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Lord Hunt of Kings Heath: My Lords, I do not agree. The most appropriate action for dealing with discrimination is to have clear policies, which the Government have, and a strong performance management framework to ensure that those policies are delivered. So far as concerns older people, I believe that the national service framework is the right way to go forward.

Lord Peyton of Yeovil: My Lords, does the noble Lord agree that there can be few organisations in the world more weighed down by and bombarded with targets, requirements and advice, very little of which achieves any useful purpose? I wonder whether Ministers and their advisers might give careful thought to stemming this useless tide?

Lord Hunt of Kings Heath: My Lords, when it comes to paperwork, bureaucrats and accountants, I suggest that the noble Lord looks no further than the internal market which his own party introduced and which we have abolished. Of course, it is important that the NHS has room to develop and to make decisions at local level. However, that must be done within the context of it being a national health service. Most of the issues raised in your Lordships' House with regard to the NHS have been complaints about the inconsistency of service throughout the NHS. We are committed to tackling that. That is why we are developing a national plan.

National Health Service: Specialised Treatments

3.6 p.m.

Lord Walton of Detchant asked Her Majesty's Government:

Lord Hunt of Kings Heath: My Lords, extra-contractual referrals were abolished because they encouraged ad hoc provision of varying standards. In their place, new regional arrangements and long-term service agreements are being established to enable fair access to clinically effective and cost-effective services.

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Out-of-area treatments have been introduced mainly for emergencies. Therefore, out-of-area treatments are not intended as a direct replacement for ECRs.

Lord Walton of Detchant: My Lords, I thank the Minister for that reply. Does he accept that one of the great strengths of the National Health Service, in which I used to work, was the fact that people who required highly specialised treatment could be referred to centres of excellence without constraint? That possibility declined sharply under the system of extra-contractual referrals. We now have evidence that out-of-area treatments or transfers are failing to satisfy the need for such specialist treatment in special cases. I give as an example the case of a young boy, aged 12, with cerebral palsy. On medical recommendation, he needed an intrathecal transplant. He was refused such a transplant because he could not be referred from his own health authority to the appropriate centre of excellence. The money was found by a charity and eventually the transplant was carried out privately.

Lord Hunt of Kings Heath: My Lords, I wish to make two points. First, in 90 per cent of cases the extra-contractual referrals have been replaced by long-term service agreements. I believe that more stability is achieved through long-term service agreements than through a system of one-off extra-contractual referrals, in which there was great instability.

So far as concerns the need for special services, I very much agree with the noble Lord that it is important that we invest in those services. Equally, we need a rational system of decision-making as to how they should be funded and to what extent. I believe that the new speciality commissioning that we have introduced at national and regional levels allows for that.

Lord Clement-Jones: My Lords, the Minister will recall that the department published new guidance on out-of-area treatments only two weeks ago. Despite its incredibly opaque language, it is clearly designed to discourage referrals to specialist out-of-area hospitals. Yet, can the Minister confirm that GPs still have absolute discretion to refer their patients to the hospital that they believe is best for the treatment involved? Will the Minister undertake to amend the circular to that effect?

Lord Hunt of Kings Heath: My Lords, I am disappointed that the noble Lord uses the term "opaque" when referring to a Department of Health circular. So far as concerns the substantive points that he raises, of course, clinical freedom remains as it always has done. The point about out-of-area treatments is that they are concerned mainly with out-of-area emergencies. We are developing a system of long-term service agreements which will ensure that stability, certainty and agreement exist among health authorities and primary care groups as to which

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specialist services should be funded and by how much. I believe that that is a much more effective system for the future than we ever had in the past.

Lord Pilkington of Oxenford: My Lords, given that the criticisms of the noble Lord, Lord Walton, have been levelled by many more professionals in the health service and the Government have been in power three years, why do they find it necessary to have a summit? What will that summit do?

Lord Hunt of Kings Heath: My Lords, the summit is meeting at this very moment and I am sure that it will have important discussions about the future development of the NHS. Surely it is better that decisions about specialist services and their funding are made in regional specialty groups and by the national specialty commissioning process, so that proper choices are made about where resources should be spent and services developed. That is a much better, more rational system than the ad hoc arrangement we inherited.

Lord Clement-Jones: My Lords, is not one problem with the new payment system that some specialist hospitals that were particularly reliant in the past on the ECR arrangement now find that their income lags behind their activity by as long as three years. As a result, they face considerable financial instability. Does not that pose a significant risk to the continuation of some specialist services and the development of new services?

Lord Hunt of Kings Heath: My Lords, in the first year of operation there were problems with some specialist centres that were, perhaps, over-reliant on out-of-area treatment income, where the time lag was clearly a factor. We have given clear instructions to regional offices that they are to manage the situation effectively. As the system develops, less and less of that resource will come from out-of-area treatment because centres will be covered by long-term service agreements. That is the most appropriate way forward for the centres.

Transport Bill

3.11 p.m.

The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, I beg to move that this Bill be now read a second time. This is the first comprehensive transport Bill that the House has had the opportunity to consider since my noble friend Lady Castle was Transport Secretary in the late 1960s. I am conscious of the great store of experience available in the House since I believe that more than 20 noble Lords have had ministerial responsibility for transport issues. I am sure they would readily agree that many of the problems and some of the solutions in prospect are not in essence ideological and can command widespread support.

