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Secondly, the independent regulator must take into account the impact of NHS foundation trust borrowing on the wider NHS when he sets their individual borrowing limits. Thirdly, NHS capital budgets are sufficient over the next few years, until every trust becomes an NHS foundation trust, to provide the necessary capital requirements for both foundation trusts and NHS trusts; in fact, there will be a 144 per cent. increase in capital for the NHS in the next five years. So it is not the case that foundation trusts can borrow whatever they like and thereby ensure that every
Thirdly, foundation trusts are not about a super elite. Over the next four to five years, all NHS trusts will have the opportunity to become foundation trusts. In the meantime, we are investing a further £200 million to improve performance in poorly performing trusts, so no one will be left behind.
Clive Efford (Eltham): If NHS hospitals are allowed to borrow up to an overall envelope limit, will any additional spending by a foundation trust, whether it comes from the private sector or not, count against other NHS hospitals and therefore limit their scope? If so, foundation trusts will have an advantage over other NHS trusts.
Mr. Hutton: My hon. Friend must take into account one fundamental issue: namely, that foundation trusts are not at liberty to borrow whatever they would like to borrow irrespective of their ability to service the debt. They must be able to service the debt. That, in turn, must be related to the revenue that they have secured through primary care trust commissioning to provide services to NHS patients. As I said, the independent regulator of NHS foundation trusts must, in approving and setting the borrowing limit, take into account the impact of foundation trusts' borrowing on the wider NHS. As elsewhere, we have tried to balance those important new freedoms with some essential safeguards. That is essentially the point that I am trying to make to my hon. Friend the Member for Wakefield.
Fourthly, my hon. Friend suggested that the proposals will undermine primary care and its emerging role in the NHS. That, too, is simply not true. It is not the case that there is no need for further reforms in the acute secondary care sector of the NHS; and it is possible to implement those changes without compromising on the key role that primary care trusts will have in the NHS in future. The Bill does not change commissioning arrangements: primary care trusts will still lead the development of the NHS.
Finally, as I said to my hon. Friend the Member for Eltham (Clive Efford), we have tried to balance operational and financial freedoms with the right safeguards, so that the NHS continues to operate as an effective, comprehensive and universal service. All trusts wishing to become foundation trusts will operate the new national pay systemwe do not want any unfair poaching of staffand foundation trusts' actions will be subject to the new arrangements on local public consultation.
Mr. Gordon Prentice: Will my right hon. Friend tell me whether individuals who want to become a voting member of a foundation trust will have to pay £1, as specified in the Bill, or merely pledge to do so?
Mr. Keith Bradley (Manchester, Withington): I shall ask a question about which my right hon. Friend may have notice, since I have already asked it on several occasions. What will be the electorate for a specialist hospital such as Christie in my constituency? Who will be eligible to vote on the governance of that hospital?
Mr. Hutton: I am happy to try to answer my right hon. Friend's concerns, because they are perfectly reasonable and many other hon. Members have raised them. The Christie hospital is a unique asset to the NHS. It is a regionalindeed, nationalcentre of expertise for cancer services. The Bill requires a public constituency for the NHS foundation trusts, and that must include representatives who are elected from the area in which the hospital provides services. However, in the case of NHS foundation trusts such as Christie'sif it became onewe assume that the majority of the public constituency, especially those elected to the board of governors, would be chosen from the patient constituency, for which the hospital predominantly provides services. That group comprises many people, and we want to work with local foundation trusts to develop the proper mechanism for reaching out to members of the patient constituency and inviting them to become members of the foundation trust.
The hon. Member for Woodspring tried to pooh-pooh suggestions that there was anything commendable in the proposal for patients to have a say in the governance of their local hospitals. He is wrong. It is a fundamental principle of democracy to extend patient choice and involvement in the NHS.
Mr. Hutton: Of course they are all entitled to their views. I have made it clear that I respect my hon. Friends' views. However, the hon. Gentleman sits here day after day, berating the Government for being a command-and-control Administration. He claims that we dictate everything from the centre. In the Bill, we are trying to set a broad structure for local governance, which should be determined and agreed locally, but in a structure of basic guarantees.
In response to the point of my right hon. Friend the Member for Manchester, Withington (Mr. Bradley) about the governance at Christie hospital, I have made it clear that the majority of the board of governors will be elected from the patient constituency.
Local consultation will take place and agreement will be reached on the governance issues for each applicant for foundation trust status. We have strengthened schedule 1 today as the result of points that my hon. Friends the Members for West Bromwich, West (Mr. Bailey) and for Ealing, North (Mr. Pound) made in Committee. It provides for an improved framework for local accountability and engagement, and the governance arrangements are clearer and more transparent. The Government have listened and acted on the concerns to which hon. Members rightly drew our attention. The Bill is therefore better and stronger. The Government will accept the relevant amendments that my hon. Friends tabled.
I believe that the aspects of the Bill that we are considering fully reflect the basic principles of the NHS, and are based on the values of public service. They are not about two tiers, markets, competition or privatisation. Nor are they about change for change's sake or simply another round of NHS reorganisation. The measure is fundamentally about how we can best improve local health services so that the patient benefits.