Westminster Hall

Thursday 29 June 2006

[Miss Anne Begg in the Chair]

Primary Care Trusts

[Relevant documents: Changes to Primary Care Trusts—Second Report from the Health Committee, Session 2005-06, HC 646, and the Government’s response thereto, Cm 6760.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Tony Cunningham.]

2.30 pm

Mr. Kevin Barron (Rother Valley) (Lab): May I first welcome the Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis). This is his first debate as a Minister in the Department of Health in which I have taken part. Clearly, he will be able to throw up his hands in the air later and say, “It was nothing to do with me, guv”, as most of the issues before us this afternoon predate his entry into the Department. I thank members of the Health Committee who are here today for taking evidence and for drawing up the report. I am the chair of the Committee, which has been doing good work over many years.

The report was instigated effectively by the Department’s letter on 28 July about both the reconfiguration of primary care trusts and strategic health authorities as well as the issue of providing and commissioning at local level. That matter, to which I shall return, was not something into which the Committee went in great detail and made recommendations about; we did not examine all the aspects of the letter of 28 July, but clearly looked into some implications of changing primary care trusts from being providers of services to commissioners of services. That was set out in the original letter of 28 July, which was entitled “Commissioning a patient-led NHS”, on which I shall comment later.

Some of our criticisms of the letter and the subsequent debate were sharp in tone and quite deliberate. The English language, on which I am not the greatest expert in the world, can draw attention to different matters just by the use of the right types of words in reports. The Government thought that some of what we said was a little over the top. In one of our recommendations, we said that the reforms were poorly conceived, rushed and badly implemented, that there was no clear evidence base for them and that the consultation process was inadequate. The Government defended themselves. We put in the report that they had developed the reforms on the hoof, in response to which they said that that was not the case. They stressed that strategic health authorities had been asked to engage with local partners in developing proposals prior to a 14-week formal consultation period.

The essence of the letter of 28 July was interesting. I will not go into the detail of our report, but the information in the letter had been sent out earlier in the year—in March, I think—by the Department when
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asking for responses from PCTs and the SHAs. Of course, we all know what happened soon after March 2005; a general election was called and, as a consequence, I suspect that one or two feet went up on the table on the basis of, “We don’t know whether what is wanted of us now will be what is wanted of us by the next Government after the general election or, indeed, the next Minister if the Government change their politics.”

We found that, because of the general election, matters slowed down; the letter of 28 July came at the beginning of the recess and there were consequent feelings by hon. Members and those outside the House that the proposals had come far too quickly. There are probably lessons to be learned for all of us, in the sense that the civil service reacts to events and, when we go into general election mode, it generally slows down a little until it knows where we are at.

Mr. Stephen O'Brien (Eddisbury) (Con): The right hon. Gentleman has made an interesting point that I had not anticipated making, which was that his Committee had identified a lesson that is worth learning. For fundamental change, particularly when consultation is both valuable and required, it must be in the Government’s best interests not to issue documents either on the last day of term or at the beginning of a recess. That happened in respect of the NHS 10-year plan, which reported that there had been consultation about the axing of community health councils, which was found not to be the case. That is another example of what he has just said.

Mr. Barron: I agree and am sure that by the end of August last year those lessons had been firmly learnt from what was going around in the media. In terms of what people felt, that feeling increased when we as a House got back in October.

David Taylor (North-West Leicestershire) (Lab/Co-op): It is not just a question of the shortness of the period. Leicestershire, Northamptonshire and Rutland SHA and Charnwood and North West Leicestershire PCT made a passable attempt at consulting, but the feedback that they got was totally ignored at every level. Was that not a problem as well?

Mr. Barron: I think it was. I will want to say something about the transparency issues of that consultation and what we were promised; something that has not yet been delivered to the House.

I suggested earlier that the Government rejected our suggestions about patient care and that patient care would suffer as a result of the disruptions caused by the changes or the potential of the changes. The Government commented that a more evolutionary approach to the changes would have benefited some organisations but have been prejudicial to others.

That was an interesting comment. If that was the case and given that we were not drawing up statutes here—although I know that my hon. Friend was not in post then—we must ask why we did not look at the issues of SHAs or PCTs on a geographical basis. My own borough of Rotherham has had one PCT for the past three years. In the neighbouring three
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constituencies, two of which are represented by health Ministers, they have had three PCTs in the same years. Socially and economically that borough of Doncaster is the same as Rotherham. Why did they have three PCTs three years ago, when nothing was laid down about what they should or should not have? Maybe that was when something should have been laid down. With very little acrimony, as far as I know, they are now moving to the one PCT model for their borough, coterminous with local government and everything else, which makes sense.

