Health and Social Care Bill

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The Chairman: With this it will be convenient to take amendment No. 66, in page 3, line 3, leave out from `functions' to end of line 5.

Mr. Hammond: The clause relates essentially to the same ground that we have been covering: the financial powers that the Secretary of State will have as part of his armoury at the soft end of the spectrum, culminating in the clause 16 intervention powers. There is quite a lot to say about how the clause works, and I shall attempt to restrict my remarks to the narrow issue of the amendment. I hope that the Committee will have an opportunity for broader debate under clause stand part.

Amendments Nos. 65 and 66 would render more objective the process by which the Secretary of State would proceed, and inject an element of natural justice into the proceedings.

The wording of proposed subsection (3C)(b) is extraordinary. It allows the Secretary of State to give a further sum to health authorities if they perform well

    against any criteria notified to them.

They do not have to perform in a defined way against such criteria; they do not have to achieve targets; they have merely to perform well. If they want to know whether or not they are performing well, they may be hampered by the words in parenthesis at the end of paragraph (b):

    whether or not the method of measuring their performance against those criteria was also notified to them.

The Secretary of State will be handing out money to those who have performed well against a criterion without telling them how he intends to measure the quality of their performance. That would be the start of a rather dangerous and slippery slope.

The amendments seek to tighten that up a little. We shall consider later amendments Nos. 67 and 68, which would further limit the Secretary of State's wide powers of discretion and ensure that NHS bodies understood explicitly the targets that they were required to meet and how they would be assessed on their performance against those targets. They would also have the opportunity to appeal if they believed that they had been wrongly or unjustly assessed, which would ensure that the process was a little more transparent, objective and accountable than under the Bill.

There are two big flaws in the provision. It gives huge power to the Secretary of State to micromanage the NHS at every level, either directly or by the implicit threat of taking over functions or withholding money; and that will lead to the distortion of clinical priorities, because trusts and health authorities will be assessed not on the overall quality of their service, but on whether they meet Government targets. For the past three years we have accused the Government of distorting clinical priorities by forcing NHS trusts and health authorities to focus on doing the Government's bidding. In particular, the waiting lists initiative forces health authorities and trusts to devote resources to dealing with those suffering from minor complaints, who are merely numbers on the waiting list, rather than addressing those in greater clinical need.

The Government consistently deny that they have used financial means to put pressure on NHS management. The clause makes it explicit that NHS managers will in future be clearly told of the Government's political priorities and of the targets that they must meet, and that they will be financially penalised if those targets are not met by not being allocated money from the performance fund.

The consultant urologist at my local hospital wrote a letter to the chief executive, a copy of which was obligingly sent to me. The consultant referred to a specific case and, for obvious reasons, I shall not mention the patient's name. He wrote:

    You were fully aware of three other patients of mine who were admitted for major cancer surgery (after a three months wait) only to be cancelled three times each, within thirty minutes of being called to the theatre.

He continues,

    these are but three examples of a long-standing problem. One year ago I was put under pressure by the management to treat non-urgent long waiting patients instead of patients with cancer

such as Mr. X.

Anyone who is interested in the NHS—including the Minister—and who talks to doctors and nurses, will know that whatever Whitehall intended, the practical effect of the way in which the system has operated over the past three years has been that hospital managements, not for their aggrandisement nor their financial enhancement, but for the good of their trusts, and needing to access the funds that were available to them conditional upon their meeting waiting lists reduction targets, have manipulated waiting lists. They have moved people off waiting lists when they should remain on them. Derriford hospital cardiology department springs to mind. Clinicians have been forced to prioritise minor waiting list cases ahead of those with clinical priority. The Government Whip may wish to intervene on the matter of Derriford hospital, but I doubt it.

Clause 2 institutionalises that system in primary legislation, and that is a potentially dangerous trend. These amendments—and later ones—seek to introduce a safeguard. They would not undo completely the Government's efforts because that is not within the scope of our ambitions, but would introduce safeguards by requiring the Secretary of State to make the criteria by which he would judge a trust's performance clear, objective and public. People in the country, informed opinion, clinicians and the medical representative organisations would then be able to comment on whether the criteria that the Government seek to impose and would use in allocating money or intervening to take control of the management of trusts, are the right criteria to ensure the delivery of proper health care. For that reason, I commend amendments Nos. 65 and 66 to the Committee.

