HL Deb 09 December 1997 vol 584 cc26-41

3.52 p.m.

The Minister of State, Department of Health (Baroness Jay of Paddington)

My Lords, with the leave of the House, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Health. The Statement is as follows:

"Today I am proud to announce the publication of our proposals to renew and modernise the National Health Service. These are set out in our White Paper, The New NHS.

"This White Paper is a turning point for the NHS, the 1 million staff who work in it and all of us who use it. This Government were elected to save the health service. We were also elected to change it for the better. We want to give it a new lease of life. Today we outline a 10-year programme of modernisation which guarantees that the NHS gets better each year—delivering quicker higher quality services for patients. The pace of change will be measured, but each year will bring new and visible improvements. Our plans will give our country a modern and dependable health service that is once again the envy of the world.

"We will make a start straight away. This White Paper abolishes the wasteful and bureaucratic competitive internal market introduced by the Tories. It sets out how services will respond more readily to patient needs and describes new targets against which performance will be judged. Doctors and nurses will be in the driving seat. It spells out a whole new approach that we have called 'integrated care'. It will break down the Berlin Wall between health and social care so that patients get swift access to care and treatment rather than being passed from pillar to post.

"The changes we are outlining today will put quality, fairness and efficiency at the heart of the National Health Service. Quality will give patients a guarantee of excellence wherever they live. Standards will be raised right across the country. Fairness will give patients an NHS that is there for them when they need it, where they need it, regardless of their ability to pay—a one nation NHS. Efficiency will deliver more money for patient care. There will be a relentless drive to cut out waste and unnecessary bureaucracy.

"We will abolish the internal market because it has failed. It has failed to deliver quality of care, fairness for patients or efficient services. It set doctor against doctor; hospital against hospital. Its business culture has been at odds with the ethos of the NHS and those who work within it. Patients want an NHS where staff can work together to provide better services, rather than having to compete against each other.

"When I became Secretary of State I promised that we would listen to the people in the front line—the nurses and doctors, midwives and other professionals, and all the staff in the National Health Service. We have kept that promise. We have listened. That is why our proposals go with the grain. We are building on what has worked. But we are discarding what has failed. For us what counts is what works. There will be no return to the command and control structures of the 1970s. Nor will there be a continuation of the divisive fragmentation of the 1990s. Instead there will be a third way—a new model for a new century.

"We will keep the separation between planning and providing services. But we will end competition and replace it with a new statutory duty of partnership so that local health services pull together rather than pull apart. We will end fundholding and replace it with primary care groups in each area putting doctors and nurses in charge of shaping services for all patients. We will end the culture of secrecy and commercialisation and replace it with a new duty of openness that will share best practice for the benefit of all patients. We will end short-term contracts, cost per case contracts and extra contractual referrals and replace them with long-term agreements that offer stability and focus on quality. Our detailed proposals for doing all this are set out in the 81 pages of the White Paper.

"We will set up primary care groups involving family doctors and community nurses in every area. They will be responsible for commissioning services for their local communities and will account to health authorities for their activities. GPs and community nurses will have a choice about the form their primary care group takes. For example, they will have the power to become freestanding primary care trusts, able to run community health services, including community hospitals. They will have a single unified budget, no part of which will be capped. So, the money will always be there to guarantee that patients get the medicine they need, when they need it. The new unified budget will give GPs maximum choice over how patients' needs are met. All primary care groups will work closely with social services to provide properly integrated care.

"For the first time, NHS trusts will have statutory obligations to co-operate with other parts of the NHS and to meet quality standards. They will remain responsible for treatment and care. Hospital doctors will have a greater say in shaping local services for patients.

"Health authorities will, over time, relinquish most of their commissioning responsibilities. The proposals will cut the number of commissioning bodies from around 4,000 to about 500. They will be leaner bodies with stronger powers. They will draw up long-term programmes for improving the health of their area in consultation with local NHS trusts and primary care groups, but also with local authorities, voluntary bodies and education and research institutions. These health improvement programmes will provide the broad framework for local action to improve general health and health services.

"All of us who use the NHS deserve a guarantee of excellence. There will be new national action to extend quality and efficiency into every part of the NHS, backed by a new performance framework which measures what counts for patients.

