Examination of Witnesses (Questions 40
WEDNESDAY 24 OCTOBER 2001
MILBURN, MP, MR
40. Would you support a scheme that moved all
existing radiologists or existing pathologists from an existing
National Health Service hospital to a private sector partner if
that seemed to be better value for money and better service for
patients? The extra capacity is already there.
(Mr Milburn) If we could avoid that that would be
preferable. However, as you are aware at the moment we have discussions
going on in the private sector and with relevant trade unions
about the retention of employment model that we are exploring
in relation to the private finance initiative, which, effectively,
is trying to find a way of ensuring the lowest paid people in
the National Health Service, the cleaners, the porters, the cooks
and the laundry workers do not automatically have to go to the
private sector for their employer in the event of their being
a PFI scheme in their local hospital. We are trying to find a
way they can retain their National Health Service hat on National
Health Service terms and conditions. We are making progress with
that and we are in negotiations and discussions but nothing is
finalised at the moment. If we can bring that retention of employment
option off there it is possible that we could apply that same
model, for example, in pathology labs.
41. You would only allow that scheme to go ahead
if the clinical staff, as you see it, stayed as National Health
(Mr Milburn) That is the current position.
42. Even if a scheme was put forward by a private
company would be better value for money?
(Mr Milburn) I should say we have had three schemes
to date where we brought the private sector in for pathology,
where in two cases, as I remember it, staff have transferred and
in one case staff have not transferred.
43. In the cases where the staff have transferred
we have had clinical staff transferring under a partnership scheme.
(Mr McKeon) Not the consultants.
44. Why is there a distinction there?
(Mr Milburn) That is why it is important that we try
get this retention of employment options working. There are good
service reasons why we should try to retain people, for labour
market shortage, for the reasons that we set out earlier, but
there is also a cultural thing, by and large people like being
part of the National Health Service.
45. I agree.
(Mr Milburn) They are quite important members of staff.
At the moment because we are having to embark on a trade-off between
getting additional capacity into the National Health Service and
some members of staff having to leave the National Health Service
that is a trade-off that is currently taking place under the PFI
and under the PPPs that we could envisage for pathology services.
The reason the retention of employment option is actually quite
significant, not just for cooks, porters and cleaners, is that
potentially it provides a means of avoiding that having to be
a trade-off. We need to try to make the retention of employment
option work, if we can. All I will say is that it is phenomenally
46. If you had National Health Service management
that had things that seem to identify more with the private sector
in your brief, I hope, I am confident that you would say, you
would also be associated with some National Health Service management
innovative ideas, risk taking abilities, and so on, if you had
such a National Health Service management that wanted to take
over the maintenance of the building of a PFI hospital and the
cleaners or another part of staff would that be considered or,
in your view, does the maintenance always have to go with the
construction of the building?
(Mr Milburn) Are you talking about PFI now?
(Mr Milburn) I think there is a natural distinction,
to tell you the truth. Remember what you are procuring under PFI
is a managed asset over a period of years. PFI is very controversial
but the one great advantage it has is that it gets the local NHS
management and the commissioners and everybody else out of the
business of having to worry about whether the building is maintained
for 30 years. The only way you can maintain the building as new
for 30 years, or 60 years, with a break clause usually after 25,
is if you have the staff who can look after the building. The
point I want to make is that I think there is a distinction to
be made between those NHS staff whose necessary function is the
maintenance of the buildingthe engineers, the ground maintenance
people, the electricians and so onand those people who
more naturally are aligned with mainstream NHS clinical services.
I know you want to come back in but let me finish the point because
this is really important. There was a view at one time that NHS
cleaning services did not really matter, you contracted them out,
you got the cheapest deal, nobody gave a damn, and people were
amazed when hospitals got dirty. What we have done over the last
few years is try to re-integrate the cleaner back into the NHS
team, and that is why we have got the matron back in fact.
48. I accept all of that, but what if NHS management
said, "Actually, what we would like to do in our hospital
is accept one less patient, we will accept 90 per cent of maintenance
because we want instead to experiment and do something different,
all the things which the PFI schemes say, so we can give better
value for patients, better service for patients and better value
for money for taxpayers as a result"? Do you dogmatically
rule that out or would you consider such a scheme?
(Mr Coates) Are you the envisaging the trust itself
borrowing the money?
