We have set out proposals to free the NHS from bureaucracy and central control. My hon. Friend the Member for Witham eloquently set out her concerns, as did a number of other hon. Members, about those levels of bureaucracy and about her constituents receiving the health care that they need, with the choices that they want and with the highest standards that they deserve. Like all members of the public, we want to end the overbearing top-down oppression and give front-line

15 Mar 2011 : Column 44WH

professionals the freedom to innovate and make decisions based on their clinical judgment and the needs of their patients, rather than centrally dictated, process-driven targets that have dogged the NHS in the past 13 years.

Responsibility for budgets and commissioning care will transfer from bureaucrats to consortia of clinicians, so that we can drive up the very highest standards of health care and achieve the highest outcomes that are specific to local communities. My hon. Friend the Member for Harlow (Robert Halfon) raised the issue of inequalities in health. It is critical to have outcomes that are consistent for everybody, not just a few, and a much simplified system—without two layers of management, the strategic health authorities and PCTs—which is, actually, reorganised in a way that is less top-down and more bottom-up. Why are we doing that now? Now is the time to do that, because now is the time that we are determined to drive down the overall administrative costs to the NHS, and achieve a better dialogue and partnerships with health and care professionals in all sectors.

Pathfinder consortia are now in place across all five Essex PCTs, involving a total of 146 practices and serving a population of almost 1 million people. The Essex commissioning consortia pathfinder in the area of my hon. Friend the Member for Witham consists of seven practices and serves a population of 70,000—debates are often an opportunity to demonstrate that we know all about the figures. I understand that the Witham practices are in negotiations about forming a mid-Essex consortium.

My hon. Friend the Member for Southend West (Mr Amess) raised a point on funding. As part of our desire to improve the standard of NHS care up and down the country, we are consistently increasing the amount of money that we provide. Total revenue investment in the NHS in 2011-12 will grow to more than £102 billion a year. The allocations announced on 15 December will provide PCTs with £89 billion to spend on the local front-line services that matter most—that is an overall increase of £2.6 billion, or 3%. Of that, Essex will receive £519.6 million, which is a cash increase of 3.2% above the national average. From 2013-14, the NHS commissioning board will allocate the majority of NHS resources to consortia, and funding will be arranged so that every area gets its fair allocation, based on the burden of disease and disability, which, again, is a point that my hon. Friend raised. Details of that will be announced shortly.

My hon. Friend the Member for Witham discussed population growth and demographics, and the pressures that they will bring to bear. I am pleased that the county council is taking a proactive approach—that is the thing to do—to get ahead of the game and make improvements to public health. With an ageing population, it is critical that people stay healthier for longer.

On redundancy and staff, there is, in fact, a great deal of natural wastage in the NHS already, and there are schemes such as the mutually agreed resignation scheme, which is intended to help the process. To some extent, redundancy is dictated by legislation and locally agreed terms and conditions of service. Some good staff will move on to assist the consortia.

The clusters that my hon. Friend spoke about are an important part of the transition, gradually moving upwards through the PCT organisation. The new consortia come in at the bottom. I suggest that she arrange

15 Mar 2011 : Column 45WH

monthly meetings with the PCT because, clearly, there are many issues that she wants to raise, in particular individual cases. She discussed the problems of Mr Shipton and Mr Cross not receiving Sativex. Of course, that will change when we have consortia, and clinicians make commissioning decisions. That will change things, and it will increase the opportunities for patients and their families to affect decisions.

My hon. Friend spoke about the case of Mrs Wetherilt, which sounds absolutely dreadful—no one should have to battle away like that—and she has raised the case of Bethanie on several occasions with the PCT. I do not know the details of it, and, as she recognises, I cannot intervene, but it is important that systems work for people who have complex needs or diagnoses. It is critical that we get that right.

On that point, I know that my hon. Friend the Member for Braintree (Mr Newmark) would have liked to mention the new community hospital in Braintree. It is a good example of a community hospital that serves the local community, which is what people want. I know that he campaigned long before the present Parliament on getting the right services for pregnant women who need maternity care.

My hon. Friend the Member for Southend West has a long and distinguished career on the Health Committee. I could say that I learned everything I know at his knee. Having sat on the relevant Bill Committee, his frustration over the formation of the PCTs must at times be unbearable. Being a prophet of the unwelcome consequences of legislation is not necessarily any comfort, albeit it is to his credit. His comments about leadership are so important, and it is not just clinical leadership but leadership across the board. Something that does not often get a mention is political leadership. Politicians and people in government have to be clear, when they are talking about health services, that nothing but the highest standards and quality of care will do. We have to keep saying that and be unrepentant about doing so. What the Government can do is set the right framework and outcomes. We get what we ask for, and if we ask people to wait more than four hours in accident and emergency, that is what we will get. Whether or not that is measured does not necessarily determine whether anyone gets better. Therefore, the Government have to be clear about exactly what they want, and not chase headlines.

Linear accelerators: does not everyone want one? Everyone would like a linear accelerator. However, my hon. Friend the Member for Southend West is right in saying that we have to take the public with us when we make such decisions. “Consultation process” is a hackneyed phrase now. I do not think that anyone has much confidence in consultation processes. What we have to do, and what I feel we will be able to do through the health and well-being boards and the involvement of local authorities, is get a real and democratic voice for local people. I share my hon. Friend’s dislike of the term “stakeholder”. We are taxpayers; it is our money.

My hon. Friend the Member for Harlow discussed inequalities, and was right to say that they are a matter

15 Mar 2011 : Column 46WH

of social justice. For instance, it is outrageous that in Westminster there is a 17-year difference in mortality: people born in some parts of Westminster may live 17 years less than those born elsewhere in the borough—that is truly shocking.

My hon. Friend raised the issues of alcohol-related deaths and obesity, and discussed the fantastic work done by many local organisations. Again, health and well-being boards will be an opportunity to put public health right at the heart of local authorities, which have a long and proud history of improvements in public health and bringing together all the organisations that do so much.

My hon. Friend was also right to say that there is tremendous social capital in our communities. In my travels around the country—I try to get out a lot, for fear someone might say that I do not get out enough—I have been fascinated to find in some of the most deprived areas the greatest social capital, innovation and response from local communities to do something about their problems. They want a way out of poor health outcomes and the crime in their area, and their resourcefulness is outstanding.

My hon. Friend the Member for Thurrock (Jackie Doyle-Price) discussed variations between Thurrock and Basildon. She was right to say that they are completely unacceptable. We cannot interfere from the centre with appointments, but she was right to reiterate the need for first-class leadership, and it was good to hear her positive comments about the new chief executive. The organisations around the country that do well have good leadership, and it is not about driving a coach and horses through something, which is what I fear the previous Government tried to do. They tried to dictate from the centre and tell people what to do. Actually, what good leaders need is inspiration and enthusiasm. They need to gather people up along the way and have a clear vision of what everyone is working towards. Such skills are hard to define, but we recognise them when we see them. I hope that Essex will get the leadership that it clearly deserves, and for which all Members of Parliament in that area have been fighting.

I agree 100% with my hon. Friend on getting accountability right. As a constituency MP who has a PCT with one of the worst financial records in the country, I know that, sadly, it is the public who suffer as a result of poor management. We are determined to get accountability right. Again, that comes to setting the right outcomes.

I believe that GP consortia, health and well-being boards and public health in local authorities will result in the kind of joined-up planning that all Essex Members want, and that we will see the improvements in health care services and public health that we want. I have outlined some of the ways in which we intend to transform the delivery of services and ensure that, in the transition from the old system to the next one, we get a patient voice that is loud and clear, and that patients get the services and the care that they need and deserve.