"There will be a new national institute for clinical excellence to give a strong lead on clinical cost-effectiveness, drawing up new guidelines from the latest scientific evidence. There will be new national service frameworks that will guarantee consistent access to services and quality of care for all patients. They will draw on the best evidence available, to set out the best ways of providing particular services. To underpin this drive for quality, there will be a new commission for health improvement to spread best practice and tackle shortcomings.

"Patients will also have a guarantee that public money is being used to best effect. NHS trusts will no longer be competing. But they will be comparing. Comparison, not competition, will drive efficiency. A national schedule of comparative costs of treating different conditions will be drawn up and each NHS trust will be judged against it. Management costs will be capped. There will be clear incentives and sanctions to help drive improvements in performance at every level. Trust performance will be benchmarked for both quality and efficiency and the results will be made public.

"Over the lifetime of this Parliament, these changes will shift an extra £1 billion from bureaucracy into frontline patient services. This will be on top of the extra £1.5 billion which the Chancellor has made available for the NHS over this year and next. And we will continue to raise spending on the health service in real terms every year.

"These changes will give patients a modern and dependable health service which makes the best use of developments in modern medicine and information technology to offer readily available and high quality services. We have already promised to cut waiting lists. We will have done so by the end of this Parliament.

"Today I want to announce three new milestones by which we will chart our progress towards the new NHS. At home, everyone will be able to contact NHS Direct, a new 24-hour telephone advice line staffed by nurses. Three pilot care and advice helplines will begin in March next year. By the year 2000, the whole country will he covered.

"At community level, patients will benefit from quicker test results, up-to-date specialist advice in the doctor's surgery and on-line booking of out-patients appointments by connecting every family doctor to NHSnet—the NHS's own information superhighway. We will have demonstration sites up and running by next year. By 2002, these services will be available to GPs throughout the country.

"In hospital, everyone with suspected cancer will be guaranteed a specialist appointment within two weeks of their GP deciding they need to be seen urgently. This will start for everyone with suspected breast cancer in 1999 and be extended to all other cases of suspected cancer by the year 2000.

"We have great ambitions for the National Health Service. We will take on those who say the NHS has had its day and all we can do is preside over its decline. We will work with the million people who make the NHS so special to turn it into a modern and dependable service for the coming century. We know that doctors and nurses and all the staff of the NHS wish to rid themselves of the unfairness and inefficiency of the current system. That is our ambition too. It is what they want and what the people of this country want.

"Next year the health service celebrates its 50th birthday. A Labour government founded the NHS and this Labour Government are now modernising the NHS to prepare it for the challenges of the next 50 years—a new National Health Service drawing on new technology, new drugs, new quality standards and new ways of working; a new National Health Service based on its timeless principles that the best health services should be available to all; the best for all, quality and equality, for the new century."

My Lords, that concludes the Statement.

4.3 p.m.

Earl Howe

My Lords, I am most grateful to the Minister for repeating the Statement. It is a Statement which has been long anticipated and which, now that we have heard it, is undoubtedly of fundamental significance for the future of the NHS. Indeed, so multi-faceted are the changes now adumbrated that it is difficult for me to give a full or considered response from these Benches today. For that reason, until the details and implications of what is proposed have been carefully studied, my reaction to the Statement must inevitably be a somewhat guarded one.

I can, however, congratulate the Government on their boldness. I do not doubt that Ministers are seeking in their own way to improve the health service. That is laudable. What some may doubt, however, having listened this afternoon, is whether the course they have charted will remotely be able to deliver the improvements they seek. My instant reaction to the proposals is that they have a great deal of sound and fury about them, but the central question always has to be: will they deliver better care more efficiently to patients?

The proposition put before us is of a health service in decline and disarray. I cannot accept that for one second. Surely to goodness, any dispassionate analysis must acknowledge one truth obvious to all of us who depend for our well-being on the NHS; namely, the admirable and robust ability of the health service over many years—but particularly over recent years—to meet the ever-increasing demands placed upon it. It has succeeded in doing so triumphantly, thanks to the dedication and professionalism of those who work for it. But, in the same breath, let us also acknowledge the enabling part played by government. Spending on the NHS has risen by 74 per cent. in real terms in England since 1979 and over 80 per cent. more NHS treatments per year are carried out now compared with 1978. Those figures do not speak of decline.

