|
Chris Grayling: I seek one point of clarification. If a trust generates surpluses and reinvests them in the acquisition of a body corporate, and in doing so further increases its revenues, will it be able to secure from the regulator a change to the code against which it is allowed to borrow; and will that change be something that can happen at any stage, or can it happen only once in every one, two or three years?
Mr. Hutton: Clause 17(3) includes a provision for an annual review of the prudential borrowing limit, but if the revenue available to the NHS foundation trust were to increase as a result of a successful investment or income-generation scheme, it would affect its overall borrowing limit because the resources available to service debts would have increased. It would clearly have an impact—I think that I am right in saying that, but I shall get confirmation later.
The borrowing limit is set out in the authorisation for the NHS foundation trust. Under clause 9, it is possible for that to be varied on an application by the NHS foundation trust. It would be possible to review the prudential borrowing limit ahead of the annual review provided for in clause 17, if the NHS foundation trust felt it necessary to do so.
Chris Grayling: I am grateful for that clarification. I am happy to withdraw the amendment.
Mr. Lansley: I accept what the Minister had to say; I understand that, as there is no power to distribute to members, there is no need for a prohibition. I understand also the need for NHS foundation trusts to use resources generated from NHS activities to provide what might be regarded as services ancillary to its NHS activities, and that child care facilities may be a good example. However, it is important to recognise one of the long-term protections that will be needed: NHS foundation trusts should not become vehicles through which surpluses generated by publicly funded activities inside the NHS can be directed towards commercial activities outside the NHS on terms that are anti-competitive in relation to commercial providers.
As far as I am aware, we can probably be reasonably comfortable about that, because if NHS foundation trusts were to engage in that sort of behaviour, competition legislation would bite upon it. Such
Column Number: 452
behaviour would be protected only insofar as the NHS foundation trusts were undertaking their public duties, which is the provision of goods and services for the health service under the NHS; otherwise they would expose themselves to anti-competitive legislation under the competition rules.
Mr. Hutton: I am grateful to the hon. Gentleman for allowing me to give the clarification and confidence that he seeks. He should remember that clauses 6, 14 and 15 already provide for the terms of authorisation to restrict activities that fall outside the NHS foundation trust's primary purpose. Under clause 14, it is the provision of NHS services that is the principal purpose that the foundation trust has been set up to secure.
Mr. Lansley: I am suggesting that an additional protection may be needed if an NHS foundation trust is engaged in its primary purpose but has a small adjunctive service. For instance, it might provide a local engineering service, perhaps for medical equipment, and begin to commercialise it. If that were subsidised out of NHS activity, it would expose itself to scrutiny by the competition authorities for doing so on an anti-competitive basis. I think that we are protected on that and so I will not pursue the matter any further. If I am mistaken, I am sure that the Minister will write to us.
5.15 pm
Mr. Pound: My right hon. Friend the Minister has spoken with great skill about my amendment No. 265. He has answered my concerns about subsection (7) completely. I still have problems with the Government's reluctance to accept subsection (8) as set out in the second part of the amendment. I cannot understand how we can countenance a situation in which a foundation trust can invest money in a company and an employee of that trust can gain pecuniary advantage. We are told that were the amendment accepted it would create an unfortunate precedent for other national bodies, but that is an argument for cleaning them up rather than amending this. I am normally the most biddable of people. My right hon. Friend usually needs little effort to convince me but I have grave doubts about this.
Mr. Hutton: I am sorry that I have not persuaded my hon. Friend on this occasion.
Mr. Pound: I have not finished yet.
Mr. Hutton: We are not giving to NHS foundation trusts or their employees any financial advantage that is not currently exercisable by employees of NHS trusts. These freedoms are already available—rightly so—to encourage innovation and public sector enterprise. It would be a sad day if we lost them.