15 Mar 2011 : Column 47WH

Richard Lee Primary School

12.30 pm

Mr Bob Ainsworth (Coventry North East) (Lab): Thank you for calling me, Mr Williams, and for presiding over this debate. The Richard Lee primary school in my constituency is a 1950s Hills-system-built school. It is built of reinforced concrete and high-alumina cement, and it has simply come to the end of its design life. Its rebuilding was repeatedly delayed because of needs arising from rising rolls in Coventry and demand for new-build schools, but it was due to be rebuilt in 2009. As a result of the collapse of another school in Coventry, that rebuild was further delayed.

The devolved capital budget for the Richard Lee primary school last year was £49,150, £40,000 of which was spent on essential repairs and maintenance, leaving practically nothing for any development within the school, any enhancements or any improvements. This year, that devolved capital money has been reduced to £9,439. The main problem with the Richard Lee school, according to the head teacher, is that it badly needs a new roof. It simply cannot be patched any more. There are patches on patches, it is coming apart, and water is ingressing the school in many places. Even if a new roof were possible with the school’s construction, it would cost in the order of £500,000.

The school needs a new boiler, and has had to close twice in recent months because the boiler has failed, but the cost would be £40,000. The windows, which form entire walls in many of the classrooms, are being pulled apart by the strains on an ageing building. As a result, they are draughty, cannot be secured, and are sometimes sealed with curtains and pieces of cloth to make the classroom environment something like bearable. A quote for replacement windows is of the order of £110,000.

Six toilet blocks are in need of refurbishment at a cost of £7,000 a block. There are awful smells and regular flooding from blockages. Despite £15,000 being spent to sort out the drains, that did not solve the problem in its entirety, and on one occasion sewage flowed freely across the school car park. There is rising damp in classrooms. They are being recarpeted and retiled regularly, but children cannot sit on the floor for story times or anything else without sitting in wet.

There is a lot of asbestos throughout the school, and although it is safe in its undisturbed state, the cost of any repairs is considerably higher than it would otherwise be. Because capital funding is being spent on repairs and maintenance, second-hand furniture is regularly bought from other schools that manage to obtain new equipment through their budgets.

The Minister and the Government claim to be interested in the big society and believe that organisations other than the Government should make a contribution to the maintenance of services that people need. The school is pretty good at tapping into local organisations and scrounging money. Local firms, such as E.ON, Jaguar Land Rover, the Prince’s Trust and local church groups, have all helped by painting and decorating parts of the inside and outside of the school. When I visited it recently, there was evidence in two separate classrooms of teachers painting the walls having bought paint to decorate their own homes.

15 Mar 2011 : Column 48WH

A burst water heater resulted in reception children being taught in the corridor for more than six weeks while attempts were made to dry out the classrooms and lay new flooring. The children returned to their classrooms in February, after the half-term break, but sadly the new flooring is already beginning to lift because of damp and will have to be removed again during the Easter break. I hope that this time it will be refloored satisfactorily.

The education welfare officer, who monitors attendance weekly, is worried about the number of absences through illness. With 4.5% of pupils absent, she believes that those genuine absences are due in part to the cold, damp conditions that the children must endure in many of the classrooms. The school does not comply with disability discrimination legislation. It has seven flights of stairs inside and four outside. They cannot, without huge expense, be adapted with ramps or lifts because of the nature of the building.

The council is so worried about the state of the school that, in May last year, it commissioned a technical report to see what needed to be done, whether the school was safe, and what the options were for keeping the school open and viable. A technical report by Martech Technical Services Ltd said that for the time being the school is safe, despite evidence of carbonisation of the cement, and therefore the beginning of corrosion of the steel reinforcement of the concrete structure, and that it could have its life extended for 10 years, but that the costs would be considerable. A simple 10-year extension of the school’s life would require concrete repair costing about £20,000, corrosion inhibitor costing about £40,000, anti-carbonisation coatings costing about £30,000, a new roof, which the head put at £500,000 and Martech put at £450,000, and preliminaries costing about £90,000. It gave no figures for contingencies such as removal and replacement of ceilings, asbestos removal, access and internal redecoration. I put those figures to the Minister in the light of the school’s capital programme of £9,439 a year.

As I was going through what I would read out from the report, I was worried that the Minister would think that I am exaggerating the difficulties, so would he be prepared to visit the school? I have been in politics for a long time, and I am rarely surprised by what I see. Nevertheless, a visit to this school is shocking. It is a good school and its recent Ofsted report—received only yesterday—stated that there have been considerable improvements, that the school is well led with an engaged and supportive governing body and that the teaching staff have made significant efforts to improve the output of the school. Ofsted is not obliged or encouraged to talk about school buildings, as that is not part of its job. In this case, however, the Ofsted report did comment on the state of the building and the impact that that was having on the school.

What on earth is the school to do with £9,400? The council is desperate to include a rebuild of the school in its capital programme, but the uncertainty about that programme, and the diminished resources that it has for the whole school estate in Coventry means that it is worried about committing to technical appraisals and the architectural work that would be needed. It does not know whether the rebuild money is likely to be forthcoming in the near future, and such technical work would take a big slice of the Coventry capital programme. I would

15 Mar 2011 : Column 49WH

like the council to go ahead with the necessary preliminary planning work so that the school can be rebuilt at the earliest opportunity. I do not believe that extending the life of the school is in any way viable, but the council needs reassurance about its future capital programme before it makes a considerable outlay at the expense of other school needs in the city.

I do not know whether the Minister can provide any comfort with regard to plans for the future. The Secretary of State talked about the varying needs of primary schools, perhaps as part of moves to excuse his decisions on the Building Schools for the Future programme. He said that there were other needs, and that it was not only about secondary schools. Having reached this situation, however, there is no alternative for Richard Lee primary school other than a total rebuild, even though, as the Minister knows, that will be expensive and in the order of £8 million.

If the Minister believes that I am in some way exaggerating the difficulties faced by the school, I ask him to come and have a look. I am sure that he will be as shocked as I was by the state of the school buildings. If he cannot find time to visit, perhaps he would be prepared to meet a delegation so that some of the dedicated governors and teaching staff can meet him, and he can see in detail some of the things that I have seen. Most of all, may we have clarity about future funding programmes so that the council can make a commitment to what is needed? Even if we have a programme now, it will be 2013-14 at the earliest before a new school can be provided.

Having got through this winter, I frankly do not know how the school will get through next winter, and I am certain that it will not be able to do so with a capital programme of £9,000. The degree of patching and mending evident at the end of this winter is far more than the school’s resources can cope with. Good people are providing a good education to children in my constituency, but they are being undermined by the appalling state of the buildings in which they are asked to work.

12.44 pm

The Parliamentary Under-Secretary of State for Education (Tim Loughton): I congratulate the right hon. Member for Coventry North East (Mr Ainsworth) on securing this debate and on raising an issue of concern in his constituency. I do not know whether this is the first time he has secured a debate in this Chamber, free from the constraints of being a Minister; I know how frustrating it can be as a Minister that one does not get the opportunity to air important constituency matters. However, the right hon. Gentleman has certainly aired one such matter today very graphically, and I appreciate the concern that must be felt by him, by parents and by teachers regarding the state of the school that he described.

The Minister responsible for schools, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), is unfortunately detained with Committee work today, but I will pass on the request for him to visit that school if he is in Coventry, or to meet a delegation. I know that he has campaigned on behalf of schools in the past, and that he is a strong advocate for improving provision for all pupils, teachers and parents.

