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Earl Howe moved Amendment No. 16:

Page 4, leave out lines 40 to 44.

The noble Earl said: My Lords, I should say straightaway that this is a probing amendment, but it concerns a matter of genuine puzzlement to me. Clause 18A(2), which is to be found at the bottom of page 4, contains a provision that permits a PCT to provide services to patients of other NHS bodies, such as a primary care group or another PCT, as long as it already provides those services to its own population. In itself, that seems a perfectly sensible provision, but can the Minister say whether the flexibility granted to a PCT in

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that way is entirely without condition? As I understand it, the clause would allow a PCT that was a provider of services and an acknowledged centre of excellence for, let us suppose, one or more of those services to treat patients living outside its own boundaries without restriction. I did not believe that that was the Government's intention.

In this Bill, we are seeing a move towards more proactive partnerships within the NHS. The powers in Clause 24 will allow greater operational flexibility between NHS providers and social services, perhaps in some cases involving more than one NHS provider. These will doubtless make for more co-ordinated provider arrangements, but that is not the point of new Section 18A(2) as set out in Clause 4.

It seems to me that what we have here is, in some senses, a continuation of market mechanisms. A PCT will be allowed to sell its people and facilities to other parts of the service. By definition, the purchaser/provider split is thereby retained. If one reads the section as an open-ended provision, it would be possible to envisage a health authority which happened to require a particular service choosing between two neighbouring NHS providers on the basis of the cost and quality that each could offer. If that is not a continuation of a kind of internal market, we need to understand exactly what it is. I look forward to what the Minister has to say about it. I beg to move.

Baroness Hayman: My Lords, perhaps it will be helpful if I clarify for the noble Earl exactly what new Section 18A(2) of the 1977 Act, which will be inserted by Clause 4, is intended to achieve.

A level 4 PCT will have a degree of flexibility as to whether it deploys its unified budget to commission community health services from another provider or provides those services itself. The noble Earl is right to point out that this is not as neat a division as perhaps the most logical of minds would wish. However, I suggest to him that it actually reflects a sensible way forward which recognises the benefits brought by separating providing and commissioning responsibilities; but it does not bring with it such a total separation that would actually stand in the way of sensible patient care.

Therefore, perhaps I may explain the circumstances in which we think it would be appropriate to allow a PCT to provide to patients outside its own area any service that it can provide to its own population. Under this provision a PCT will be able to enter into a service agreement with a health authority or another PCT to provide services. These services may be health services--for example, health visiting or speech and language therapy. That flexibility--I believe the noble Earl recognised this in his introduction to the amendment--may be especially helpful where a PCT has particular expertise or well-developed services which other parts of the NHS might sensibly want to use.

Equally the services provided by a primary care trust could comprise management or support services. This provision thus offers opportunities to arrange services in

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more efficient ways, for example, by allowing a PCT to provide support services--such as payroll management, estate management or IT support--to other parts of the NHS. This provision therefore provides both for operational flexibility in the way in which primary care trusts secure the delivery of services to patients and provides opportunities to increase management efficiency.

Where a PCT provides services to other parts of the NHS in this way, it would get income for these services through service agreements. That income would be on top of the unified budget allocation that the PCT will get to commission and provide services for its own population. Any arrangement for a PCT to provide services outside to other parts of the NHS--and this is the key issue about whether we are allowing a free-for-all into a market let rip--would obviously be subject to agreement between all the interested parties. The health authority will have to satisfy itself that any arrangement is consistent with the local health improvement programme. We believe that that will give a framework in which such arrangements can take place. It will be a sensible one in terms of maximising the expertise and services that an individual PCT may be able to provide for a wider geographical area and group of patients, without turning the chief executives of PCTs into Arthur Daleys trying to sell services throughout the country.

I believe that it is a sensible recognition to say that some of the divisions are not as neat and tidy in some areas as they could be. However, it would actually allow an appropriate extension of the providing activities of the PCTs. On that basis, I hope that the noble Earl will feel that I have answered the questions raised by his amendment.

Earl Howe: My Lords, I am grateful to the Minister for what was a most helpful explanation. I do not disagree in any way with the provision in the clause, as explained by the noble Baroness. Indeed, it will obviously make for greater operational flexibility. The clarification she gave about how this fits into the context of health improvement programmes was also most helpful. No doubt it will be a comfort to all the Arthur Daleys out there in the NHS.