Mr. Pound: My response would be that I hope we are starting down a different road. NHS foundation trusts are a different beast from those we have known before. We should use this opportunity to breed a better beast. The fact that it exists at present is not a persuasive argument. However, I recognise that it
Column Number: 453
would probably be inappropriate for me to seek to divide the Committee on this occasion as several hon. Members want the matter to be discussed in another place and in the Chamber.
Amendment, by leave, withdrawn.
Clause 17 ordered to stand part of the Bill.
Clause 18
General powers
Chris Grayling: I beg to move amendment No. 474, in
clause 18, page 8, line 8, leave out
'which appears to it to be'
This amendment need not take up more than a couple of minutes of the Committee's time. It seeks to avoid offering opportunities to the Minister's past profession and his former colleagues. The phrase
''which appears to it to be''
seems extremely woolly for a piece of legislation that should be tightly and carefully worded. We cannot see why ''anything'' needs to be subject to interpretation; surely the phrase ''that is'' is an acceptable alternative. It is a minor improvement that we hope the Government can accept.
Mr. Hutton: The hon. Gentleman said that the drafting was woolly and unacceptable. I can reassure him that it is taken from legislation that his party introduced.
Mr. Burns: That does not mean it is good.
Mr. Hutton: Indeed, but it has certainly stood the test of time. Paragraph 16 of schedule 2 to the National Health Service and Community Care Act 1990 states:
''an NHS trust shall have power to do anything which appears to it to be necessary or expedient for the purpose of or in connection with the discharge of its functions''.
It has not had any undesirable or outlandish consequences, and I have no reason to assume that it will on this occasion.
There is one other problem with the amendment. Clearly, someone must decide what is necessary or desirable for the purposes of a foundation trust discharging its functions. Generally, it is better for that to be the responsibility of the organisation's management and governors rather than, as the amendment would require, another body. In this case, that would be the independent regulator. The amendment could be interpreted as requiring every exercise of an NHS foundation trust's function to be subject to individual approval by the independent regulator. That would be ridiculous.
Chris Grayling: I am not sure whether I agree with the Minister's interpretation, but I am grateful for his clarification of the reason for the wording. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Column Number: 454
Chris Grayling: I beg to move amendment No. 16, in
clause 18, page 8, line 9, at end insert—
'(1A) An NHS foundation trust shall have the power to pay remuneration and allowances to any person without reference to future national agreements on pay negotiated by the NHS.'.
We now go back to a significant point of principle and difference between the Conservatives and the Government. The amendment is designed to provide a foundation trust with the freedom to set its own pay rates. The Minister will undoubtedly talk about the freedom available in ''Agenda for Change'', but I dispute that and challenge the need for any straitjacket to be placed on NHS foundation trust managers who seek to take decisions aimed at enhancing and strengthening patient care.
It is extremely difficult for NHS trusts, particularly in the south of England where housing and other living costs are disproportionately high in comparison with other parts of the country, to secure the staff they need, whether ward nurses, surgical doctors, utility staff or laboratory technicians. There is a huge difference between the financial position of a young nurse on a salary of £18,000 to £20,000 a year in Surrey and that nurse's equivalent in Durham, Scotland, Wales or other parts of the country. The average house price in those areas means that a young couple—a teacher and nurse, for example—who are married or living together can easily afford to pool their salaries to buy a small starter home in the early stages of their career. That is simply not possible in other parts of the country, including my constituency, and too many of our public sector professionals are faced with the task of trying to get subsidised public sector housing.
As the Minister and all Members who represent constituencies in the south of England will know, there is no easy solution. However, trusts in areas of the country with either general or individual staffing issues—the inability to fill one post or the desire to recruit someone with specific expertise, for example—should be able to deploy their financial resources in a way that enables them to secure the skills they need to run their hospital and deliver the treatment their patients expect.
That is the purpose of amendment No. 16. It puts down a clear marker to say that if we are going to have foundation hospitals that are truly free and able to take decisions in the interests of their patients and the communities that they represent, they should not be straitjacketed by national pay agreements that do not reflect the realities of the local labour markets.