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We all know that this country faces serious transport problems. For years our public transport system has suffered from under-investment. Road traffic levels have risen faster than predicted, leading to increasing congestion. Road maintenance in particular has deteriorated while many potentially useful road schemes have yet to be built. Altogether, that is bad for the environment and business and a continuing source of exasperation for too many motorists and passengers.

Our transport system, for whatever reasons--lack of foresight or lack of resources--has been allowed to decline too long. We have to sort that out--and soon. The Government have a clear view of where we should be going and of the integrated transport system required. We also have a strategy on how to get there. We are putting in place by virtue of this Bill the legislative powers to make it all happen.

Following the vision set out in our integrated transport White Paper, the building blocks for a new transport system are properly funded means of delivering improvements, such as the Strategic Rail Authority, bus quality partnerships and local transport plans; innovative forms of finance, including public private partnerships and hypothecation of taxes and revenues specifically to improve transport--something no British Government have done before--combined with continued increases in public investment; and a renewed commitment to safety across all transport modes. All of that lies behind the radical Bill we have brought before the House today.

The Bill contains proposals for air traffic services, local transport services, road user charging and workplace parking levies, and railways.

Part I covers air traffic services and provides powers to proceed with a public private partnership for national air traffic services, NATS. Certain documents relating to that partnership have been placed in the Library. They are the draft licence under which the new company would operate; draft articles of association; a draft partnership agreement; and draft heads of terms of the NATS/Ministry of Defence contract.

NATS at present provides a reassuringly professional service in increasingly crowded skies. We believe that NATS would now benefit from access to private investment funding and project management expertise so that it can sustain safety and upgrade its systems to the standards demanded by ever-increasing levels of air traffic. It will cost approximately £1.3 billion over the next 10 years to develop new systems which we believe will be world class.

Part I will enable large-scale investment in NATS without adding to pressure on public sector borrowing or being subject to its vagaries. Through the public private partnership--PPP--we intend to secure a long-term strategic partner that will commit to investing in and to delivering on time and on budget, air traffic control systems that will offer the technology and capacity required to cope with this inexorably expanding industry.

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Under the PPP, NATS will be owned by the Government, with a 49 per cent shareholding, a strategic private sector partner, with a 46 per cent shareholding, and an employee trust with 5 per cent. It will be designated a private sector operation, as are the existing air traffic operations at many UK airports, including East Midlands, Bristol and Liverpool.

We do not believe that a 100 per cent sell-off of NATS--its privatisation, as proposed by the Official Opposition--would provide an appropriate option, given the complexity and sensitivity of the business. Under our proposals, the main strategic decisions of the NATS board would require the unanimous vote of all directors--including those appointed by the Government under the PPP arrangements. Moreover, by retaining a substantial shareholding, we can ensure that the Exchequer and hence the taxpayer share in the future success of the company, which could be considerable, given the potential for international consolidation being driven by technological advances and the commercial imperatives of an ever-expanding global aviation industry.

In any such global consolidation of air traffic services, our PPP will ensure also that Britain's national security interests are safeguarded. The Bill has been carefully prepared in close liaison with the Ministry of Defence, so that there can be no doubt of the Government's power to step in at any stage should they deem it necessary to do so in the interests of national security. Our proposals ensure that NATS will continue to provide, in conjunction with others, a safe, efficient and secure service for all civil and military users.

It has been said that our proposals compromise safety. I shall deal with that concern in some detail, given its overriding importance. First, I repeat the Government's commitment to safety. Your Lordships may be assured that safety will continue to be paramount. We do not accept that the PPP would jeopardise safety in any way. Neither do British airline operators who told a Select Committee in the other place that our proposals would enhance aviation safety. Would any of us suggest that the 13 major UK airline operators are indifferent to the future safety of their passengers and the reputation of their companies? Please be clear: the function of safety regulation will remain in the public sector in a reformed Civil Aviation Authority. Our proposal that safety regulation should rest with a public body and be separate from the company that is responsible for operations is now widely accepted. The CAA, shorn of NATS, can more single-mindedly continue to set and monitor standards. We have made it abundantly clear that standards will not be reduced in any way. It is true now--and it will continue to be the case--that no one can provide air traffic control services in the UK unless the CAA safety regulation group is satisfied that they can do so safely.

The CAA will continue to conduct regular inspections and audits. The competence and medical fitness of all operators will be tested annually. Procedures and equipment used by air traffic controllers will have to be approved by the CAA.

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It will also control maximum working hours and no company will be able to make air traffic controllers work undue hours since shifts will continue to be controlled by regulation.

None of the existing safeguards will be weakened. Staffing levels and the type of equipment used will be controlled by the CAA. Again, nothing changes in respect of the complement of controllers and the efficiency of their equipment.

Safety will be entrenched in the strategic partnership agreement which will be a legally binding contract between the Government and our partner. A main board director of NATS will have specific responsibility for safety. A safety monitoring committee will be established within NATS, most likely to be chaired by a government-appointed director.

The safety management system of NATS which presently includes elements that exceed statutory minimum safety requirements will remain in place. The CAA's monitoring procedures will be extended to ensure that an audit of safety management is conducted annually. Finally, training and development standards will be further enhanced.


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