WEDNESDAY 8 NOVEMBER 2000
_________
Members present:
Mr David Hinchliffe, in the Chair
Mr David Amess
John Austin
Mr Simon Burns
Dr Peter Brand
Mrs Eileen Gordon
Mr John Gunnell
_________
RT HON ALAN MILBURN, a Member of the House, (Secretary of State), MR
JOHN HUTTON, a Member of the House, (Minister of State), and MR
COLIN REEVES CBE, Director, Finance and Performance, NHS Executive,
Department of Health, examined.
Chairman
190. Can I welcome you to this meeting of the Committee. Can I
particularly welcome our witnesses, the Secretary of State, Mr Hutton and Mr
Reeves. We are trying to find you a nameplate, it will be here in a moment.
Would you each mind introducing yourselves to the Committee.
(Mr Milburn) Alan Milburn, Secretary of State for Health.
(Mr Hutton) John Hutton, the Minister of State for Health.
(Mr Reeves) Colin Reeves, the Director of Finance of the NHS
Executive.
191. When we met Mr Reeves last week we briefly explored the
Concordat, amongst other things. I wonder if I could begin by raising one or
two specific things about the agreement last week with the private sector.
I am interested in why the Government has entered into this Concordat. In
particular, it is common knowledge that the health service has made use of the
private sector for very many years. My understanding is we currently spend
around one and a quarter billion pounds in the private sector at the present
time, 4.8 per cent of the total spend. As that is already happening, why have
you had to specifically sign this Concordat in the way that you did last week?
(Mr Milburn) I think for a pretty simple reason, Chairman, and that is
that right now the NHS is short of capacity. I think it is fair to say that
given the levels of investment that the Government is now making, it is
important that colleagues remember that the investment over these four or five
years is going to be pretty substantial set against the historic trend, and
certainly the historic trend has been running at around three per cent in real
terms for the last 30 or so years and over the Spending Review years it is
going to be running at about six per cent in real terms. There is a very real
opportunity here to expand the capacity of the service. I think most people
looking at the NHS today will recognise that although there is a big
opportunity to expand the range of treatments that we can offer and the speed
of treatment that we can offer to people, right now we have what is an under-
doctored, under-nursed and arguably under-bedded system. Certainly in the
short-term we have very clear capacity constraints. Clearly it takes time to
put these right, it takes three or four years to train a nurse, it takes
double that to train a hospital doctor or a GP. We also know that there is
spare capacity in private sector hospitals, for example. I think this
Committee has expressed concerns in the past about the occupancy levels in NHS
hospitals which are running at around 82 or 83 per cent on average. I am told
by the independent sector, by private sector providers, BUPA and the like,
that their average occupancy levels are around 50-55 per cent and arguably
falling. What you have within the National Health Service is, I think, a
system that frankly is not so much short of cash now, which has certainly been
the position for very many decades, but a health care system that is short of
capacity. It seems slightly anomalous to me that if there is spare capacity
that is available within private sector hospitals, for example, that we should
not be taking advantage of that for the benefit of NHS patients. This is a
key point. The care under the Concordat, and remember the Concordat is a
national framework agreement between the Department of Health and the
Independent Health Care Association, the nuts and bolts of how the
relationships are going to be bedded down in practice will be hammered out on
the ground between local NHS Trusts and private sector providers.
Nonetheless, if there is spare capacity there we should be taking advantage
of it. The patient, regardless of the setting, will remain an NHS patient and
the care will be provided for free.
192. You mentioned that the NHS is under-doctored and under-
nursed, and one of the reasons is that the NHS trains staff, trains medical
staff, trains nursing staff, and they disappear into the private sector. What
consideration have you given to the way in which you are effectively boosting
the private sector, and in some areas that will result in staff being further
lost to the National Health Service?
(Mr Milburn) I think there are a couple of responses to that. First
of all, the situation in regard to doctors and nurses in the private sector
is slightly different. It is true that by and large private sector hospitals
do not employ their own medical staff, with one or two exceptions, maybe a
medical director here and a clinical director there. It is true that largely
for their day-to-day work they rely on NHS consultants, that is absolutely
right. As you know, the Government has very clear proposals on NHS
consultants in private practice for the future.
193. Which do not seem to square up with the Concordat, they seem
contradictory.
(Mr Milburn) I do not think they are. Let me come back to that
specific issue in a moment. Let me deal with the specific issue of capacity
and this charge that is made against the Concordat, and I suppose against the
Government by definition therefore, that somehow or other we are about
transferring resources from the National Health Service, and I mean staff
resources, into the private sector. I do not think that is the case. Nurses
are in a slightly different position. There are around 8,000 nurses employed
by the private sector hospitals - employed by them. There are many more, as
you know, employed by private sector nursing homes and so on. The option that
we favour and the option that we would like to see actively pursued, certainly
in the short-term, is for private sector facilities - operating theatres that
are lying idle or hospital beds that are not being used in private sector
hospitals - to be made available to NHS patients and, if you like, to be
staffed by NHS doctors and possibly by NHS nurses.
194. Possibly by NHS nurses?
(Mr Milburn) Yes, possibly by NHS staff.
195. Not necessarily?
(Mr Milburn) Not necessarily. That is the option that we would favour.
Let me give you a concrete example. This winter, as in previous winters down
the ages, the National Health Service will largely move quite rightly, as many
health care systems do, from elective work to emergency work, it will put
emergencies first. By and large nobody would have an argument with that, it
is the right thing to do. However, some surgery will be displaced and we
already know that elective operations, for example ear, nose and throat
operations, will be displaced. I do not say for a moment that ENT surgeons
are going to be sitting around twiddling their thumbs, because by and large
these are pretty busy people and working damned hard for the National Health
Service, but if they are displaced and if the patients who should be receiving
treatment are displaced, and if there is labour that is available, if we can
match that with capacity that is available in private sector hospitals for the
benefit of NHS patients then that seems to me to be a sensible thing to do.
196. You do not think that what you are proposing will end up
drawing into the private sector staff currently working in the NHS?
(Mr Milburn) No. If you go back to the starting point of this, this
is about how you take advantage, for the benefit of the National Health
Service and for NHS patients, of capacity that is currently lying idle. As
you are aware, the Concordat actually covers three areas: elective work, what
we have been talking about now; so-called intermediate care, which we may come
back to in a moment or two; and then critical care is the third area. There
is spare capacity there and it would seem anomalous to me, and I would guess
pretty perverse to patients, if we did not take advantage of that. Let me
answer the specific point that you raised in relation to our policies in
regard to NHS consultants and the future of their private practice and our
policies in relation to the Concordat with the private sector. In fact, far
from pointing in opposite directions, they are pointing in the same direction.
That is about maximising capacity. As far as NHS consultants are concerned,
we are going to massively expand the number of NHS consultants over the course
of the next few years, a huge increase of 30 per cent, 7,500 more consultants
than we have now, and by and large that is pretty welcome. It has been
welcomed in the service and I think it is even welcome to those representing
consultants. They would probably like to see more and if we can do more we
should certainly do more. There is a quid pro quo here. If, as everybody
wants, we want to see more patients treated more quickly then we have to
ensure that as we are growing NHS consultants we are taking maximum advantage
of their skills for the benefit of NHS patients. If you like, what we are
trying to do here is produce for newly qualified consultants a new career
structure, a new career path for them. So in the early years of their career
when they have just qualified, and frankly when they are at their most eager,
we maximise their contribution to the National Health Service by, for example,
saying to them that for up to seven years they have got to be working
exclusively for the National Health Service. In the middle point of their
career, when they are perhaps in their forties and so on, then, sure, they
should be able to get access to private practice providing, of course, they
can demonstrate compatibility with NHS service objectives. In the later
stages of their career, rather than working them hard, as we continue to do
now in their fifties, as hard in their fifties as in their thirties, what we
envisage is consultants moving over, after they have worked hard for the
National Health Service, to more mentoring and training and, frankly, less
front line clinical work. The net benefit of that will be that we will get
more out of our NHS consultants when we want to and actually we will end up
retaining more of them.
197. You have mentioned that private sector nursing staff could be
used to treat NHS patients, but what about consultants who may be NHS part-
time consultants who are also working in the private sector on a private
basis? Could they be used working in a private hospital?
(Mr Milburn) Existing consultants, yes.
198. I am not talking here in terms of their NHS work, I am
talking in terms of their private work.
(Mr Milburn) Yes.
199. They could be?
(Mr Milburn) They could be.
200. I have read the details that you published on the Concordat,
particularly referring to elective care, which is what you have been referring
to in discussion over the last few minutes. You could end up with a Primary
Care Trust commissioning care from a private health provider for a patient who
has been waiting on an NHS waiting list to see an NHS consultant who also
works in the private hospital where the commissioning could take place. So
we could have NHS patients who are not able to see the local consultant
directly being referred by their own GPs often, as we are aware, because that
consultant has a healthy private practice and he is not available because he
is working in the private sector, but instead of seeing them in the NHS they
will see the same consultant in the private hospital on this contract, whether
the commissioner is PCG or PCT, at a much higher cost surely?
(Mr Milburn) That is why I say that there are two further important
caveats. I said, first of all, that our preferred option is genuinely to take
advantage of spare facilities. If operating theatres are not being used and
if hospital beds are lying empty and we can use those for the benefit of NHS
patients I think broadly that is a good thing to do. If people are waiting,
with respect, for an NHS operation and are waiting in pain and discomfort, let
alone needing critical care facilities, I think the last thing that they are
concerned about is frankly where the treatment takes place, providing the care
is for free.
201. But one of the reasons they are waiting, Secretary of State,
is because we have got consultants moonlighting in the private sector. You
are giving a huge boost to that moonlighting by virtue of the answer you have
just given me.
(Mr Milburn) With respect, that is your word and not mine.
202. I think it is your word as well.
(Mr Milburn) Well, since the cameras are rolling and since we are in
public session, that is your word and not mine. However, as you know we have
a set of proposals around precisely that phenomenon. You call it
moonlighting, I call it maximising the capacity of the National Health Service
and ensuring that we get the maximum contribution from each and every
consultant. So we have an answer to that particular question and I think
there is a further very, very important set of caveats that everybody should
be clear about. I think it is the right thing to do, to take advantage of
private sector capacity for the benefit of NHS patients, but there are two
important caveats. One is that we should get the best value for money for the
taxpayer, and there is certainly no blank cheque here. My guess is that there
will be tough negotiations between NHS Trusts, Primary Care Trusts, Primary
Care Groups, health authorities and private sector providers and that is how
it should be, because nobody would forgive us, least of all this Committee or
the Public Accounts Committee, if we did not get a good deal for the taxpayer.
The second caveat is that we have to be in a position where we ensure not just
good value for money for the taxpayer but the highest standards of care for
the patient.
203. I have to say that in terms of the taxpayer, the answer that
you have given me seems to indicate that in many respects we will be paying
more for the use of the private sector than the use of the National Health
Service, so that ----
(Mr Milburn) With respect, Chairman.