However, if you do retain the purchaser/provider split and actively allow a PCT to sell its services to other arms of the NHS, it seems to me that what you have in some sense or another is a kind of market. Nevertheless, it is not an issue which I want to press in any way. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 [Payments relating to past performance]:

Baroness Hayman moved Amendment No. 17:

Page 6, line 14, leave out ("(3B)") and insert ("(3BB)").

On Question, amendment agreed to.

Lord Hunt of Kings Heath: My Lords, before we move on to deal with Amendment No. 18, it might be convenient at this point for us to take the Statement on NHS modernisation. It might also be for the

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convenience of noble Lords if I say that it is intended to move at the end of the discussion on the Statement that the House adjourns for dinner for 45 minutes.


Lord Hunt of Kings Heath: My Lords, before we take the Statement on NHS modernisation, I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

NHS Modernisation

6.57 p.m.

Baroness Hayman: My Lords, with the leave of the House, I should like to repeat a Statement made in another place by my right honourable friend the Secretary of State for Health. The Statement reads as follows:

    "Madam Speaker, much of the National Health Service which we inherited from the previous government was run down and shabby. Much of its investment in information technology had been an expensive failure. Much of its equipment was unreliable and let down both patients and staff. Patients waiting on trolleys had become a commonplace feature of the service. That is why one of the top priorities of the new Government is to modernise the NHS, build new hospitals, replace outdated and unreliable equipment and give patients quicker, easier and more modern access to NHS services.

    "We are already committed to investing an extra £21 billion in the NHS over the next three years. The biggest hospital building programme in the history of the NHS is already under way. This coming year at least £350 million will be invested in upgrading and replacing outdated equipment.

    "Today I can give the House details of an additional £200 million to be invested in the coming year to speed up our programme to modernise the NHS. This is made up of £100 million to be invested in modernising accident and emergency departments and, drawing on the example of NHS Direct, in improving rapid access to professional advice and help for patients. The second £100 million will come from the National Lottery and will be used to step up the fight against cancer by helping provide new and replacement equipment like linear accelerators, diagnostic machines and scanners as well as extending the services provided by hospices. What better use could there be for lottery money.

    "Earlier this year I was able to announce that £30 million was to be invested to improve 79 accident and emergency departments round the country. That will be funded from the NHS Modernisation Fund. Last Tuesday in his Budget the

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    Chancellor of the Exchequer announced that £430 million from the Government's Capital Modernisation Fund had been earmarked for investment in the NHS, and that £100 million would be made available this coming year to modernise the NHS. Between £70 million and £80 million of this will be invested to modernise all those A&E departments that remain in need of improvement. These improvements will include special areas for children and easier access to X-ray, pathology and pharmacy services. The layout and furnishings of A&E departments will be improved to make them both more pleasant and more secure. Video surveillance and alarm systems will bring greater efficiency and add to the security of both patients and staff. Some modernised A&E departments may incorporate an NHS Direct telephone point. All A&E departments which need it will benefit from some or all of these changes.

    "A survey by the Royal College of Physicians published early in 1997 showed that fewer than half the hospitals with A&E departments had an admissions ward. Since that survey the numbers without either an admissions or observation unit have been reduced to 22 out of 202, and by the end of this initiative only five will not have one and all five have good local reasons for not doing so.

    "Proposals which are likely to be funded under the new A&E initiative include extension of children's A&E at the Royal Liverpool Infirmary, improvements at Sheffield Children's Hospital and in children's facilities at North Staffordshire Royal Infirmary. In Ipswich there is a major scheme including improvements to resuscitation facilities and a children's area, and in Luton more resuscitation facilities and close circuit TV. Some £250,000 worth of improvements are intended at the Royal London in the East End and a similar sum at the Mayday Hospital, Croydon. Large-scale improvements are intended at Southampton General and a new observation unit and better facilities for the GP co-operatives are planned for Frenchay Hospital, Bristol. These are just a few examples of what is planned for hospitals in every part of the country.

