§ Mr. Desmond Swayne (New Forest, West)
The Lymington hospital has 112 beds, 60 of which are located in an infirmary and are primarily intended to provide rehabilitation for elderly patients. In addition, the infirmary provides 20 hospital day places. The hospital provides beds for medical, surgical and maternity treatment and has theatre sessions for general surgery, urology, oral surgery, ear-nose-and-throat surgery and gynaecology. The best measure of the hospital's importance, however, is the hole that it would leave if it no longer existed.
Dr. David Balfour is the chairman of the New Forest primary care group, which is to become the primary care trust that will take over responsibility for the hospital. He wrote to me on 14 November, saying:The local health economy could not absorb the amount of work being done at Lymington if the present hospital were to close. Southampton already has significant problems around lack of space…bed shortages, lack of theatre space…as Southampton increasingly develops as a regional specialist and cancer centre, waiting lists for standard secondary care services are increasing. It is worth noting that one third of all endoscopies done in Southampton and South West Hampshire are done at Lymington. Also if the local Health Economy then had to absorb some 7,000 admissions, 20.000 outpatients, 4,000 day cases, and 17,000 casualty attendances a year, chaos would ensue.Those 20,000 out-patients, 17,000 casualty cases, 4,000 day cases and 7,000 admissions are a measure of Lymington's contribution to local health care. However, there is a problem.
The infirmary buildings date from 1836 and the hospital dates from 1913. They are dilapidated and unsuited to modern health care. Transport is required between the two hospital sites. For instance, the X-ray and casualty facilities are separated by hundreds of yards of corridor.
Despite the dedication and the overwhelming efforts of the staff, leaving things as they are will result in an unacceptable decline in services, and ultimately to the hospital's demise. Even with a £3 million major refurbishment and remodelling, the hospital would achieve only the minimum acceptable standards.
I believe that the development of public policy will give community hospitals an even more important role, given the increase in elderly patients and the winter crises to which we have been subjected in recent years. In a written answer last Thursday, the Minister of State, Department of Health, the hon. Member for Southampton, ltchen (Mr. Denham), said:The National Health Service Plan announced a major programme of investment in intermediate care and related services to promote independence and improved quality of care for older people. As part of this investment, there will be 5,000 extra intermediate care beds by 2004, and the Plan makes it clear that some of these will be in community hospitals.—[Official Report, 9 November 2000; Vol. 356, c. 378–79W.]I submit that many more than "some" of them will have to be in community hospitals. In fact most, if not all, will have to be so, because those beds will not be found in residential homes and nursing homes. All over the south-east of England developers are queueing up to buy such homes and build residential properties on the plot. That is certainly the case with Farnley house in 228WH Lymington and Kivernell house in Milford-on-Sea. Therefore, the role of community hospitals is increasingly important.
We believe that the efficiencies achieved by a level transfer of the existing beds and facilities at Lymington to a designed, purpose-built modern environment will allow the treatment of more patients and provide a wider range of services. That is an exciting vision. We aim to develop a radical intermediate care facility that will make a significant contribution to the health needs of the people of Lymington and the New Forest, and to the local health economy. We want to develop an efficient unit dealing with diagnostic services, day cases, short-stay surgery and rehabilitation. To realise that vision, fundraising began in 1980 and the PFI initiative was published in the Official Journal of the European Communities in 1995. A full business case was presented, which was praised by the private finance unit, and much of the credit for that is due to the chief executive of the Southampton Community Health Services NHS trust, Mike Lager. The site for the new hospital has been purchased and is already under preparation as a result of more than £1.5 million in funding raised by the League of Friends of Lymington hospital. That is a tremendous credit to them. How many hospitals begin with such a signal of good will from their local community? I take my hat off to the fundraising efforts of the League of Friends over many years.
