HL Deb 17 March 1999 vol 598 cc722-4

2.54 p.m.

Lord Clement-Jones asked Her Majesty's Government:

What action they are taking in response to the recent UNISON report Downsizing for the 21st Century which analyses plans for the North Durham Acute Hospitals Trust private finance initiative development.

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

My Lords, we have carefully considered the report to which the noble Lord refers. It contains a number of inaccuracies and misunderstandings and we intend to issue a formal response shortly. A copy of that response will be placed in the Library.

Lord Clement-Jones

My Lords, I thank the Minister for that reply. Instead of that report, I could easily have cited a report by St. George's Hospital medical school in relation to seven other PFI contracts which demonstrate that PFI schemes do not deliver either the quality or the amount of service that publicly funded schemes deliver, and that they offer less value to the public. Is it not time that the Minister's department woke up to the problems associated with the PFI? Will the department join the BMA, the NHS Confederation, UNISON and the Health Select Committee in their reservations? Is it not time that the department instituted an urgent review of the PFI schemes in order to ensure that they secure value for money and much-needed beds?

Baroness Hayman

My Lords, of course we must ensure that PFI schemes, and indeed publicly funded schemes, provide value for money. I need not remind the House that there have been problems in the past, in terms of both time and cost overrun, in relation to hospital building in the public sector. Equally, we must ensure that the number of beds and the range of services provided in new schemes, whatever the means of procurement, are adequate for the health needs of the population. That is the reason that we are undertaking a national bed survey. However, where PFI schemes such as the one in North Durham (as the report to which the noble Lord draws attention makes clear) offer value for money against strict and accepted criteria, when they deliver a hospital in one phase in three-and-a-half years instead of in two phases in seven years, and to a better design specification, and when more cash is coming back into the NHS through land sales, I do not believe that we should say for ideological reasons that that method of procurement is not right.

Earl Howe

My Lords, does the Minister agree with the UNISON report that, under the PFI, North Durham will be spending more for a reduced level of service than would have been the case under the public sector option? If that was the result of the capital investment appraisal, was there therefore a ministerial direction to the Department of Health accounting officer to proceed with the PFI option—and if not, why not?

Baroness Hayman

My Lords, it would be difficult for the House to go into the textual analysis of a report that it has not seen. However, I assure the noble Earl that the economic appraisal showed the Durham scheme as providing better value for money than its public sector comparator over the 60-year period against which the Green Book states that investment decisions should be assessed. There is no question of not providing value for money. That is one of the misunderstandings in the report to which I referred. We shall make that clear in our response. As the noble Earl will be aware, new hospitals initially cost more than the old, outdated facilities that they replace. But the step changes in the standards of care which the modern NHS needs to deliver can best be achieved by building new hospitals, whether under the private finance initiative or from public funding.

Lord McNair

My Lords, does the Minister have any idea how many beds are available in the private health care sector which could be used when there is a shortage of beds in the National Health Service?

Baroness Hayman

My Lords, I do not have the figures available for the number of beds across the private sector as a whole. I will write to the noble Lord. The assumption that such beds could be made available when they were needed involves many hypothetical issues. I am not sure that a definite decision could be arrived at. Our aim is to provide within the NHS adequate facilities for treating NHS patients. As I said, the national bed survey will look closely at whether, over the past two decades, we have reduced bed numbers too sharply in this country.

Lord Clement-Jones

My Lords, will the Minister confirm that her reply to the noble Earl, Lord Howe, means that the Dryburn hospital scheme, compared to a publicly funded scheme, provided worse value over 30 years than over 60 years?

Baroness Hayman

My Lords, we do not have the figures for five years, 10 years, 20 years, 30 years, or 40 years. The standard economic appraisal accepted across the board and by the Treasury against which value for money should be judged is the full economic life of the asset. That is 60 years for hospitals and that is the appropriate comparator to use.