| Health and Social Care (Community Health and Standards) Bill
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Dr. Harris: This is an interesting debate and one that we have not had properly so far, certainly on the Floor of the House, because the Government's position seems to change regularly. However, there is no doubt that this is a difficult area, because a balance has to be struck between the wish to provide independence for this significant part of the trust's turnover and the need to ensure that there is not what the Government sometimes describe or used to describe as poaching, but now describe as a return to competition instead of collaboration. It is a difficult position. The Liberal Democrats are not opposed on principle to local pay, locally responsive pay and, for what it is worth, the resultant pay inflation that will allow the public sector to compete with the private sector in areas where it needs to. There is not ideological opposition to local pay as there used to be—in the Labour party as well. To an extent we already have local pay in two ways: first, we have cost of living allowances that differ greatly from one area of the country to another. They are not sensitive enough; they are not adequate, but they are different, which means that take-home pay is different, although it is supposed to monitor living costs. Secondly, in the appointment, recruitment and pay of agency staff there is an unregulated local pay situation where nurses often leave the NHS to get a better deal from trust money through an agency. Chris Grayling: Does the hon. Gentleman agree that one of the problems with local allowance structures being set within national pay frameworks is that they can create major distortions within the locality that local management is unable to address? On one side of the London boundary compared with the other, staff Column Number: 457 can be paid up to £6,000 a year more in different public services. Local managers do not have the ability to break out of those structures and to remove the distortions that that creates in the local labour market.Dr. Harris: Clearly, if one were to have a system of local pay, in the ideal world it would be locally responsive for people who can respond to the local labour market conditions and do not have to accept an allowed regional imposition of pay flexibilities or cost of living allowances. In those areas I have some sympathy with the hon. Gentleman. But he did not mention the poaching of staff—although I am sure he recognises the issue—regardless of there being some trusts that can borrow more or keep more of a return from selling assets and other things. Even within the same sort of provider model some trusts are blessed in inheriting a capacity that means that they do not have to spend over the odds buying in extra capacity through agency nurses or expensive contracts with the private sector. Such trusts will be in a better position and will be able to attract staff effectively because there is not an excess of staff at the moment and it will be some years before there is. They will attract their staff from other NHS hospitals that do not have either the flexibility on resources because the foundation trust has a different provider model, or which, even within the same model, are afflicted with historical capacity problems, whether they be in the acute sector as I have just described or in the social care sector. If in one area there are not enough nursing homes and much of the capacity is taken up with delayed discharges, the trust will be spending greater resources to open up new beds to replace those that are blocked. That is not really a sign of bad management on its part, yet it will effectively be punished. So we need to find a way out of that dilemma. Its impact will be that struggling trusts will struggle even more because the only way they will be able to compete is to pay inflation that they cannot manage. Those that are already doing well will do better. I hope that the hon. Member for Epsom and Ewell will recognise that as a threat, risk and problem and will address what he would do to deal with it. Mr. Gary Streeter (South-West Devon): I agree that this is an important discussion, to which I hope to contribute in a moment. Does the hon. Gentleman recall that the Minister sought to reassure us the other day that clause 27, entitled ''Co-operation between NHS bodies'', was the primary safeguard to prevent hospitals from bidding against each other and poaching? Is he reassured by that safeguard? Dr. Harris: No, and I was coming to the Government's position. However, I thought that it would be wise to set out the problem and then to say briefly how we would tackle it. Identifying the problem is not just a matter of saying to the Government, ''Yah boo, your approach is not correct.'' There may be a different way and it may not surprise the Government that our model of local pay involves the ability of local Column Number: 458 health service commissioners, who ultimately pay the bill, to be able to raise money through tax-varying powers locally. The hon. Member for West Chelmsford (Mr. Burns) is always surprised and shocked to hear a good idea, but he has heard this one before. [Mr. Burns: I am still waiting for the policy paper that the hon. Gentleman promised me. Dr. Harris: I am guilty of assuming that the hon. Gentleman is able to go to a website. Mr. Burns: The hon. Gentleman promised me that he would personally make a policy paper available to me before the recess. Dr. Harris: I said only if the hon. Gentleman was sufficiently abrasive and nasty and he has been too pleasant. If he carries on, I will give him a paper but he ought to pay as he has huge amounts of outside funding that we do not