15 Mar 2011 : Column 50WH

As the right hon. Member for Coventry North East knows, improving provision is a priority that the Government share. Even in times of austerity, we are determined to make this country’s education system among the best in the world by ensuring that schools prepare every pupil for success. I congratulate Richard Lee primary school on the comments it received in the recent Ofsted report. The dedication of the teaching staff and those signs of improvement are doubly to be congratulated because of the challenging physical circumstances involved.

Our ambition is based on the simple but profoundly important principles of giving teachers and heads greater freedom, giving parents greater choice, providing higher standards for pupils, and reducing the amount of red tape in the system. We have taken steps to achieve those aims. The academies programme has been expanded, and we are now looking at the national curriculum with the intention of restoring it to its intended purpose—a minimum core entitlement beyond which teachers can tailor their tuition to meet the particular needs of pupils. By February 2011, the Department for Education had received 323 proposals to set up free schools, and that initiative is progressing. Through such changes, each local area will have a good mix of provision, and parents will have real choices for their children.

As the right hon. Gentleman persuasively argues, school buildings, teaching staff and pupils need to be a continuing part of the investment, and the coalition Government are committed to ensuring that that remains the case. However, we are faced with exceptionally tough circumstances. The appalling economic and financial inheritance left by the previous Government, of whom the right hon. Gentleman was a member, is one of those obstacles. The amount that the Government currently spend on debt interest payments could be used to rebuild or refurbish about 20 primary schools such as Robert Lee every day. We urgently need to reduce the deficit, and the previous Government knew that. They had already set a target of a 50% reduction in Government infrastructure expenditure by 2014-15, but they failed to admit that an impact on school building would be inevitable after such a reduction. Although I recognise the parlous state the school is in, it is not something that happened over the past nine or 10 months. The situation has been in decline for some time, and there were opportunities to address it in the past.

The underlying financial position was not the only element that the previous Government chose to ignore. Since four-year-olds are too heavy for storks to transport, there is generally four years’ notice of a child’s need for a primary school place. A small part of the pressure on places arises from migration and immigration, but the birth rate has been rising since 2002, levelling off for a couple of years from 2007.

Two years ago, Members of the then Opposition highlighted the increasing need for primary school places in a debate in this Chamber. On 3 March 2009, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), now the Minister responsible for employment relations, consumer and postal affairs, led a debate on the need for primary school places in London. My hon. Friend the Member for Bognor Regis, now the schools Minister, and my hon. Friend the Member for Brent Central (Sarah Teather), now the Minister responsible for children, also took part. All speakers underlined the need for

15 Mar 2011 : Column 51WH

action to ensure that there are enough school places for the children who need them, and although the debate focused on London, the issue has spread beyond the capital.

Making sure that there are enough places in schools is fundamental; it is the most basic need of the school system. Nevertheless, the Government of the day chose not to treat the matter with the seriousness it required. Instead of tackling the need to which my hon. Friends drew attention, the Government proceeded with their unaffordable and inefficient Building Schools for the Future programme, announcing the entry of new authorities to that programme on 15 July 2009, and last year on 8 March and 5 April, just before the general election.

However, I must be fair to the previous Government. They were not the only ones who failed to respond to rising birth rates and the impending pressure on school places. Local authorities have statutory responsibility for ensuring that there is a school place for every child who needs one, and several authorities have been slow to respond to the emerging evidence of pressure on school places.

As well as being responsible for ensuring that there are enough school places, local authorities are responsible for ensuring that schools such as Richard Lee primary school are kept in good condition. Clearly, that is a particularly big challenge in this case. Schools shoulder some of that responsibility through the delegation of school management to the schools themselves. The central Government capital grant is intended to help, but the maintenance of premises is one of the purposes of revenue budgets. The revenue budget for the 484 pupils of Richard Lee school in 2010-11 was more than £1.5 million, which averages about £80,000 for every 25 pupils—an average class size. Freedoms for schools entail responsibilities and, for every school, those responsibilities include a share of the maintenance responsibility.

However, none of that improves the situation of the pupils of Richard Lee school, some of whom have been having lessons in conditions that no one would regard as satisfactory, as the right hon. Member for Coventry North East rightly highlighted. I was relieved to learn that all the classes are now at least taking place in classrooms. I understand that, as he said, for a spell after the boiler burst, some classes were taking place in corridors, which is completely unsatisfactory.

We are taking a number of urgent and decisive steps to tackle school building needs. First, we have put a stop to the bloated and misdirected Building Schools for the Future programme, because we recognise, as the right hon. Gentleman’s party did not, that the top priorities for investment in school buildings have to be ensuring enough school places and tackling poor building condition—precisely the needs that Richard Lee primary school embodies. Through the work of the capital review that Sebastian James is leading for us, we are developing ways of managing capital that will be more efficient and give better value for the funds spent. We expect the review to report in the next few weeks.

In the announcement of 13 December, £13.4 million was allocated to Coventry city council and its schools for capital investment in Coventry schools in 2011-12. We expect similar levels of funding to be allocated from

15 Mar 2011 : Column 52WH

2012-13 to 2014-15. The allocation forms part of a national allocation for Department for Education capital of £15.8 billion during the four years from April this year to March 2015. To put that in perspective, the figure for 2014-15 is 60% below the historic high of 2010-11, but the average annual capital budget during the four-year period will be much higher than the average annual capital budget in the 1997-98 to 2004-05 period.

Within the allocations, basic need and maintenance are the areas to which we are giving priority. For 2011-12, the grant to Coventry for new pupil places is £6.5 million and the maintenance allocations come to £5.8 million. It is now up to Coventry city council to decide its priorities for the available funding, having regard to the building needs of the schools in the city and in line with its statutory duties and local priorities.

Mr Ainsworth: I seek clarification. I want to make the Minister aware that there are four Hills system schools in the city, two of which are in my constituency. The school that we are discussing is but one of them. He appears to have just talked about a capital allocation for Coventry that in total is about £13 million. He knows that a rebuild of Richard Lee in itself would take about £8 million of that city-wide £13 million pot, leaving practically nothing for distribution to the rest of the city. Is that figure to remain the same, and is my understanding correct that he said we would have clarity on the capital budget within the next few weeks?

Tim Loughton: The right hon. Gentleman knows that if we had more money from Building Schools for the Future—if money had been spent much more efficiently on the schools that were built at that time—more money would have been left over in the budget to spend on primary schools that are in a parlous state. I did say that the Sebastian James review will report in the next few weeks—imminently—about how we will approach capital spend in the future. I hope that the right hon. Gentleman will be able to take some clarity from that.

The situation is not easy. As I have said, we are in very tight budgetary circumstances, but I entirely recognise the particularly harsh circumstances in which Richard Lee primary school finds itself physically at the moment. I gather that Richard Lee was included in Coventry city council’s original primary strategy for change submitted in 2008 as part of the city council’s primary capital programme. Work on the school was to be a new build project, with an estimated budget cost of £8 million, as the right hon. Gentleman said.

However, the school was not subsequently prioritised in the council’s primary capital programme. That was a matter for the council. Instead, another school was deemed a higher priority due to its condition and the need to address additional pupil numbers. One might wonder about the state that school must have been in compared with the school to which the right hon. Gentleman is referring.

The primary capital programme will not continue beyond the current comprehensive spending review term. Therefore, there will be no opportunity of funding for the school through that route. However, I understand that Richard Lee school is now the council’s top priority for capital investment when funding can be identified.

