of opted-out hospitals. They have made it clear that they are determined to press ahead with the next wave of opt-outs regardless of public opinion.

We have all heard about the situation at Guy's which was described by the noble Lord, Lord McColl. He pointed out all that has gone wrong in the past 11 years. I remind him of the nature of the Government who have been in power during that time. Last year a consultation document was issued regarding application for NHS trust status. It is 231 pages long, is glossy and says absolutely nothing about the underfunding crisis at Guy's and the possibility of job losses. Indeed, on page 91, dealing with staffing, it states: An attitude survey recently carried out in this District by Price Waterhouse identified a range of factors that influence our current ability to recruit and retain staff. As well as pay and conditions the survey identified:— Inadequate staffing levels". On finance it states: Throughout this District high priority has been given to the maintenance of tight budgetary control and cash management systems. Additionally, considerable efforts have been directed towards the introduction and maintenance of sound systems of financial control. As a result we have achieved clear external audit reports for the last three years". It goes on to state:

This District [of which the proposed Trust makes up 85 per cent.] has consistently remained within its budgets which are operated on an income and expenditure basis, and also within its cash limit". The sums were wrong by £8.3 million in eight months. If a commercial company had been so badly wrong the directors and auditors would be called to account under company law.

In that hospital, about which we heard so much from the noble Lord, Lord McColl, I understand that only this week seven patients spent the night on stretchers in casualty because there were no beds for them.

The problems are not only at Guy's. An internal market depends above all on accurate information. A consultant anaesthetist told me that the accountants in his authority are deliberately pricing procedures to fit pre-determined targets. When the calculated price appears to be too high it is arbitrarily reduced to make the hospital appear more competitive. I understand that that is common practice.

That is confirmed by a consultant cardiologist in a different district. He estimated a figure of £56,000 for consumables in his department. That was promptly reduced by the accountants, without any reference to him, to £26,000 because that was the figure which fitted the budget. The same consultant said that it is hoped that his department will be on line to the pricing computer by 1993. Until then, the pricing will be mainly guesswork.

We have heard a lot about the two-tier service. There cannot be a two-tier service for everybody as suggested by the noble Baroness, Lady Cumberlege. That is a contradiction in terms. There is anxiety about this possibility of GP budget holders receiving preferential treatment. That was confirmed in a curious way only last week by the Secretary of State, Mr. Waldegrave, when he addressed the Royal College of General Practitioners. He said, Fundholders are absolutely right, like any purchaser, to seek improvements in waiting times for their patients…Hence I would expect District Health Authorities to learn from the contracting successes of fundholders and vice versa. I must equally make clear that all contracting arrangements, whoever the purchaser, must be deliverable within the hospital environment and contain sufficient flexibility, for example, to ensure that urgent cases can be accorded proper priority". What are the successes of fund holders if they are not the improvement in waiting times for their patients— to use the words of the Secretary of State? If urgent cases are to be given proper priority then presumably the non-urgent cases will find their place in the queue depending on the budgetary arrangements of the general practitioners who send them. What is a non-urgent case? As the Guardian put it very brutally this morning, it means only that the patient will not die in a week.

What is the situation regarding non-contract referrals? I heard from a general practitioner in Warwickshire who said, A wheelchair-bound male pensioner from Luton came to stay for a short while with his daughter, who lives near here and is registered with a neighbouring practice. The pensioner developed a foot infection which needed to be dressed several times a week and my colleague arranged for the District Nursing Sister to visit the home for this purpose. She mentioned this matter to her Nurse Manager and was surprised to be told that in future she could not undertake such a task unless prior agreement had been obtained from the patient's home Health Authority that it would meet the costs". In a following letter the GP added: I have this morning verified the facts with the Nurse-Manager concerned and she confirms that this is what she has been given to understand by her superiors". I ask the Minister: how long is that pensioner supposed to wait to find out if his home health authority will meet the cost? Who will decide? Will it be a doctor or a bureaucrat?