As the Government have recognised, there will always be pressure for more money and greater efficiency. The pressures felt by the NHS are nothing new. Ever since 1948 it has had to contend with a growing demand for treatment, an ageing population and the relentlessly rising cost of medical technology. For any government to respond to those challenges, it is necessary to demonstrate not only a commitment to a proper level of resources but also some flair and innovation so as to ensure that those resources are efficiently directed. Those are the two tests on which the Government will be held to account at the next general election.

We have heard much in the Statement about the alleged inadequacies of the previous government's health service reforms. I am saddened that Labour, now that it is in office, cannot be fair minded enough to give credit where credit is due. Those reforms, introducing as they did the distinction between purchaser and provider, better accountability to patients and devolved budgets to fund-holding GPs and trusts, were a vitally necessary set of changes which have been of huge benefit to the quantity and quality of health care delivered by the NHS since 1991. Of course there have been difficulties in effecting those changes. It would be extraordinary if there had not been. Of course we all want to minimise unnecessary bureaucracy, and large slices were indeed eliminated by the previous government. But those, like the Minister, who condemn the internal market should reflect on the transformation that that market has brought about in waiting times, in the information available to patients and in the quantity and quality of treatment delivered. Those are real bench-marks of success and of value for money.

The Statement says that NHS staff want to be rid of the current system. I have yet to come across a GP fund-holding practice which regrets its decision to adopt fund-holding status. There is no doubt whatever that fund-holding has injected new life into the NHS from top to bottom. Yet here we are with an announcement which heralds the end of the internal market and the end of fund-holding as we currently understand the term. In their place we find the proposal that primary care groups should take responsibility for a much greater part of the NHS budget and to a large degree take over the role of health authorities.

If the object of these changes is to open the way to greater efficiencies, I feel bound to ask the Minister how they will do so. The proposals appear to amount to an extension of fund-holding. But we are told that they do not amount to fund-holding. So what are the mechanisms, in the absence of the internal market, which will bear down on waiting lists, conduce to better care and ensure better value for money? It is not clear from the Statement whether the distinction between purchaser and provider is to be retained. Will it be; and if it is, how will it manifest itself? But more than that, how are GPs supposed to be equipped for this new role? To run a budget covering hospital and primary care, and perhaps some areas of social services as well, will require management skills and large amounts of management time.

We are told that the Government are keen to get rid of bureaucracy. But how will these arrangements avoid yet another form of bureaucracy, multiplied hundreds of times across all the GP practices or primary care groups in the country? It is effectively another layer of administration in the NHS.

In moving away from fund-holding, doctors are bound to wonder how their ability to take decisions will be circumscribed by the needs of other doctors in other practices, and to wonder, too, what will happen when there is a direct conflict of opinion. Seven or eight doctors in one practice can agree relatively easily. A committee of 50 is another matter.

The mechanism that we are asked to accept as being the driver of financial discipline is a cap on management costs. How will those be defined? Can the Minister confirm absolutely whether or not there will be a cap on the drugs budget? If not, do the Government have any plans for controlling such expenditure? I ask again: where are the mechanisms to ensure that GPs prescribe within budget?

The Statement also speaks of NHS trusts comparing and not competing. I am not sure how much of that is semantics and how much a real departure, but to base comparisons on a national schedule of comparative costs of treating different conditions is not a facility that comes by waving a wand. The data underpinning such comparisons will need to be collected in detail, and often, if it is to have validity. How will that be done without extensive paperwork and form filling? Will the resultant benchmark be as applicable in London as in Liverpool, or as realistic in Plymouth as in Perth? I need to be convinced about the credibility of such figures and the cost effectiveness of gathering them.

The Government have high ambitions for the NHS and I welcome them. I welcome also their ambition to bring health and social care closer together. It will be admirable if that can be achieved. I shall be grateful if the Minister can expand on how the Government propose to achieve that.

