Health and Social Care Bill

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Mr. Hammond: Is the Minister giving the Committee an assurance that no such question will receive the answer that the data are not available, or collected centrally—a response with which all members of the Committee are familiar?

Mr. Denham: That situation clearly arises where there is a local activity on which central data are not collected. In this situation, it is the centre making money available to trusts; therefore the centre, by definition, has the necessary information and the question would have to be answered.

Mr. Hammond: We have scored something of a modest success by getting the Minister to place on the record that there we will be able to ask a specific question about the allocation of money to trusts and get a specific answer through the parliamentary question route. That is a rather tortuous process, given the number of trusts and PCTs; none the less, it is some progress.

The point about the need for transparency has been made more than once. People need to know what is going on—not just Members of Parliament, but people in trusts and health authorities, so that they feel that they are treated equally. People in West Surrey health authority, for example, should feel they are treated in the same way as people in Durham health authority. The Minister, relatively unusually among his colleagues, represents a southern England seat and he may be familiar—[Interruption.]

Mr. Denham: Just looking over my shoulder it would appear that at least 50 per cent. of the Labour Members of the Committee represent southern constituencies.

Mr. Hammond: When I used the phrase ``the Minister among his colleagues'', I was thinking of the hon. Gentleman's ministerial colleagues. Although he is not likely to share this with the Committee, he may have the experience in the inner councils of Government of having to represent a view—which may or may not be correct—which is widely held in southern England, that in health funding matters there is a tendency to skew funding away from southern England towards northern England. This morning, I gave the example that a patient waiting for elective surgery in my constituency is nine times more likely to be waiting for 12 months or more than a patient waiting for elective surgery in the Prime Minister's constituency. The statistics go on.

Mr. Ian Stewart (Eccles): I would be happy to swap the heart problems suffered in my constituency with those in the hon. Gentleman's. Does he not realise that the only way to run a proper health service is to address the greatest need first?

Mr. Hammond: Would the hon. Gentleman care to comment on the need of patients awaiting elective surgery in my constituency compared with the need of similar patients awaiting elective surgery in the Prime Minister's constituency? They are nine times more likely in my case to wait 12 months or more. That statistic is even more shocking than it appears on the surface, because in the West Surrey health authority area more than 50 per cent. of all elective surgery is carried out privately. Taking that consideration into account, and bearing in mind the costs faced by the authority, the shortfall of funding for West Surrey is even more shocking.

Mr. Stewart: The hon. Gentleman does the Committee no service when he tries to give specific cases from his own constituency, having made nonsense general statements such as ``the north of the Country is better off than the south''. Of course each area has its serious problems. That is why the people of this country elected a Labour Government and will keep that Government in power. They will do so to ensure that provision is made on a strategic and fair basis.

Mr. Hammond: The hon. Gentleman does the Committee a disservice by reducing the debate to this level. I was saying to the Minister—I am sure that in private he will confirm that he is aware that this happens—that, rightly or wrongly, many people in the south of England believe that health funding has been skewed away from their areas into other areas. If the hon. Member for Eccles (Mr. Stewart) looks at debates in the House of Commons over the past couple of years, he will see that Member after Member has asserted that belief.

Several hon. Members rose—

Mr. Hammond: I will not take any more interventions. The purpose of my comments has been to reassert the reasoning behind this series of amendments which has sought to make information available about the basis on which money is distributed. To put it at its most neutral, the amendments encourage the Government to choose mechanisms that would reassure people that money is allocated on a proper, fair and equal basis. That would disperse any lingering suspicion that the money available for distribution under the mechanisms of clauses 2 and 3 could be distributed in a way that was not fair or even-handed.

I accept the Minister's assurance that he does not intend to cover up any of those matters. In due course, he may feel able to go further than he has today in reassuring the Committee about the availability of information in the public domain. However, our point has been made, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendment proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill.

Question agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4

Public-private partnerships

6.15 pm

Mr. Desmond Swayne (New Forest, West): I beg to move amendment No. 72, in page 4, line 6, at end insert—

    `(3A) The Secretary of State shall publish not later than the 31st December in each year an audited statement of his assets and liabilities (including contingent liabilities) under arrangements made under this section at 31st March in that year.'.

The Chairman: With this it will be convenient to discuss amendment No. 73, in page 4, line 27, at end add—

    `(7AA) The Secretary of State shall publish not later than the 31st December in each year an audited statement of his assets and liabilities (including contingent liabilities) under arrangements made under subsection (7A) above at 31st March in that year.'.

Mr. Swayne: I rise to speak to amendment No. 72, tabled under my name and that of my hon. Friend the Member for Woodspring (Dr. Fox). When I put my name to that amendment, I expected that my hon. Friend would move it. However, events have intervened. Labour Members who have unjustifiably accused me of verbosity will be reassured that I will, of necessity, be brief.