15 Mar 2011 : Column 53WH

We know that there are schools, such as Richard Lee, in need of refurbishment that missed out in previous Government capital programmes, and people feel that they have therefore been treated unfairly. We are determined to continue to invest in the school estate overall. It is for local authorities to determine their priorities locally. As I have said, the average annual capital budget during the period will be higher than the average annual capital budget in the 1997-98 to 2004-05 period. However, I recognise that in the short term it will be difficult for schools to adjust to reduced capital funding.

We will introduce a new approach to capital allocation, which will prioritise ensuring enough places and addressing poor conditions as quickly as we can. That model will be outlined in the capital review, which, as I said, will report in the next few weeks. Within the funding available to us, our intention is that the new model will prioritise areas that are experiencing high pressure to increase the number of school places and those with buildings in most need of repair, as would appear to be the case for Richard Lee school.

We are determined to ensure that money is spent on school infrastructure and the buildings themselves, not on bureaucracy and processes, which have claimed too much of the funding in the past. Even when funding is tight, it is essential that buildings and equipment are properly maintained to ensure that health and safety standards are met and to prevent a backlog of decay that is expensive to address. Clearly, the patching of patches that the right hon. Gentleman mentioned is not the most effective way of spending resources.

By stopping Building Schools for the Future projects that were not contractually committed, we have been

15 Mar 2011 : Column 54WH

able to allocate £1.337 billion for capital maintenance for schools, with more than £1 billion being allocated for local areas to prioritise maintenance needs. In addition, £195 million will be allocated directly to schools for their own use. We have also allocated £800 million for basic needs in 2011-12, which is twice the previous annual level of support. We expect similar levels of funding to be allocated from 2012-13 until 2014-15. The capital allocation for this year for Coventry city council and its schools was announced on 13 December, as I said. It is now up to the council to decide how it prioritises its local spending.

I entirely appreciate the right hon. Gentleman’s very genuine and clear frustration with the state of that primary school in his constituency. I repeat my congratulations and thanks to the staff and governors for the job that they are doing in very adverse circumstances. We are determined that in future what reduced moneys there are for capital spend will be targeted at those most in need, in terms both of the condition of the fabric of buildings and ensuring that sufficient places are available, given rising school rolls. I hope that the right hon. Gentleman will be able to see from the results of the James review, coming out soon, how we intend to achieve that, so that there may be some renewed hope for his school—now at the top of Coventry’s priorities—to get a better settlement in the future to deal with the problems that it clearly has. I will pass on his request for a visit or for a meeting with a delegation to the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton, who is responsible for schools. Once again, I congratulate the right hon. Gentleman on having raised the subject today.

15 Mar 2011 : Column 55WH

New Homes Bonus

12.59 pm

George Hollingbery (Meon Valley) (Con): It a pleasure to serve under your chairmanship, Mr Williams. I welcome the Minister to the debate and I am glad to see him almost in his seat.

I spent 11 years as a district councillor in a local planning authority. As many colleagues will know, being a local councillor is a frustrating affair, but never more so than when it comes to the provision of housing for local people. Many obstacles are set in the way of local councillors, and there is often great hostility. With huge numbers of people on the housing waiting list, I wished we had been able to get to grips with the issue better.

Regional spatial strategies provided for local plans and core strategies to include more houses. That was a valuable stick, which ensured that many authorities made plans for homes, when they might not otherwise have done so. However, the inclusion of houses in local plans and local development framework core strategies was almost always achieved in the teeth of fierce resistance from local people. A great many houses were planned but never built, and that is a key issue, which we need to confront. Plenty of areas did not have regional spatial strategies; indeed, in my time, the south-west still had not put even the bare bones of a spatial strategy in place.

Most important, however, the strategies removed the need for local councillors to think about the merits or demerits of increasing local housing. They could simply hide behind the Government’s skirts and say, “It is all that nasty Government’s fault that new houses have come to your area.” They never needed to confront local people or hostile sections of communities about why increasing local housing provision was a good thing. Quite simply, that infantilised councils. Furthermore, the arrangements gave a huge advantage to those who opposed the plans. One thing follows the other; if a positive argument is not made for increasing local housing, it is hardly surprising that the most extreme views on the other side win the day.

I therefore greatly welcomed the Conservative party’s publication two or three years ago of its Green Paper “Open Source Planning”. It talked about a huge change of emphasis in our approach to planning. We were going to consult much more deeply with local communities, about not just the houses themselves but the reasons why they might be required. We were going to acknowledge that people lost amenity when large amounts of housing were built. We were going to provide a carrot, which we now know as the new homes bonus, to compensate local people in some way for the fact that they would have problems when the new houses came along. That was good common sense.

I already knew at that stage that deep consultation was absolutely necessary. In the Winchester district, we had the courage to act ourselves. We went out into the community and consulted widely. We sat down with large groups of local people, ran workshops and tried carefully to explain why we wished to build more homes. As a result, we found that we could persuade people. If we took the arguments out there and set them out rationally, people would listen; they would accept more housing if they could see why it benefited their communities.

15 Mar 2011 : Column 56WH

We received 3,000 separate responses to the consultation, including nearly 50,000 separate comments. That just goes to show that we really can engage communities if we wish to. That change—consultation, getting together with communities and deciding with them what they need for their areas—forms the principle plank of the proposed changes.

Neighbourhood planning empowers local communities to shape their own responses to their population’s needs, as set out by their local councillors, and councillors have to make that case persuasively. That is all well and fine, but where does the new homes bonus fit in? As I said, the issue is loss of amenity, which is slightly difficult to quantify. Most of the benefits that people think about when we talk about new homes are in the realm of public goods. For example, new homes might provide the critical mass for the local shop, ensure the continuation of the local school or reduce out-commuting in search of local employment. All those things are persuasive, and it is difficult to relate them to the fact that people will be stuck in more traffic when they go to work or might find it more difficult to see the local doctor. However, many individual households will see little, if any, direct benefit from the fact that new houses are going up.

Why not soften that blow, therefore, with a contribution towards whatever the community wishes to spend its money on? That is the right way to move things forward. Indeed, why not go further? There has been lots of criticism, certainly from members of the Select Committee on Communities and Local Government, that such an approach somehow involves bribery and that it is a bad idea for money to change hands in the planning system. I understand that argument, and I see where people are coming from, but if people suffer a direct loss of amenity and see their lives somewhat devalued, is there anything wrong with making a payment to them or reducing the amount of council tax they pay for several years? I think not. If people see that the authorities understand that they are genuinely losing something, even if only for a brief period, as a result of new homes coming along, we can responsibly make payments in kind to them.

For that very reason, it is incredibly important that all proposals for the new homes bonus include the assumption that spending should be very local to where the development happens. That leads me to my first question to the Minister. What about the 80:20 split in two-tier areas? Why does a county council need to have a share if compensating local people is the primary objective?

Mark Pawsey (Rugby) (Con): I congratulate my hon. Friend on introducing such an important debate. The 80:20 split is of great concern to Rugby borough council, which argues that it has taken forward the proposals for the new housing from which Rugby will benefit. It is concerned that a proportion of the new homes bonus will be allocated to the county council, which will benefit from development under the section 106 agreement and the community infrastructure levy. I hope that the Minister will give us a little more detail about where this 80:20 split comes from. I note from the responses to the consultation that it is a starting point for negotiation, but those who represent the authority in my area would be interested to understand a little more about where the split comes from and where it is likely to end up.

15 Mar 2011 : Column 57WH

George Hollingbery: I thank my hon. Friend for that timely intervention. I absolutely agree with what he says. In a moment or two, I want to develop this argument a little further, because there is some confusion about where infrastructure comes from.