Mr. Denham: The hon. Member for Runnymede and Weybridge has every right to rehearse familiar arguments about the Government's approach to running the NHS and the emphasis that we have put on cutting waiting lists and waiting times. The NHS plan makes clear our plans to go further and cut waiting times in the years to come. We have also made clear that clinical need should take priority.

Mr. Hammond: What about waiting lists?

Mr. Denham: Before the hon. Gentleman intervenes, he should recall that one of the things that he objects to most strongly is the notion of a maximum waiting time for an operation in the NHS. However, I remind him that the concept of an 18-month maximum waiting time in the NHS was introduced by the previous Administration.

Mr. Hammond: My remarks today, and previously, have been directed at the waiting list initiative. We said at the time—and have said since—that it is more sensible to focus on waiting times rather than lists. The consultant urologist from whose letter I quoted was being asked to reduce numbers on a waiting list regardless of clinical priority.

Mr. Denham: I may have misunderstood the letter from the hon. Gentleman's constituent. I understood that his complaint was that long waiters were receiving priority treatment. I agree that clinical priority must win out, but I understood the letter to refer to long waiters rather than numbers on a waiting list.

I shall concentrate on the clause because the idea that it introduces sweeping new powers is not right. Under the Health Act 1999, the Secretary of State already has powers to pay additional funds to health authorities on the basis of past performance. Secretaries of State have always managed the NHS and have wide powers to direct NHS bodies on the carrying out of their functions. As we discussed during our first sitting, the Secretary of State already has wide discretion to determine how much each health authority receives.

12.15 pm

Clause 2 seeks to bring extra flexibility to the way in which the Secretary of State can pay additional funds to health authorities, especially through the ability to make in-year payments against in-year criteria of health authorities' performances. I shall give an example, which I hope will be helpful and justifiable. As all members of the Committee know, there are no published waiting times for seeing a therapist. The implication of the NHS plan is that we will need to develop such indicators, as our current measures are limited solely to some consultant-based out-patient services. It is conceivable that the Department will work with the health service to develop useful, robust and well defined indicators of the time taken to see a therapist. Through the performance system, which I will say more about later, the Department might want to incentivise the achievement of improved waiting times to see therapists.

Under the amendment, if the detail of those measures were not in place when a health authority allocation was made, nothing about waiting times to see therapists could be included in performance measures for the year ahead. That could lead to a considerable delay in building waiting time performance for therapists into the allocation of health authority resources. The clause is worded in a way that will overcome the lack of flexibility in the system. I acknowledge that the wording may have caused concern, but it will be useful for me to state what the clause is meant to do and how it will set about it.

I want to give some background by talking about the performance system that underlines the Government's measures and the reasons for the clause. The clause will enable the Secretary of State to make additional payments to health authorities based on their performance during the year in which the payments are made. Current powers allow us to make additional payments to health authorities based only on their performance in previous years.

Clause 2 and clause 3, which is about supplementary payments to NHS trusts and primary care trusts, will be used to implement the new national health performance fund, which will be worth £500 million by 2003-04. Our prime purpose relates not to giving some people more money than others, but to the level of conditionality that applies to money dispersed through the performance fund. The fund will assess trusts as having red, yellow or green-light status. Each trust will receive its fair share of the performance fund with a different degree of conditionality. Green organisations will have access to their share of the fund as of right. Yellow health authorities, NHS trusts and primary care groups and trusts will be required to agree plans, signed by the regional office, setting out how they will use their share of the fund. Red organisations will have their share of the fund held by the new modernisation agency. They will receive their share of the fund, but it will come with strings attached and the agency will oversee spending.

Health authorities will be notified in advance of the objectives that they will need to meet or the criteria that will be used to assess whether they will receive additional payments, but the clause will mean that the Secretary of State can notify health authorities of the precise method of measuring their performance against those criteria after the start of the assessment period.

I do not want to mislead the Committee. Although I have talked about the performance fund and the allocation of fair shares, I should acknowledge that the clauses would allow the Secretary of State to make additional funds available if, for example, he chose to offer incentives for improvement in a particular area in a particular year. We have put much emphasis, in the plan, on people getting their fair share, but the provision would enable the Secretary of State to offer incentives in the form of additional funds for good performance by certain organisations. Equally, the flexibility of the clause allows some choice as to whether that would be assessed against absolute or relative performance criteria.

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Prepared 23 January 2001