204. Can I just finish the point? A number of people in the NHS
have already come forward with their concerns over the way in which this
Concordat will cost the public purse more than would have been the case had
we used the National Health Service. That is a concern that certainly I have
got looking at the detail of what you are proposing.
(Mr Milburn) With respect, there are two answers to that. First of
all, you do not know and I do not know what the deals are going to look like
as they are hammered out on the ground. Secondly, it is not a question of
making a choice. The National Health Service today, and we all know this from
our own areas, is short of capacity. So patients are being asked to wait
artificially long. We do not have enough beds, we do not have enough doctors,
we do not have nurses, we do not have enough operating sessions. We are
putting that right and the thing is moving in the right direction and over the
next few years there will be more doctors, there will be more nurses, there
will be more beds, more critical care facilities, and at the same time we have
spare capacity going begging, lying idle, in the private sector. Personally
I do not think that there should be a sort of ideological barrier to patients,
National Health Service patients, getting treatment there.
205. I think my concerns are practical and I have put some
practical questions. You know my views on the private sector and I think I
know your views on the private sector as well. My concerns are entirely
practical. We have talked about the Health Service being short of doctors and
nurses, and certainly the inquiries this Committee has done have shown exactly
where the doctors and nurses go; they are trained by the NHS and they are
recruited by the private sector. That is the reason why we cannot staff our
beds, because we have not got the manpower, you are losing these people to the
private sector. The concern I have got is that what you are doing will lead
to even further numbers of people leaving the NHS and going into the private
sector. I have got a number of colleagues who want to come in on this point
but can I just finish with one quick question on quality. Currently in the
private sector, as far as I can see, and we looked at the quality of the
private sector and certainly this Committee across the board politically had
serious concerns about quality issues in the private sector, they do not
publish information on performance. Is that an issue that you are looking at?
Is there some mechanism whereby you intend to introduce this? Certainly there
have been many witnesses that we have met at this Committee who have raised
very serious questions about the quality of the work that is currently
undertaken in the private sector.
(Mr Milburn) I understand those concerns and, as you know, there have
been concerns raised in the House about the quality of private work, sometimes
in both Houses, when things go wrong. There are some issues there. Certainly
if we are treating NHS patients for free in independent sector hospitals then
I have to have an assurance as Secretary of State that the standards of care
are appropriate and as high as possible. There are two important changes that
we are introducing. One we have already introduced is the Commission for
Health Improvement. Remember that its remit, if you like, is the Independent
Inspectorate for the National Health Service will follow NHS patients as they
are treated in private sector hospitals. So the Commission will have a remit
there and, of course, it will publish reports and data and so on and so forth
following its inspection visits. The second important development is the
National Care Standards Commission, which admittedly will not come on line
until 2002 but it has a specific responsibility for, if you like, policing and
inspecting the private sector, not just acute sector hospitals in the private
sector but also residential and nursing homes and so on and so forth and,
again, it will publish more and more data. Yes, I think this is a good
question to raise and there are some corollaries. If essentially the taxpayer
is paying for more care of NHS patients in private sector hospitals taking
advantage of capacity that is not being used at the moment, then certainly the
taxpayer and the public, as patients, have got to be assured that the
standards of care are right. I think that will mean inevitably over time that
in the private sector - hospitals we are talking about here but the same
applies to residential and nursing homes too - there will have to be more and
more openness and have to be more accountability about their performance
standards. That seems to me to be a good thing and not a bad thing. It is
always the same with this, the good guys have got nothing to lose, the only
people who are worried about it are those who have got something to hide.
Mr Burns: Secretary of State, I was listening very carefully to what
you were saying and it seemed to me that you were being extremely logical and
putting forward an extremely sensible suggestion.
Chairman
206. Notice where the support is coming from.
(Mr Milburn) That is particularly helpful, Mr Burns, and I am extremely
grateful for your support.
Mr Burns
207. The other thing that I thought was interesting was one of the
reasons you said why it was important to do this, with, of course, the crucial
proviso that the health care is free at the point of delivery and always will
be, was you mentioned that of course you should do this with spare capacity
because most of our constituents are facing artificially long waiting times
at the moment and it is silly not to use such spare capacity. I think that
is absolutely right.
(Mr Milburn) I think that is right. I think, with respect, ----
Mr Burns: No, no, stop there, do not spoil it. I have not finished my
question.
Chairman
208. Let him finish his question, to be fair.
(Mr Milburn) I will spoil it in a moment.
Mr Burns: Given the logic, the sense, of all this, could you tell us
why it has taken three and half years to do it given that the problems have
not gone away and, in fact, in some ways, particularly on waiting lists, just
on the numbers, the problems during part of that three and a half years have
increased? The other thing I would like to know, because of course you were
the Minister of State at the Department of Health for the first 18 months of
this Government, is did you share these vigorous, logical, sensible views at
the time in the Department of Health or did you feel rather constrained by
your predecessor who I think would be more like our Chairman in his views on
your Concordat.
Chairman
209. He is a Yorkshire man.
(Mr Milburn) That is an extremely helpful set of questions. I have
indicated that I think consistency is an important quality in politics and I
hope I am always consistent. I will be consistent in a moment, if I can, by
coming to quite a sharp differentiation between, with respect, the two
parties' policies on these issues.
Mr Burns
210. Parties?
(Mr Milburn) The two parties' policies on these issues.
211. I have not mentioned parties.
(Mr Milburn) No, but I am going to mention them because it is one of
the prerogatives of those questioned here that they are allowed to give their
own answers.
212. Right.
(Mr Milburn) Let me just deal with the specific question about why it
took three and a half years. What we had to do in 1997 when we got into
office was stabilise the National Health Service. That was the right thing
to do, it was the right priority. You remember when we got in, indeed I think
you were a Minister, Mr Burns, in the Department of Health just prior to 1997,
at that point the National Health Service was spiralling out of control. We
had œ500 million worth of debt in the National Health Service and in the last
year of the previous government spending on revenue actually fell in real
terms, the first time it had done that in many, many years indeed. Morale was
plummeting and, of course, waiting lists were rising. Our first priority,
quite rightly, was to get the National Health Service back under control.
213. I do not quite remember it like that, but carry on.
(Mr Milburn) I am happy to try to refresh your memory.
214. From one side.
(Mr Milburn) That was the right thing to do, to try to stabilise the
Health Service. It is not true to say, incidentally, as the Chairman was
indicating just a moment or two ago, that somehow or other the Concordat, or
co-operation, with the private sector has just come out of the blue; it has
not. In fact, I think the figures the Committee have been given indicate that
over the last few years the proportion of NHS spending going into the private
sector has increased. I do not have a problem with that providing it is
getting a good deal for taxpayers and the right quality of care for patients.
Where I think there is a world of difference, with respect, between what the
Government is trying to do and what others would seek to do, and maybe you are
one of them, I do not know, I think it is right and appropriate if there is
spare capacity available in the private sector to use that for the benefit of
NHS patients. I do not have a problem with that and I do not think that you
do either.
215. No.
(Mr Milburn) Where I have a problem is in the expansion of the
privately paid for health care sector because if that happens, if those who
advocate that the answer to our health care systems problems in the UK are to
expand the private health insurance market and thereby expand the number of
patients for their care, if we accept, as I think we all do, that there is a
constraint capacity problem for the National Health Service, in other words
we have not got enough doctors and we have not got enough nurses, if that is
the situation and people accept that then an expansion in the privately paid
for health care sector can only be robbing Peter to pay Paul. It can only be
to the detriment of NHS patients for a very, very simple reason, and that is
that if there are not enough doctors and nurses working for the benefit of NHS
patients, an expansion of the doctors and nurses providing care to the paid
for private health care sector can only be to the detriment of the National
Health Service. Those who advocate this policy need to look at it again,
because far from being a relief for the National Health Service and a
relieving of the burden on the NHS, it is actually the imposition of a burden
on the National Health Service.
216. What about the first 18 months as Minister of Health?
(Mr Milburn) As I said to you, I have always been consistent in my
views about this.
217. I did not ask if you had been consistent, I assumed, because
you told me, that you are. I asked if the Department of Health had a problem
with the sort of sensible policy you are now ----
(Mr Milburn) No, and you can see that, with respect, in the figures.
The figures demonstrate that in 1997, or 1998-99, the proportion of NHS
spending going into the independent sector was around 4.8 per cent and that
had increased from our first year in office. That would indicate that far
from there being a problem, it was always recognised as a sensible, pragmatic
solution to the immediate short-term capacity constraints that the National
Health Service faces.
Dr Brand
218. That is a fascinating answer but ----
(Mr Milburn) I cannot speak for anybody other than myself.
Mr Burns
219. I did not think that your predecessor was on record in public
taking that view. I know you are saying that you cannot take responsibility
for him, and of course you cannot take responsibility for what your
predecessor said or did, but you were part of the team with him and he was the
leader of that team that probably set the public face of the way to move
forward.
(Mr Milburn) As I say, it is also one of the prerogatives of those
coming here that they answer for themselves and not for others.
Dr Brand
220. I think the figures given by the Secretary of State are
interesting because they mainly reflect expenditure in the residential care
and long-term nursing care sector rather than the acute sector. When we asked
officials last week what assessment had been made of the extra shift in
resources towards the private sector as a result of the Concordat, they could
not give a figure. Have you thought of what sort of figure might be involved
or what sort of percentage of work?
(Mr Milburn) In the future you mean?
221. What are you aiming at in the Concordat?
(Mr Milburn) We do not have an aim in terms of the percentage being
spent in the private sector. Let me give you the closest I can get to that
because, frankly, that is a matter of local discretion. I cannot decide, with
the best will in the world, although sometimes people accuse me of wanting to
do this, and believe me it is the last thing I want to do, I do not actually
want to run the health service in the Isle of Wight, that is ----
222. I have not seen the Darlington Echo so ----
(Mr Milburn) It is the Northern Echo because otherwise I will into
trouble if we get the man with the newspaper on us. I do not even run the
health service in Darlington, let alone the Isle of Wight. That is the
responsibility respectively for those in Darlington and in the Isle of Wight.
They have got to hammer out the arrangements as far as private sector
provision is concerned.
223. Surely you would have some concern if, say, 30 per cent of
NHS revenue goes into the private sector?
(Mr Milburn) Let me try to answer specifically the question and then
I will answer your follow-up question. If the figures provided to us by the
Independent Health Care Association are right, and I guess they are right
because those are the figures that they have provided us with, we reckon that
in the acute sector, which is for the moment what we are concentrating on,
there are approximately 10,000 acute beds in the private sector hospitals.