have. [Hon. Members: ''Withdraw.''] I will not follow that line. I am not withdrawing anything. The key issue, if there is to be local pay, is that those who pay the bills locally must have the ability to respond to labour market pressures and a competitive environment. There is no denying that if there is flexibility in pay for NHS staff there will be competition in the labour market, especially when staff are in short supply. Local people must have the ability to say, ''We think that it is worth ensuring that we can compete in this area and pay what is necessary to have well-trained, well-motivated NHS staff, based locally, not indirectly employed through agencies, and we need to introduce that system. If we do not, those without resources will get poorer as they will be unable to compete in a more flexible labour market.'' The Conservative party needs to address that fundamental problem. It is not a fanciful suggestion; such things are already happening and we have not heard the Conservatives' proposal to tackle the matter. [Interruption.] The hon. Member for Chesham and Amersham (Mrs. Gillan) says that it is the Government's problem to sort out these matters. It is the Government's problem, but one has to come up with an alternative. In the interim, we propose having realistic living cost allowances, which many parts of the country do not have at present. That is why many no-star trusts are made scapegoats. They perform badly because they have no capacity. They have the greatest difficulty in recruiting all hospital staff, especially nurses, and staff for the care home sector. The data is clear; the shortage of care workers is greatest in the south-east, in the social care sector and in the NHS. Until the trusts that are struggling have the ability, through the commissioners and their contracts, to increase resources locally, introducing the proposed flexibility will make matters worse. I now come to the point made by the hon. Member for South-West Devon (Mr. Streeter). The Government say that there will be no poaching and Column Number: 459 also that foundation trusts will have the ability to offer more than a neighbouring trust. I have never been able to understand their position on that. I make a genuine plea to the Minister to explain how the proposed flexibility can be used in the present tight labour market—that is a generous way of putting it—without it involving poaching and therefore a breach of the duty not to impact badly on other trusts.The hon. Gentleman was right to draw attention to clause 27, amending the Health Act 1999, which states that there is a duty of co-operation between NHS trusts and NHS foundation trusts. There is a fundamental inconsistency between Ministers talking in the current pay climate and labour market climate about increased flexibilities to pay more and about a duty of co-operation. I know that the Minister is keen to address those key issues, but I am not sure that he always has the time to get round to doing so. I hope, however, that he will address the issue of how those two statements might match. That is a challenge for all parties, and the Conservative party needs to explain what it would do about non-foundation trusts or about NHS trusts that are simply unable to compete because they do not have the resource base to do so. Chris Grayling: Has the hon. Gentleman considered the fact that the labour market is not so flexible that people simply up sticks and move around ad nauseam? One does not move from one part of the country to another at the drop of a hat. If all NHS trusts were to become foundation trusts, which is what we would choose, surely he would accept that those trusts would be able to provide an attractive framework for all employees and would be more strongly and clearly placed to attract people into the health service, which is the real problem. Does he accept that we are not attracting back from the private sector people who gave up the health service, and we need to make it attractive for them so that they will come back? Dr. Harris: I do not believe that the private sector will lose all its staff to foundation trusts, especially in the current climate. I have examined this carefully and have found that, generally speaking, if an employer advertises for nurses at a higher rate than the local NHS rate, it will be nurses working in other trusts who are looking to move on who respond. Some people working in these professions are reasonably young. They are mobile and will move for better pay, or better conditions—pay is not the only thing that is important, as has been pointed out several times. It is not enough for the Conservative spokesman to say that everyone will be on a level playing field if all NHS trusts are foundation trusts, because some NHS foundation trusts would still spend much more than others when buying extra capacity because of capacity constraints outside their control, such as delayed discharges consequent on an inadequate supply of social care settings and domiciliary or residential care at the social services level. In those circumstances, the issue is not about foundation trusts versus non-foundation trusts, although that is relevant to the Bill, but about those people who are in a losing position having no option for raising extra revenue. The policy Column Number: 460 that I propose is attractive because it allows commissioners to recognise the problem and to tell the electorate, ''We need the resources if we are to compete and have a well staffed, well motivated and well trained work force, and if you, the local consumers of the service, want such a work force, it must be paid for.''
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| ©Parliamentary copyright 2003 | Prepared 3 June 2003 |