Of course that could have happened without the 28 July letter going out. It was a matter for them. We were not making law or changing law. Maybe a piecemeal approach would have been a better way of doing the reconfiguration in those areas in which it was needed. As I suggested, for PCTs in some areas, like my own, that was not needed.

As for the SHA in my part of Yorkshire, that has changed and we now have one big one that covers the same area as the regional ministerial office. Although we have that, there was little or no voice for the public as to whether or not that was wrong thing to do. Most of the debate that we had after 28 July could have been avoided, certainly in areas like south Yorkshire, if we had proceeded in a piecemeal basis as opposed to all at once, as here.

The Government have not stated clearly whether or how PCTs would divest themselves of their provider functions. SHAs are therefore being asked to design organisations without an understanding of their ultimate purpose. I thought that that criticism was rightly made. If one was to change providing and commissioning at primary care level, then the shape of the primary care side would be crucial. We lost that, in my belief. The Government’s response made clear that PCTs would not be instructed to stop providing services, but that PCTs would be required to review all the services that they commissioned in 2007, including those provided directly. The Government will issue a fitness-for-purpose tool for the new PCTs in the summer of 2006. I accept that, but again think that the Committee found a weakness in the system when looking at that particular area, which should have been thought out a lot more.

Also, we said that the reduction in the number of PCTs would lead to a loss of local contact and responsiveness, which we believed was one of the main arguments for the previous configuration of PCTs. The Government’s response argued that larger organisations could still engage effectively with the local population. The Government commented that the development of effective, professional executive committees would be central to ensuring effective local engagement. They also commented that the roll-out of practice-based commissioning would make services more localised. Over time that might probably be the case, but nobody thinks for one minute that at this stage, while we change the reconfiguration of PCTs, we will have practice-based commissioning at any level at all. We also had concerns that the reforms were cyclical in nature because the new PCTs will be similar in size to the scope of the old health authorities that were only disbanded in 2002.

One can imagine what it was like; people sat before the Committee and said that they remembered the changes that they had to make to get into that new structure. They said that it seemed as if we were rolling back into an old structure, which was just a few years down the road. We had to be critical, given what we were confronted with, when we were taking evidence in that area.

The Government argued that the NHS had changed radically since PCTs were created and that

“reforms, such as Practice-Based commission and Payment by Results make it especially important that the roles of PCTs are adjusted and strengthened.”

They went onto argue that the reforms do not represent a “change for change’s sake” That many PCTs had already begun to merge or worked collaboratively with the neighbours prior to the 28 July letter. They rejected the Committee’s suggestion that the reforms would set the development of PCTs’ core functions back by 18 months. The only thing that I can say is that we will have to wait and see.

It seems to me that we are in position of waiting to see exactly whether the Government are right in that analysis or whether there is an 18-month disruption when you do go to having these types of changes inside our health care system. Jill Morgan, from the NHS Confederation, brought that to our attention early on in the inquiry.

We commented on the fact that the reforms were largely motivated by financial, rather than service, considerations. We were led to believe that there were going to be savings around the £250 million mark. The most savings with the reconfiguration that we could find was somewhere between £60 million and £80 million.

However, it might be that those types of savings do take place. It does not give me any great pleasure to say that the £250 million tag was in the Labour party manifesto. Yet, when we were taking evidence, it was initially denied that that was the reason that those reconfigurations were about to take place. Consequentially, we had to probe it even more.

David Taylor: Two hundred and fifty million pounds represents, or will shortly, about one day’s spend in the NHS. It is possible that the manifesto was right that savings of that kind are available within the NHS. However, to tackle the basic structure in such a hurried way was highly likely to lead to no savings whatsoever. We shall not know for four, five or six years. The Minister replying today may be forming his own Administration at a period when we shall be able to look back with some accuracy on this matter. I hope that that will be the point at which he will re-count.

Mr. Barron: I would suggest that the future will tell us exactly about the rights and the wrongs of that. We have had some movement in that area since the Government’s response. Presumably, Committee members will have been involved in some of the consultation that has been taking place on PCT reconfigurations.

In May of this year, the Government published the fitness to purpose tools for new PCTs. A document of more than 500 pages was sent out to them; I am sure that they will greatly appreciate that. On 16 May, the
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Government issued the final plans for PCT reconfiguration. PCTs will be reduced from 303 to 152 from October of this year, and we now have the renewed boundaries.