If they are also right that their average occupancy is around 50-55 per cent,
and if they are also right that in, for example, January and February those
occupancy figures fall even further because by and large people opt not to go
into hospital over Christmas, New Year and so on and so forth, then arguably
there are probably around 5,000 acute beds that are currently unoccupied in
private sector hospitals that potentially, at least, are available for NHS
patients. That is the best answer I can give in terms of the usage which
potentially can be taken advantage of, but I would just stress to you that is
a matter that has to be hammered out on the ground. As far as the percentage
of NHS expenditure going into the private sector is concerned, I do not have
a figure for that but I would be pretty amazed if we are talking about
anything other than the sort of marginal use of the private sector you see now
- 4.8 per cent at the moment.
224. You are going to be monitoring that. Can I follow up? We
talked about the acute sector but of course the main work is done in
intermediate facilities, intermediate care, and I very much welcome that is
part of the national plan. Do you have a concern that the private sector
might not actually be there to provide it? I am getting a lot of feed-back
from nursing home commissioners, let alone the providers of nursing home
places, that they are not going to survive until these contracts are going to
be in place.
(Mr Milburn) Perhaps I can bring in John in a moment or two because,
as I think members of the Committee are aware, Mr Hutton had a meeting
recently with some of the care home providers to discuss precisely those
issues and maybe he can run through the figures for you. My understanding,
from the best knowledge we have, is that although it is true in some parts of
the country there has been a movement of providers out of the nursing home
sector - actually largely, I think, because of the escalation in property
prices in London and the South East and so on and so forth and it has actually
become a slightly more attractive proposition to sell up rather than to
continue in business - the market analysts who deal with this and who provide
advice to the sector and advice to the public too, I suppose, Laing Buisson,
say that right now there is still over-capacity in the sector rather than
under-capacity.
225. But that does not help a health authority or a trust which
has lost a third of its potential private sector capacity because people have
gone out of business, and they cannot deliver the guarantee of nursing home
places as part of the winter crisis planning.
(Mr Milburn) But this is a very important issue. I think if we get
terribly hung up about the definition of intermediate care that is purely
about the number of nursing home, or indeed residential home, places which are
available, frankly, we miss the point. Intermediate care, which is what you
are asking about, spans a whole series of services. It is not even just about
traditional nursing home and residential care placements, it is about
intensive home care packages of support provided in people's homes. We know
from all the monitoring we have undertaken over recent months and weeks that
in fact social service authorities are buying enormous quantities of intensive
home care packages of support. I think that is by and large the right thing
to do and it is indeed what this Committee has argued for in the past, that
rather than fostering dependence in the care system, we should be fostering
independence in the care system ---
226. No one is arguing with that, Secretary of State.
(Mr Milburn) --- and allowing people to remain at home rather than
being institutionalised. There is more investment in home care packages of
support. Intermediate care also includes the provision which is made
available to prevent people from getting into hospital in the first place and
ensuring their more rapid discharge from hospital when they are ready to leave
hospital. What I am saying to you is, when we assess preparations for this
winter, or indeed when we assess the state of health of the health care system
as a whole, we really must look beyond the traditional definitions of
institutionalised care, whether that be in a hospital or in a care home
setting. I believe if we do not do that actually we will end up replicating
many of the real fault lines we have in the system today. You know as well
as I do that, for example, we have according to our National Beds Inquiry -
the first inquiry of its sort in 30 years - approximately 20 per cent of
elderly people who are needlessly today occupying an acute hospital bed, not
because they need it but because there is nowhere else for them to go, and
that is wrong. It is wrong from their point of view because it means they are
not getting appropriate care, it is wrong from the hospital's point of view
because they cannot be using the beds for patients who really need it, and at
the end of the day it is probably wrong from the taxpayers' point of view
because keeping people in hospital is a pretty expensive business.
227. I made that very point, Secretary of State, in my first
questioning on health expenditure three years ago, but it does not do away
with the fact that there are going to be patients blocking acute hospital beds
- it is a nasty term - because the private sector at the moment does not have
the confidence that the fee levels currently paid for the majority of their
business which is through social services will allow them to remain open so
they can offer capacity to the National Health Service. The National Health
Service can be quite generous with their fees but it is a marginal part of
their activity, and they depend on the security of realistic fees being paid.
My own local authority area is suffering from this, as are other providers.
If, on the Isle of Wight - and we pay very similar fees to the rest of the
country - people are finding it difficult to invest and to have commercial
confidence in providing these places, then I really wonder how people
operating in Surrey or Berkshire manage to do this very work. I hope the
other part of the Department, the social services arm, is seriously looking
at fee levels.
(Mr Milburn) I think John should come in.
(Mr Hutton) I think the Secretary of State has made it very clear, Dr
Brand, that when we are talking about the intermediate care services we are
not just talking about beds in nursing homes ---
228. No, I accept that.
(Mr Hutton) I think that is a very important point. The defining
characteristics of intermediate care services include, for example, hospital
admission prevention work, home care support and speeding up the rate of
recovery from acute episodes of illness. Some of those will clearly need to
be provided for in-patient facilities, some by the private sector, and that
is very much what we would like to see happen, but not all of them require
that type of service. On the point you made about shortages in the nursing
care sector, all the information we have at the moment is that there is not
a uniform national picture about the number of bed losses in the nursing home
sector, in fact there are some parts of Britain, certainly some parts of
England, last year which recorded a slight increase in the number of nursing
care home beds. There is certainly evidence to suggest there are some
regional problems and overall there is no doubt in the UK overall there has
been a loss of some beds. We estimate around 8 to 9,000 beds might have been
lost last year, which is about 4 per cent of the capacity in the sector as a
whole. But I think it is very important too that the Committee is aware from
the evidence which was recently made clear in the Performance Assessment
Framework for Social Services, for example, that that has been largely offset
by a substantial increase in the amount of support provided for people in the
home, both intensive packages of home care support and more broadly based
packages of home care support which would support independent living at home.
It is a complex situation, I would agree. One of the things we will have to
deal with is this whole sector, which is a crucial partner in developing
services in this area and in making sure the NHS itself runs effectively and
we do not have the problems which have been identified. We do have an issue
to address and we are beginning to do that, as the Secretary of State said a
moment ago, by opening up a new dialogue with the caring sector, all parts of
the caring sector not just the profits sector but the independent sector and
the local authority sector as well who all have contributions to make, to try
and get the stability and confidence back into the market which is clearly
necessary. We need to do that and we will be addressing that in the next few
months. It is probably wrong to say, Dr Brand, that our ability to deliver
the intermediate care packages we identified in the NHS Plan, which are
fundamental to the new vision we have for how the Health Service works in the
future, at this stage will be compromised by the current market trends in the
private nursing home sector.
John Austin
229. I go back to elective treatment. You referred to a lack of
capacity in the NHS and spare capacity in the private sector, in the two NHS
Trusts which serve my area, the lack of capacity is not an absence of
operating theatre availability, for instance, it is a lack of skilled nursing
staff, doctors and the other technical and care staff. So if that is the
reason for the under-capacity and you are going to tackle the waiting lists
by purchasing the capacity in the private sector, it clearly is not going to
be done with the nurses and doctors who are not available in the NHS to carry
out the work. I do not know what it is like in other National Health Service
Trusts, but in both of the NHS Trusts in my area they are not under-spent on
their budget at the end of the year, so if money is now going to be spent on
treating patients in the private sector, it can only be found from taking it
away from the NHS.
(Mr Milburn) If that is the situation in Greenwich then clearly there
will not be a deal. That is a matter for the people in Greenwich, it is not
a matter for me. I cannot decide that. I would be astonished if in Greenwich
this winter, for example, plans have not already been put in place - and it
would be an eminently sensible thing to do - to deal with the inevitable
pressures that arise during the winter months. They arise everywhere.
Despite what you read in the Daily Mail it is not just a phenomenon in
England, Scotland, Wales and Northern Ireland, it happens the world over. If
provision had not been made to move the National Health Service in your area,
Mr Austin, largely from elective work to largely emergency work, the
consequence of that is some of the capacity that you say you are short of,
doctors and nurses - and I accept you are and I accept, incidentally, the
National Health Service as a whole suffers from that and we are putting it
right rather than sweeping it under the carpet which perhaps has been the case
in the past, we have been straight about these things and said there is a
problem and we have a way of dealing with it and over time it will be put
right - and I would be very surprised if precisely that shortage of capacity
you describe from the doctors and nurses, particularly some of the surgeons,
is not actually displaced this winter as emergency pressures come in. That
is inevitably the nature of what happens in the seasonal cycle in the National
Health Service. Then there is a choice for the National Health Service. I
do not know whether you are going to be under-spent or over-spent this year
---
230. I do!
(Mr Milburn) As Colin quite rightly reminds me, we are going to break
even, and that is why he is the Director of Finance and I am not! This year
the National Health Service is in a different situation, and actually it is
difficult for Directors of Finance to recognise that they need not hoard a lot
of cash now. That is perhaps what has happened in the past when the NHS has
been under-provided for, this year there is actually quite a lot of money in
the system. If there is money in the system what I want to say to every part
of the National Health Service is if there is cash available and if the value
for money arrangement can be struck with the private sector and if there is
capacity which is available and you can assure yourself of good, high
standards for patients, then do that in order to get NHS patients better and
faster care.
231. Talking about the winter situation, I agree whole-heartedly
with the Minister of State when he says there are people occupying beds
inappropriately and that is the problem. Why is it then that the number of
geriatric beds in the NHS Trusts is continuing to fall? The figures you
produce in the Bed Availability and Occupancy paper show that in the last
seven years geriatric beds in National Health Service Trust hospitals have
gone down by 5.4 per cent and in the past year by 2.9 per cent. Why are beds
still closing in the NHS?
(Mr Hutton) I am not sure I have precisely those figures in front of
me. I know we have submitted evidence to the Committee about that. I think
we are trying to address some historic trend problems here in the NHS. The
position we inherited was that there was this argument and dogma, "You can
just dispense with these beds; bed numbers are not important", but we have
moved to a situation where we now recognise quite clearly that those issues
are important and we are trying to address that. As part of the NHS Plan, for
example, we have just been discussing around intermediate care, we do envisage
5,000 extra intermediate care beds coming into service. I think a very large
number of those clearly will be in the NHS.
232. Do you have a break-down of how many of these intermediate
care beds will be in the NHS?
(Mr Hutton) We will try and help the Committee with that. At the
moment I do not think I can be more specific than the information I have given
you. These are historic trend issues and we are trying to address these and
to reverse them and that is what we have in mind.
(Mr Milburn) As far as geriatric beds are concerned, I think you are
looking at Table 4.13.1, which is the table I have in front of me ---
233. Table 4 on page 18 of the Bed Availability and Occupancy
paper.
(Mr Milburn) I think we are agreed about the fact if not the table.
Specifically on geriatric beds, and if I can now I will make a more general
point about general and acute beds, yes, it is true they are continuing to
fall but remember there are different forms of provision which are coming on
line. In truth, geriatric provision is not what it always should have been
from the National Health Service. If the Committee is as concerned as I think
it is about standards of care and the quality of care which is provided,
particularly to older people in the National Health Service, then frankly
keeping people on long-stay geriatric wards has not always been the most
appropriate thing to do, and many of us would have doubts about whether some
of the provision that is currently available is as appropriate as it should
be, and keeping people in hospital needlessly is not necessarily good for
their health. That is why, taking a broader view about the form of provision
and making sure we do genuinely get the right number of beds of the right sort
in the right place, is the right thing to do in my view.
