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Earl Howe moved Amendment No. 2:

After Clause 1, insert the following new clause--

Direct fundholding practices

(" .--(1) The Secretary of State may, at his discretion--
(a) grant individual general practitioners leave to withdraw from any established Primary Care Trust;
(b) grant individual general practitioners leave to withdraw from the direct budgetary control of a Health Authority, or sub-committee thereof.
(2) Any general practitioner given leave under subsection (1) above shall take on powers, functions, and a budget as directed by the Secretary of State.").

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The noble Earl said: The Committee stage of a Bill gives us an opportunity to examine some of the broad conceptual underpinning of the Government's health reforms as distinct from the kind of matters we have just been considering; that is, structure and practice which flow from the policies. The high hopes that all supporters of the health service must share for PCGs and PCTs are, for many of us, counterbalanced by deep doubts.

It is worth looking at a few aspects of the new arrangements. The Conservative government introduced reforms into primary care which were significant; but at the same time they were voluntary. GPs were able to choose whether or not to become fundholders; there was never any question of forcing them to do so. The present Government have adopted a different course. There is no longer a question of choice. Doctors must become part of a primary care group, and that PCG will be an entity which represents the interests of a great many more patients, doctors, nurses and clinicians than even the largest fundholding practice ever did.

Doctors were previously given a choice, and if they wished to be fundholders they were given their own budgets and a great deal of freedom in which to develop primary care services for their local area. The benefits of that freedom, as I said at Second Reading, have been clear and tangible. Now, GP fundholders' budgets are to be taken away from them and their freedom of action within a PCG will be largely governed by the policy of the PCG itself, together with the health authority.

The Government's stated aim in abolishing fundholding is to reduce inequalities in the delivery of primary care and to cut bureaucracy. Of course, those are laudable objectives. But will they be achieved? My first question to the Minister is: where is the much trumpeted figure of £1 billion of savings in bureaucracy to come from? As far as I can make out the only thing that the Government have done in that context is to cut the number of commissioning bodies. I accept that less paper is likely to flow in the form of invoices and so forth, but the PCGs and PCTs will still need managing and administering. That will be a much more complex task than fundholding and is bound to generate paper rather than the opposite.

Devolved budgets gave fundholder GPs an incentive to make savings and plough that money back into primary care services. Can the Minister say what incentive GPs will have in a PCG to make savings, knowing that any such savings will be swallowed up by less efficient practices within the same group? What are the levers that will encourage them to do that? I do not see them. Indeed, how robust will the accountability mechanisms be in level one and level two PCGs? Why, in the final analysis, should a GP do as he is told by the health authority?

Is the intention to withhold funding from any GP or practice which does not conform? Non-conforming GPs are bound to be a feature of the new arrangements. The sheer size of a PCG, let alone a PCT, which is likely to be much bigger, will make for unwieldiness in decision making. It will also make for much less of a facility to cater for local needs than has been the case under

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fundholding. The "accountability model"--as it is called--is weak. Meanwhile, at levels one and two it is the health authority's neck that is on the block.

If the Government really believed in flexibility, they would have set up flexible structures to match that aspiration. Instead, they have gone the other way. That is what lies behind my amendment; a power to leave a future Secretary of State with the flexibility, if he so chose, to introduce devolved budgets for groups of GPs, should that seem to be a sensible course in a particular health authority area. Such a provision would, of course, keep a power in reserve without the need for further primary legislation in the future.

That is the long and the short of it. It is, I hope, a modest proposal and not an offensive one. I look forward to the Minister's reply. I beg to move.

4.30 p.m.

Lord Renton: Before my noble friend sits down--he has sat down but perhaps I may ask him a question. As we are in Committee, he will be free to answer. If a general practitioner is granted leave to withdraw from the PCT, would he, nevertheless, still be under an obligation to work within the National Health Service?

Earl Howe: Most certainly. The object of my proposal is to enable that to happen but to grant the GPs concerned more flexibility than they might otherwise have had. It would be a decision for the Secretary of State, though they would remain within the health service and subject to all the other disciplines of the health service.