However, there is a fundamental problem. On 2 November, the NHS executive called off negotiations with the Rotch-Schroder consortium, which was bidding to build the £23 million private finance initiative scheme for the new Lymington and New Forest community hospital. Where do we go from here? We expected the new hospital to open at the beginning of 2003, and that itself represented a considerable delay compared with initial expectations. Any further delay will stretch our ability to maintain the services to the required standards in the existing buildings. If we had to start another private finance initiative, the time frame would be such that we would have to invest significant amounts in the existing hospital in the meantime, which would be completely wasted when we rebuilt. Equally, what enthusiasm would there be for a renewed private finance initiative after the investment of so much money, time, effort and good will in the previous bid? There would be no guarantee that it would be any more successful a second time around.
Perhaps I should put my doubts about private finance initiatives on the record. The Minister will not be surprised to hear that I have always thought that they had rather more to do with the Maastricht convergence criteria than with sound principles of public finance. [Interruption.] The one thing that I have always accepted, despite my scepticism about the role of the state in many aspects of our lives, is that the Government can raise capital more effectively and cheaply than the private sector.
Setting aside my scepticism about the private finance initiative, I understand the reluctance of the NHS executive to tie itself into a 25-year contract with a private consortium when Government policy on intermediate care is even now under development in the 10-year national plan for the NHS. Indeed, its relationship with the private sector is also dynamic and under development.
229WH The most obvious and expedient course is to build a hospital with public funds, as the project is already so advanced. Will the Minister play her part in ensuring the survival of this vital asset to the health care economy of south-west Hampshire by showing the Government's willingness to consider with an open mind the case for funding the new hospital with £23 million of public capital? It is a pleasure to share this campaign for a new hospital with my hon. Friend the Member for New Forest, East (Dr. Lewis), and I am keen to hear how he will support the case.
§ Dr. Julian Lewis (New Forest, East)
It is typically generous of my hon. Friend the Member for New Forest, West (Mr. Swayne) to give me the last portion of his allotted time, and I endorse everything that he has said.
Westminster Hall is rightly regarded as an arena in which confrontation should be kept to a minimum, and there is no confrontation on this issue. We have even had a meeting of minds, to judge by the Minister's reaction to my hon. Friend's doubts about the role of the private sector in raising capital for such a project. Westminster Hall is working its magic.
The Lymington hospital is sited in the constituency of my hon. Friend the Member for New Forest, West, but the new Ampress site—just south of Boldre in my constituency and just north of Lymington in his—is virtually on the border between the two. More importantly, the Lymington hospital, in both its present and future incarnations, has a wide catchment area covering the residents of the New Forest, the Waterside and even further afield.
My involvement in this matter goes back to spring 1995. 1 was minding my own business at my desk in the research department of Conservative central office, when the telephone rang. It was a wonderful lady, whom I later came to know well, called Pamela Combes, who was concerned even then that the Lymington hospital was becoming a political football, and wanted my help in investigating the matter. That led to a chain of events culminating in my accession to the position of prospective Conservative candidate for one of the New Forest seats, to which I was subsequently elected. I am sure that the Minister will not hold the fact that the hospital was indirectly responsible for my becoming a Member of Parliament against it, and that it will not prejudice the prospects for its future.
The problem, even in 1995, was that there was great community concern about where the hospital should be, what the money raised with great effort by the local community should be used for, and how the partnership arrangements should be drawn up. Even the press release from the NHS executive, when it announced that it was pulling the plug on the private finance initiative, acknowledged that the two NHS trusts to which it referred—one on the isle of Sheppey and one at Lymington—had worked hard with their private sector partners under the PFI. Mike Lager and his team have made every possible effort to get this project off the 230WH ground and to make a go of the PFI approach. That has not worked. Even the Southampton Community Health Services NHS trust accepts that. It thought that it had a deal ready in June, but, as its press release states:We were all but ready to sign. Since then the Rotch consortium's financial figures have changed—they're now no longer affordable nor good value.There is no dispute between the NHS executive and the community health services trust that the scheme has not worked, but it is more than five years since I was drawn into the matter and one can imagine the effect on the morale of all concerned—those trying to build a new hospital and those manning the existing one—if the clock were turned back to the beginning and they have to start again.