234. But that is the total figure for geriatric beds, it does not
address the issue of quality. Some may be good, some may be bad.
(Mr Milburn) We can come back to you but I do not think it is. I do
not think, for example, it would in this category, but maybe Colin can correct
me if I am wrong, include the build up of NHS intermediate care provision, and
nor would it, as I was indicating earlier to Dr Brand, account at all for
social services provision which is provided in the form of intensive home care
packages of support. Arguably, if we listen to what older people are saying,
as we should, what they most value about the care they are provided with is
the ability for them to retain their independence. Older people are just like
everybody else, they want to remain independent rather than being dependent.
So I do not think, in truth, we should assume that the number of geriatric
beds in hospitals is the best yardstick against which we can judge the quantum
of either beds or services that are being provided to older people in the
National Health Service.
235. I accept the point there may be ways of caring for people
other than in beds in hospitals or private facilities, but in terms of the
headings I cannot see those intermediate care beds in the NHS could be in any
other category other than under geriatric in that table, because they would
not be under acute or anything else.
(Mr Milburn) I have not got the answer to that but perhaps I can check
and send the Committee a note, if that is helpful.
236. One other point I want to raise on the question of elective
surgery being carried out in the private sector is that much has been made in
the past by doctors of the difficulties of split-site working. The other
issue, of course, is much of the care provided in NHS hospitals is provided
by junior doctors, and the Royal Colleges have taken a very strong line on
split-site working in terms of validation of qualifications. One of the
reasons why a hospital closed in my area was because the Royal College would
not accept the split-site working for junior doctors was a reasonable way of
training. How are you going to address the issue of providing medical care
in the private sector? It is not just junior doctors but the whole question
of anaesthetist cover as well.
(Mr Milburn) I think that is a big issue, it is an issue certainly in
relation to the Concordat but it is a broader issue too. As you know, when
we put together the NHS Plan we did a lot of work with several of the Royal
Colleges - Surgeons, Physicians, GPs and so on and so forth - and I have the
greatest respect for them but it does not always mean they are right. There
are very, very different views amongst the Royal Colleges, for example, about
the appropriate size of a population that should be served by a district
general hospital. The Royal College of Surgeons say one thing, the Royal
College of Physicians say quite another thing, and there are different views
too about split-site working. My own view is this, I think two things have
to happen. First of all, I think that as the NHS Plan signalled, we will want
to enter into discussions with the Royal Colleges about better ensuring in the
future that the training needs of doctors are better aligned with the service
needs of patients and in particular that the training tail is not wagging the
service dog, and that sometimes has happened in the past. But, secondly, we
have to get into some meaningful discussions to try to solve the big conundrum
which is that medicine is becoming ever more specialised, continually more
specialised, and indeed the way we train and educate our doctors in many ways
exemplifies that and it intensifies it so we have more and more concentration
of medical expertise potentially in fewer and fewer hospitals, and at the same
time, quite rightly, we want to make more care available more closely to home
for people. In the end, I think the only way we will deal with these two
issues is by recognising that rather than the mountain having to come to
Mohammed, sometimes Mohammed will have to go to the mountain and doctors will
have to service several hospitals in their area. That is what is happening
in my own area in Darlington, the Darlington and Bishop Auckland Hospitals are
now within one Trust and increasingly we expect the orthopaedic surgeons and
others to cover both hospitals and for good reasons, because they are serving
two quite distinct communities.
237. Whether that is desirable or not, at the moment the
accreditation and approval rests not with the Secretary of State but with the
Royal Colleges.
(Mr Milburn) That is why, as you will recall from the NHS Plan, we
talked about forming a new organisation, the Medical Education Standards
Board, precisely to deal with some of these issues, to ensure we can better
square up the service needs of the Health Service with the needs of patients,
particularly to have good, high quality clinical care based as closely to home
as possible and the training needs of doctors. We want to have specialised
doctors providing high quality care but that cannot be allowed to compromise
the access to service provision which, quite rightly, NHS patients want. If
you remember, in the NHS Plan we suggested the new Standards Board will look
at these issues, that the Royal Colleges will be represented on them but the
Royal Colleges will be working in conjunction with the National Health Service
rather than, as perhaps has appeared to be the case in some places in the past
- including by the sounds of it your own - imposing requirements on the local
National Health Service which arguably have not always been in the best
interests of the local National Health Service.
(Mr Hutton) Could I add, Mr Chairman, before we move on, that some of
the wider issues that Mr Austin is referring to in relation to the style and
pattern of NHS services for old people will be addressed in the National
Service Framework for Older People which we hope to publish before the end of
the year. I think the concerns you were raising earlier about the pattern of
acute based care centred around the number of geriatric beds will be addressed
as part of the new national standards which we expect the National Service
Framework to be addressing.
238. Could you confirm that might be on or around 14th December?
(Mr Hutton) Certainly we expect it to be published before the end of
the year, so that gives us a little more leeway, it might give us until 31st
December. We hope to publish it before the end of the year.
(Mr Milburn) I have more information on the geriatric beds, Chairman.
Chairman
239. Amazing!
(Mr Milburn) It is amazing, is it not?
John Austin
240. Could I also say that according to the document I have in
front of me, the number of households receiving home helps, meals-on-wheels,
or attending day care, is also falling.
(Mr Hutton) Can I just correct that because I think the data you might
well be using is the data we provided to the Committee and it only goes up to
1998. In the Performance Assessment Framework I am glad to say the data is
more up-to-date than that, and I think for the first time we can say that
trend has been reversed.
(Mr Milburn) I am told, though I may stand corrected, that geriatric
beds are actually counted in the general and acute bed category.
241. The intermediate care beds?
(Mr Milburn) No. The intermediate care beds I think are a quite
separate category although I will try to clarify that later.
242. Not in this table?
(Mr Milburn) Not in this table.
243. The headings include acute, geriatric, general medical,
mental illness, learning disability ----
(Mr Milburn) Geriatric beds are a sub-set of general and acute beds,
and it is true to say that overall the number of general and acute beds fell
in the last year for which we published figures, which I think was up to 1998-
99. The number of acute beds fell by approximately 500. My own view is that
that is probably a bottoming-out of the long-run trend because the number of
acute beds has actually been falling on average by around 2,700 every year
and, as you know, in the NHS Plan we made it pretty clear that over the course
of the next few years we need to see an expansion in the number of general and
acute beds, because with occupancy levels running pretty high in hospitals
already, leaving aside the fact we want to be doing more waiting times work,
getting waiting times down, ensuring there are more operations carried out
rather than fewer, that would seem to me to call for an increase and expansion
rather than a decrease. I do not know whether that in part answers your
question or not but that statistically, I am told, is the right answer.
Mrs Gordon
244. I wonder if you could clarify the situation on critical care.
I am not sure what medical conditions you are talking about. In the Concordat
you talk about the transfer of patients between NHS, private and voluntary
health care providers. How will you ensure the standards of care are
maintained during transfer? Following on Mr Austin's point about more than
one site for treatment, what is the critical care? Who are you treating and
how will you ensure those standards are maintained? I have other questions
but I will leave it at that for now.
(Mr Milburn) We make it pretty clear to the NHS, because it is good
clinical practice in any case and most people would want to do this if they
humanly can, that the number of transfers should be kept to an absolute
minimum particularly for critically ill patients. That is self-evident.
Clearly it is not a good thing to have to move a critically ill patient
between hospitals. So where possible we have to minimise the transfers but
that, in turn, is dependent upon the extent of critical care provision. This
year, because we have spent an extra œ150 million on expanding critical care
services, and also changing the way in which they are provided in hospitals,
there will be very many more critical care beds in hospitals this winter than
there were last winter. There will be probably over 300 more critical care
beds available in NHS hospitals this winter than there were last winter,
precisely because of the investment we have made. However, we do know that
in addition the private sector has a number of critical care facilities.
Critical care is usually divided into two categories, as you know; high
dependency and intensive care. My understanding is, although I do not have
the figures in front of me, that most of the critical care beds which are
available in private sector hospitals, unlike in NHS hospitals, tends to fall
into the former category, ie high dependency care rather than critical care.
But you could envisage, for example, an NHS patient who has a major operation,
a heart by-pass or whatever, in a private sector hospital, could then take
advantage of critical care facilities in the same private sector hospital, so
it would be that sort of arrangement which would pertain in the Concordat.
245. I understood last week when we were talking to the officials
that there would be actually a differentiation between NHS patients in private
sector facilities and the private patients there, that there would in fact be
a basic package for NHS patients, not in medical treatment but in the whole
care that they got. I was a bit worried about this differentiation. Given
that the private health care has to make a profit, I was worried that the NHS
patients are going to be given the hard sell to buy the frills, if you like,
which were not put in the package. The other thing was, you talk about winter
pressures, is the Concordat just for winter pressures and for the bad times
of the year, or is it for all time?
(Mr Milburn) On these two separate points, I very much hope that no NHS
patient is pressurised to do anything they do not want to do, and certainly
that is not the intention. As far as different levels of care are concerned
between an NHS patient and a private patient paying for their care, clearly
that is a matter which has to be sorted out between the NHS Trusts, the
Primary Care Trusts and the independent sector/private sector provider. On
the question of winter pressures and whether or not the Concordat is only
about winter, I have absolutely no doubt whatsoever that the Concordat will
be beneficial during the course of the winter precisely because of the extra
demand pressures which inevitably flow into any health care system in the
depths of winter with more 'flu, more respiratory illness, probably more road
traffic accidents, more slips and falls and breakages and so on and so forth.
If there is capacity there during the winter, we should be seeking to take
advantage of it, and the message which is being sent out into the National
Health Service is that it will be for the local health service to determine
how best to take advantage of the framework that we have established under the
Concordat. But, no, it is not just for the winter because right now, as I
indicated in my first answer to the Chairman, we simply do not have enough
capacity in the National Health Service to do what we want to do. Sure, we
will grow that capacity over time, and certainly by 2004-05 the situation in
the National Health Service will look very different from the situation today,
there will be an increase in the number of general and acute beds, we will
have 2,000 more, there will be an increase of 7,500 consultants, we will have
2,000 more GPs and 20,000 more nurses, so the situation will look very, very
different then. Right now, those nurses and doctors by and large are in the
training pipeline. Obviously we have to recruit some from abroad and try to
bring back some who have left and retain people, but they are not on-stream
at the moment, and that causes a short-term capacity problem for us. This is
one means by which we can plug it, just as I announced yesterday in the
agreement with the Spanish Government that one of the ways we can in the
short-term plug the capacity gap we have in the number of nurses available to
the National Health Service will be to do some recruitment from abroad,
providing of course that the standards of care and the English language
qualifications are right.