Graham Jones (Hyndburn) (Lab): It is a pleasure to serve under you, Mr Williams. My area is in a two-tier district. Does the hon. Gentleman accept that the funding for the new homes bonus comes from reductions in the formula grant, which affect the county council? According to the hon. Gentleman’s argument, the reduction in Lancashire county council’s formula grant will be redistributed only to the district authorities, which, in my area, is Hyndburn borough council. Does he not accept that that argument is flawed and that the Minister should not adjust the formula grants for shire authorities if they will not receive any of the bonus at the end of the year?

George Hollingbery: I thank the hon. Gentleman for his intervention. He makes some cogent points, which the Minister will want to respond to in a moment.

There is a danger here. We are clearly channelling payments down to a community for its loss of amenity, but it is dangerous for us to confuse that with the provision of infrastructure. Let me develop that argument a little more. Page 11 of “New Homes Bonus: final scheme design” states:

“Local authorities will have flexibility on how to spend the unringfenced grant…In many cases this will involve advanced planning with other local service providers to ensure that there is timely delivery of infrastructure for the new development. For example, local authorities can pool funding to deliver infrastructure.”

I hope that that will not be read as an invitation to spend the new homes bonus on infrastructure that would be provided by the community infrastructure levy or other agencies in any event. There is a dangerous blurring of the margins here, and I seek some reassurance from the Minister that the new homes bonus will be focused on local communities.

There is a further confusion. The community infrastructure levy is coming through. Section 106 will be narrowed to deal only with site-specific issues. On top of that, there is open spaces funding—I think it will still exist, although I am not 100% certain—and the new homes bonus. There will, therefore, be three potential ways of providing infrastructure, and I would like some reassurance from the Minister on the potential confusion about them. I have had evidence on the issue from local parishes in my area, and particularly from West Meon parish council, which I met recently. Its members were very confused about where open spaces funding would sit in the new matrix.

Just yesterday I received a letter from Hampshire county council, which is particularly worried about the timing of the community infrastructure levy. It says:

“We believe the arbitrary date of April 2014 will cause serious problems both for ourselves and the district councils and risks triggering a growing infrastructure deficit.”

It goes on to request that only local planning authorities with robust policies in place for CIL should be subject to the changes by April 2014. That causes me to worry that there is going to be yet more impetus for the new homes bonus to be spent on infrastructure that should otherwise be provided by different mechanisms.

15 Mar 2011 : Column 58WH

Andrew Stephenson (Pendle) (Con): I congratulate my hon. Friend on securing the debate. I agree with what he has said and also the comments from my hon. Friend the Member for Rugby (Mark Pawsey) and the hon. Member for Hyndburn (Graham Jones) about the 80:20 split. Will my hon. Friend the Member for Meon Valley (George Hollingbery) comment on another issue? In my constituency there is a significant problem of empty properties. We have 896 empty properties in the town of Nelson alone. Will my hon. Friend join me in welcoming the Government’s decision to include long-term empty properties being brought back into use as part of the new homes bonus, thus boosting the financial viability of regeneration schemes in areas such as Pendle?

George Hollingbery: That is entirely to be welcomed. I would add that a section in the recently published final scheme for the new homes bonus reminds us that the spending review also announced that the Government were investing £100 million through the Homes and Communities Agency to enable housing associations to support local authorities to bring more than 3,000 homes back into use. As a package, I think that is to be welcomed. It is right that the new homes bonus should also be made attractive by bringing empty homes back into use.

My second question to the Minister is about transfers across local planning authority borders. I emphasise again that the new homes bonus is to compensate for a loss of amenity. However, what about the loss of amenity to those sitting on the other side of a local planning authority boundary? All of us who represent rural constituencies—and even those who perhaps represent slightly more urban areas—will recognise a situation in which one planning authority plans a large number of homes in an area of its administration which will not have any effect on its citizens.

There is such a development in my constituency at Whiteley, where 15 years ago a large new development of 4,000 homes was built. It was immediately adjacent to Fareham town, which has no contacts at all with Winchester district. All contacts went south. Under current rules on the new homes bonus, all of that new homes bonus would flow to Winchester and not to Fareham where it rightly should be. Likewise, we are now confronted by a proposal from Fareham borough council, which wishes to build 6,000 homes on the border of Winchester constituency, with most of the loss of amenity affecting those in Wickham and Knowle in the Winchester district authority.

I believe we should be able to form neighbourhood forums across LPA boundaries, and some of the payment of the new homes bonus should go directly to those forums across boundaries. We should at least encourage the chief executives and leaders of local councils that reduce the amenity of those across the border to share and share alike.

Jason McCartney (Colne Valley) (Con): I thank my hon. Friend for giving way and for securing this important debate. House building is probably the biggest issue in my constituency at the moment. The Labour-led Kirklees council is pushing a local development framework plan using the old regional spatial strategy house-building target of 26,000. There is a lot of suspicion about that, particularly about the new homes bonus.

15 Mar 2011 : Column 59WH

My hon. Friend spoke about the loss of amenity. My constituents are really worried about the loss of amenity of green belt, green fields and the countryside. Could we ask the Minister about the possibility of a massively disproportionate new homes bonus for houses built on brownfield sites and regeneration of empty homes, which my hon. Friend the Member for Pendle (Andrew Stephenson) mentioned, as opposed to a bonus for homes built on greenfield sites? That would be a really positive step.

George Hollingbery: I thank my hon. Friend for his intervention and add his question to the Minister’s already long list.

1.14 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): It is a pleasure to serve under your chairmanship, Mr Williams, and I congratulate my hon. Friend the Member for Meon Valley (George Hollingbery), his hon. Friends and the hon. Member for Hyndburn (Graham Jones) on their contributions to the debate.

My hon. Friend the Member for Meon Valley fairly set out the problem that the new homes bonus is intended to address. For decades house building has failed to keep up with people’s needs, and a combination of the recession and the regional spatial strategies targets that generated a bow-wave of opposition in many areas, led to a steep decline in the number of new homes provided. The year 2009 saw the lowest level of house building in England and Wales in peacetime since 1923, and the cost of a new home doubled in real terms between 1997 and 2007.

There is no doubt that housing is central to economic success as well as to personal well-being. We need to make building homes a motor for growth again. The new homes bonus will do exactly that. It has localism at its heart; it will re-energise communities; it will give them an incentive to say yes rather than no, which was the consequence of the top-down, target-driven scheme that it partly replaces.

Graham Jones: I welcome the Minister’s comments that this is a positive policy to encourage growth, and his assertion that it will create growth. However, what is the incentive to build houses in light of the following two factors? The hon. Member for Pendle (Andrew Stephenson) touched on them. The first is population decline, and the second is the existence of too many houses already.

Andrew Stunell: I suggest that the hon. Gentleman look at the empty homes element of the new homes bonus as particularly appropriate for the communities of east Lancashire. My hon. Friend the Member for Pendle (Andrew Stephenson) made exactly that point. It is an important way of providing a market signal to those who own empty homes, to encourage them to invest in them and bring them back into use.

Graham Jones: I accept the Minister’s point that long-term voids are not on the council tax base, but short-term voids are. There will be a mix when a row of terraced houses is demolished: there will be short-term

15 Mar 2011 : Column 60WH

empties, occupied houses and long-term voids. Some houses will be deducted, so short-term voids are included in the net figures for the new homes bonus. Will the Minister comment on that?

In describing his policies the Minister talks about regeneration, but also about two-into-one and three-into-one schemes. The hon. Member for Pendle has some of those schemes in his constituency which, I know, are very successful and are selling well. There will be net reductions in the new homes bonus available for constituencies such as Pendle. Surely, the two-into-one and three-into-one schemes and short-term voids should not be part of the new homes bonus. We need to add to the council tax base process an element that includes those that are on the council tax base, and not just talk about long-term voids that are not. Will the Minister accept those points?

