NHS Private Finance Initiative: Scrutiny (Hansard, 13 May 1993)

§ The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege)
My Lords, the private finance initiative was announced by my right honourable friend the Chancellor of the Exchequer in the Autumn Statement. Use of private finance is encouraged where it gives the National Health Service best value for money. The Department of Health and the Treasury will continue to scrutinise business cases for large projects, while those for smaller ones will be scrutinised locally.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for her full and detailed Answer. Is she aware that Mr. Tom Sackville, a junior Minister who sits in another place, last month made a Statement in which he disclosed that hospitals would be free to negotiate with firms for deals worth up to £10 million without the need for Treasury approval? The present limit is £225,000. Is not that an enormous increase to set loose without scrutiny? Bearing in mind the recent announcement that the Secretary of State is negotiating with Tesco and Marks & Spencer—a company which does not provide basic toilet facilities or a changing room for mothers with babies in its stores—are we not entering into partnership with some extremely strange people?

§ Baroness Cumberlege
My Lords, the National Health Service has strict scrutiny of its finances in terms of the Audit Commission, the National Audit Office and internal auditors, which every hospital and health authority must have. The Tesco scheme to which the noble Lord refers has not yet been agreed. The limits have been reduced. Where a case being submitted is either novel or contentious, then the Treasury would want to have a say in it.

§ Lord Mancroft
My Lords, does my noble friend agree that the £225,000 limit on joint ventures between private companies and the health service was so small, on the basis that building costs are so expensive, that no private venture of any consequence ever took place? The result of increasing that limit to £10 million means that whole blocks of new capital from the private sector will be able to go into the health service. It will then be able to produce better funding and, as a result, infinitely better care for the patients who deserve it.

§ Baroness Cumberlege
My Lords, my noble friend is absolutely right. Even as a chairman I remember being extremely frustrated by certain schemes which would be good for the private sector, the National Health Service and patients but which were not able to go ahead. With the additional flexibility being introduced, £2.1 billion extra capital finance will be available to the National Health Service this year.

§ Baroness Robson of Kiddington
My Lords, can the Minister assure the House that, in the case of deals taking place—in order to obtain further capital for the health service—with companies like Tesco and Marks & Spencer in return for the right to build stores, the local planning authority will never be overridden on a question of planning for those stores?

§ Baroness Cumberlege
My Lords, those cases will be treated as any other. Where the local planning authority has jurisdiction I am sure that it will come to the right conclusions.

§ Lord Ennals
My Lords, bearing in mind that the Secretary of State is going to the private sector because of the crazy way in which resources have been used, does the noble Baroness agree that the new Chelsea and Westminster Hospital, which Her Majesty the Queen is visiting today, was the wrong hospital on the wrong site costing a grossly over-inflated sum of money—£100 million more than the estimate? That decision was taken against a much more viable plan, including retaining hospital services in the Westminster area, which was put together by an all-party group of Peers, of which I had the honour to be chairman. Is it because of that sort of absurd incompetence that the Ministry feels it must go to the private sector?

§ Baroness Cumberlege
No, my Lords. The new Chelsea and Westminster Hospital is a very, very wonderful hospital. It is one of the best in Europe. I believe that it will provide the services that are necessary. It has made savings in terms of the rationalisation of other hospitals that has taken place. We are immensely proud of it and I have no doubt that it will provide the first-class service for which it was built.

§ Lord Jenkins of Putney
My Lords, is the noble Baroness expecting the introduction of the private sector into the National Health Service to have similar beneficial effects to those of Group 4 in the prison service?

§ Baroness Cumberlege
My Lords, we cherish our patients. We hope that we are not careless with them. But this is not a new idea. We have been working with the private sector for many years. This is just introducing flexibility into the rules. Market testing produces £125 million every year. That is the equivalent of running two 500-bedded hospitals.

§ Baroness Jay of Paddington
My Lords, is the Minister aware that, in spite of the fact that the health service cherishes its patients, the present statements cannot be described simply as flexibility? Is she further aware that, in the light of some of the recent statements, the pledge of the Prime Minister at the 1991 Tory conference that, there will be no privatisation of health care, neither piecemeal, nor in part, nor as a whole, not today, not tomorrow, not ever while I am Prime Minister", now sounds very hollow? In that context, will she agree that, following the Questions of my noble friend Lord Dean both today and yesterday, it really is important that, if private companies are to be brought into the health care system, procedures for accountability are put in place before that private investment is made rather than, as we have seen in the Wessex debacle, in retrospect pulled out by the Public Accounts Committee and the National Audit Commission some time after the event?

§ Baroness Cumberlege
My Lords, this is certainly not privatisation. It is the use of private finance to aid the National Health Service. This brings more resources to the service; it ensures that people get good value for money; and it increases the enormous amount that we already put into the National Health Service—£4 million every hour. Of course there has to be very careful monitoring of the schemes; and I explained earlier on in answer to a previous question from the noble Lord, Lord Dean, exactly how we were going to do that.

§ Lord Molloy
My Lords, will the Minister make every endeavour to carry along all the staff associations of the NHS? Anything that could come out of the scheme, whether it is privatisation or anything else, is bound to affect all the staff of our NHS. Will she give the House an assurance that they will be consulted at all times?

§ Baroness Cumberlege
My Lords, of course we try to work with the staff in the National Health Service. They are our greatest resource.

§ Lord Desai
My Lords, if, as the Minister says, borrowing money from the private sector is not privatisation, what, in her view, is privatisation?

§ Baroness Cumberlege
My Lords, privatisation is when we abandon the ethic of the National Health Service, which is that people—whether they are rich, old, young, poor, black or white—should get their services free at the point of use. That is the ethic of the National Health Service. If that ethic was abandoned, it would be privatisation.

§ Baroness Serota
My Lords, can the noble Baroness say whether in future NHS patients who are treated in the private sector will still be able to complain to the Health Service Commissioner if they consider that they have suffered injustice as a result of maladministration?

§ Baroness Cumberlege
Yes, my Lords. They will be part of the National Health Service if the National Health Service is paying for their treatment.

§ Lord Orr-Ewing
My Lords, is it not true that we have expanded health service expenditure from £7 billion when we came to power to £36 billion—an increase of 42 per cent. in real terms? Has my noble friend received any constructive ideas from the Opposition as to what is to be done to find the money, without putting taxes up immensely, to meet the expanding needs of more people living longer, more medical progress and therefore more changes in services? What has been proposed positively by the Opposition?

§ Baroness Cumberlege
My Lords, very little that I can recommend.