246. Given that the private health sector is working at 50 per
cent capacity - I am not going to imply nurses and doctors are standing round
doing nothing, obviously they are not but they have that capacity there - do
you ever think to try and recruit them back into the NHS?
(Mr Milburn) We have been pretty aggressive in our recruitment of
nurses, as you are probably aware, and indeed we have offered enhancements to
try and attract people back into the NHS, not least pension enhancements and
so on and so forth. I have no doubt there will be some - I cannot quantify
the numbers but I would guess - nurses who have come to work in the National
Health Service who used to work in the private acute sector or indeed the
private nursing home sector. That is probably true but I do not have numbers
on that, I am afraid.
Chairman
247. We have spent over an hour on the Concordat and I know Mr
Burns wants to move on to long-term care but before we move off this, so I
fully understand the Government's position, can I ask you this? When we
looked at the issue of consultants' contracts, we did clearly get some
anecdotal evidence suggesting the creation of waiting lists to produce a
demand for private practice and that you were aware of that. I got the
impression that you were concerned in the discussions on the consultants'
contracts to attempt to draw into the NHS consultants who spend much of their
time in the private sector. Does that remain the Government's position?
(Mr Milburn) Yes. We set out in the NHS Plan precisely what we intend
to do which is ---
248. So you remain committed to try and draw NHS consultants who
are part-time currently in the NHS into, wherever possible, full-time
positions?
(Mr Milburn) There is a differentiation, I think, and I think there has
to be, given the fact we have some existing consultants and they are employed
on a particular set of terms and conditions, between existing consultants and
newly qualified consultants.
249. I appreciate that. I am looking at existing consultants. I
appreciate the answer you gave earlier about the first seven years.
(Mr Milburn) Let me finish the point then. Although we want to
introduce this policy for newly qualified consultants, and that is the
Government's intention - and clearly there has to be a negotiation but unless
we intend to do it we would not have said we were going to do it in the NHS
Plan - there will be discussions going on with the British Medical Association
and with other organisations. But I think what will happen as a consequence
of doing this and actually making it more attractive for people financially
to work in the National Health Service, because this will not come for nothing
from the Government's point of view, from the taxpayers' point of view, if
essentially we are saying to newly qualified consultants - and I will come to
existing consultants because I think this will have a knock-on effect - "We
want your labour exclusively for the National Health Service for up to seven
years and you cannot go and work in the private sector", it seems to me
perfectly reasonable that we should offer those newly qualified consultants
some more money, and that is what we will have to discuss. There are various
other things we will need to do, we will need to reform the discretionary
point and distinction award system to provide a bigger pool of resources
available to reward those consultants who are committing most to the National
Health Service. What I think that will do is not just have an impact on newly
qualified consultants, I think that will have an impact on existing
consultants in a positive and beneficial way, because it will begin to turn
on its head the way that for 50 years the National Health Service has operated
in relation to its consultants which is this, that the only way you as an NHS
consultant get on and do well and get more prosperity is by working in the
private sector. We, the National Health Service, in the way it was
established and the way it has operated for 50 years, have actually provided
a positive incentive for NHS consultants to go and work in the private sector.
That is a choice that the National Health Service made then and we are making
a rather different choice now, which is to say, that we want your exclusive
labour, certainly as newly qualified consultants, but we want to provide some
of the right incentives to you to come and work in the NHS. For example, as
far as these distinction awards are concerned, which are very important
enhancements to a consultant's pay, worth up to œ50,000 a year on the top of
the distinction award ladder, it seems self-evident to me that the people that
we should really be rewarding for NHS endeavour, as NHS consultants, through
the distinction award and discretionary points system, are those who are
committed most to the NHS and doing most for NHS patients. So the answer to
your question is, yes, we want to have more NHS consultants and, yes, we want
to get more NHS work from consultants, and by doing what we are doing, or
proposing to do with newly qualified consultants, I think we will begin to
turn the incentive structure round so that it becomes more worthwhile for
people to commit more full-time labour to the NHS. Now that, just as a
caveat, does not decry, for a moment, the fact that NHS consultants are
overwhelmingly working extremely hard for the NHS. They are. You only have
to go into every hospital and you will see that people are working under
pressure. They are working pretty much flat out. That goes for the doctors,
the nurses, the other staff too. But certainly I think here that there is a
big deal on offer. If we are going to expand the number of consultants in the
way that we are, in a historic rise in the number of NHS consultants - 30 per
cent over the course of the next few years - that will get us more labour.
What I also want to do is to maximise the contribution that each and every one
of those consultants make to the NHS.
250. I remain baffled as to how the Concordat takes us in that
direction. It appears to me that quite clearly you are shifting work into the
private sector and the private sector is being awarded for those doctors, (to
use the term moonlighting), to gain more work in the private sector, will do
more work there, and will spend less time in the NHS.
(Mr Milburn) With respect, Chairman, I answered, that question earlier.
I think I answered it twice. You might not be convinced but that is a matter
for you and not for me.
251. Well, I am absolutely baffled as to how this is consistent.
(Mr Milburn) I think it is entirely consistent because, as I indicated
at the outset, our preferred option is very straightforward in relation to the
Concordat. That is, to use private sector facilities, operating theatres,
hospital beds, critical care facilities, when they are available.
252. And staff.
(Mr Milburn) And to use NHS consultants in NHS time to provide care for
NHS patients.
253. You did indicate to me that it could be an NHS consultant who
was working in their private time treating NHS patients. That was what I
could not understand how that could benefit. That was the answer you gave me.
(Mr Milburn) No, no, I gave you two answers which were entirely
consistent.
254. It is not consistent with what you said because clearly you
said to me that we could have a referral. I asked you about elective care
where a purchaser, a PCT, purchased from a private contract, with a private
hospital, care for a particular patient, who may be on the NHS waiting list.
That patient would be treated by a NHS consultant working in the private
sector. You gave me that answer. You are nodding. Is that correct?
(Mr Milburn) Can I be absolutely clear ---
255. I am asking you, is it correct? Is my understanding correct?
(Mr Milburn) Let me give you the answer since you have asked the
question now on three or four occasions. I will give you one answer.
256. Is it correct, that is the important point.
(Mr Milburn) The important thing is this. In the Concordat what we set
out are a number of options as to how the NHS and its staff can be deployed
for the benefit of the NHS patients in the private sector. As I indicated
earlier, no, I would not rule out the National Health Service purchasing care
from private sector hospitals and using NHS consultants who are working in
their own time in the private sector. I would not rule that out. My
preferred option - and I have said this now and I guess that you are getting
bored with it ---
Dr Brand
257. With all due respect, Chairman, I think the rest of the
Committee has now heard the question three times and the answer almost four
times.
(Mr Milburn) Well, I will give it for a fifth time and maybe I will
convince the Chairman. (It is worth trying, I do not give him up as a lost
cause!) My preferred option, as I have stressed throughout, is to use private
sector facilities, critical care beds, operating theatres, hospital beds,
using NHS staff specifically, NHS consultants working in their NHS time, to
provide care for free for NHS patients. That is precisely what happens in
many trusts around the country. It happens in the Medway Trust. What we do
there - nothing to do with me, it is the local management who negotiate that
with the BUPA hospital - they have persuaded, cajoled or encouraged NHS
orthopaedic surgeons to work in NHS time, on NHS patients, providing
operations for them in private sector facilities. That is my preferred
option. That is the right thing to do. I think that should help to solve
your sense of bafflement.
Chairman: Okay. It has been an interesting exchange.
Mr Burns
258. May I move on to long-term care because this is something we
did discuss with your officials last week. I wonder if you could define
nursing care and personal care.
(Mr Hutton) It might be helpful if I try to answer those questions for
you. We set out very clearly in our response to the Royal Commission on long-
term care in the NHS Plan the actions we intended to take to end what I think
most people would accept has been an anomaly and a perversity of funding
arrangements long-term care. If you were at home or in a residential care
home, nursing care would be met by the NHS. If you went into a nursing home,
you were means-tested and therefore faced a charge yourself. We are going to
correct that anomaly.
259. I am sorry, that was not what I actually asked. I asked if
you could define what nursing care and personal care was.
(Mr Hutton) I will do that for you. However, I want to make it clear
that we will need to legislate to do this. We hope to do that as soon as we
can. I set out too in the NHS Plan what we intended to cover by our
definition of free NHS nursing care. We defined it very clearly and precisely
in the Plan to cover the time spent by a registered nurse either providing,
delegating or supervising care for residents in a nursing care home. That is
our definition of nursing care. It is a more gentle step certainly than we
find in the Minority Report of the Royal Commission. Certainly it is broadly
along the same lines as the Royal Commission Majority Report when they talk
about time spent by a qualified nurse. We are not intending to define
personal care.
260. No, I just wondered if you had a definition of defining
personal care.
(Mr Hutton) I do not.
261. You do not?
(Mr Hutton) I do not have a definition of personal care. The care
that is not provided in the way that I have outlined by a registered nurse
will therefore be care that is, in theory, subject to social services means-
testing. It is worth pointing out that currently seven out of ten people,
either in residential care or nursing homes, get all or most of their personal
costs met by the state as well.
Dr Brand
262. A very short one in relation to that. Are you going to use
that definition for means-testing in the home as well? If you are going to
use that definition, people are going to lose out enormously in home care.
(Mr Hutton) No, because we are not proposing to change the
arrangements there.
263. So you are going to have one definition of nursing care when
it is delivered at home and another definition of nursing care when it is done
in a residential establishment?
(Mr Hutton) No. It is currently the NHS that meets that home-based
nursing care support already. We are not going to change the arrangements for
that.
264. It is not just nursing care. There is also care provided by
non-registered nurse assistants, auxiliary health visitors assistants.
(Mr Hutton) With respect, we are not changing the arrangements in
relation to home based care. What we are trying to do ---
265. So you will have two definitions?
(Mr Hutton) No. What we are trying to do is to make the charging
arrangements in relation to home care services much more consistent and fair
across the country. One of the things we are concerned about, and we made it
clear in the White Paper Modernising Social Services is the huge scale of
variation in charging for domiciliary care at home. It is unacceptable. That
is why in the Care Centres Act we have taken the new statutory powers to
regulate and try to get greater consistency in charging for home based care.
That is a very significant step forward. I hope it is going to be possible
through that new guidance to correct some of the anomalies and some of the
inconsistencies of how we charge for home based care. The definition we are
discussing now, to which I was trying to answer Mr Burns's question, relates
to nursing care provided in residential homes. That is the definition, Mr
Burns, that we outlined in the NHS plan and what we intend to deliver in the
package of reforms we outlined in the NHS plan.
Mr Burns
266. Would we be right in thinking that the people who are going
to interpret this definition will be the front line nursing staff?
(Mr Hutton) What we intend to develop is a new assessment protocol,
a new assessment procedure, which will improve the assessment process
generally in relation to people both at home as well as those who are going
into residential care, either a residential care home or into a nursing home.