    "This is the biggest programme of investment in A&E services in the history of the NHS. It will cover every part of the country. By April 2000 every A&E department will have been modernised or work will be well on the way. It should ensure that patients are treated more quickly, more effectively and with greater privacy than ever before. I am determined to make sure that both patients and staff get maximum benefit from the A&E modernisation programme, so it is not just a matter of new buildings, new plant and new equipment. We have to make sure that the new and better ways of organising A&E such as emergency nurse practitioners and greater use of telemedicine are taken up all over the country. We need to speed up the spread of best practice. I am setting up a team of professionals to spearhead this

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    work. I can announce today that the team will be led by Mike Lambert, A&E consultant at Norfolk and Norwich Hospital.

    "This A&E modernisation programme will not just be good for patients and staff. It will be good for jobs, not just for the builders who do the work on site but also for firms who supply building materials and specialist fittings. Let me give just one example. The A&E department at Portsmouth has just been refurbished at a cost of just over £1 million. It used materials supplied by more than 20 firms from all over the country. Orders, large and small, included locks from Walsall, paint from Darwen, weather proofing from Slough, carpet from Swindon, wash-basins from Rugeley, partition walls from Loughborough, wall units from Broadstairs and the specialist security reception desk came from Glasgow. The A&E modernisation programme will reflect such orders one-hundred-fold.

    "The remainder of the £100 million from the Government's Capital Modernisation Fund will be invested in improving direct access to the NHS. The success of NHS Direct, the nurse-led 24-hour helpline, has demonstrated the public demand for rapid direct access to professional advice and help from the NHS. Following the success of the pilot schemes, NHS Direct has already been extended since Christmas to cover 5 million extra people in the Black Country, Essex, Northampton and West London and will cover 20 million by Easter. Its success has also shown that, given the chance, the talented staff of the NHS can do a brilliant job supplying what the public want. We are now considering an NHS online service to provide a web site with on-line access to a wide range of health information. Between £20 million and £30 million is being made available in the coming year to finance capital investment in further developments in direct access to the NHS, including pilot schemes for walk-in services. These could include services provided by GPs or practice nurses located in or near accident and emergency departments; out of hours services provided by GP co-ops; and services in main streets or shopping malls.

    "We want, as with NHS Direct, to work with the professionals to try out direct access, walk-in services in places and at times which are particularly convenient to patients. Some schemes may be confined to providing advice or directing patients to existing services for treatment or care. Others, particularly those associated with A&E departments may provide treatment and care, there and then. This is not intended to replace general practice but to augment it. All these ideas go with the grain both of modern living and what the health professionals are already developing. The new Government are determined to give impetus to all this to help create a new NHS for the new century.

    "That brings me to the extra £100 million which will start to be invested in the coming year to augment the existing NHS investment in the fight against cancer. In line with our election promise we have set up the New Opportunities Fund to make sure that

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    more money from the National Lottery goes into the things the people of this country want to see it spent on. Every time there is a discussion about what to do with lottery money, thoughtful people ask why some of it is not being used to combat cancer. Well from now on, it will be.

    "Over the coming three years £150 million from the New Opportunities Fund will be invested in tackling cancer in the UK as a whole. In England we want to make a major start this year in investing in new equipment. The order making this possible was laid by my right honourable friend the Secretary of State for Culture, Media and Sport. The direction he issued at the same time makes clear that the focus of this initiative in England will be to augment voluntary efforts to raise funds to provide new and better equipment, including breast screening units, scanners and linear accelerators and also to help hospices and palliative care. The aim is to provide additional equipment and replace unreliable equipment. It is likely to help fund, for example, replacement linear accelerators at the Christie Hospital in Manchester or new equipment for the diagnosis and treatment of cancer of the colon at Lewisham Hospital which my right honourable friend and I visited this morning.

    "All this money comes on top of the extra funds previously announced for the NHS and will help the NHS in every part of the country to catch up with more modern standards of cancer diagnosis and treatment. The initiative has the strong support of Macmillan Cancer Relief, Marie Curie Cancer Care and the National Council for Hospice and Specialist Palliative Care services. It comes on top of the extra £30 million we have invested in breast and colorectal cancer over the past 18 months and the further £40 million we are making available in the coming year to combat breast cancer, colorectal cancer and lung cancer and our commitment to speeding up specialist attention for people suspected of suffering from cancer.

    "The commitments I have announced today will speed up the renewal and modernisation of the NHS. They will make services more readily available and more dependable. At the same time they will make it easier for the dedicated staff of the NHS to provide quicker and more high quality services. That is only possible because we have a Government who invest public money wisely and have the right priorities".