A large part of the current problems in the health service come from the Government's insistence that health authorities should balance their budgets by 1st April, at a time when the global deficit is in the order of £110 million to £120 million. I repeat a question I have asked before in debates on the health service but to which I have never received an answer. Why were the Government able to write off billions of pounds worth of debt for the nationalised industries to prepare them for privatisation? They spent hundreds of millions of pounds on advertising fees for privatisation and found £4 billion to throw at the poll tax. However, they refuse to write off £110 million to £120 million of health authority debts; a refusal which led directly to bed closures, increased waiting times and all the other problems of which we are aware, apart from the problems which relate directly to the so-called reforms.

I conclude by reminding the House of the situation facing the Government in the health service. It is similar to their problems with the poll tax. Like the health service reforms, that was a deeply unpopular measure which was rammed through ignoring all advice. It wasted enormous sums on bureaucracy and, finally, was defeated by the sheer weight of public opposition.

7.43 p.m.

Baroness Hooper

My Lords, I am glad to have the opportunity to be able once again to confirm the Government's commitment to the National Health Service and to the ideal of free and comprehensive health care for all. I am glad also to add my words of congratulation to my noble friend Lord Harmsworth for saying that he was a fan of the National Health Service and for being so positive and constructive about it. Like my noble friend Lord Skelmersdale I believe i t is depressing to hear an opening speech such as that c f the noble Lord, Lord Ennals, who insists on suggesting that doom and gloom are the order of the day. I am glad that subsequent speakers went a long way to correcting that very erroneous impression.

The National Health Service is currently embarked on a vital period of change and development. But change does not equal crisis. It means modernising and revitalising a great public service to make it even better. My noble friend Lord Nugent gave us some helpful background about the early days of the National Health Service. It is important to keep that kind of perspective in mind when we look forward to what the National Health Service can achieve in the 1990s and beyond.

The Government's approach is based on three key factors. It is worth stating those at this stage. First, due to the growing number of elderly people, the further development of medical technology and the rising expectations of society at large, the demands on the health service continue to rise. Nevertheless, our record is hard to beat. As has been said, plans for this year will mean record expenditure of £32 billion; that is an increase of 51 per cent. in real terms since 1978ߝ79. There are now 15,000 more doctors and dentists and almost 68,000 more nurses than 10 years ago. I need not repeat all the other good news facts which were effectively quoted by my noble friend Lady Seccombe.

Secondly, to go with the extra money and more staff we need the right funding arrangements, the right management structures and the right incentives. That is what the reforms are all about. Thirdly, looking ahead, we are developing a strategy to improve further the health of the nation. I am sure that your Lordships will join me in welcoming the forthcoming publication of a consultative document setting out our proposals for such a strategy.

I am grateful to the noble Baroness, Lady Robson, for correcting everyone on the terminology used in relation to National Health Service trusts. They have perhaps been the main theme of the debate although a wide variety of other valuable points have been raised. The noble Baroness, Lady Fisher, began by saying that we all know what National Health Service trusts— she used the other word— are all about, and went on to show that she in fact knows nothing about what they are about. They are certainly not a first step to privatisation. The noble Lord, Lord Carter, who quoted the privatised industries and the writing off of debts, should take heart from the fact that we are not moving down the road to privatisation.

National Health Service trusts have an essential part to play in the new National Health Service. While remaining fully within the service, trusts are operationally independent. They have the power to make their own decisions without being subject to bureaucratic procedures, processes or pressures from higher tiers of management. We believe that trusts will be able to use their new powers and freedoms to achieve better, faster, decision making to the benefit of patients, the community and the staff. My noble friend Lord McColl, with his considerable personal experience, was able to illustrate that and the fact that that is already happening.

We are a mere six weeks into the reforms and already our volatile Opposition are urging us to change again. We will see changes; I have no doubt about that. But they will be evolutionary changes adapting to the reforms, not changes recklessly reacting to newspaper headlines. We stand by what we have always said, that the levelling-up process on which we embarked will not happen overnight. We shall be watching carefully the progress of the first trusts to ensure that the experience gained is available to subsequent starters. Therefore, I promise the noble Lord, Lord Hunter, that as trusts develop we will be following their progress in that way. However, we do not intend to slow down the process.

My noble friend Lady Eccles will welcome that, and I say to the noble Lord, Lord Kirkhill, that when he quoted Professor Enthoven he omitted the fact that the said professor made a subsequent visit to this country. He admitted that he was wrong in suggesting that we were going too fast and too quickly with the reforms. He said that he had the favourable impression that all was going extremely well.