This is not a matter of doctrine or ideology, nor of freeloading because, as my hon. Friend the Member for New Forest, West said, the community has raised enough money to buy the freehold of the land. Many people have made an emotional, professional and financial investment in the project. The PFI approach has been tried but has failed, so please do not make us return to that approach with all the time constraints involved. We need the NHS fully to fund the hospital.
§ The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart)
I, too, am delighted with Westminster Hall and its non-confrontational atmosphere, but the hon. Member for New Forest, East (Dr. Lewis) mistook my response to his hon. Friend's views on the private finance initiative. I was merely surprised that he agreed with his party, which was committed to the PFI but never made it work. I am also surprised, and delighted, that the hon. Member for New Forest, West (Mr. Swayne) managed to bring Maastricht into the debate. We could not have had such a debate without a mention of Europe.
I congratulate the hon. Member for New Forest, West on raising the matter, and the hon. Member for New Forest, East on joining him. I know that it causes great concern in their constituencies. I shall set out the steps that will ensure that the hon. Gentlemen's constituents continue to have access to the best possible health care services, but I want to start by making a few points about the main principles behind the private finance initiative.
The failure of the Rotch consortium deal should not be seen as a failure of the PFI process, but as a sign of success, showing that rigorous methods of testing are continuously applied. In a press release, Alan Meekings said:It is very disappointing that the Trusts involved have had to stop work on the PFI options, but they will simply not deliver viable value for money solutions. The trusts have therefore been unable to complete the business cases for the schemes and they must now be abandoned.He also said:Now that the PFI options have been discontinued, the important thing is to move forward as quickly as possible with alternative arrangements to ensure that the healthcare needs of local people are met.I want to assure the House that the bottom line is to ensure continued good health care for local people.
231WH The PFI provides extra resources for the NHS building programme, and transfers many capital investment risks to the private sector. Ultimately, we hope to achieve better care for patients and best value for money for taxpayers. The process was designed to allow the NHS and the private sector to work together effectively. The hon. Gentleman will be aware of the announcement earlier this week of our proposal to build at least 18 new hospitals around the country at a cost of more than £2.3 billion. We also confirmed our approval for 16 additional schemes worth more than £350 million. Those schemes endorse our commitment to the expansion of the NHS and to improving facilities nationwide. I was delighted to be able to announce schemes involving ambulatory care centres. We have heard about PFI contributing to a loss of beds. In any PFI project, the assessment of beds is made well before the financial decisions are made, so the two issues should never be connected.
Before approval is given to PFI schemes, a number of key factors must be carefully considered. First, we must ensure that key local stakeholders in health economies consider that the scheme will meet the health care needs of the area and fit in with the strategy. Secondly, we must ensure that all PFI proposals represent best value, and decide whether a scheme would be better value for the NHS and the taxpayer under PFI than under the equivalent publicly funded alternative. Thirdly, we must ensure that local health authorities and those that commission services will be able to afford the overall cost of the proposed scheme.
The Government have a major responsibility to support the NHS in managing PFI as well as it can. That is why, last December, we published guidance entitled "PFI in the NHS", which clearly sets out the process for testing the PFI market and negotiating a PFI contract. The guidance was based on the experience of the public sector in negotiating such deals, including the wealth of experience gathered from the first wave of major PFI schemes. One outcome of the review was that standard form contracts are now mandatory for the schemes.
We have seen several successes among the PFI schemes, probably the most striking of which is the new Cumberland infirmary in Carlisle, which had a completion timetable of 25:12 months, compared with the 54 months that was envisaged under the conventional public capital route. It is now open, and was the first major PFI hospital to become operational.
One can sometimes make a virtue out of disaster. I visited the Worcester hospital which had to be evacuated because of the flooding of the River Severn. When I went to the site to which some patients were being transferred, I could see the progress that had been made on the PFI hospital there—it was the first to be started after 1997 and is well on the way to completion. We should not run away with the notion that, because we unfortunately had to withdraw from some negotiations because the project was not viable, the PFIfunded process is more lengthy than the public sector option.