Lord Clement-Jones: I am not sure whether a Bench can nail its colours to the mast. Be that as it may, whatever the appropriate metaphor, this seems to me the point at which I wish to indicate that, on these Benches, we support the broad thrust of the transition to PCTs. Indeed, the move towards PCGs that the Minister has indicated has already started.

Of course, all change is uncomfortable and one recognises that the amount of work, management and sheer worrying general practitioners currently have to do is enormous. Nobody underestimates the amount of work taking place to prepare for when PCGs come into operation. In addition, nobody underestimates the amount of work which needs to be done with the Bill to improve the provisions in terms of the constitution of PCTs and in relation to accountability, transparency, partnership and consultation. We shall be seeking to ensure that a great many additions are made to the Bill in that respect.

We do not support a command and control structure for the NHS as tight as perhaps the Government appear to be drawing it. I noticed in The Times the other day that the Secretary of State was talking about personally scrutinising the CVs of all trust chief executives. That is the route to a situation where the Secretary of State is responsible for every bedpan in the National Health Service. Quite frankly, I have no doubt that he does not wish to be responsible for every bedpan; it is bad enough being responsible for one!

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That said, there must be consent. Many of the amendments that we are considering today, which have been tabled by noble Lords of all parties, relate to the way in which the transition from PCGs to PCTs takes place. I believe that if that is run and constituted properly, the transition from, say, class 1 PCGs to class 2 PCGs and on into the PCT structure can be done in a proper, user-friendly way and mean that GPs are fully brought on board in the process. When I say GPs, I am not ignoring the other professions allied to medicine, a great many of whom have made a lot of representations on this Bill. However, I do not believe that trying to overturn this structure by a side-wind in this amendment is a sensible way to go. An opt-out for GPs by simply reconstituting fundholding by any other name is not in the interests of patients. It is certainly not the thrust of the proposals in the White Paper which we supported, and we do not believe that this amendment is the right way to go forward.

Baroness Fookes: I do not suppose one needs supernatural powers to imagine that the Minister's brief is marked "resist". Nonetheless, I support the amendment because I am sorry to see fundholding, as a concept, disappear. It has become clear to me over the years that all organisations are as much subject to fads and fashions as hemlines for ladies used to be. It is clear that fundholding is now last year's fashion. However, I would not wish the time to pass without saying that I believe this is a mistake on the part of the Government.

I believe that fundholding was showing itself to be successful. If it had been given time, in the end, by voluntary means, all GPs would have joined in and we would have had a very satisfactory position, with none of the objections currently raised against it. However, it is clear that the Government are prepared to go on to another form, another fashion, and we are unlikely to see fundholding retained. That is regrettable. I support the amendment which seeks to leave a little loophole for it to return at some other time.

Lord Haskel: I do not believe it is a matter of fashion. The noble Earl who moved the amendment did not address the main argument against fundholding; that is, that it makes for inequalities in the service. Patients want an equal service of a high level, not inequality of service according to where they live. That is why I believe that the move the Government are making is a desirable one to achieve that equality of service.

Lord Skelmersdale: I shall not pursue the "hemline" route pursued by the previous two speakers. However, I hope the Minister will recognise that this is a very unusual amendment indeed. Generally speaking oppositions resist like crazy giving extra powers to the Secretary of State, no matter what Bill is being discussed. In recent years they have been backed up by your Lordships' Select Committee on Delegated Powers and Deregulation. Indeed, we shall come to the arguments proposed by that committee a little later--probably not today, but on Monday.

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However, I would take issue with the noble Lord, Lord Clement-Jones. The amendment does not give GPs an "opt-out", which I believe was the phrase he used. As my noble friend Lord Howe stated, it allows a future Secretary of State to take account of a developing situation, and this is, of course, a developing situation. We go on from groups, through their various stages, to trusts. It may be that in some parts of the country things are not working quite as fast or as well as the Government apparently expect. I cannot see any good reason why there should not be a reserved power for the Secretary of State to take account of that. It may be that my noble friend does not have quite the right "account-taking" amendment--if I may put it in that way. Nonetheless, if we have to go back time and time again to primary legislation, that must be wrong. Therefore, I support my noble friend, certainly in the premise behind his amendment, if not in the amendment itself.

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