NHS Reform and Health Care Professions Bill

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Mr. Heald: Will the Minister say a little more about one aspect of the structure? It is clear from clause 1, which we have already debated, that there is a power for the liabilities of health authorities to be transferred to SHAs, and no doubt such liabilities could be transferred to PCTs because there are similar powers in schedule 3. Are the Government in a position to explain what will happen to PCTs as regards debts that have built up in health authorities over many years?

Mr. Hutton: I can reassure him and the Committee that there is only one health authority that has a deficit. The issue of the potential transfer of liability only arises in that one case. My understanding is that that deficit will be resolved by the end of this financial year.

Mr. Heald: I am grateful to the Minister. As regards general liabilities and ignoring the question of that one historic debt, which is of course of great interest to me, can he tell us what will happen to the various liabilities that any company, corporate body or in this case health authority has at any particular moment? Are those liabilities something about which he can tell us in Committee?

The evolutionary principle, which was set out in 1999, was designed to ensure that PCGs could not go on to become PCTs if local people in consultation felt that that was right. That decision would have involved weighing up a range of different concerns. It would have involved an analysis both of the PCT's practices in the area and of its strengths and weaknesses; it would have involved looking at the robustness of the management, and thinking about whether staff with particular areas of knowledge could be recruited; it would have been about the premises, their location and a whole range of matters. Of course, above all, it would have looked at the sort of services that would be available to local people.

7.15 pm

It is rather shocking to see that the Government have gone back on that approach, and that they have not explained why. I hope the Minister will be able to tell us why he is abandoning the points made by Baroness Hayman, such as the fact that primary care trusts will be established by the Secretary of State, and that progression to trust status will be determined by local views; that the Secretary of State will be able to establish primary care trusts only after local consultation; and that the views of the primary care groups, local GPs and other professionals, as well as the wider community and the local NHS, will be key considerations for the Secretary of State.

Is the Minister really indifferent to bodies such as the Royal College of Nursing, which was obviously told that this scheme was to commence in the year 2003? The Royal College of Nursing has voiced concerns over the viability of the successful implementation of the proposals in the time scale envisaged. PCTs are relatively new organisations, and the expectation that they will be able to provide the proposed services by 2003 is very ambitious. PCTs will need support if they are to take on new responsibilities.

If it were just the Royal College of Nursing—although I would never put it in this way—one might say that only one body of health professionals takes that particular view, but everybody else disagrees. If so, we could do what the Minister seems to want to do, which is to ignore it. However, what the British Medical Association—the main representative group for doctors—says is almost word for word the same. The BMA says that it is concerned that PCTs, where they exist, are relatively new organisations and that the demands may well be beyond their existing capacities. They are already experiencing difficulties in recruiting clinical staff who are able, willing and competent to participate. The BMA states that the PCTs will be up and running by spring 2003; it has obviously been told that as well. This is an ambitious timetable, given that there remain approximately 130 primary care groups, many of which have not yet made any preparations towards PCT status.

In the light of those comments from the two main representative bodies of health professionals, the Committee is entitled to ask the Minister whether the PCGs and PCTs are ready for these reforms. The answer seems to be no. The Minister is aware of the tracker survey, which has already been referred to. This survey states that progressing, commissioning, health improvement and partnership working are slower, and that a lack of reliable and timely information and insufficient managerial capacity remain as problems. Professor Wilkin's views have also been referred to. The message is that the groups are not really ready for this change. The executive summary looks at more detailed points about the wide variation in the numbers and type of staff available to PCTs and PCGs, making the point that this is likely to be reflected in a varying capacity to deliver improved services.

I know the Minister found it deeply shocking when my hon. Friend the Member for Woodspring said on Second Reading that the average number of managerial, financial and administrative staff employed by PCGs was 6.8, compared with an average for PCTs of 15.8. The number of staff needed to bridge the gap between PCG and PCT status and to perform the sort of detailed, enhanced functions that the Minister proposes raises a key concern. The numbers of staff employed or seconded have increased considerably during the past 12 months, but one in seven PCGs and PCTs still has no finance staff.