Andrew Stunell: I notice that Pendle is credited with 107 new homes, so it will be getting the new homes bonus. It is only fair to my hon. Friend the Member for Meon Valley, who initiated the debate, to turn to his points.

It should be clear that the Department for Communities and Local Government has set aside almost £1 billion for the scheme over the spending review period, including £200 million in 2011-12. That funding for 2011-12, contrary to the assertion of the hon. Member for Hyndburn, is additional money outside of the grant formula.

The balance between market and affordable homes is also crucial and, therefore, there is an additional £350 payable for each affordable home for the following six years, on top of the new homes bonus for homes in general. That means that local authorities could receive up to £9,000 for each affordable home over the next six years.

Gavin Barwell (Croydon Central) (Con): I thank the Minister for giving way. I served with him on the Localism Bill Committee, and we had long debates about the benefits of incentives versus coercion. Does he agree that it is important that the Government should constantly review the level of the bonus, for both normal and affordable housing, to ensure that the incentive is sufficient to generate the necessary level of house building?

Andrew Stunell: I will shortly be speaking about some of the other incentives that are in place, but I agree with my hon. Friend that if we had more money we could have bigger incentives. Nevertheless, it might be wise to wait for the scheme to bed in before starting that revision.

The scheme will pay grant equal to the national average for the council tax band concerned on each additional property, and it will be paid for the following six years as an un-ring-fenced grant. I stress that it is not ring-fenced; the Government make no prescription and give no advice to local authorities on how they might spend the money. It is entirely a matter for the recipient authorities. That brings me to who are the recipient authorities.

My hon. Friend the Member for Meon Valley asked me to say something about the split between the county and district tiers in two-tier areas. First, I should say that in single-tier areas, 100% goes to the principal local

15 Mar 2011 : Column 61WH

authority; in county areas, 80% goes to the district planning authority, and 20% to the county council. When I say “it goes”, that is the default position, but it is open to each of those authorities to consider whether they want that to be the case in all circumstances. For instance—this is an example; it is not intended to be a Government directive—if the tipping point for the creation of a new primary school were involved, there might well be some other consideration than 80:20. I remind the House that when it comes to local authority spending, it is generally the case that 80% is spent by the county and 20% by the district, so we are inverting that ratio.

Every development is different and will need different services to support it, and different local concerns will drive the choice on how to spend the new homes bonus. Local authorities and local communities are best placed to negotiate those choices in meeting the needs of local neighbourhoods. My hon. Friend spoke of local communities having the loudest voice. I certainly agree with him on that, hence the 80%, but there are also parish and town councils; and in many unparished areas there will be residents’ and community groups. I would expect sensible local authorities, in working through the new local planning arrangements with neighbourhood plans, to see the bonus as a vital part of negotiating effectively with those communities on how the new homes bonus should apply in those areas.

My hon. Friend also asked how the boundaries question would be dealt with, and gave the example of Whiteley. That may be seen as pulling in the opposite direction to his point about county and district investment, because both of the areas that he spoke of are in Hampshire. The county council will benefit by just over £1 million from the new homes bonus—that will be its 20% for the coming year—and it is a provider of services across both of the areas mentioned. In such situations, the fact that there is a top-tier section of the new homes bonus may be to everyone’s advantage. In addition, the Localism Bill introduces a duty for local authorities to co-operate, which is relevant in establishing plans, taking decisions about how things such as the new homes bonus should be spent, and how some common objectives can be met.

My hon. Friend the Member for Colne Valley (Jason McCartney) asked about the possibility of adapting the new homes bonus to give preference to approvals on certain types of land. That is not part of the scheme; nor, as things stand, do I foresee it happening in future. However, the introduction of the neighbourhood planning system will give local communities and local neighbourhoods a much firmer grasp of such decisions as they build up their neighbourhood plans under the district plan, which is subject to the national planning policy framework. I hope that my hon. Friends are satisfied to hear that.

If I may, Mr Williams, I shall use the rest of my time speaking about the different streams of money that support the Government’s intention to see vigorous, sustainable development across the country. My hon.

15 Mar 2011 : Column 62WH

Friend the Member for Meon Valley asked about open spaces funding. The Department has set aside £11.2 million for community green spaces funding for the coming year. That goes principally to supporting groundwork for the green flag award accreditation scheme, and the federation of city farms and community gardens partnership work programme. Those programmes continue on a comparatively modest scale, but the amount that local authorities choose to allocate for parks and other green spaces is rightly a matter for them.

George Hollingbery: Do I take the Minister to mean that open spaces funding will not be levied on developments from now on?

Andrew Stunell: I am sorry to say that I did not catch what my hon. Friend said.

George Hollingbery: I apologise. Am I to take his comments to mean that local authorities will no longer be levying an open spaces fund—a charge for open spaces?

Andrew Stunell: I shall take note of that question and write to my hon. Friend, so that I do not give a misleading response.

The Government have given communities the opportunity to participate much more strongly in the process of protecting spaces through the community assets list, the community right to reclaim land and the community right to bid and challenge. Local communities that are concerned about these matters therefore have a number of opportunities to become directly involved.

As well as the new homes bonus there is, as my hon. Friend said, the community infrastructure levy and section 106 agreements. Both are specifically directed to infrastructure investment and planning outcomes. They are different from the new homes bonus; they are not ring-fenced and there is no obligation for the money to be spent on infrastructure or related matters.

Local authorities will have the opportunity to introduce a community infrastructure levy. I note the concerns that my hon. Friend passes on from Hampshire, but it is important that we get these incentives in place quickly. If my hon. Friend lets me have that correspondence, the Department will give some thought to those matters.

Section 106 will be scaled back so that it is specifically directed to deal with the impact of particular developments. Statutory tests were introduced in 2010 to ensure that obligations are directly related to proposed developments. Regulations prevent section 106 agreements and the community infrastructure levy being collected for the same piece of infrastructure. After 2014, tariff-style planning and obligations will not be permitted. The characteristic level at which the community infrastructure levy is likely to fall would be between £5,000 and £10,000 per home. Taken with the new homes bonus, it is a really powerful incentive for communities to agree to new developments.

15 Mar 2011 : Column 63WH

National Blood Service

1.30 pm

Jim Dobbin (Heywood and Middleton) (Lab/Co-op): Thank you, Mr Williams, for relieving me of my Chairman duties so punctually. It was a great relief to have a rest and a coffee before I opened this debate. I am pleased to see the Minister in her place, because this is a subject that she will understand from her time in the national health service. I requested this debate on the future of the National Blood Service to highlight the intentions of the Government to sell off “elements” of the service to the private sector. I understand that there have been some preparatory discussions with a number of contractors. That was revealed in a report in the Health Service Journal. Three possible contractors are Capita, DHL and TNT.

In the paperwork relating to this debate, Members may notice that I have an “R” after my name. I spent 34 years in the national health service. Although I specialised as a medical scientist in microbiology in the NHS, I spent some of my former years in the National Blood Service, particularly in emergency transfusion services, so I have some experience of the subject.

The NHS staff who deliver that service are highly skilled and highly trained and it is essential that they are. I notice that a number of my colleagues are here, and I am quite happy for them to get involved in this debate. I will only spend about 10 minutes talking on the subject.

