Examination of Witnesses (Questions 440
THURSDAY 15 NOVEMBER 2001
440. So you have not got an idea how that would
(Mr Stone) It is so far off the agenda at the moment,
we have not gone right the way down that route. But we need to
look at the evidence. As for how the dickens we manage things,
I have not got a clue at the moment, it is not one I am competent
441. Mr Davis, you were very careful in what
you said about not wanting clinical services as a personal opinion,
does that mean that Catalyst as a company which you represent
might be thinking about it?
(Mr Davis) No, I think it is reflected very much in
our policy, and again the maturity of our thinking and our ability
and experience now means we are concentrating in the next few
years on large inner city teaching hospitals, particularly those
associated with regeneration, and we think both in terms of urban
regeneration and reproviding facilities which are extremely complex,
that we have learnt a lot from capital projects and we can recycle
that for the benefit of the NHS. I was very interested in the
comment from the Chief Executive of Battle because our experience
is that it is now no problem at all to include a high percentage
of refurbishment within PFI procurements, and perhaps colleagues
from Manchester can talk about that because there is a large element
of the retained Estate to be refurbished or not refurbished, so
refurbishment is no longer an issue in PFI.
442. Mr Stone, you said that clinical services
were "so far off" the agenda at the moment, suggesting
you would be quite pleased to see them come on to the agenda at
the right moment. As a matter of interest, have you been having
any discussions with the Department of Health to get the item
on the agenda?
(Mr Stone) Not specifically, is the direct answer
to your question.
443. And the indirect answer?
(Mr Stone) The indirect answer is that I am, whenever
possible, encouraging open and honest debate about setting the
boundary where it is of best benefit to the taxpayers as a whole.
444. How are you doing that?
(Mr Stone) It is just part of the general conversation
one has with one's clients.
445. With clients?
(Mr Stone) On both sides, both public and private
446. So you have not specifically discussed
(Mr Stone) No.
447. It might have been part of a general discussion?
(Mr Stone) In general, part of what I think a number
of people are involved in
448. They have not closed the door?
(Mr Stone) It would be unfair to say we have had any
formal conversation with the Department about the involvement
of the private sector in delivering clinical care. As in all circumstances,
there are plenty of conversations which happen privately to look
at the way in which the boundaries may or may not be relaxed.
The expectation at the moment from practitioners is that we will
be long in the tooth and very grey by the time we seek clinical
services being involved in the process. For the time being, for
the industries at large and for us as advisers on both sides,
it is an irrelevancy because it is not in our medium-term vision.
449. Even if there had been informal private
discussions with the Department of Health, would they have been
with officials or with ministers?
(Mr Stone) I think practitioners is the best way to
450. I do not understand the term "practitioners"?
(Mr Stone) People involved in the PFI process.
451. But ministers are involved as well as officials.
(Mr Stone) Not at the practical level they are not.
452. So we can take it, can we
(Mr Stone) I have not spoken to ministers.
453.you have not spoken to ministers
at the Department of Health?
(Mr Stone) Absolutely.
454. But special advisers you have? You have,
obviously. Come on, you can tell the Committee!
(Mr Stone) I think the correct and proper answer to
your question is we have spoken to people in the normal course
of our work about where the boundaries might lie in the long-run
on the basis that it is incumbent on all of us to make sure we
do not find ourselves stuck in the process for the sake of the
455. Does that mean you have spoken to special
advisers in the Department of Health or not? With respect, your
answers are very circuitous.
(Mr Stone) They are, on the basis that the conversations
are entirely off the record and entirely private.
Mr Burns: You brought up the subject.
456. We have confined these questions to your
dialogue with the Department of Health, what about other elements
of Government? Is there any other dialogue with other departments
or other areas of the Government on this issue?
(Mr Stone) There are conversations with people in
the Treasury about the whole process in general and to the location
of the boundaries and as to whether or not they should be examined
more carefully, but nothing more specific than that. We are certainly
not advocating a specific course of action other than one based
457. What about the shadow Secretary of State
for Health? Have you had discussions with him?
(Mr Stone) I have not personally, no.
458. Still on the theme of the extent of the
PFI in the NHS, but changing to primary care, we are interested
in the lessons which can be learned from PFI and acute hospitals
within the LIFT scheme in primary care. I would be interested
in the view of KPMG, Mr Stone and Mr Davis, on the LIFT scheme,
whether you think we are talking about very different schemes
so the lessons which can be learned are much smaller, or whether
you think the fact they are simpler means there is much more scope
to roll out the PFI in primary care?
(Mr Stone) The important point is that those people
who have been involved in the development of the LIFT concept
all the way across the board are people with substantial practical
experience of deals which work and do not work historically, so
there is a lot of historical expertise being brought into this.
By expertise, I do not mean process-specific but much more how
the processes were built, how we have developed the PFI process
and the PPP process generally over time. So the lessons which
have been learnt from that, for example approaches to standard
contracts, approaches to standard payment mechanisms, understanding
how to create a deal, all that experience has been built within
the advisory community and within the NHS.
459. Because we are talking about much smaller
localised schemes, we are not talking about the reputation of
some of the big, blue chip companies involved in PFI, we are talking
about different operators.
(Mr Stone) There is potentially a wider scope of operators
involved, in that we are primarily focusing here on the inner
cities and we have something like 35 per cent of our GPs retiring
between 1998 and 2005, and there is a real issue in terms of sorting
out primary health care in inner cities. As to the schemes overall
on an individual basis, it is likely that when contracts are let
they will be on a basis as has been pioneered in the schools environment,
but again we are learning very much from all the previous health
care schemes and other attempts at bundling to create a mechanism
which will deal with many small schemes in a relatively small
geographical area. It is not yet at the stage where it will address
in principle anyway those issues of widely geographically scattered