UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 26-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE THE

WELSH AFFAIRS COMMITTEE

Cross-border provision of public services for Wales: follow-up

Wednesday 2 December 2009

MR MIKE O'BRIEN MP, MR BOB ALEXANDER AND MR PHIL WOOLAS MP

MR DAVID LAMMY MP, MR JOHN NEILSON, MR MICHAEL HIPKINS

and MR JOHN LANDERYOU

Evidence heard in Public Questions 35 - 125

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Wednesday 2 December 2009

Members present

Mr Phil Willis, in the Chair

Mr David Jones

Alun Michael

Albert Owen

Mark Williams

________________

Memorandum submitted by the Department of Health

Examination of Witnesses

Witnesses: Mr Mike O'Brien MP, Minister of State for Health Services, Department of Health; Mr Bob Alexander, Director of NHS Finance, and Mr Phil Woolas MP, Minister for the North West, Regional Minister, gave evidence.

Q35 Chairman: Good morning, and welcome to the Welsh Affairs Committee and this inquiry into Cross-border Public Services Provision. Would you like to introduce yourselves, please?

Mr O'Brien: I am the Department of Health Minister of State. On my left is Bob Alexander, who is the head of NHS Finance.

Mr Woolas: I am the Minister for the North West of England and, I reassure you, Chairman, not here as the Board of Control Minister!

Q36 Chairman: I thank you for your sense of humour, and hope that you still have it at the end of the session! Could I begin? We are very appreciative of the fact, certainly I am, that we now have a much stronger sense of partnership between the UK Government and the Welsh Assembly Government; the very fact we have regional ministers appearing before us is an interesting and welcome development. Are you confident that the revised protocol for cross-border healthcare commissioning has solved the funding problems we identified in our earlier Report, both at the national and the regional level?

Mr O'Brien: As far as the protocol is concerned, we have only had a relatively short time for it to be in operation. It seems to be working very well at the moment. It would be perhaps over-optimistic for me to say it solved all the problems indefinitely but what we have is a two-year period to ensure that we have dealt with most of the issues around the funding. It does not deal with everything but is focused particularly on some of the funding issues across border and GP registration, and then we will revise it at the end of the two year period and try to run it in three year periods in association with the spending reviews, so we can keep it up to date and ensure that we deal with problems as they arise.

Q37 Chairman: On a practical level, how do you react to reports that people are still being refused treatment across border?

Mr O'Brien: They should not be. The whole aim of the protocol was to ensure that there was clarity about how funding would be organised, and from what we are gauging at the local level we are not picking up a lot of complaints, unlike some time ago when there were issues around this, so if there are particular problems that people have then we would be very interested in making sure that the PCTs that are involved know about it and also, if there are wider problems, that we get to hear about it in the Department of Health so we can identify what the nature of the issue is and try and resolve it. Relationships, as you say, are very good at Welsh Assembly Government level and at our level, and I think everyone is satisfied that the negotiation of the protocol, which Bob Alexander headed up for us, was well done and seems to be the basis upon which we can all say we are satisfied at the higher level, but if a problem is arising at the grass roots then we need to know about it to make sure it does not happen again.

Q38 Chairman: Would these be matters of discussion at ministerial level? Would you be having a discussion with the Welsh Health Minister on these practical issues?

Mr O'Brien: Normally we would expect it to be resolved at a local level. It is only if it needs to be escalated that it would be. At the moment, as far as I am aware, we have not got any particular issues that we are seeking to resolve. There is always on-going dialogue but it is normally resolved at a local level.

Mr Alexander: The protocol in itself does have a dispute resolution process which has an escalation path built into it, so we would expect the initial engagement to be between the PCT and the Local Health Board. If there were still on-going problems we would expect that to be brought up to a regional level, and if there were still issues of dispute then we would bring it forward for formal discussion between departmental and Assembly officials, but, as the Minister said, as yet the feedback I am getting from the NHS side is that the protocol has been well received in all the regions that it covers, and I am not aware of any specific issues that have needed to invoke that escalation process to my level, say.

Q39 Albert Owen: Just taking that a little bit further, I hear what the Minister says, it is a relatively new protocol and was set up to deal with specific issues. How is this monitored and how transparent is that? When we did the first inquiry we had a lot of anecdotal evidence, but nothing was really put down and monitored and it was not very transparent, and we had difficulty in finding out what was going.

Mr O'Brien: What we have are two mechanisms, one in the process of being established and one already operating, and that is West Midlands, North West and South West SHAs are co-ordinating with the Welsh health authorities to ensure they are able to resolve things at their level. What we are also seeking to do is establish a new border officials group, officials from the Welsh Assembly Government and the NHS in England, who would then be able to liaise at a higher level. The aim of the latter is not so much to deal with individual problems because they are expected to be dealt with locally, but to deal with issues that have arisen as a result of problems in the way in which administrations function. Any problems with the protocol, in other words.