The annual review of the National Blood Service—and it is its own review—highlights the efforts that have gone into offering a world-class service to the NHS. It is probably the best blood service in the whole of the globe. Thanks to its unique clinical knowledge and experience and the support that it receives from its many dedicated donors and families, many people who need blood and organs can be saved. In its annual review, the organisation has spent some time evaluating its system and performance. In other words, it has looked at itself in great depth and that has allowed it to achieve substantial savings and to lower the cost of a unit of blood. According to its annual review, a unit of blood has dropped from £140 to £130 and it should reduce further to £125 this year, which will mean a saving of £30 million a year to the NHS. That money can be reinvested in NHS front-line patient care.

The National Blood Service administers not just units of blood, but organ donation, tissue donation and work on stem cells. There have also been improvements in the delivery of organ donation procedures, including training additional specialist nurses and increasing the numbers of people who are prepared to contribute organs. User hospital trusts pay for the blood products and services. It is important that both hon. Members and the public understand that blood and tissue donors give their services for free.

Andrew Stephenson (Pendle) (Con): I congratulate the hon. Gentleman on securing this important debate. May I ask him a question on the subject of reform? The National Blood Service is crying out for new donors. Should the fact that there is still an arbitrary ban on

15 Mar 2011 : Column 64WH

certain groups of society giving blood, such as gay men, be up for review or does he think that such a ban is okay?

Jim Dobbin: Everything should be up for review at the present time. I am quite sure that the National Blood Service is considering that matter as part of its review.

Donors give their services absolutely free to the national health service. The Department of Health funds the production of all the organisation’s services within its factories, processing centres and laboratories. The system has a record of sound financial control, of which the NHS should be proud. I was in the service when cleaning services were compulsorily tendered out to the private sector. If my memory is correct, that resulted in a reduction in the quality of service. We saw wards cleaned less frequently and an increase in hospital infections such as clostridium difficile, E. coli 0157 and methicillin-resistant Staphylococcus aureus. We have all seen the publicity that such infections have received. Privatisation would introduce an element of cost cutting in order to increase profit. Shortcuts, reduced training and a reduction in quality are all strong possibilities.

The public who donate their services for free will be discouraged from taking part if the profit motive is introduced. The demand for blood from those who have serious health conditions will not diminish, but the supply of donors is in danger of being reduced.

Mr Gerry Sutcliffe (Bradford South) (Lab): I congratulate my hon. Friend on securing this debate. As I understand it, the National Blood Service is allowed to use the blue flashing light to transport blood to the most serious cases. Is it not the case that if the service were privatised, the private sector companies would transport the blood but would not be able to use the blue-light service because it is restricted at the moment?

Jim Dobbin: If that were the case, it would make it much more dangerous for those patients who were waiting to receive that blood or organ. I would not like to see that happening.

The National Blood Service has created a strategy for each of its departments as it strives to improve its service and, looking at the review in great detail, in my view, it is succeeding. It is aware of the current economic situation and the constraints that it is working within over the next few years. It is planning more developments in future years. The question that has to be asked is why sell off something that is working so well. I understand that scientific staff have been angry about these moves. They have blasted the Government plan and demand changes to the Health and Social Care Bill, which will let private companies cash in on lucrative Government contracts.

Lisa Nandy (Wigan) (Lab): Does my hon. Friend share my concern about the staff who currently work in the National Blood Service? Many of them opt to work in such services because they believe in the public good and in the common good. Does he share my concern about the impact that privatisation will have on them?

Jim Dobbin: Yes. That is exactly right. Those staff, who are well trained specialists in their area, are very concerned about the damage that this proposal would

15 Mar 2011 : Column 65WH

do to the blood transfusion system and they are very angry about what is possibly going to happen. Of course, they also fear that donors will walk away. There are 1.4 million volunteer donors at the moment. They donate about 200,000 units every year, which is a huge amount of blood, and all of it is donated voluntarily. Privatisation of the blood service has been tried in New Zealand and it drove down the number of blood donors. It deterred them from making that contribution freely, because donors do not like to see their organs or blood as part of a private sector business.

Why should the private sector profit from blood that is given freely? There is no private sector organisation that has the expertise to provide the range of services—blood supplies, tissue, organs and specialist products, plus the specialist research expertise—that are provided by the NHS blood transfusion service.

Jason McCartney (Colne Valley) (Con): I congratulate the hon. Gentleman on securing this important debate. He raised an important issue when he said that there are a number of reasons why people give blood. Personally, I gave blood at the Galpharm stadium in Huddersfield a couple of years ago because I was inspired by Adrian Sudbury, the journalist from The Huddersfield Daily Examiner. Before he died, he also inspired people to sign up to the bone marrow register maintained by the Anthony Nolan Trust. So there is a lot of good work going on and the hon. Gentleman has identified that. I hope that the Minister, in her deliberations, will think about the other roles that the National Blood Service plays. The hon. Gentleman quite rightly identified that the service is not only about giving blood but about giving tissue and other material. I thank him for making that point.

Jim Dobbin: I thank the hon. Gentleman very much. That was a very positive contribution, based on his own specific experience. There is a petition about this issue, there are now some 35,000 signatures on it, and it is building up all the time.

Grahame M. Morris (Easington) (Lab): I also congratulate my hon. Friend on securing a very important debate about an issue that is of great concern among the public. I wanted to ask him about the lessons from overseas countries where blood transfusion services have been privatised and where it is standard to pay for donated materials. What lessons can we learn from those countries about the safety of supply?

Jim Dobbin: I referred earlier to another privatisation that took place in the health service, when cleaning was put out to tender. Of course, the quality of the service was reduced. That is exactly what I fear will happen with the blood service, because if someone is in the business of making money and making profit they take short cuts. It is as simple as that.

The petition that I was talking about is building up. In addition, 300 people got in touch to say how much they valued the blood service. For many of those people, their loved ones personally benefited from the altruism of a fellow human being.

The blood service began before the national health service, around the time of world war two, when the demand for the service originated. So the blood service is older than the NHS.

15 Mar 2011 : Column 66WH

I am very concerned. The Government are saying that only elements of the NHS blood transfusion service are under discussion at the present time but that is a dangerous route to go down. I hope that the Minister will take this issue back to the Government and the Secretary of State, and ask for a review of this particular service that the public so dearly love. The other thing that I will say is that if someone is looking for a big society in action, the blood service is it.

1.44 pm

The Parliamentary Under-Secretary of State for Health (Anne Milton): Having not served under your chairmanship before, Mr Williams, I now find myself doing so twice in a day. It is a pleasure.

I congratulate the hon. Member for Heywood and Middleton (Jim Dobbin) on securing the debate and I pay tribute to his experience of this sector. I also echo the tributes that he paid to the staff who are part of such a fantastic organisation and who are one of the reasons why it has such a high reputation.

The debate is an important opportunity to discuss an issue that is not only important to the NHS and the public but which has been the subject of very unhelpful rumour and speculation. I become very disappointed when I see scare stories in the press that are not necessarily based on any foundation and that will only result in scaring people off donating blood, tissue or organs. Those stories are not helpful. I urge the hon. Gentleman and the other hon. Members sitting beside him that if they want to clarify the situation they should please feel free to contact me. That is much better than running scare stories, or a story getting out of hand, so that the issue becomes a disservice to the public we are all trying to serve.

Contrary to what some people have been saying publicly and indeed privately, there are no plans to privatise the blood service, which is part of NHS Blood and Transplant, or NHSBT. I can say categorically that we are not selling off the service. If I do nothing else in this debate, I want to knock that rumour on its head.

The Government have said previously that we will retain a single national system for blood with NHSBT at its helm and we stand by that statement. Under its current management team, NHSBT has done a great job and it continues to do so. It has maintained—indeed, greatly improved—the stability and security of the blood supply. It has also improved productivity in blood processing and testing by more than 50% in three years, which is a true achievement.