Currently, at the moment, there is, again, a significant amount of discretion
and variation across the country as to how those assessments take place, which
I am sure you will be aware of as a former Minister in the Department. We are
not going to, as it were, leave people to their own devices. I think there has
been some concern that these changes will be introduced without any central
guidance and support from the Department, of course we are not going to do
that. We are developing, currently, at the moment, through the chairmanship
of the Chief Nursing Officer in England, working with a variety of
organisations including the Royal College, Alzheimer's Disease Society, Age
Concern, Help the Aged and others, to get the processes right whereby we can
make the correct assessments.
267. Would it be fair to say that what you are seeking through
this working party is to come up with a standardised form of assessment?
(Mr Hutton) That is right.
268. To try and get continuity and standards.
(Mr Hutton) Absolutely. It is a fundamental part of the machinery we
want to put in place. I think it will address some of the wider concerns too
that I think the Committee has about cost shunting. We are not trying to
create new perverse incentives, we are not trying to create new anomalies, we
are correcting an age old anomaly in the system which has impacted unfairly
on people going into nursing homes.
(Mr Milburn) I think why this will be helpful is that clearly it will
be inappropriate for front line clinicians, in this case registered and
qualified nurses, to be, if you like, doing an assessment purely in the dark.
It is important, therefore, that we have a framework to which they can work.
I think that is the right thing to do because it gives them support and it
gives them the appropriate framework. I think equally it is important that we
all recognise, as I am sure we do, that individual patients will have quite
different and individual needs. That is why in the end the best people to
undertake the assessments are going to be those responsible for the care vis
a vis the individual patient. One very, very important point of detail which
I think is absolutely critical about this is just in case there are any
concerns about caps on costs or any of that nonsense that sometimes I
occasionally hear, there will be no cap on cost for the individual patient.
So, for example, if an individual nurse decides that an individual patient
needs a particular package of care then, providing that is consistent with the
framework, that is what we will provide for them because different patients
will have different needs.
(Mr Hutton) That is right.
(Mr Milburn) It is that we are hammering out now in discussion with the
appropriate patient organisation - Alzheimer's Disease Society, Age Concern,
the Royal College of Nursing.
269. Can I just press you a bit more on your statement that there
will be no cap on the costs for the individual patient's care. You are not
saying, are you, that the sky is the limit in certain cases if there might be
a more cost effective way of providing care for someone?
(Mr Milburn) Say that again, I did not quite understand.
270. You said there will be no cap on the costs for an individual.
(Mr Milburn) For nursing care?
271. Yes.
(Mr Milburn) Yes, for the nursing care that is provided.
272. So will there be a cap though on the total amount of money
available for nursing care, not for the individual but in toto for nursing
care? Surely you have not got an open ended wallet?
(Mr Hutton) No. Of course, all resources, by their very nature ----
273. Right, well, how do you square your statement with the
Secretary of State's that there will be no cap on the costs for the individual
cases?
(Mr Milburn) It is self-evident. Different individuals will have
different care needs. A patient at the terminal stage of Alzheimer's Disease
will have a quite different set of circumstances to deal with and their
relatives will have a different set of circumstances to deal with than
somebody who has lower needs.
274. Of course.
(Mr Milburn) Of course they will. Inevitably, the thing is bound to
average out, is it not, that is how it will work. The important thing about
this, I think, and this is absolutely critical to how this will work on the
ground, is to ensure that we get the best of both worlds and I think we can
have this by doing what we are proposing to do. One is to get a National
Assessment Framework that provides some consistency and ensures that the many
thousands of nurses who will be providing the care have some framework which
they can operate. Otherwise, frankly, I think it will be unfair for them and
unfair for the purchasers of care, firstly. Secondly, we have to be able to
achieve individual packages of care and, therefore, individual costs to the
needs of the individual patient. If you like, it is the same with the
situation that a GP would come across in a surgery. We would not say to a GP
"Well, here you go, you can only prescribe to an individual patient a certain
level of drugs" when individual patient's needs vary, because they do, do they
not?
275. What about with beta-interferon?
(Mr Milburn) I am happy to deal with beta-interferon if you would like
me to.
276. That is just to make the point that if certain GPs get
patients coming to their surgery now and saying "I would like beta-interferon"
they will have great difficulty in some cases getting it, depending on where
they live.
(Mr Milburn) That is precisely why we have referred beta-interferon to
the National Institute of Clinical Excellence which is absolutely the right
thing to do, precisely to ensure there is greater consistency and care.
277. I am just simply making the point as of now, when you said
someone will not go to their GP and be told they cannot have whatever it is,
I was just giving you an example of where they can.
(Mr Milburn) You would not want to see that lottery of care, that
certainly I decry and I guess you do too.
278. I am just making the point.
(Mr Milburn) You would not want to see that replicated for patients.
279. That is what is happening at the moment in the real world.
(Mr Milburn) That is why the approach which is being taken is to have
a National Framework with clear rules, clear standards, a clear assessment
protocol too, so that the individual nurse is working to a protocol for the
individual patient but that does not inhibit getting the individual patient
the right level of care, whether in terms of the package of care or, indeed,
in terms of cost.
(Mr Hutton) Can I say there is one other dimension ---
(Mr Milburn) Unless you think that is wrong.
280. I do not want to make an argument out of this. I just want
a clear steer from you that you are not going to cap the costs on individual
patient's care which I understand and that is clear cut. Logically that does
mean that the budget for patient care in this field is going to be unlimited
to keep that commitment. I just want to check that is the right assessment.
(Mr Hutton) There is another dimension to this argument, Mr Burns,
that I do not think you are considering which perhaps I should suggest to the
Committee and essentially it might help you. What we have been trying to
develop, as the Secretary of State has been saying, is for the first time a
clear National Assessment Procedure which will allow a nurse led assessment
of the person's nursing needs to take place in a proper framework. If the
result of that assessment is somebody needs, say, for example ten hours of
registered nurse time taken in a nursing care home every week, that is the
package of care and that will be resourced. That is what we have made very
clear. The other dimension to this, which might help you a little bit, is that
of course on top of that and running in parallel to that, as you will be
aware, as the Committee will be aware, we have the review currently taking
place about continuing care guidelines themselves and, of course, there will
be cases, around about eight to ten per cent of cases currently at the moment,
whose needs are so heavy, whose nursing and other medical needs are so
intensive that they need full-time care and support from the NHS funded by the
NHS sometimes within an NHS facility but, more often than not, in a private
nursing care home too. Of course that is the mechanism by which we deal, I
think, with the kind of case that you are indicating there about a person
whose needs might be very, very intensive. There are resources there, there
always have been, to fund those types of care packages and that is an NHS
responsibility. Of course that means we pick up the tab, Chairman, for the
whole package of care that person needs, including their living costs, their
food, their personal care, their nursing care costs as well. I am sure the
Committee would like to be reassured about that.
281. On the question of your assessment, will the patient or the
family of patients who may have responsibility for them have a right of appeal
against an assessment if they do not agree with it?
(Mr Hutton) Yes, they will. Of course that will be a feature of the
proposals.
282. How will it work?
(Mr Hutton) I think it will work through the way that the appeal
system currently works. Of course there is, as you know, an established Social
Services Complaints Procedure, there is an NHS Complaints Procedure. We will
make sure that if there is a dispute around the assessment that people will
have a proper opportunity to exercise a right of appeal. That is fundamental,
that is how we want to be treated by the NHS and social care. Those appeal
mechanisms will be in place for this assessment process as well.
283. May I ask you a question that I asked your officials last
week, which I think they suggested would be better to ask you, which is this.
There is anecdotal evidence - I suspect all around the country, certainly in
my constituency - that when the social service budget or the health budget is
under strain for other reasons, that there is a tendency on the patient to
assess an individual for residential care when, strictly speaking, they should
properly be in nursing care because, of course, residential care is relatively
less expensive than nursing care. Providing you accept that this probably
does go on in this country, how will your proposals get round that problem or
minimise it?
(Mr Hutton) I think you are probably right. I think we have all
picked out cases in our own constituencies where we think that might be going
on. I accept the point you are making. That may be an aspect of how the
current system works. Of course, the key to challenging that will be the new
assessment procedure that we put in place, which will for the first time give
us a proper framework right across the country, led by nurses, delivered by
nurses, so that we can properly assess nursing care needs. So dealing with
the problems of cost-shunting, which I think is right to refer to, is
something that we will have to address and the new assessment process will
allow us to do that. The full budgeting arrangements that the Royal
Commission were very keen on, in supporting integrated care for services for
other people, which we certainly endorse and embrace, are taken forward in the
NHS Plan through the new care trust system that we want to see up and running,
together with that flexibility which we introduced last year, I think that
will help us to overcome some of those problems. Certainly, as I said
earlier, it is not our intention in introducing what I think is quite a
fundamental reform, bringing great fairness to the long-term care system, that
as a result of that we somehow build into the system some other anomaly, some
other disincentive to get the system working properly. We are not going to
do that. The key to that is to have a new assessment protocol, but we do not
have that at the moment. That may be in part why the anecdotal evidence that
you have drawn to the attention of the Committee may be surfacing because we
do not have that proper assessment procedure in place. Through all of those
many and different ways we will get to a position where I hope the Committee
and yourself will be satisfied that we have not put in place the type of
arrangements that facilitate that type of inappropriate assessment which we
have identified.
284. Do you think it is a lost opportunity, having gone through
the whole procedure of a Royal Commission on long-term care and aroused a lot
of both interest and expectations from that, that at the end of it all, apart
from the proposals to raise the savings levels, which undoubtedly will be
welcome, nothing else, to the best of my knowledge, is being done on helping
people, with regard to residential care and the costs of that, which will
continue to see a situation where individuals or families on their behalf have
to sell their homes?
(Mr Hutton) It is completely wrong. There are a number of other
changes that we are proposing, which we identified in the NHS Plan. For
example, a three-month disregard. The new arrangements for home loan schemes
which we will resource local authorities to provide in future, which will
prevent that type of scenario coming out at the end of the day. The response
we have made is a pretty full response. We have certainly accepted the vast
majority of the Royal Commission's recommendations. It is clear that we did
not accept the recommendations about personal care but let me be absolutely
clear to the Committee. Of course, we have a choice about that. Of course,
we have. We could have spent the billion pounds that we have available on
providing free personal care but we would not have been able to address the
sort of criticisms that our constituents are always addressing to us about the
deficiencies that we have in the care services for older people. Not enough
choice. Not enough individually tailored services. Not enough intermediate
care. Not enough home based care packages to keep people independent at home
where they want to be. The choice we have to make is a very difficult choice.
Of course, it is. But we have chosen to make the resources that we have
available: œ1.4 billion investment in this area to try to address the key
deficiencies in the fairness agenda about how long-term care is brought in;
and also addressing what I think are the most serious problems facing the
development of long-term care for the elderly. It is a choice we have made.