My Lords, that concludes the Statement.

7.7 p.m.

Earl Howe: My Lords, once again the House has cause to be particularly grateful to the Minister for repeating the Statement on the Budget settlement for health. My only slight regret, if I may be candid, is that there is a rather unnecessary tone in the opening sentence which seems to cast aspersions on the record of the previous government. I am sorry about that.

At first blush this is all good news for the health service, which we welcome. There is no doubt that many accident and emergency departments in acute hospitals need additional funding to help them to

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improve services to patients. It is true to say that improvements of this kind will also help doctors and nurses, who can suffer considerable levels of stress in trying to cope with working in conditions that are far from satisfactory. As we have said before from these Benches, it is a remarkable tribute to doctors and nurses that the pressures experienced during the past winter in A&E departments did not lead to greater difficulties than they did.

One of the lessons learnt from last winter was that money and schemes designed to alleviate A&E pressures should be announced in good time so that hospitals can plan ahead properly. It has to be said that the Government's announcement last winter was far too last minute for many hospitals to take timely action before the pressures built up. Can the Minister say whether the amount of money allocated for this up-grading work to A&E departments is based on any preliminary assessment of need? In other words, how many hospitals are likely to benefit from this funding? How will bids from hospitals be assessed and ranked?

I am confused about whether this money is really new money. There are two aspects to that. It is said to be part of the capital modernisation fund, so I am not sure whether this is money that has been announced before in one form or another. Secondly, on 9th November last year the Secretary of State announced £250 million of additional spending following the pre-Budget announcement. The NHS confederation spokesman, Stephen Thornton, said at the time:

    "This is really only next year's money paid early".
Was he right to say that and, if so, is any of the money that we are talking about today part of that previously announced package?

The other area of puzzlement relates to the capital modernisation fund. It is very difficult for those outside the DoH to keep track of the portion of the fund that has now been earmarked for various purposes. The modernisation of A&E units seems a perfectly bona fide use for modernisation fund money, unlike the funding of the nurses' pay award from the NHS modernisation fund which came as a somewhat unexpected use for it. To my mind, at least, pay should fall into the category of regular expenditure. Can the Minister say how the modernisation fund is now placed after these latest calls upon it?

I do not know whether the Minister recalls, but her party pledged in 1996 to set up a taskforce to monitor the number of patients forced to wait on trolleys for treatment. I am not sure what has happened to that idea. It does not seem to have been proceeded with. The worry I have is that if one dedicates wards for people waiting for A&E then one is bound to reduce capacity elsewhere in hospitals. I would welcome the Minister's comments on that.

Turning to NHS Direct, once again I have a sense of deja vu over what has been announced. Have the Government come to any conclusions as to how NHS Direct will be organised on a national basis? National centres are likely to be more efficient and lead to more uniform standards but, at the same time, they are more

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likely to reduce co-ordination with local GPs; whereas local centres based in practices may have advantages; they may also lead to a lack of uniformity in standards.

It would be impossible not to welcome a new investment of £150 million into cancer care. In particular, it was heartening to hear mention in the Statement of the Christie Hospital in Manchester, which the late Lord Dean of Beswick did so much to support. I am always worried by the appearance of Lottery money in this context. Can the Minister reassure me that none of the proposed expenditure represents what is normally regarded as core NHS spending? It would be quite wrong to use Lottery money to take the place of central funding.

I shall conclude by making one or two comments about the context in which the Statement has been announced to Parliament. The 6 a.m. news on Radio 5 Live contained a detailed report on the setting up of admissions wards within hospitals which could only have come from a detailed knowledge of the contents of the Statement. It has also appeared on BBC Teletext. The Statement on the nurses' pay award was leaked to the press more than two weeks before publication; the Statement on Ashworth Hospital was leaked to the Daily Telegraph one day before the delivery to the House; the Statement on mental health was leaked to the Sunday Telegraph two days before publication; the Statement on social services appeared in the Independent and the Guardian on the morning of publication; the Statement on safeguarding children appeared in the Evening Standard on the morning of publication; and the Statement on health spending of March 1998 appeared in The Times on the morning of delivery to the House. I do not believe that I am alone in finding that unacceptable. I hope that the Minister can provide some reassurance that she and her right honourable friends will do all that they can to stop that kind of practice.