We support the principles of partnership and involvement with the private sector that underlie the clause—indeed, we have a measure of enthusiasm about them. That is my understanding, at least, but if I have got it wrong my hon. Friend the Member for Woodspring will correct me.

The Bill allows the Secretary of State to

    form, or participate in forming, companies to provide

finance and guarantees to the bodies in question. Our amendments would create the requirement for the audit of the assets and liabilities that the Secretary of State will acquire or incur under the opportunities that arise for him in the provisions of clauses 4 and 5. That strikes me as perfectly sensible—pure common sense, entirely uncontroversial. Therefore, I have every expectation that the Minister will accept the amendments.

Members of the Committee will understand, however, that a concern underlies that requirement. The track record of Government investing in the private sector is long and inglorious. I will not try your patience, Mr. Maxton, or use the Committee's time to detail any of that history—the history of picking winners, for instance. I am sure that it would not prove controversial if I were to do so, however, because we are now governed by new Labour, which accepts the case that mistakes were made. Government Members would now take great care before putting in a Bill provisions that enabled such a process to begin again.

The amendments would require a quantifying of the liabilities that the Secretary of State incurs and the finance that he puts at risk when he invests in companies. They would require the Secretary of State to measure the liabilities into which he enters and to publish them annually, making public the contingent liabilities and off-balance sheet risks. That begs the question as to how one measures such contingent liabilities. In my former occupation in the Royal Bank of Scotland, I specialised entirely in developing technical solutions, finding algorithms and computerising them to calculate precisely the values of those contingent liabilities.

In the past, general practitioners have financed their own premises, borrowing commercially and obtaining reimbursement of the rental from the health authority by the cost rent, or notional rent schemes. That system encouraged general practitioners to work with health authorities to identify third-party developers to design, build and finance premises, and then let them to general practitioners and trusts at a market rent. The national health service does not want a lease longer than 15 to 20 years, however, and I would not blame it for that. Given the 10-year plan, it would be too much to expect the NHS to enter leases for more than 15 or 20 years. Indeed, many commercial undertakings would not wish to do so.

Dr. Brand: Will the hon. Member explain why the Conservatives were so enthusiastic about the Government's private finance initiative projects, which tied the health service to contracts of some 60 years with a 30-year break clause?

Mr. Swayne: As the hon. Member says, no such contracts were entered into under the previous Conservative Government, precisely because of the terms and conditions that applied. Only as a result of those conditions being changed do we now have private finance initiative contracts.

The difficulty is that the cost of purchasing and developing the site cannot be amortised at a market rent set by the district valuer. The commercial developer of such sites therefore seeks to make the enterprise profitable. Consequently, if the NHS does not wish to renew the lease, the residual value of the site falls to him.

That is no problem in a constituency such as my own, where developers are queueing up to build on redundant primary, secondary, and—regrettably—intermediate care sites, which are largely privately owned. Recognising the residual value of a site after a development's natural life has expired is not a problem. There is, however, a problem in inner cities and rundown areas in other parts of the country, where initiatives such as this are most required so that modern and desirable premises for the NHS may be provided. Market rents are often too low to justify such a development in the first place, although since 1999 the district valuer has had some scope to deal with that problem. The difficulty arises because there may be no alternative use for the site if the NHS decides not to renew the lease. Therefore, the developer attempts to obtain a longer lease, or seek some guarantee with respect to the residual value of the site. The alternative is to seek agreement with a non-commercial NHS partner to purchase the land, or pay in part for the development itself, which would change the economics of the entire enterprise.

The economic reality is that in areas where the Department of Health wants new premises, but where there is no real demand for modern commercial property, the only way to develop the site is by underwriting some of the developer's costs. The advantage of that over the health authority simply commissioning and owning the project in the traditional way is not immediately clear. The private sector is able to accept the risk of managing a project. However, it is not good at or even willing to accept risks such as those that will be incurred as a consequence of developing new general practice premises in areas that are largely represented by Labour Members. To return to our previous discussion, Labour Members might justifiably say that they represent all areas, but I am sure that that imbalance will shortly be corrected in the months, if not weeks, to come.

If public borrowing is to be avoided, the Government will have to be prepared to enter into deals with the private sector that will have a significant potential cost, or contingent liability, in 15 or 20 years' time. When the leases expire and the residual value of the sites is not realised by the developer, the contingent liability, which the Secretary of State will have had to have underwritten in order to initiate the project, will fall due. It is only prudent to measure those liabilities as they are acquired and report on them every year to find out precisely what the Secretary of State is entering into as the years progress. That strikes me as entirely proper.

I have one or two other anxieties about the clause, largely as a consequence of an excellent document furnished by my right hon. Friend the Member for North-West Hampshire (Sir G. Young). However, as I would not want to divert the Committee's attention from these focused amendments, I shall leave those remarks to an even more focused debate on, if you are willing, Mr. Maxton, clause stand part.

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