In other respects my heart sinks at the terms of the Statement. The word "new" appears in it an off-putting number of times. I am suspicious of the word "new", as it conjures up marketing-speak. It would have been better if the Government had stuck to the substance without trying to doll it up. Further analysis will determine what these proposals amount to. At present I am fearful that the new NHS will mean new bureaucracy. I would genuinely like to believe the best of these proposals, but for the time being the jury is out and I suspect that it will remain out for some considerable time.

Baroness Robson of Kiddington

My Lords, may I also thank the noble Baroness for repeating the Statement made by her right honourable friend in the other place. I agree with the noble Earl, Lord Howe, on two statements he made in his opening remarks. He mentioned his unbounded admiration for the robustness of the staff and the people working in the NHS in view of the greater demands which they have met in recent years. I agree with him. He quite rightly claims that to some extent his party can take credit for some of the changes that have taken place. But it must also take the blame for certain things.

One of the sad aspects of the health service is that this is about the eighth reorganisation of the service since 1974. Therefore, apart from paying credit to the staff of the NHS for the work they do, we must also pay enormous credit to them for the way in which they have kept their allegiance to the organisation during all those changes. It must have been very difficult for them.

As each change has taken place it has meant an increase in management costs. I know that the Statement says that this new reorganisation will reduce those costs, but I find that very difficult to accept. It is stated on page 8 of the Statement that the reorganisation will save the NHS £1 billion. That seems unbelievable. We are not moving towards reducing management costs; in my view we must be increasing them.

By removing GP fundholding we are creating groups of about 50 GPs who will get together to arrive at an agreed statement and demand what they need. In order to do that management structures will have to be set up. Fifty GPs cannot possibly meet round the table and hope to come to a conclusion. They will have to be served by some form of management. GP practices which are not at present fundholders will have to employ a manager. There will be a need to instal up-to-date computers in every practice, just as fundholding groups do at the moment. That is not going to save money. The same situation will apply to the primary care groups. In commissioning services for a particular area they will need a full-scale administrative structure behind them. I would like an explanation as to how we shall save £1 billion by changes of this kind.

I also find it difficult to accept that the internal market will be removed. I cannot see that there is much difference between the providers in the hospitals, as proposed for the future, and the present situation. All I can foresee is that they will have to deal with a larger number of commissioning groups. Instead of 100 health authorities there will be at least 500 local commissioning groups. I therefore find it difficult to accept that there will be the savings that we are looking for.

However, I welcome one statement. That is the extension of the length of contract to be negotiated, which is to be for a period longer than one year. I believe that that will save money and time. It is a good measure, and one which we have been asking for for years. However, I have another request for the Government to consider when they look further into the proposed reorganisation. It is not enough to have GPs and community nurses working together providing what is called a unified health service. I believe that all social care needs to be included. I do not believe that greater control over the NHS budget by GPs will break down the "Berlin Wall" between health and social services. That will only be eradicated when health and local authority budgets are merged, as the Liberal Democrats have long advocated. I regret that it is impossible to go into all the details of the Statement, but I very much look forward to the main debate on the measures in this House.

Baroness Jay of Paddington

My Lords, I am grateful to both the noble Earl and the noble Baroness for their extremely authoritative remarks. I join with them in admiration for, and very much underline the points which were emphasised in the Statement about, the flexibility, skill and resilience of those who work for the NHS in the quality of care that they provide and have provided over a long period of years.

The point about the increase in bureaucracy which both the noble Earl and the noble Baroness thought might result from what is contained in the Statement goes against the point that I made about the reduction in costs of £1 billion a year. That has been very carefully costed. I know that the noble Baroness was concerned that that figure was not broken down in detail in the Statement; however, it is broken down in some detail in the White Paper. If you reduce enormously the transaction costs of individual contracts between individual health authorities and local health providers, as the new system will; if you cap management costs in both health authorities and local commissioning groups; if you abolish extra-contractual referrals and ask everyone to work to a national reference system of pricing for particular treatments; and if you work, as we intend to do, to an agreed and well worked out budget of £3 per patient within each commissioning group, the sum mentioned is not at all unrealistic. It has been appropriately costed. That sum will be demonstrated to have been saved by the end of this Parliament. The simple fact of reducing the number of commissioning bodies, which I mentioned in the Statement, from nearly 4,000—I believe that the absolute figure is 3,700 to 500 across the country must in itself reduce the administrative and management costs at a stroke, as it were.