7.15 p.m.

Lord Clement-Jones: My Lords, I join the noble Earl in thanking the Minister for repeating the Statement made in another place. I have very similar concerns about understanding the exact amount of money involved in the Statement. It is difficult enough as it is to distinguish between the capital modernisation fund and the NHS modernisation fund and to understand the linkages between the two when, for instance, the £30 million previously announced for accident and emergency comes out of one fund and the current expenditure today, it appears, comes out of another.

In addition, of course, as I understand it, this money is brought forward money rather than new money, as was announced on Budget Day. The Chancellor was basically saying that £250 million could be brought forward from later years into this year, and in that regard the NHS, I assume, is getting something approaching £70 million or so additional funds. Sometimes it is rather difficult to track and it would therefore be helpful if in future Statements the Government were able to be more precise about what money is involved in terms of being brought forward, how much money is new and

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how much has already been announced in any Statement. Otherwise, bald figures such as these are extremely difficult to track.

As I understand it, we have the announcement today of expenditure of £100 million which comes from the capital modernisation fund but we do not yet have an understanding of how much will come out of that fund and how the remainder of the £430 million will be spent over the next two to three years. Again it would be helpful in terms of planning by NHS trusts if that information were available.

That said, however, I very much welcome the additional expenditure announced by the Government for accident and emergency. That is a proper response to the winter pressures and the problems in the NHS that we have seen over the past few months. Patients waiting on trolleys is completely unacceptable. The idea of admissions wards is a good one and is clearly an imaginative way of dealing with some of the issues.

However, at the end of the day, capital expenditure must be linked with the staff to go with it. Without the commitment on staffing the capital improvements that are taking place in accident and emergency will not tackle the winter pressures that have been identified. Furthermore, in the context of accident and emergency, it is worth while taking a look back at the Audit Commission report of 1996 which discussed the issue in considerable detail. It is not enough simply to look either at staffing or at capital expenditure. For instance, are the Government looking at other areas such as taking steps to meet the resource requirements of supporting an effective emergency service, in particular specialist staff and in-patient beds? Other recommendations include setting a research agenda to build a robust knowledge base for decisions about the future of emergency care; optimum approaches for meeting a full range of emergency needs; how patients' views can be ascertained in a way which is useful to improve care; the cost and quality of alternative forms of emergency services; improving education to facilitate informed self-care and first aid as well as more appropriate use of alternative facilities for emergency care; and, finally, and very importantly in the context of a great deal of the load that was put upon accident and emergency departments by the flu epidemic--or perhaps I should say the flu non-epidemic--communicating to the public the need for change in the organisation and use of accident and emergency departments so that it is clearly seen to be inappropriate to refer yourself to accident and emergency in those circumstances. It would be helpful to have the Minister's response on those aspects.

I also welcome the proposals for better access to primary care. But I am somewhat confused. The noble Earl referred to expenditure on NHS Direct, but I think that this is analogous to NHS Direct. This does not represent further funds for NHS Direct. We have asked many questions in the past about that particular aspect--I am sure we will ask more in the future--but, as I understand it, this is building on the experience of NHS Direct to improve primary care and other aspects of the NHS.

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We on these Benches welcome the additional expenditure on cancer equipment and treatment. However, £100 million of lottery funding has been spent on cancer treatment. The Government admitted in their manifesto that this was a core area for additional expenditure. It seems extraordinary that a transfer of responsibility from government to lottery funding is taking place. We have grave doubts about that. If this area is a major priority for the NHS, should it not be funded out of ordinary mainstream NHS income? Where do we draw the line? What other core NHS expenditure will be borne out of lottery funding? Where does it end?

We are talking about capital expenditure and about an important set of components. We welcome the fact that there are funds which allow capital expenditure to be made. That said, there are other aspects of capital expenditure within the NHS which give considerable cause for concern. I have previously raised the issue of how PFI funding is proceeding. The evidence so far is that that is providing very poor value for public money. I believe that the Government have now succeeded in uniting the BMA, the NHS Confederation, UNISON and the Health Select Committee in being extremely critical of the current PFI programme. If the Minister is able to respond to that point, we on these Benches shall be grateful.

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