We are very confident that it is the right choice. Had we done it
differently, we would have simply locked in place the present totally
unsatisfactory range of care services for older people. We would not have
moved on that agenda at all. We would still be here two years from now
dealing with the same criticisms that our constituents are raising about
flexibility, availability, the quality of care services to meet their needs.
We would not have moved on that agenda at all. So we have tried to do the two
things together: to improve the care services across the range for older
people, as well as addressing the glaring unfairness of the arrangements about
funding long-term care. We have drawn the line where we have drawn it. I
think it is in exactly the right place.
285. Why is it then that most people do not share your view on
residential care and think you have it wrong?
(Mr Hutton) We have an obvious argument to make and can have a
discussion about that. But we should not lose sight of the fact - I tried to
slip this into the argument earlier and I will try to slip it in again, it
might help - the argument is often presented as a choice between free personal
care or personal care that everyone has to pay for. In fact, as I said ---
286. It does not have to be.
(Mr Hutton) It is. As I said, 7 out 10 people in residential nursing
homes get all or most of their nursing and personal care costs already funded
by the state. That is the issue about personal care. We have 30 per cent who
get no help at all with their personal care costs. Now we have to make a
choice. We have made a choice about whether we invest one billion regardless
of a person's needs to deal with that issue. If we do that, we make no
further changes to the quality of older care services or we make the
investment in those services. That is what we have done.
287. I think I heard you right. You said basically that 70 per
cent of people in residential care have their bills paid for by the state.
Of that 70 per cent, what proportion is people who did not start having their
bills paid for by the state, but after selling their houses and their incomes
have dropped to 16,000 and have tapered down to 10,000 are now being paid for?
Because if that is the case, it is slightly misleading to try and suggest that
70 per cent may factually be having it paid now, if you forget that for a lot
of those 70 per cent they are only having it paid for by the state because
they have exhausted their own funds through selling their home or whatever
else, or using up their savings to the threshold.
(Mr Hutton) Clearly some of those who are getting some or all of their
care costs will be people in that category. I do not know, Mr Burns,
precisely what the figures are. If those figures are available, which allow
us to bottom that out, we will make them available to the Committee.
288. The way you put that figure is slightly, or seemed to be,
slightly misleading.
(Mr Milburn) There is quite an important point here. As you know
yourself, there are always choices and decisions to make about how best to
take forward public policy and how best to deploy public resources. That was
one point of agreement between the Minority and Majority Report of the Royal
Commission on free nursing care. The way we have defined nursing care has
been drawn rather more broadly than the Royal Commission suggested. Far from
suggesting that has not been welcomed ---
289. I was not suggesting, for one minute, that it has not been
widely welcomed.
(Mr Milburn) Let me finish this. It has been widely welcomed. It has
been widely welcomed in particular by the 35,000 people or thereabouts who
will pay on average œ5,000 a year. They will welcome it and so will their
families. I believe that people will also welcome the other measures that
John has indicated that the Government will be taking. We are increasing the
capital limits. They have been frozen for very many years. We were not
responsible for that.
290. Hang on, Secretary of State. Factually, "very many years" is
a suitably vague term that does not bear reality. If you remember, Secretary
of State, it was the last Chancellor in the last Government who increased
those levels. I did not want to bring this in, but if you also remember,
Secretary of State, it was a Labour councillor in the north west who refused
to accept the will of this House and those levels ,and proceeded to charge
elderly people for their residential care. This went to the High Court and
the Department held with great relief when they won the case in the end. So
I think it is a little unfair to say that.
(Mr Milburn) Regardless, the levels have not been increased and now
they have been increased. Free nursing care had not been provided and now it
is going to be provided. That is true, is it not? It is also true that we
are enabling councils, because we provide more resources to them, to take
charges on people's homes on the point they go into care; so at the point they
go into care, by and large they will not have to sell their home. That will
be happening now. It did not happen in the past but there is a big choice
to be made about how best we take forward the improvement in nursing care
services. In the end I think it is quite straight forward, either we can spend
roughly a billion pounds as the Royal Commission suggested to us in the
majority report, although not in the minority report, providing personal care
for free for everybody. That will not provide a penny piece worth of extra
care for anybody, for any other elderly person, and it will certainly do
nothing to improve the standards of care or the provision of services that
elderly people need. That does not make it any easier a choice but I think
the right choice has been to do what the minority and majority report agreed
on, free nursing care, and the other changes that we will introduce - the
increase in capital limits and so on and so forth - and at the same time to
dramatically expand both the range of services that are available for people.
We have spent a lot of time talking about intermediate care today, and we will
be investing a lot of money in intermediate care and by 2004 there will be
around about an extra œ900 million going into intermediate care services which
had not been available in the past. We all know from our own constituents,
those elderly people who write to us and contact us, that the shortage in
particular of rehabilitation and recovery services is a real blight on their
lives and on their family's lives. In the end, although it is a difficult
choice, and although you ask about whether it was a waste of time having a
Royal Commission, of course it was not, because the Royal Commission came up
---
291. I did not say it was a waste of time.
(Mr Milburn) No, you asked the question about whether or not we
regretted going through the whole exercise.
292. No, I did not.
(Mr Milburn) It was neither a waste of time nor a waste of opportunity.
293. I did not say it was a waste of time.
(Mr Milburn) It was not either. I am telling you I do not think it was
a waste of time or a wasted opportunity. Actually we have actioned the
overwhelming majority of the Royal Commission's recommendations and on top of
that we have in addition invested, and are investing, a huge sum of money in
more services for elderly people and in improvements in the standards of care
which they receive. Now, arguably, that should have happened many years ago,
it did not and we are now getting on with the job.
294. One final question. You do not think though, on the
residential care side, there could have been a third way which was to look at
some form of insurance policy to help elderly people protect their capital
asset, which from your point of view and the Treasury's point of view would
not have involved the massive amounts of public expenditure if you had paid
for the whole bills of those people?
(Mr Hutton) We are generally in favour of the third way as you know,
Chairman.
Chairman
295. I noticed.
(Mr Hutton) You may not be. If you look at Chapter 5 of the Royal
Commission Report, Mr Burns, I think you will see the Royal Commission
themselves addressed this issue and felt that some of the proposals, that the
Government of which you were a member of had put forward, these issues would
not work, they were not practical, and it did not seem to be clear to the
Royal Commission who would benefit. We are not going down that route. We do
not think that is the solution to the problems in the way you have described
but we are currently looking at the whole issue of long term care insurance
products and the market for long term care insurance. The Treasury, who have
responsibility, of course, for this work, I understand are shortly to consult
on a range of proposals in this area.
John Austin
296. Can I turn to the PFI. Some people argue the new hospitals
are being built without any regard to how they may fit in with other
resources.
(Mr Milburn) Yes.
297. You have allowed PFI schemes to proceed in advance of
developing a national strategy for health care need. Was that wise?
(Mr Milburn) I think when we came to office we were faced with a
choice, and that was pretty straight forward. The hospital building programme
had stalled. PFI had stalled as an initiative, as you will recall. There had
been no hospitals built although there had been rather a lot of money spent
by the previous Government on consultants and on lawyers and by and large it
is a good thing to spend money on patients. I get lots of legal advice and
sometimes it is helpful, sometimes it is not. We had to get the hospital
building programme started. If you like, in some sense, in truth, we had to
create a market in PFI because there was not a market, there was not capacity
and there was not expertise out there. Now we have got that going and, of
course, there will be lessons to learn, of course there will. I think the most
important lesson for us is this: if in future we are building, as we will be,
more acute sector hospitals, more new hospitals because heaven knows the
National Health Service needs them, we have a stock of buildings which by and
large are pretty ancient - I cannot remember the figures but Colin will
probably be able to tell me the proportion of our infrastructure that is 50
or more years old and some of it dates back to Victorian times or before then
- clearly we have to modernise and we have to get new hospitals built but I
think the important thing is this, that as we are building new hospitals in
future what I will be looking for, whether they are procured, whether they are
bought either by Exchequer capital through the traditional public procurement
route or through the private finance initiative route, is what we are terming
technically as whole health economy PFI deals. In other words, we will only
sign a deal in future where we are able to demonstrate firstly that the needs
of the rest of the local health service have been fully taken into account
before the acute sector hospital is built, the impact it will have upon GP
services, community services and, indeed, social services and, secondly,
particularly in the next tranche of major PFI deals that we will be announcing
before too long, we will want to encourage more deals that encompass not just
the new hospital but new health community infrastructure, primary care
infrastructure and, where it is possible, social care infrastructure too. So,
if you like, some of the concerns that have been expressed in the past about
the adverse impact that building a new hospital in isolation from planning the
rest of the local health economy, we can deal with some of these concerns
through this route.
298. Is there a danger with some of the schemes we have got we may
be faced with outdated hospitals which do not fit in?
(Mr Milburn) That is true, frankly, whether you buy through the private
sector route or the public sector route, of course it is a danger. At least
in the PFI route, with respect, we can walk away from it at the end of the
term, whether it is 30 years or 40 years. If we do not want to continue with
the concession at the end of that period the National Health Service can
either walk away or the asset can return to it at the end of that period.
299. Is there not a problem that you need to adapt to change in
the mean time because you are locked into a contract?
(Mr Milburn) No, and let me give you a good example of where we have
been able to vary a PFI contract in the shape of the Norfolk and Norwich
Hospital, for example. I know that concerns were expressed there that in the
original outline business case and then in the full business case, and indeed
when the hospital started I think its building work, that sufficient provision
had not been made for general and acute beds, the number of beds in the
hospital. We varied that, we changed it, and I think we increased the number
of beds in that particular case by 144, if you like, during the building phase
of the thing. The other important issue is if you go around and talk to some
of the people who are responsible for designing these new hospitals, they are
acutely aware, as indeed they should be, that health technology and health
needs are changing so fast that whether in the future frankly we build a
hospital through private finance or through Exchequer capital, we are going
to have to have flexibility built into the very structures of the building.
We will have to have that in the future.
300. You have mentioned Norfolk and Norwich, the figures I have
are for 1995/96 bed availability was 1,120, pre-PFI it was 1,008, with PFI
809. If you look across all the PFI schemes the figures suggest that there
has been a 30 per cent reduction in bed availability.
(Mr Milburn) Let me give you the figures that I have got for Norfolk
and Norwich and then see if we can reach agreement. The total number of beds
at present for Norfolk and Norwich is 955, that is what I have at present.