I appreciate the points made by both the noble Earl and the noble Baroness about the capacity of the local commissioning groups to assume such a very broad agenda. Perhaps I should point out that—again, in contrast with the previous major changes in the health service to which the noble Baroness referred—this will be an evolutionary change. As I said in the Statement, the programme is devised to progress along a 10-year timeframe. We do not expect that every local commissioning group or every local group of GPs will be able to assume full responsibility at the beginning of the process. As is clearly demonstrated in the White Paper, we accept that there will have to be a well structured, evolutionary process from a position where a GP group might be acting simply in an advisory capacity to its local health authority to a position where that local GP group might assume the powers to run local services or, indeed, even the local community trust.

I am not quite sure where the noble Earl and noble Baroness found the figure of 50 GPs sitting around a table. That was certainly not mentioned in the Statement and, as far as I can recall those 81 pages, it does not appear in the White Paper. I should emphasise in general terms that it is intended that there should be great flexibility with regard to the local commissioning arrangements. There will be differing responsibilities and different degrees of authority assumed depending on the skills that can be demonstrated. The groups will be flexible in size and type, again depending on the nature of the community served and the geographical region.

The whole emphasis of the White Paper is that we want to re-establish the National Health Service in terms of national service frameworks, national quality standards, and as a national organisation for clinical effectiveness and for cost effectiveness. However, we expect that local people will want to choose the way in which their local commissioning group and local health authority function. There will be no diktat from the centre about how that should be done, but we shall require it to be carried out within the new statutory general framework. Perhaps the noble Earl and the noble Baroness are looking for something slightly more rigid than appears in the White Paper.

We are extremely keen to promote the amalgamation of social care and health care. That is why there will be a new statutory obligation on both NHS trusts and local GP commissioning groups to form partnerships—not simply with other health service providers, but with other providers and with the leaders of other agencies, both in the statutory and voluntary sectors, at local level.

The noble Baroness had a good point about the funding structure of local services. We shall want to explore that in the development of this work. As both the noble Earl and the noble Baroness will be aware, 42 primary care commissioning group pilot schemes are currently being established to try to develop some of these arrangements in ways which seem to us to demonstrate best practice in different parts of the country.

In the context of the amalgamation of health and social care and the involvement of other agencies such as those relating to education and the environment at a local level, perhaps I should mention the health action zones. They appear in the White Paper but not in the Statement because they have previously been announced. They will bring together all the different functions in 10 pilot projects which will, again, start next year.

Overall, I must reinforce our belief that this change will be effective in reducing bureaucracy. It will enable local initiatives to continue to flourish. Those local initiatives must, however, be contained within the national quality frameworks which will enable us to get away from the lottery of care, which was one of the unfortunate results of the internal market.

The noble Earl said that this change was being made for presentational purposes. He referred to "The new NHS". Perhaps I may draw his attention to the first page of the White Paper which shows that that title has been derived from that of the original White Paper on the NHS in 1948. That White Paper was called "The New National Health Service". Presentational skills may have been less important then.

4.25 p.m.

The Earl of Onslow

My Lords, I wonder whether the Minister will help me a little. From the Statement one gained the impression that she had inherited from the previous administration a collection of tents in a swamp in Bangladesh. I can promise the Minister that the last time that I had to go to hospital I was advised to use the National Health Service. In Surrey, the NHS and our local GP service—I do not know whether it is fund-holding—is of such quality that it should be emulated and copied in all areas. It ill behoves the new Administration to downgrade the achievements of the last government in making the NHS worthy of an enormous amount of admiration. I say that as somebody who applied for an appointment with a specialist the other day and the appointment came through so quickly that I had to postpone it. That is the efficiency of our local health service. It ill becomes the party opposite, which has suddenly become Her Majesty's advisers, to imply that what went before was not absolutely super—because it jolly well was!