May I take up three or four outstanding matters? One matter is the approach to change. In response to our concerns, the Government have clearly modified the approach that it had in the 28 July letter. For example, their stance on divestment of services has softened considerably. The Government have explicitly stated that PCTs will not be instructed to stop directly providing services.

Equally, some explicit decisions regarding local PCT boundaries have been adjusted in response to local pressure. The Government have acknowledged that the top-down, one-size-fits-all approach to change is not the one that is required. That is shown by both the current significant variations and those that will be coming into being in October of this year. The new Hartlepool PCT covers a population of just 90,000, but Hampshire PCT covers a population of more than 1.25 million.

Mr. Michael Wills (North Swindon) (Lab): My right hon. Friend is making a powerful case. I recognise the pressures that he described, but does he agree that the impact of the reform process on individual PCTs is to some extent dependant on the way in which those PCTs are managed? An effective PCT is much better able to respond to the opportunities of change. In Swindon, we have an effective, well managed PCT that has taken advantage of the changes that the Government are driving forward to look at innovative ways of servicing delivery. That is driven not primarily by financial considerations, as my right hon. Friend said, but, for example, by integrating the work of the PCT with social services and housing services to provide a total care provision that is imaginative and will significantly improve what we can offer to the people of Swindon. That is possible only because of the managerial competence of that PCT.

Mr. Barron: I entirely agree and perhaps when PCTs amalgamate, the best management will take over the helm of the one at the top. That could be grounds for great improvement in the service that people receive. The health community talked to us about the disruption and so on, but there may be positive changes in our communities 18 months on. At this stage, we are trying to second-guess that.

On decision making, the Government appointed an independent, expert panel to advise on which proposals submitted by SHAs should be accepted. The Health Service Journal reported on 25 May that in some cases the recommendations of the panel were not accepted. Avon, Gloucestershire and Wiltshire SHA recommended that the 12 existing PCTs should be reduced to three, which was backed by the panel. In response to a campaign by local MPs, however, seven PCTs have been retained. I do not know whether to say “congratulations” and whether that is the right way of planning health care and health care systems in this country. If it is a matter of those with the loudest voice prevailing—hon. Members on both sides will fundamentally disagree with me here—I instinctively feel that that is a difficult area.

Similarly, in County Durham and Tees Valley the panel supported the SHA’s recommendations that its 10 PCTs be reduced to two. In response to pressure from local MPs, I understand that six PCTs were retained, not two. Again, I am not sure that that is how we should deal with reconfiguration of our health care service.

Several hon. Membersrose—

Mr. Barron: I thought one or two hon. Members would rise to the fly.

Steve Webb (Northavon) (LD): The Avon, Gloucestershire and Wiltshire SHA is in my area and the difference between three or seven PCTs is that the four unitaries in the former Avon area wanted a coterminous PCT with their unitaries. That is what every MP of every party and all the local authorities argued for. If the right hon. Gentleman is saying that despite everyone who has ever been elected anywhere in the entire country having one view, the Government should have gone in the other direction, I do not agree.

Mr. Barron: Perhaps the consultation process should have taken place much earlier and involved people on the ground, including Members of Parliament, who certainly have a role to play. I do not know the details, but in terms of health service planning I am not sure that those with the loudest voice should prevail. I am not saying that that is what happened; it may be the best reconfiguration to improve health services. If that is the case, I am happy, but when I see reports about people with the loudest voice and political debates resulting in more PCTs than the initial plan suggested, I oppose it. That is a matter that all Members of Parliament should consider.

Mr. O'Brien: As it happens, the Government are to be commended for listening during the Cheshire consultation with the Minister’s predecessor, with whom I had a number of discussions. The Conservative-controlled Cheshire county council, under its new post-1974 configuration, wanted coterminosity of the four PCTs of Ellesmere Port, Cheshire West, Central Cheshire and Cheshire East and indeed the SHA. In the end, my hon. Friends the Members for Macclesfield (Sir Nicholas Winterton) and for Congleton (Ann Winterton) and myself were able to persuade the Government that the health economies that would really be best kept as a localised focus were the combinations of central with east and of west with Ellesmere Port. The added advantage was that the Cheshire West PCT, which has just received a £20 million bail-out, would therefore not be able to disguise its dysfunctionality by combining with others and has therefore been held accountable.

Mr. Barron: Again, I am grateful for the fact that there has been local consultation. Clearly, the Government need to take this into account. My hon. Friend the Minister will be pleased that the hon. Member for Eddisbury has complimented the Government on what they have been doing in the Cheshire area in that short intervention. It is pleasing that the Government have
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followed the Committee’s advice in taking a more consultative approach and that in some areas they have listened to the wishes of local communities. However, the Government have not published the advice they received from the expert panel. This leads to the accusations that this form of consultation was not transparent.