PCGs have extended efforts to involve key stakeholders, but the interests of local communities and voluntary organisations are still poorly represented in many PCGs and PCTs. The proportion developing locality groups—something on which the Minister places particular emphasis—is slightly more than one third. However, only seven have delegated budgets to that level.

That body of concerns has come out through the Government-supported tracker survey. Only one fifth of PCG and PCT budgets are in line with national resource allocation targets. Half are developing financial incentives related to clinical governance, but only one third were planning to link the financial incentives to notional practice budgets for hospitals and community services. Given the extent of the Minister's ambition for PCGs and PCTs, that is a long way off the mark.

The background is that responsible health professional bodies such as the BMA are proposing an ``ambitious'' timetable; as I said earlier, that is a bit like Sir Humphrey describing a Minister's decision as courageous. [Interruption.] I am happy to give way to the hon. Member for Weaver Vale (Mr. Hall) if he so wishes, or we could discuss the matter later. The hon. Gentleman may have been suggesting that my recollection of Sir Humphrey was poor, but I stand by it.

The Health Service Journal recently undertook a study of the views of chief executives of NHS bodies. Some 304 chief executives responded, which I would suggest is a very good sample. They produced a series of findings that make sobering reading. Some 45 per cent. of chief executives thought that the inabilities of PCTs to cope with enlarged responsibilities were due to the fact that they lack managerial capacity, resources and vision. A third—33 per cent.—thought that the time scale for the changes was unrealistic and dangerous. Some 29 per cent. thought that the changes were resulting in disruption to delivery and risks to the NHS plan. Almost a third of chief executives believe that the organisational changes involved in the Minister's great NHS plan, designed to deliver all the improvements that we hear so much about, will damage progress.

A fifth of executives—22 per cent.—had concerns about the future of many health authorities, regional office functions and the lack of detail in the proposals. Some 20 per cent. thought that the effect of changes on staff, the loss of key staff, the lack of continuity and the impact on morale were very important. One could go on and on listing the drawbacks that were found in the study. One chief executive was quoted in the survey as saying that

    ``many of the smaller PCTs and some of the newly appointed chief executives are not going to be able to deliver the new agenda. It is crucial to tackle this issue and not wait for these organisations and individuals to fail.''

That is what we are saying. Why go forward with something half-baked, when allowing it a little extra time to evolve in the way it was originally intended might prevent the mess, which, under the present arrangements, will occur?

Another chief executive put it this way:

    ``Governments never learn that reorganisations disrupt delivery, demotivate staff and usually fail in their stated objectives. A programme of sustained development and performance management based around the NHS plan would have been far more likely to achieve the Government's stated objectives.''

I have asked myself whether the implementation of the NHS plan would be delayed as a result. Three quarters of the chief executives asked said that it would. One said:

    ``policy making has been rushed and is inadequately informed by understanding of how the NHS ticks.''

Another said that there was

    ``a need for a more measured pace if lasting, carefully thought-through reforms are to be achieved''.

Will money be saved? Ministers say in ``Shifting the Balance'' that £100 million will be saved. The chief executives believe that the one-off costs involved in winding down health authorities and other organisations, setting up new ones, transferring staff, changing offices and so on—the sort of churning that occurs when one reorganises—will alone cost £200 million, dwarfing the saving of £100 million. Can the Minister name a single organisation in which change has not brought massive costs? He and I know from debating reorganisations of various sorts over the years that they cost money. If he says that there will be no costs, which is what the summary of the financial effect suggests, can he explain why that will be the case when there normally are?

We must consider the human cost of the reforms. A fifth of the chief executives surveyed were concerned that there would be a loss of experienced staff. Some 15 per cent. said that they planned a career move outside the NHS, and 14 per cent. said that they would retire early. That would be a substantial percentage of chief executives lost to the service. One said that the changes were

    ``the most ill-conceived, poorly thought through set of changes in decades. Is the plan to torpedo the implementation of the NHS plan? This is my sixth reorganisation in a 30-year career in the NHS. I have always responded positively to change previously. However, these proposals are a recipe for disaster—a blend of lack of insight, ineptitude and disregard from all staff at all levels.''

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