49. No, somebody else builds the building and
they have some staffcleaning or something elsebut
not maintenance staff.
(Mr Coates) The problem I think is really the security
of the money. You are saying to the banks which lend the hospitals
several hundred million pounds, "Trust us, we will deliver
it back to you and pay the bills on time without any security."
If you are going to do that method, you have to find some way
of the trust itself providing security to the banks, and that
begs the question, who is borrowing the money then, and perhaps
you might find that actually the NHS is better at borrowing money
than an individual trust.
50. I understand that. It is a dogmatic rule
you have to stick to for Treasury rules.
(Mr Milburn) Poor old Treasury, it always gets it
in the neck.
51. Yes. A lot of what you have talked about
is trying to move away from spot-purchasing by the private sector
and moving instead to long-term agreements.
(Mr Milburn) Yes.
52. If you had those long-term agreements buying
operations for NHS patients, that means private sector nurses
in those hospitals providing the support and care for NHS patients.
Is that any different from contracting out clinical services?
(Mr Milburn) It could mean the BUPA nurse providing
the service but, as I indicated earlier in the example I was using
to the Chairman about Kent, it depends what you are contracting
for, it depends what you are actually buying. We were talking
earlier about the purchase of the London Heart Hospital, and as
it happened the staff came along as a sort of consequence of the
purchase of the asset. Primarily what we were buyingand
it was fantastic to have some more nurses and great to have some
more trained doctorswas the asset. In a lot of these instances
under the Concordat and under some of the arrangements I outlined
to Mr Burns for the future, what we are interested in is procuring
more assets, more capacity, more hardware. Very often in these
instances, it will as much involve the NHS nurse and the NHS doctor
treating the NHS patient in a different location as it will the
BUPA nurse treating the NHS patient in their hospital.
53. But in many cases it is the BUPA nurse as
well, so in that sense the clinical services are contracted out?
(Mr Milburn) It could be but we are not taking a group
of NHS staff and lobbing them over to the private sector, saying,
"There you are." That is what used to happen with cleaners.
We are trying to get to a position where that does not happen.
What we are trying to do is to purchase the maximum capacity from
the BUPA hospital, or whichever hospital it is, which happens
to get the maximum capacity out of the people they already employ.
It does not involve the transfer of staff. If the idea is that
somehow or other this is akin to some sort of privatisation of
clinical services, that would be an allegation I wish to refute.
54. I very much welcome your recognition of
the Medical Laboratory scientific officers' key role in the NHS
and the fact they want to work in the NHS, but you recognised
in the last pay round the demoralisation there was amongst pathology
staff and that was recognised by the substantial increase. In
terms of the professions allied to medicine, for those who are
outside the Pay Review Bodies, what is your timescale for bringing
them within the Pay Review Bodies because it is clearly in those
areas, where staff have been outside the Pay Review Bodies, where
we have seen the greatest demoralisation and gap.
(Mr Milburn) There is a negotiation going on. I am
the employer and there are trade unions, and one of the trade
unions' demands, one of the MSF's demands as it happens, is that
they want to have their people inside the Pay Review Body. But
we are in negotiation, in the middle of that right now. Agenda
for Change, which is the negotiation, which is how we have modernised
NHS pay across the piece, including looking at who should be in
and outside the review bodies, has been going on for some considerable
time. It is slow going, I know that, it is pretty frustrating
all-round, both for the unions and indeed for us, but it is not
surprising it has been slow going when you are negotiating with
a whole host of different people with quite different agendas.
I cannot say when it is going to come to fruition and nor can
I say what the outcome will be, because we are in negotiation.
55. We want to look at the overseas patients
programme and I will move to Simon Burns in a moment but on capacity
can I ask one final question. You will remember, when we looked
at mental health, we expressed concerns about the way in which
we felt the use of the private sector had retarded the development
of more appropriate accommodation within the National Health Service.
We gave examples of particular patients placed in private sector
secure units in Yorkshire who were primarily London-based patients,
and we did not see a great deal of logic in that policy when a
key part of their treatment was to try and care for them in the
community they came from and had lived in. My worry about this
is that it is very short-term thinking. You talk about longer
term arrangements, will that include a longer term evaluation
of whether the use of the private sector in what was, in mental
health, initially the short-term but it has become the longer
term, is really value for money and offering proper quality services?