The Government are clearly wising up to that fact, and they should take credit for doing so. I do not think that they have gone far enough, but during the Budget debate the Chancellor of the Exchequer referred to the problem and talked about the need to create regional conditions in pay. He spoke about establishing regional retail prices indices to enable the public sector in particular to take more informed decisions about the pay and labour market realities in individual areas.
Column Number: 455
In response to a question from my hon. Friend the Member for Woodspring (Dr. Fox), the Secretary of State for Health said:
''It is right, as my right hon. Friend the Chancellor of the Exchequer said, that we need to recognise that there are different labour market conditions in different parts of the country.''—[Official Report, 29 April 2003; Vol. 404, c. 142-43.]
To that extent, there is common ground between the Government and us. The difference is in how we would address those problems. The steps that the Government have taken to deal with the situation, predominantly through ''Agenda for Change'' and by saying that there should be a 30 per cent. flexibility ceiling for local employers, are welcome as far as they go, but they do not go far enough. An artificial ceiling is being created that does not need to be there. The figure of 30 per cent. sounds huge, but it is not when one thinks of the salary level of, for example, a junior lab technician in the national health service. Thirty per cent. may be £4,000 a year.
Furthermore, in parts of the country, one can hire a lab technician on a relatively low wage, and in other parts one cannot. In one part of the country, employers may be able to get the people they need for £15,000 or £20,000 a year, but in another part of the country they may need to pay them £20,000, £25,000 or £30,000. That decision can and should be taken locally by managers considering the budgets available to them and saying, ''Look, we have a critical hole in our staffing. This laboratory lacks a key person. If we cannot fill the post, we cannot provide a service, so we need to go that bit further to fill the gap.''
I experienced that directly in my constituency recently. This is a very good example. A lady who was on a waiting list for a bone scan at St. George's hospital in south London had been waiting 11 months for her treatment. Her appointment date was after 12 months. About three weeks before she was due to go in for her treatment, she received a letter from the hospital, saying that owing to chaos in the department over the past few months, the hospital was unable to provide her with the treatment at that time, and offering a new appointment date 12 months further on. That lady will therefore have a two-year wait for that bone scan. The reason is that the hospital lacks key people in the department but, under current NHS pay structures, has no ability to say, ''This is an unacceptable situation. We have to deal with the problem. Let us pay someone more to come in and do the job.''
The Minister knows that any number of skilled professional medical practitioners have chosen to leave the NHS to go into commercial industry or entirely into the private sector, yet we are not giving our trusts the ability to say, ''We need that person back. We will go and get them.'' Currently, national pay and conditions structures preclude that from happening. I accept that the Minister is building in some flexibility through ''Agenda for Change'', although as my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) said in Health questions earlier, the first vote on ''Agenda for Change'', involving radiographers, has gone against
Column Number: 456
the package, and it is far from clear that the Government will be able to implement that new contract structure.
In reality, we do not need, and we should not need, to place these constraints on our health service managers. There are huge issues at individual locations, where individual posts need to be filled urgently and where patients will suffer quite badly even if only one post goes unfilled. That is why we must give hospitals the freedom and flexibility to say, ''This is important. This is the right use of our resource. We will go out and get that person.''
That is the purpose of the amendment. We want hospital managers to have those powers. An artificial 30 per cent. ceiling is not needed. With regard to the principle of foundation hospitals and managers having freedoms, we have heard how their freedoms to borrow are curtailed and we are now hearing how their freedom to employ staff on their own terms is curtailed. The only freedoms that they really have are to decide who can vote for the foundation hospital boards. We strongly believe that if foundation hospitals are to achieve what they should achieve, this is one of the fundamental freedoms that their management teams must have. We urge the Government even now to think again and give them that freedom.
5.30 pm
| 