I take this opportunity to reassure hon. Members about the Government's commitment to making appropriate and effective use of community hospitals, 232WH and to confirm their important role in the delivery of local health care and the future development of intermediate care.
I was struck by the introduction given by the hon. Member for New Forest, West, in which he outlined the huge local support that the hospital has received. It is important to place on the record that it was never suggested that the hospital should simply disappear without being replaced by alternative facilities. He referred to the mechanics of working on split sites—I am familiar with that problem. We agree that we need to move forward constructively.
In the NHS plan, we pledged that by 2004 there will be 5,000 extra intermediate care beds, some of which will be in community hospitals, some in existing facilities and some in new developments. That will provide an opportunity to breathe new life into community hospitals.
I turn now to the events in the hon. Gentleman's constituency and the proposed PFI scheme to rebuild Lymington community hospital. I acknowledge that the decision to terminate negotiations must have been extilemely disappointing. However, we must not lose sight of the fact that PFI schemes will only proceed when they represent value for money. It is now important for all parties concerned to move forward as quickly as possible with alternative arrangements. I heard the pleas from the hon. Members for New Forest, West and for New Forest, East about the speed with which the next steps should be taken.
A review process has been initiated to appraise the options to meet the needs of the local health economy. That will engage the Southampton and South West Hampshire health authority, the local primary care groups and Southampton Community Health Services NHS trust. By requesting the debate, the local Members of Parliament have had their chance to contribute to that process, and I am sure that they will continue to do so.
The review will take place over a six-week period and will be fully supported by the south-east regional office of the NHS executive. I am sure that hon. Members will appreciate that it would be inappropriate for me to speculate on its outcome. It is important that, while proposals are being discussed at local level, the local population are confident that effective community services are in place to help the health economy over this coming winter. All health economies will face surges in demand, and we must ensure that we have measures in place.
I am advised that considerable work has already been undertaken to support this vital area of work. Some £2 million has been identified to support the whole of the Southampton health economy over the winter—£1.9 million to support critical care, and £572,000 for improved access to primary care services. In addition, £525,000 has been allocated to primary care groups and trusts, which will be managed as pooled budgets with local authorities. A number of schemes using these funds have already been agreed, including the establishment of rapid response teams across the health authority, and that covers the constituency of New Forest, West.
233WH The emphasis will be to prevent unnecessary hospital admissions. It is important to recognise that, although hospital buildings with extra beds are seen as a real improvement to services, rapid response teams, who react quickly and prevent hospital admissions—which is what most people want—play an important part in rebuilding a fundamental structure that enables us to give better primary care.
Additional residential care has been purchased for those people awaiting discharge from hospital. Again, it is important that the flow of patients through hospitals is well managed. The development of an emergency home care service that will operate seven days a week is planned. Again that will cover the New Forest. I fully appreciate the concerns the hon. Gentleman has raised, and it is only right that he and his constituents question how local health services will be provided. I have been reassured by my own discussions with representatives from the regional office and by all the key players who have to participate in that review that they are aware of the sense of urgency.
There is considerable disappointment, as much among the private providers as in the health authority, that the scheme could not go ahead, but it simply would not have been right. We had to recognise at some stage that it did not provide value for money. Part of the consortium had to withdraw four of the five bids that it submitted: one of them was well advanced and looked all right, but the other four had to go back to the drawing board. This is not a delaying tactic and it is not a sign from the regional office that it does not appreciate the needs of the community.
I should also like to pay tribute to the League of Friends. The hon. Gentleman was right in his introduction. It raised a considerable amount of money. Many a hospital scheme would like to be able to start with an endowment as generous as that given by the league. We will build on that—I should make it clear that I mean build in the metaphoric rather than physical sense: that is by no means a ministerial commitment. We will use that good will and support as a foundation on which to progress. Although the withdrawal of the PFI scheme in Lymington has undoubtedly caused anxiety locally, I hope that I have reassured the hon. Gentleman that every effort is being made by all parties to bring this matter to a swift conclusion.
§ Mr. Deputy Speaker (Mr. Frank Cook)
We come now to the penultimate topic for our consideration today.