Baroness Jay of Paddington

My Lords, I am grateful to the noble Earl for pointing out the excellence of the services in his locale. I wish that it were true throughout the country. Some extremely good services are offered by the NHS. One of the particular frustrations of the way in which the service was fragmented by the previous internal market system was that precisely the excellent service (which I am glad that the noble Earl enjoys in his part of the country) was not spread throughout the country. Excellent services were not available to everyone. They were available only in certain areas. We are not downgrading what happened previously. As I said in my first sentence in response to the noble Earl and the noble Baroness who spoke earlier, all of us are agreed on the enormous skills, dedication and commitment of NHS staff. What we want to do is to improve the service. We do not want to preside over something that people think may last only another 10 years. We intend the service to improve and modernise so that it is there in 50 years' time, serving all of the people of this country in the way in which the noble Earl is being served now.

Lord Winston

My Lords, I am grateful to my noble friend the Minister for repeating the Statement. Those of us who work on a day-to-day basis in the health service know how far short the protestations that we have just heard about the health service are from the actual practice. It is true that the previous government made some improvements—I have grave doubts about the internal market—but despite what the noble Earl. Lord Howe, said, the previous government at least made some investment in research and development. However, one consistent problem has been that that research and development has not been able to be put into practice. I am sure that the House would be grateful if the Minister could refer to the new national institute of clinical excellence and say how it will help us to improve the application of research in the health service and how that body will interface with our existing centres of excellence. We welcome the opportunity of this body; it seems like a very far-seeing idea.

Baroness Jay of Paddington

My Lords, I am grateful to my noble friend. He is right that it is the excellence of research and development and the clinical care by individuals like himself in the health service that maintain the quality of standards. He is also right that we want those standards to be broadly disseminated and most effectively introduced. We hope that the National Institute for Clinical Excellence will do precisely that.

There are a number of such organisations funded within the health service, some of which have been set up in the past few years. For example. the health technology assessment organisation at the University of Southampton is already doing good work in this area. However, these bodies are rather disparate and do not pull together in providing a national basis for assessing and disseminating the best quality evidence on which clinically-led medicine can proceed. The intention is that the national institute should bring together those organisations that already provide some of the evidence and lean on some of the others to ensure that throughout the country the understanding of research and development is put into practice.

Baroness Gardner of Parkes

My Lords, I am concerned that the Statement recites that the health service has set doctor against doctor. I do not accept that for a moment. My experience of the health service is that all of those within it work well together. It is most unfortunate that the Statement says that.

However, my main interest lies in the costs to which the noble Baroness has referred. The Statement says that management costs will be capped. The noble Baroness went on to explain that that would mean £3 per person. Can the Minister elaborate on exactly what that £3 covers? I believe that it refers to the management of the new structure.

The Statement goes on to refer to the fact that there will be clear incentives and sanctions to help drive improvements in performance at every level. It is clear that the budget will be tightly operated. The Minister said that the health service and the social services would be working together. Can she elaborate on the budget? Does this mean that we shall have to pay something for health services or that all of the social services will be free? One of the problems has always been the division of costs as between care, particularly long-term care, in hospitals in the NHS and care in residential homes.

I note that on page 2 of the White Paper the document of 48 years ago is reproduced. I have seen the original document. Until I saw it recently I had not appreciated that at the opening of the National Health Service the then Labour Government said that they were unable to introduce a proper dental service. When the Minister says that we are going back to the position 50 years ago,I believe that that is exactly so. There is still an inadequate NHS dental service. It is only on page 85 of the document that one sees any reference to dentistry. It states: Primary Care Family health services provided by family doctors, dentists, pharmacists, optometrists and ophthalmic medical practitioners". That is the definition of primary care. Except for doctors and nurses, there is no mention anywhere of how the primary care services are to be run. As a dentist I believe it is very important that people should be given access to national health dentistry again. I ask the Minister to comment on the points that I have just made.

Baroness Jay of Paddington

My Lords, the noble Baroness has made several points. I hope that I can remember all of them. I start with the last point. Of course, the Government intend to include dental care in the organisation of primary care. The precise proposals in that regard will be provided in the consultation document on the framework for developing the management organisation, which I suspect will not be published until after Christmas. It had been intended that it should be published alongside the White Paper but it was regarded as rather indigestible. As regards dentistry, I do not believe that I have said anything to suggest that we want to go back 50 years. In many ways we do not even wish to go back to the 1970s. I was merely responding, perhaps in a light hearted way, to the noble Earl's point about presentation and the adoption of this particular title.