Lord Warner gave us a commitment to publish all information submitted to the external panel as soon as possible. We are now at the end of June and we still have not got to that stage. It may be historical, but there may be lessons to be learned from what the expert panel wanted to do and what the reconfiguration ended up with. That is something that I would like to look at.

I now move onto the other area of provider functions. The Government have responded to the Committee’s concerns by stating quite categorically that they will not instruct PCTs to divest themselves of service provision, and

“nor will we impose any timetable.”—[Official Report, 10 January 2006; Vol. 441, c. 598W.]

However the White Paper “Our health, our care, our say”, published in January 2006, instructs PCTs to review all its services in 2007 and says that where services are not sufficiently qualitative, PCTs will be expected to look for alternative providers, including private sector organisations. That is on pages 172 and 174 of the White Paper.

There are concerns that PCTs will be pressurised into tendering out some services which they currently provide directly in order to stimulate competition in the primary care sector. Further assurance is required that PCTs will be allowed to make independent decisions about the future provision of primary and community service.

When we first talked about the implications of moving from working for an NHS provider to an independent provider, we asked some fundamental questions. First, we asked Lord Warner about what happens to someone’s pension. I do not want to get into a debate about local government pensions or NHS pensions today as we seem to be doing that every other day in this place, but it is a fundamental issue. If I were changing my employment—certainly at this point in my life—I would want to know exactly what was going to happen to my pension. Many other people would too. In the first session we took with Lord Warner and a senior civil servant, they were unable to convince us that they had looked at this in any way at all. They said that it may be covered by TUPE or that it may not.

As a member of the Liaison Committee, I asked the Prime Minister what would happen to people’s NHS pensions under these circumstances. It was only when I received a letter from him that we eventually came to know the truth.

This will be an issue if we are to see this method of travel succeed; we were told by Ministers that providing would travel further out into the independent sector than it does now. As I suggested earlier, the Committee did not look at that; we did not say whether it was a good or bad thing. I have discussed this with other organisations as we were told it would be a road of travel. Issues such as terms and conditions and in particular, pensions, are also important.

I talk a lot to the independent sector now—not just in Westminster, but on visits to where my PCT gets its independent sector care from; the charitable sector. If one considers the interaction with the national health service, there is no longevity in terms of contracts or anything else. If that is the preferred route, there will be a lot of debate in this country about how such a route could be travelled. The Government may think that they can just contract with providers in constituencies such as mine, but there are very few independent providers in such constituencies.

We were taking evidence earlier today in the Health Committee when I was explaining that even the NHS has not been a brilliant provider of services in my constituency. Doctor-patient ratios have been some of the highest in England and Wales for many years; in fact, for decades. Health inequalities are massively greater than in quite a lot of other constituencies, yet, in my personal view, the NHS on the ground is not at the level it should be. If we are going down that road, that is fine, but the Government need to ensure that people will be travelling down that road with them as well.

You will be pleased to know that I am going to stop now, Miss Begg. I know that other people want to talk about the specifics of what has been happening and what is likely to happen in October this year in terms of the reconfiguration of PCTs and SHAs. We will obviously be keeping a watch on how that affects, or may affect, health care in our communities, in the months to come.

It is crucial that when we go down roads such as this, particularly given the reaction from the NHS in July of this year, we get it right and we improve health care. On occasions, the two Front Benches might agree, and it is good that they have done so on this matter. I have said this before, but it is a fool’s dream to think that we are going to stop the NHS being a political football in this place. However, it would be better for the health service and for our constituents if we did.

2.57 pm

Dr. Richard Taylor (Wyre Forest) (Ind): I am very honoured to be called so early in this debate, and revel in the luxury. It is a pleasure to follow the esteemed Chair of the Health Committee, and to see a new Minister in his place. I always regard a new Minister as, possibly, a new broom. As he was not involved with the report or the response to the report at all, I hope that he will take back some of our criticisms of the report and of the way things were done.

I want, first, to talk a little about consultation, because it figured quite largely in our report. The Department of Health considered that as the changes were only managerial, there was no need for formal section 11 consultation. I was really quite bothered about that, because when one thinks about what PCTs provide, such as community hospitals, community nurses, intermediate care beds, and GP beds in other hospitals, it strikes that me that there is quite a big provision element as well. I wrote to the Secretary of State, from whom I received a letter in March, which said:

“I can confirm that there is no duty to consult under section 11... because the SHA, PCT and Ambulance Trust reconfiguration proposals amount to managerial and administrative changes only.”