Much has been said about the accountability of trusts. As with all parts of the National Health Service, trusts will continue to be called to account for the services they provide. They will be accountable in several ways: to my right honourable friend the Secretary of State and hence to Parliament for delivering their financial duties; to purchasers for the quality, form and quantity of services specified in their contracts; and to the general public who will have access to the trusts' annual reports and accounts and will be able to attend their annual general meetings.

Quite a lot of fuss was made about job reductions in specific National Health Service trusts. Indeed, the noble Lord, Lord Ennals, quoted a Guy's document citing inevitable reductions in direct patient care and giving the example of Dr. Levison's directorate. The leaked memorandum to which he referred is in fact based on out-of-date and invalid assumptions about the level of cuts in the pathology directorate. At present the trust is reviewing services with its purchasers and no decisions have been taken on possible service reductions.

As my right honourable friend the Secretary of State for Health has commented, and as borne out by my noble friend Lord McColl, the trust has inherited problems engendered by a bureaucratic system which produced first-class health care but, sad to say, second-rate management structures. Therefore they are now quite rightly organising their resources to meet the demands of purchasing health authorities as detailed by the contracts they enter into. It is blatantly untrue to suggest that trusts are putting profit before patients. They are simply ensuring that they are in a healthy financial state in order to respond to the priorities set by purchasers. Action to remove deficits and redeploy resources into services which purchasers identify as being of a high priority, is a sign of good management and an indication of future success of the reforms.

I quote in that regard the signs of developments and improvements in patient care within the National Health Service trusts that we are already seeing. One of the examples is the Rugby National Health Service Trust. New laser equipment has been introduced which for the first time allows surgeons there to perform major surgery with pinpoint accuracy and just keyhole incisions, thus speeding patients' recovery.

In the Kingston National Health Service Trust work has begun on a patient hotel where national Health Service patients who do not require full medical care, but who are not well enough to go home, can be looked after in a warm and caring environment. The Liverpool Cardio-Thoracic Centre plans to increase its number of beds by 37 per cent. and increase the staff complement by 66 whole-time equivalent posts. The East Gloucestershire National Health Service Trust plans to increase the number of consultants by six and to take on more nursing staff. That is all happening.

I now turn to the business plans. There has been a great number of calls for the publication of both National Health Service trust business plans and the publication of the independent assessments of Coopers & Lybrand Deloitte. Both the financial projections and the business plans have been prepared by trusts on the basis that they will be confidential between the trust, the management executive and my right honourable friend the Secretary of State.

Lord Ennals

My Lords, why?

Baroness Hooper

My Lords, they are working documents for the trusts' management. In them the trusts were encouraged to examine various options as to how they provide the services the purchasers required and how they would accommodate changes to patterns of service that purchasers might also require. As such, both documents can be said to represent the trust management's thinking in private in order that it can present a coherent strategy to purchasers and patients.

Lord Ennals

My Lords, that has been paid for by the taxpayer.

Baroness Hooper

My Lords, it is that strategy which the public want to know about. Furthermore, trust contracts themselves are public documents. Annual reports and accounts will be published. It is from these that the public will be able to see what services the trust intends to provide and how successful it has been in delivering them. In deciding which applicants to approve for trust status one of the criteria considered by my right honourable friend was whether the trust was financially viable. To that end Coopers & Lybrand Deloitte were commissioned to produce an independent assessment of each applicant's financial viability. The reports of their work were available to my right honourable friend when he made his decisions on which applications to approve. They were not audit reports, but management consultant reports. They naturally drew heavily on the financial projections I referred to a moment ago. Therefore, for the same reasons they too must remain confidential. They must also be confidential, like all such reports, so that the consultants are free to express frank opinions.

Nevertheless, I can tell the noble Lord, Lord Ennals, that the report actually said that there were few trusts which represented no or little financial risk. That is unsurprising. I am trying to respond to a point raised by the noble Lord, Lord Ennals. Few new enterprises start off with no risk attached to them. The report went on to say that only in a few cases were the risks of the magnitude that the application should be rejected. I trust that the noble Lord finds that reassuring.