The costs will be much more clearly spelt out in the management framework document. However, we are all aware of the Berlin Wall, as we call it, between social services and healthcare organisations. When we looked at the very specific problem of how to spend the relatively small sum of extra money on the winter pressures, we made a deliberate effort to try to devote some of it to social services, for example to ensure that community care in particular areas was in place over the Christmas period and people were not held in hospital who could otherwise be discharged to their homes. There has been a very effective and co-operative development at practical level, often in mundane areas such as the provision of local patient transport to deal with a short-term situation. But I believe that it bodes quite well for the future development of partnership in this area.

As I said in repeating the Statement, there will be a statutory requirement for partnership. It is hoped that some of the more detailed mechanisms or arrangements between the two will evolve. For example, a chief executive of a local authority will not be a member of the local health authority but will be able to take part in that authority's deliberations. The opportunities for partnership are there. As I said in my original answer to the noble Baroness, there are questions about funding which it is hoped we will have a chance to explore through health action zones and other pilots.

Lord Bruce of Donington

My Lords, I rise to congratulate my noble friend on repeating the Statement this afternoon. Over the past 19 years I have watched the tremendous efforts of all those who have participated actively in the health service, in particular in a direct capacity—doctors, nurses and so on. Nevertheless, as one who was marginally responsible for the introduction of the health service in 1948, when I stood behind my noble friend on the other side of the House I witnessed the depressingly steady erosion of the values that we sought in those days in founding the National Health Service. It was very depressing indeed. It has not been pleasant to observe the degeneration in the administration of the health service to a point where it is rapidly becoming a two-tier service, as everyone who has participated in it as a patient or otherwise knows perfectly well.

I am confident that a beginning is now being made—and that I can be cheerful once again—to restore progressively the old values of the health service. I dislike the terms "new" and "modern". I believe that there are two factors which my noble friends in government should bear in mind. First, it is not true that we are at the limit of our financial resources in financing the National Health Service. This country's expenditure on health is marginally less than 6 per cent. of GDP; in France it is 7 per cent. and in other countries it is more than that. Therefore, literally speaking, it is not true that we are at the limits of our prudent financing of the health service. What is true is that we can have a profound effect upon its cost by ensuring that poverty and bad housing are progressively abolished, unemployment ceases to be a chronic problem and the fear and insecurity that lie behind many of the claims of patients in the health service are progressively eliminated. I am confident that my noble friend and her colleagues will do that, and I hope that they will take account of the observations that I have ventured to make.

Baroness Jay of Paddington

My Lords, I am grateful for the observations of my noble friend and his congratulations. I well remember the debate on the 50th anniversary of the Royal Assent to the National Health Service Bill which took place almost this time last year. My noble friend made his contribution from the very place where he had stood behind the then Secretary of State during the passage of that Bill. In a sense that reinforced our understanding of the continuity of the values represented by the NHS. My noble friend is right to say that as a proportion of our national income the NHS is an extremely cost-effective organisation. That is precisely what we wish to build upon in ensuring that the evidence-based approach to cost-effectiveness reinforces those standards.

I do not wish to be drawn too much into discussion about the semantics of the "New NHS". However, I would remind my noble friend that in the last paragraph of the Statement we talk of: A new National Health Service based on its timeless principles". I hope that he will accept that.

The question of the organisation of the general social policy as reinforcing those timeless principles is of course essential. That is what I hope we shall see developed within the health action zone pilots, where at least as much emphasis will be put on the policies about which my noble friend talks—local employment, local environmental policies and local education problems—as the delivery of NHS care. I agree with him that policies such as the minimum wage and other similar policies contribute at least as much to the health of the population as the organisation of the health service.

Lord Alderdice

My Lords, there is much in the Statement that will be welcomed by those who work within the health service, especially the warmth, enthusiasm and vigour, the words about partnership and working together, and all the assurances about how much might be available. I welcome in particular comments about health and social services working together, as they have been integrated in Northern Ireland for almost 30 years.