However, she followed it up with a very powerful, important paragraph:

“However, if there are any proposals to make changes to service provision put forward in the future by the newly reconfigured organisations, there will be a duty on those organisations to involve and consult patients and the public on those proposals under section 11”.

In the Government’s response to the Select Committee report, that was repeated. They said:

“Commissioning a patient-led NHS is not about changes to local services. Our policy is clear: decisions about service provision will be a matter for the PCTs to determine locally.”

So, thank goodness the PCTs are absolutely committed to consult on some of the changes that some of us are very worried about.

The lack of section 11 consultation was extremely significant because it meant that even if overview and scrutiny committees put in a response, that response had no effect. Under section 11, the response is passed to the Secretary of State for a final decision. If she is not happy, it can go to the independent reconfiguration panel. In my county, all the forums and the overview and scrutiny committee objected strongly. That had no effect at all, I am afraid. I rather fear for the future that the Department of Health will always have the let-out that the definition of management can be rather wide.

I have just learned, rather to my horror, that without any form of consultation, because it is possible in the future only if there is a management change, the Department has just placed adverts in the supplement of the Official Journal of the European Union inviting bids from companies that wish to appear on a Government-approved list of suppliers of management services to PCTs, presumably for cases in which a PCT’s management is perceived to fail. It is fairly significant that that came a day or two after the Derbyshire judgment, which, although it did not go in favour of local people, was incredibly helpful in that the judge recognised the wide obligations to consult on NHS bodies that flow from section 11.

Still on the subject of consultation, the Government response to our recommendation 9 quoted a letter from John Bacon, sent to all SHAs on 8 December. It said:

“Responsibility for approving PCT consultations, ensuring they reflect the conditionality set out in my 30 November letter and that equal weight is given to all options, rests with the SHA.”

The huge problem is that if the option that local people want more than any other is not even on the list, where does one go from there? We in Worcestershire were completely floored, because we were told that the size of the PCT was absolutely crucial. We have three PCTs with populations of 110,000, 170,000 and 260,000. We were not even allowed to consider the continuation of those three PCTs, or even two PCTs, despite the fact that that was what all local people wanted.

The consultation document sent round by the West Midlands South strategic health authority contained the phrase:

“The lack of ‘critical mass’ within these small organisations also compromises the management of financial risk and, in general, reduces the scope for achievement of operational efficiency and value for money. These models would also perpetuate the current high management overheads seen in the PCT sector. This option was not short listed on this basis.”

That leads me to reflect on some of the comments made by the right hon. Member for Rother Valley
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(Mr. Barron). If we consider the small PCTs that preserved their autonomy, 10 had populations below 150,000, which is tiny. Eight of those were in Government-held constituencies and the two smallest, with populations below 100,000, were Darlington and Hartlepool. They may be coterminous, but it looks as though there is a bit of political influence.

I was absolutely delighted to hear from some Opposition Members that they felt that they had influenced things. We in my patch were completely unable to influence things, and we are very upset about that.

David Taylor: I can reassure the hon. Gentleman. Charnwood and North West Leicestershire is one of the larger PCTs, and it strikes the right balance for size. It is big enough to be efficient in delivering services and small enough to be accountable, with a population of about 250,000. It is working really well, and people from all parts of the political spectrum supported it.

Despite the collective efforts of three Members of Parliament, two of us Labour and one not—myself, the hon. Member for Loughborough (Mr. Reed) and the former Secretary of State for Health, the right hon. Member for Charnwood (Mr. Dorrell)—what is happening? We are becoming part of an enormous untested structure of 750,000 people, a doughnut wrapped around the city of Leicester. It is not necessarily politically driven.

Dr. Richard Taylor: I am grateful to the hon. Gentleman, who is always helpful in putting me straight.

The external panel’s response has been mentioned. We said in our report:

“It is essential that the external panel’s responses are made public also.”

The Minister at the time did not say that he would publish the response. He said that he would publish the information given to the panel, which is remarkably different and not what we want at all. We need to see that response. We want to know what the external panel felt about the PCTs that were affected politically or non-politically.

I move to the issue of distraction. We were bothered by evidence that told us quite clearly that such a major reorganisation put the local work force back by two years and required another 18 months for them to catch up. Witnesses at this morning’s Health Committee bore that out. It takes an awful lot of time for people to catch up. We must add to that the fact that under this particular reorganisation, people who will no longer have their jobs are planning for what happens afterwards. As I have said before, I do not think that that is like turkeys planning for Christmas. It is not the best plan. That has been borne out graphically.