The total number of beds provided by the PFI solution will be 953 so yes it
is true there will be two fewer beds in the new hospital. What that does not
take account of - and I can probably provide you with the figures for Norfolk
and Norwich, although you seem to be getting new advice - is the number of
intermediate care beds that have been provided in that area. As I was
indicating to Dr Brand, I believe we have not got enough acute and general
beds in hospitals. I have been absolutely clear about that and I have said
over the course of the next few years we are going to reverse a 30 or 40 year
trend and we are going to increase the number. I also believe, equally
profoundly, that what we cannot go on doing is just looking at the number of
hospital beds in isolation. What we need to be doing is planning the number
of beds in the whole care system, intermediate care, private residential and
nursing home, the support that is offered in people's homes, etc. Unless you
do that you will not get the sort of seamless care and the continuity of care
that people need. Now in the case of other PFI projects, they have increased
the number of beds in hospitals. In my own area - and I do not think it is
just a coincidence that it is my area in Bishop Auckland - the number of beds
at present in the hospital I understand they give at 308. Under the PFI
scheme they will be increased to 347. In the case of UCLH there are 660 beds
at present. They are going to increase to 664. So this rather fallacious
argument that is sometimes made - not by you, Mr Austin, but sometimes by
people who are quite sloppy in their thinking about this issue - is this idea
that somehow PFI has been a destroyer of beds. What has been happening over
the course of the last 20 or 30 years in the National Health Service is that
the number of hospital beds, particularly general and acute beds, has been
declining and has been declining quite markedly. Within the last Government,
within the last ten years, I think they got rid of 40,000 general and acute
beds. Now my own view and the Government's view is that this state of decline
cannot go on. Certainly what I can say to you today is that in the next
tranche of new hospitals, whether built through PFI or not, overall I would
be expecting to see not a decrease in the number of hospital beds but an
increase in the number of hospital beds. Now that has to be the situation
because otherwise frankly we are not going to be able to do what we promised
in the NHS Plan, which to grow the number of general and acute beds in
hospitals and realise what we need to have realised which is more capacity in
the NHS, precisely so we can treat more patients and get waiting times down
in the way we envisage.
301. Could I ask you on the Norfolk and Norwich case, which maybe
you would like to deal with in correspondence with the Committee, because I
do not expect you to have the figures at your disposal, can you tell us how
much it costs to vary the contract to create the additional 144 beds in
Norfolk and Norwich. What was the impact on that?
(Mr Milburn) You are right about that. I do not know the figures. We
will endeavour to get them, perhaps even during the course of hearing. If
not, I will have to provide you with the information. You know, I think there
is a great mythology around PFI. Frankly, there is a great industry around
PFI too. There is a very critical industry around PFI and, of course, we have
a list of what people say. But some of the analysis is just fallacious,
frankly. The idea, for example, that we would sign off a deal for a PFI
hospital and that we would do that in the face of an argument that it did not
represent value for money, I wold be the first person before the Public
Accounts Committee.
302. Is it not true that various cases have been approved which
are based upon shifting costs out of the NHS into continuing care or whatever,
without the sources having been secured for the expansion of those facilities?
(Mr Milburn) I would love to see the examples. I will say this to you,
Mr Austin. Every time we have - and there have been, as I have said, a number
of pretty ropey and rudimentary analyses of the problems in PFI, including
individual PFI deals - but let me tell you, every time we have one of these,
whether at North Durham or elsewhere, when we have examined the situation the
analysis has turned out to be wrong. Just bear in mind an important point of
comparison. In Dr Brand's area the National Health Service right now is
paying through the nose for the failings in public sector procurement where
we built a new hospital there, St Mary's on the Isle of Wight. It massively
ran over cost. I think it probably ran over time. It doubled in cost. Then
when it had been built we found that they had the cladding of the hospital
wrong and we had to invest a further œ26 million putting right what public
procurement had got wrong. I do not say that the PFI initiative is perfect.
It will evolve. But the idea that somehow or other this represents bad value
for money for the taxpayer and a poor deal for local communities and that
somehow the answer is precisely the form of traditional public procurement
which is delivered cost over-run and time over-run, time after time, is simply
wrong.
303. But you are saying that the reduction in beds, that is
implicit in all of the PFI schemes, are not as a result of PFI?
(Mr Milburn) No. I think the Committee was provided with the figures.
I asked officials in the Department, after we had published the National Beds
Inquiry, to analyse the compatibility of the various hospital schemes that we
have on stocks with the National Beds Inquiry findings. In particular, to do
an assessment of the number of beds. It is true that under PFI deals - Colin
may well have the figures under this - there were 34 schemes at over œ10
million in value, which are currently in procurement. 25 were PFI projects.
Nine were publicly funded. In the 25 schemes, the ones provided under the PFI
initiative, there were 326 general and acute beds lost. That is true. My
arithmetic suggests that is an average loss of approximately 13 beds in each
PFI deal. By contrast, in the nine publicly funded schemes - the publicly
funded schemes - there were 208 general and acute beds lost. Now, I have not
done the arithmetic properly, but I guess that this is a loss of 23 beds on
average. So the idea that it is PFI that is the destroyer of general and
acute beds is proven wrong by this analysis; and, in addition to that, that
overall whilst there has been a loss of 536 general and acute beds in these
34 schemes, that was more than counterbalanced by the provision of 756 other
beds, giving a net gain of 222 beds. What is happening in the health care
system and the drivers of change is that they have precisely nothing to do
with PFI or the way we procure or buy or run new hospitals. They have
everything to do with the long running trends that we have seen in this health
care system and every other health care system where there is more
through-put, there are more day places, there are more short stays in
hospital. My own view - just to repeat this for the benefit of the Committee
- is that this trend has to come to an end because what we now want to do is
to dramatically increase the number of patients that we are treating and
dramatically improve the waiting times that they have to have for treatment
and, as a consequence of that, for its first time in 30 years, over the course
of these next few years, whether it comes through PFI or whether it comes from
Exchequer capital, we have to see an expansion in the number of general and
acute beds and a expansion of the number of beds in the whole care system in
total.
304. I might be more reassured by your answer if I knew what the
base line was for your calculation of gains and losses.
(Mr Milburn) I will quite happily provide that to you in writing. I
hope that the Committee will take seriously the figures that I did not
specifically commission for the Committee but certainly were commissioned for
the National Beds Inquiry and which proved categorically once and for all that
some of the sloppy thinking around this is simply wrong. It is not the way
that you procure that hospital that counts but the results that change it all.
305. Can I get points on the record which you may not answer
because I know the Chair wants to move on but which I think are important.
One was in relation to the question of transfer of clinical services as part
of the PFI deal. On whether you encourage or discourage it or whether the
Department has actually commissioned any work on transfer of clinical
services.
(Mr Milburn) As you will be aware only too well, the Government has a
manifesto commitment about clinical services. That is the manifesto
commitment and since we were elected on it - not transferring clinical
services- that is what we will stick by and that is what we are doing.
306. There is no research on that?
(Mr Reeves) We have not.
(Mr Milburn) Believe it or not, the Department has all sorts of bits
of research which I am not aware of sometimes. I will gladly check for you
if that is helpful.
307. May I put a question about table 4, 8.11. Pages 156, 157 on
our document. The question is in the figures you quote there, you provide
figures for trust income and capital charges. What I would like to know is
whether you can explain the statement counting the costs which make up the PDC
and the depreciation of pre- and post-FPI. This is because there seems to be
under PDC dividends a substantial increase post-PFI. I am looking at in
particular Calderdale, Dartford, Gravesham and St George's. I would like to
know why trusts with PFI schemes are paying both PFI charges and PDC dividends
and why there has been such a hike in the PDC post PFI?
(Mr Milburn) Very good question, Mr Austin. Mr Reeves will provide you
with a very good answer.
308. I think he tried to answer it last week.
(Mr Reeves) I did indeed. In terms of table 4.8.11 you have an
analysis in terms of first of all the unitary charges in respect of the PFI
scheme and the remaining payments in terms of the public Exchequer capital
utilised in the past so you will have a combination of both, the new PFI
scheme and the unitary payment associated with that, but also in terms of the
existing capital charges in terms of Exchequer capital. I should make one
point, you will get one difference in the sense that we have changed the
trust's financial regime so in actual fact the analysis - I think I explained
this last week - in terms of public dividend capital as opposed to interest
bearing debt has changed because the Government took the view that two years
ago interest bearing debt was a quasi commercial manifestation so we felt it
would be more important in the future to focus on PDC.
309. At the end of the day what does it cost the trust? You may
have changed the method of accounting but what will it be to the budget of the
trust?
(Mr Reeves) Can we give an example. Calderdale is one where what we
are suggesting here is the income from the trust in actual fact once the PFI
deal has been signed has actually increased from 80 million to 100 million.
Of that additional 20 million, 15 million relates to the unitary payment in
terms of the PFI scheme and because some of the existing Exchequer capital
will have been replaced by the PFI capital you would expect a diminution in
terms of both depreciation and PDC dividends. That is shown again in terms of
Calderdale with figures falling from œ1.6 to 1.2 in terms of depreciation. In
actual fact there is an increase in terms of PDC dividend but that is mainly
a reflection of the fact we changed the trust's financial regime in terms of
repayment of debt.
310. In Dartford it is a drastic change from 1.4 million to 4.3
million.
(Mr Reeves) I do not have information, I am afraid.
311. It is on page 157, table 4.8.11.
(Mr Reeves) Using the same logic in terms of Dartford, what we are
suggesting there is the income of the trust has marginally reduced, although
I have to say the vast majority of the figures in this table indicate an
increase in income. What we are suggesting here, in terms of this one, there
is no indication about what the additional unitary payment is as a result of
the PFI scheme.
Chairman
312. Would you like to get back to us on this point?
(Mr Reeves) Yes.
John Austin: I think we would all like an idiot's guide.
Chairman: A few idiots would welcome that.
Mr Gunnell
313. If I can make an observation on an earlier discussion first.
It seemed to me the Royal Commission was only keen on the integration of
nursing care and personal care if personal care was free at the point of
delivery. It seems to me that also ties up with the question which I want to
come on to which is the question of Care Trusts. As I understand it, your
proposals for the new Care Trusts and the Commission's role do seem to me to
be very much in line with the suggestions we made to you and in our report on
Health and Social Services. It seems to be moving forward in that direction.
Therefore, one is an observation which I think ties in with it. How do you
imagine the future for social services departments in local authorities when
we have moved forward and we have the brand new Care Trusts in place? How will
the accountability of the trusts to local authorities be put into practice?
Will local authorities have a role, say, in what happens in the trust?
(Mr Milburn) First of all - I will bring John in in a moment - I think
the introduction of the Care Trusts is pretty much in line with what Members
of the Committee, and I think the Committee, have been arguing for some time.
314. A long time.
(Mr Milburn) Actually for the benefit of planning purposes within both
services, health and social care, but most importantly of all the benefit of
patients receiving the service, it will be helpful to have one organisation
dealing with both planning and provision in the form of a Care Trust.
315. Yes.
(Mr Milburn) Interestingly, although there is still further work to do
on, for example, fleshing out the Government's arrangements, we are getting
quite a high level of interest in the Department from both the NHS side of the
fence and the Social Services side of the fence about voluntarily forming Care
Trusts, and that is very, very welcome. I think that indicates that there is
an appetite, if I may say so, not just in the Committee and not just amongst
those who take a strategic oversight of the care system but on the front line
too. I think people are very, very frustrated indeed at the way 