I wonder whether everything in the Statement is quite what it appears to be. While there is talk about ending the internal market, and no more fundholding, it seems to me that in a curious way all GPs will become fundholders. They will not have funds of course; they will have budgets. They will not work as individual practices but as large commissioning groups. I wonder whether that will achieve all the radical changes that are suggested, although I suspect that it might help a little with bureaucracy.

There are then the words about corrosive commercialism. I entirely share that view. However I see little evidence that PFI will disappear. Rather it seems likely to take an increased share of the health service's revenue expenditure in the future. The biggest issue which has not been addressed is that while we can talk about scientific excellence, quality, making everything available and ensuring that everyone has everything that they need, there are questions of resources and whether services have to be rationed.

The health service has available to it now forms of treatment and approaches which were not available when it began, or even 10 years ago. There are expensive treatments and ways of working. There are ways of working which were always available, even in the health service's heyday, but more in the south east of England than in the north of England or the other provinces. However unappealing it may be, there needs to be a national debate on what the NHS can do and some of the things it cannot do.

I am a little disappointed that the opportunity to look at the future of the health service has not faced that issue realistically, albeit that the warmth and robustness of the presentation will give a good feeling to many of those working in the health service and those dependent upon it, at least for this afternoon.

Baroness Jay of Paddington

My Lords, I am grateful to the noble Lord for his comments, especially those on the position in Northern Ireland, which, I agree, provides an interesting model. I shall pick up on a point from the Statement which answers the general points that he made. We are determined to ensure that what counts with us is what works. We believe that what has worked has been the effective division between planning and having a strategy for local services and providing. We do not believe that that maintains anything to do with the market.

On the noble Lord's point about the cost drivers of introducing more effective evidence-based healthcare, I believe that there will be a balance. The question will be how that balance works out. I shall give him one example of how scientific evidence has reduced costs. There has been great pressure in this country. much of it led by people who are concerned about their own health, to introduce the prostate screening programme for cancer. The health technology assessment organisation at Southampton, about which I spoke earlier, demonstrated clearly that that was not an effective way of dealing with the matter, and therefore it has not been introduced. There will be a balance.

Lord Glenarthur

My Lords, this is an important Statement which has given those of us who work in the health service much cause for thought. I declare an interest as chairman of St. Mary's NHS Trust, as the Minister is aware. There may be much in the Statement that can be praised in certain ways. The one element that I would take up, which the noble Baroness, Lady Robson of Kiddington, mentioned, is extending the contract for three years. I am sure that that will be supported.

There are a couple of other matters. Will the Minister say what progress is being made, and when an announcement is to be made, on the London review, because that will have a major impact, at least in one part of the country, about what the Statement can achieve? An area upon which she might touch, which does not seem to feature at all, is the role of academic medicine. That, at least in part, helps define how NHS delivery of service is obtained, where and how it can be done and how trusts could co-operate with one another. Will she also enlighten me about what appears to be a contradiction on page 6 of the Statement which states: NHS Trusts will have statutory obligations to co-operate with other parts of the NHS, and to meet quality standards"? The Statement then continues: Hospital doctors will have a greater say in shaping local services for patients". Will those doctors be expected to operate outside the terms of their own trusts or within them?

Baroness Jay of Paddington

My Lords, I am grateful to the noble Lord. On the point about London, I am afraid that I cannot give him a date. It is something which is progressing as rapidly as we can make it progress, and it will emerge shortly.

On the point about academic medicine, I believe that I touched upon that briefly in my response to my noble friend Lord Winston. There is an important part for academic medicine which is dealt with extensively in the White Paper, particularly the R&D side. I am sorry, but I have forgotten the noble Lord's third point.

Lord Glenarthur

My Lords, the doctors.

Baroness Jay of Paddington

My Lords, that is not a contradiction in the two parts of the Statement. There will be the introduction within NHS trusts of what is called clinical governance, which will enable the doctors and the managers to work together. The chief executive of the health trust will be responsible for the hospital's financial and clinical standards. The planning for a locality's health improvement programme could well bridge a hospital and a community trust.