Jim Dobbin: I have a letter from Andrew Pearce, who is the head of donor advocacy in the NHS. The second paragraph says:

“The review is at an early stage and is likely to take a few months. Although we cannot rule out that the review might eventually suggest that some of our supporting activities should be market-tested, this is by no means certain.”

There is some doubt in that letter, which is from someone within the blood system itself, about whether market-testing is going on with a view to something else happening. People do not test something for the market if they are not intending to put it out to tender.

Anne Milton: I thank the hon. Gentleman for his intervention. What matters is that people get good value for money from the taxes that they pay. What also

15 Mar 2011 : Column 67WH

matters is that we do things effectively and efficiently, so we constantly market-test within NHS provision. We should do so. What matters to us is having a quality service. However, we are not selling off the blood service and we are not privatising it. As for performance, I am sure that the hon. Gentleman will agree that the performance of our blood service puts us in the top quartile compared with other European blood services. That is a fantastic achievement.

I reiterate the hon. Gentleman’s comments about what the improvements in the blood service mean. There has been a reduction in the price of a unit of blood, down by £15 from £140 in 2008-09 to £125 today. As he rightly pointed out, that reduction saves hospitals £30 million each year, which can be channelled straight back into patient care. Again, I pay tribute to the staff who have achieved that reduction.

It would be a huge oversight on my part if I did not also pay tribute to those who donate their blood for the benefit of others. I am pleased to learn that my hon. Friend the Member for Colne Valley (Jason McCartney) has donated blood himself. Every year, 1.4 million people donate blood, which means that 2 million units a year are donated in total. That equates to 7,000 new units of blood every day, or about five a minute. Statistics are wonderful when one is engaged in a debate such as this one; they show the scale of the donations that are made. Those donations have saved countless lives and continue to do so. Indeed, the altruistic donor system is one of the rocks that the NHS is built on and we will not do anything to jeopardise public confidence in it.

It would also be remiss of me not to mention organ donation. The one thing that we do not do often enough is to thank people who donate their organs and those of their loved ones, saving many lives in the process. We have made great improvements in organ donation, which is up by 28% since 2008, but we must continue to make improvements. I do not want anything, anyone or any public statement to jeopardise any of that. On the contrary, we want to carry out a review to help NHS Blood and Transplant to improve its operational efficiency even further and provide an even better service.

The blood service must be seen in the context of its role in the NHS. The hon. Member for Easington (Grahame M. Morris) mentioned courier services for getting blood around the place. We have been using courier services for many years—the previous Government did so as well—to deliver organs and tissue, and there is no question of putting the delivery of blood at risk.

Grahame M. Morris: Just for the record, it was my hon. Friend the Member for Bradford South (Mr Sutcliffe) who raised that issue, but it is one that I am concerned about.

Will the Minister address the new role of the economic regulator, Monitor, and the responsibilities that it will have regarding competition? Will its remit extend to the blood service?

Anne Milton: I apologise for confusing the hon. Gentleman with the Member who was sitting next to him. At least it gave me the opportunity to clarify the point. To ensure that I give the hon. Gentleman a

15 Mar 2011 : Column 68WH

precise answer, I will have to come back to him on Monitor because I do not have the information with me. I will happily do that after the debate.

The blood service is self-funding, in that it recovers the cost of collecting, testing and processing blood through the price paid by the NHS for each unit. The price of a unit is therefore directly related to the efficiency with which NHSBT conducts its operations; the one feeds into the other. If the cost of a unit of blood goes up, there is pressure on budgets, so the whole NHS has an interest in NHSBT being as efficient as possible and keeping the cost low. The £30 million that we have been able to put back in demonstrates that costs are being kept low, and more can be spent on patient care.

The review of NHSBT was announced in the report produced by the arm’s length bodies review in July 2010. The review is ongoing, and I cannot say what the outcome will be, but I would like to explain what the review is about, and in doing so, clarify what it is not about and hopefully reassure the hon. Member for Heywood and Middleton and all those who might share his concerns.

The review will identify opportunities both to help NHSBT further improve the efficiency of its operations, and to save money. Aspects of NHSBT’s activities covered by the review include IT, estates, testing, processing and logistics. NHSBT has recognised that those areas have room for improvement, in both developing services and increasing efficiency; such functions can often be carried out more efficiently. NHSBT already outsources some of its activities to private sector companies, for example facilities management, legal services and the call centre, so by exploring whether greater savings are possible, the review does nothing new. It simply takes a currently successful model, which has demonstrated that it can improve, and considers whether it would work if it were to be expanded.

As I said, we are looking to ensure maximum efficiency for NHSBT, and I am sure that the hon. Member for Heywood and Middleton agrees with that aim. We will do whatever works, and whatever can ensure a safe supply of blood to the NHS.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Will the review of the British national blood service be subject to European competition law?

Anne Milton: I am pretty sure that it will, but I will check.

There have been suggestions that outsourcing some other functions might lead to donors declining to donate. We are absolutely clear that in exploring other opportunities, we will not put at risk any aspect of public health. I do not want donors or any Member here today to believe that this is privatisation of our highly respected National Blood Service.

Jason McCartney: I thank the Minister for clarifying that there will be no sell-off—no privatisation—of the National Blood Service. Some Opposition Members are concerned that if there was some privatisation there would be a drop in donations, which is something that no one in the House would wish. Hopefully, Members on both sides of the House can now pass on that information, so that there is confidence in the National

15 Mar 2011 : Column 69WH

Blood Service and we see an increase in donations. We welcome the efficiency measures as well.

Anne Milton: I thank my hon. Friend for reiterating that point. Blood is donated freely to the NHS to improve and save patients’ lives. Like any donation, it is a gift, and we want to maximise the opportunities for that gift. We do not want to do anything to discourage donors. I state categorically that the donor-facing aspects of blood donation are excluded from the review, which will ensure that the relationship between NHSBT and its donors is not compromised.

My hon. Friend the Member for Pendle (Andrew Stephenson) mentioned that people, in particular men who have had sex with men, are excluded from blood donation, and that issue is currently under consideration. I understand that there has been a lot of concern that the rules are outdated, and we will make an announcement on the issue at some point in the near future.

I feel that I have been repetitive, but I need to be to make the point, so I reiterate the Government’s support for, and belief in, a single national system for donated blood and organs, with NHSBT at its helm. That does not mean there is a blinkered belief that the system has already reached the peak of its potential; it would be remiss of the Government to think so. NHSBT, like all areas of public and private life, must continue to innovate and to challenge itself if it is to provide the best possible

15 Mar 2011 : Column 70WH

service. The current review is designed to explore how it can do that, to keep the price of blood—the cost to the NHS—as low as possible and to provide the high-quality blood service that donors and recipients deserve.

Jim Dobbin: I agree that we should continually look at research and at improving the system for the people of this country. I have no problem with that, except that I would like the service to remain within the NHS.

Anne Milton: In everything he does, the hon. Gentleman operates from a deep-seated belief in organisations such as the NHS, and he wants the best, not just for his constituents but for the people of this country. I therefore urge him, as I urge all Opposition Members, not to play politics with this issue, although I am sure that that is not his intention. If Opposition Members have any concerns, I urge them to discuss them with me; my door is open. It would be a tragedy if anyone did anything that reduced the number of donors coming forward. We are determined to ensure that that does not happen, but scare stories in the press can have that unintended consequence. We should not believe everything that we read in the newspapers.

Question put and agreed to.

1.58 pm

Sitting adjourned.