At lunch time I was talking to a health service manager who was
telling me we are spending £35 million a year in London alone
for private placements of acute psychiatric patients outside London.
That does not seem to make sense to me.
(Mr Milburn) The corollary of a longer term relationship,
which is what we have been discussing and what I have been trying
to outline today, is that we have to make sure we get the benefits
back, and that means we do have to assess the value for money
implications if we are contracting with the private sector to
provide certain services, mental health services, secure beds,
from the point of view of the taxpayer. That is why I was saying
earlier that whilst it has been true that thus far under the Concordat
local health services have very much made their own deals with
the local private sector providerand frankly have paid
quite differential prices as a consequenceif we have a
longer term relationship which guarantees to the private sector
greater continuity of custom from the National Health Service
to treat patients, the corollary of that is that you would expect
to see movement on price and expect us to use the benchmark of
NHS reference costs when we are undertaking those contracts. That
will take us into new terrain and terrain we have not been into
so far. Point one is there will be a deal to be struck. Point
two is that I think the obligation on us, if we are doing more
contracting with the private sector in that sort of way, in value
for money terms will be to make sure we are undertaking the appropriate
monitoring to get the best possible deal for the patients. I have
no doubt that organisations, whether it be the National Audit
Office, or others, will be taking a real interest in this area.
I do not have a problem with that at all. The third and final
point is that on secure beds, you are right, historically the
National Health Service effectively contracted out the provision.
We are changing that, as you know. One of the real things that
we have achieved in the mental health field is to begin to address
the real gap in capacity round the secure bed provision. We have
put in 400 or 500 beds in the last five years and I hope we are
getting them into the right areas of the country. There have been
for very many years historical problems in London, which is why
you have patients shipped up to Yorkshire, we will have to address
that over time.
Chairman: Now we go overseas.
56. I want to ask you one or two questions about
the overseas patients. I fully accept that given the court ruling
was only three months ago you may have difficulty in answering
questions because it is too soon and things have not bedded down.
(Mr Milburn) Sure.
57. I understand that there are pilot schemes
at the moment with some patients going to Germany. How do you
envisage, if we put aside for a minute the cost implications or
the cost estimates, on the nitty gritty things, for example, like
the travelling from the United Kingdom to presumably, a logical
conclusion, anywhere in Europe for treatment and the cost of taking
a family member with you to look after you and help you both getting
there and returning to the United Kingdom? What is the situation
in those countries? Correct me if I am wrong, in Spain, for example,
you have to provide your own food or the family has to provide
the food for the patient who is in hospital, which is a system
totally different to here. What happens in those circumstances?
What happens if there are adverse clinical incidents or post operation
complications, who is responsible? What is the route for help
and redress, and whatever?
(Mr Milburn) I think all of those are very, very telling
points, that is why I will start with the big point and then to
deal with some of the specifics. That is why those who see the
sending of patients from this country to other countries in Europe
as a panacea for the National Health Service are wide off the
mark. I think it can help, I think particularly in those parts
of England that are close to the Continent, potentially it may
be attractive for some patients to travel 30 miles to the North
of France rather than travel 30 miles further northwards in England,
it may well be. There are a couple of caveats round it that are
very, very important, and I will raise some of them: (1), if we
are going to do this then it has to be with the consent of the
patient. There is no question whatsoever of sending patients abroad
against their will. (2), it has to follow a full clinical assessment
of their needs. (3), we have to put in the place the appropriate
arrangements to ensure that we get good value for money for the
taxpayer and a guarantee of clinical standards of the highest
level for patients.
58. Can I pick you up on the first one, where
you said it has to be with the total agreement of the patient
which, of course, is absolutely right. Is there not a problem
where a patient is confronted with an either/or situation, where
they are told that they need an operation and they are told that
if they want it in London the waiting list, as far as it can be
judged, is 10 to 12 months, but you can have it in two weeks'
time if you travel to Northern France or Germany. That voluntary
element is slightly removed in some ways because of the temptation
that they could have their operation in two to three weeks' time
rather than having to wait 10 to 12 months?
(Mr Milburn) Those might be extreme ends of the spectrum.
59. Do you think it would be extreme?
(Mr Milburn) I will solve that dilemma for people.