My noble friend Lord Nugent asked specifically how the contracting process was proceeding. A number of other noble Lords raised queries about contracting. The new contract system was introduced on 1st April of this year so it is still only six weeks into practice. It is still in the early stages. But purchasers have successfully negotiated mainly block contracts with providers of health services. We have found already that even the simplest contract is a powerful tool. It defines quality and activity levels which can then be monitored and which provide a mechanism for bringing the health strategy to which I referred, and which has been generally welcomed by the medical profession, into effect.

Many questions have been asked about GP fund-holders. The GP fund-holding contracts represent something like 1 per cent. of the total contracting achieved by 1st April of this year. I believe it was the noble Lord, Lord Pitt, and the noble Countess, Lady Mar, who were concerned about a two-tier service with waiting time for treatment depending on whether the GP is a fund holder or not. The important factor is that the GP fund holders can now select the best provider unit for their patients not least on grounds of waiting time and quality of care. Fund holders can use the spare capacity of hospitals to provide extra services. They have also negotiated a range of improvements to services which providers can then extend to the patients of all practices.

GP fund holders are not preferentially funded to treat their patients. They pay prices calculated on the same basis as for any other potential purchaser. They look at the various provider units offering the treatments that they need to buy and contract with the ones which they believe offer the best service to their patients, not least in terms of quality of service and waiting time. That is simply a development of the GP's habitual role of comparing hospitals on such issues before referring patients. As regards any restrictions in a GP's freedom to refer, the district health authorities will secure contracts with hospitals which GPs and their patients have indicated that they prefer.

Inevitably some patients will need treatment at hospitals with which no contract is held. A reserve of uncommitted funds will be maintained by the district to pay for them. As my noble friend Lady Cumberlege said, G Ps are shakers and movers in all this. She gave some interesting examples to prove that, so I do not need to quote additional ones. The contracts of the district health authorities are based on wide consultation with all GPs, not just fund holders, and on the GPs' preferred referral patterns. These patterns follow patients' choice. Where referrals are made off-contract because of patient or GP choice, they will be funded as quickly as resources allow.

There has been an unprecedented level of consultation between districts and local GPs to achieve that. Generally speaking, considering the time availab12, the scheme has been an enormous success. Nevertheless, my right honourable friend the Secretary of State has said that we stand ready to modify I he GP fund-holding scheme in the light of the experience of the first wavers, of the views of experts, and the outcome of the pilot project we are conducting into the expansion of the scheme. It should be clearly understood that we are monitoring closely all these changes and developments.

The noble Lord, Lord Walton, and others, including the noble Baroness, Lady Robson, in particular, raised anxieties about teaching and research suffering because of cost. I reassure them by saying that the Government are firmly committed to sustaining medical education and research. Teaching hospitals will be protected by SIFTR programmes. Units will use the money to offset their costs so that they are not made uncompetitive through their support for teaching and research. Therefore, purchasing health authorities do not have to meet these costs.

It must be right that medical teaching should be shaped around service needs and not vice versa. As regards the quality of research and development, it will be for the district health authorities and the GP fund holders who are commissioning the services from providers to ensure that their residents receive the right quality of service and account for that in the contracts that they negotiate.

The noble Lord, Lord Walton, and other noble Lords, referred to the low levels of pay in the National Health Service. Greater flexibility in National Health Service pay is being introduced throughout the service. T rusts will be free to negotiate new contracts of employment with their staff enabling them to move away from national arrangements. Both these changes are a move away from the rigid centralised system of the 1970s under which local recruitment and retention problems could not be tackled. Such freedoms will allow performance to be rewarded.

I have not been able to answer each detailed question, for which I apologise. However, the noble Lord, Lord Walton, asked me to take note of the anxieties expressed. I shall certainly do that as long as, if I may say so, noble Lords opposite acknowledge all the progress, all the enthusiasm and all the good news too.

8 p.m.

Lord Ennals

My Lords, I am most grateful to all who have taken part in this debate. What was very refreshing and different from previous occasions is that we were able to hear from people with experience of the health service on both sides, all committed to the National Health Service but taking pretty opposed views in terms of the Motion before us. I thank all concerned. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.