Q40 Albert Owen: Do you think it is fair to say that when devolution was set up this was an area that was overlooked, and we are catching up years later?

Mr O'Brien: I was not directly involved in the discussions around the detail of devolution so I cannot say the extent to which it was discussed then and whether it was overlooked. There have been some difficulties over the last few years which have needed to be resolved in the protocol, and our understanding is that so far that is working well. Certainly at our levels people are broadly content, but that does not mean that no problems will arise at all.

Mr Woolas: Perhaps I can help, Chairman. At the very local level there is the Strategic Health Authority, the North West along with West Midlands and South West on the cross-border group. For our region it is the West Cheshire PCT that is the main PCT involved. That body is also part of the Central Wales West Midlands Cross-border Health and Social Care Group; even though it is not in the government office of the West Midlands area the geography makes sense. We have also established a link with the PCT with the North West Specialised Services and the National Secure Mental Health as the lead PCT on cross-border issues. We have also got into place local arrangements on swine 'flu preparation and response. The advice I got in the run-up to this meeting was that the involvement of the PCT is helping to improve matters but they are still focusing on some areas that I mentioned, in particular swine 'flu. Also worth mentioning, to be helpful, is that in our part of the world the geography is such that the Countess of Chester hospital is the main centre, and the problem we have had in the past, which still exists to some extent, is the awareness of patients on GP referrals. We think, and I am advised, that we are on top of that, but that might be an area your Committee would want to look at.

Q41 Albert Owen: That is an area we will come to shortly. You have named a lot of bodies there. Are you confident that it is easy to monitor and that it is transparent?

Mr Woolas: The other point to take into account in the ten years since devolution is the evolution of the structures of the Health Service in the area itself, and the movement of the primary care groups and primary care trusts. My own view, and this is not one particularly from North West Health, is that the coterminosity of the PCTs and the new local authority arrangements, which have also recently changed because of the re-organisation of Cheshire - at their request, not at Government imposition - has made it better to provide joined-up services with Social Care and Health, but again that is very early days. It is only recently that those are new unitary bodies in what was formerly the county of Cheshire, and is now West Cheshire with Chester.

Q42 Mr Jones: The new protocol, as I understand it, also involves the transfer of about £12 million from the Department of Health. Is that transfer to the Welsh Assembly Government or to the commissioning bodies in Wales?

Mr O'Brien: There is not a straight answer to that in the sense that it is via our arrangements but it will go to their health authorities and therefore it will end up funding them, so probably it will go through the Welsh Assembly Government structures.

Mr Alexander: That is right.

Q43 Mr Jones: But effectively ring-fenced for the benefit of --

Mr O'Brien: It is health matters.

Q44 Mr Jones: Looking forward, is this £12 million assured for subsequent years or just for this year?

Mr O'Brien: The aim is it would be there for the two-year period. It is not envisaged that it will particularly change for the following spending review, but what we wanted to do is try to line them up to some extent with the spending review.

Q45 Mr Jones: And effectively the purpose of this is to enable Welsh commissioners to pay English hospitals on an English basis rather than a Welsh basis?

Mr O'Brien: Yes.

Q46 Alun Michael: Can I say I welcome the engagement; I think it is the first time we have had a Regional Minister ... (technical interruption) ... Wales does have a very long and porous border and it often gets very personal. For instance, my father lived most of his life in North Wales but died in a hospital on the Wirral, and many people have that sort of experience particularly in relation to the Health Service. I think Phil Woolas' reply to the last question indicates an engagement of this sort. Do you think that the role of the Regional Minister is going to improve relationships across the border in future?

Mr Woolas: Chairman, I do. What having a Regional Minister does, hopefully, is enable policies to be better co-ordinated at the local level, because if one takes the Health Service, of course we have the regional SHA as the main body with PCTs, specialists, mental health, we have the Alder Hey children's hospital, for example, in the North West which is the main provider for North and North East Wales for some of the most difficult and emotive cases, so what one is able to do is make sure as best one can that health policies and social care policies in this area, but it may be also transport, are better co-ordinated. I would not claim that it was systematic and comprehensive, but I would claim that the presence of a Regional Minister forces that question to be asked, whereas it did not before.

Q47 Alun Michael: I think it is something we may take an interest in because obviously it is going to develop over time, so I am grateful for that response. There is a draft Directive on cross-border healthcare which is currently being negotiated in the EU, and perhaps slightly with tongue in cheek can I ask whether that Directive would make it easier to go to a foreign country in Europe to seek treatment than across the border between England and Wales?

Mr O'Brien: As far as the Directive is concerned, I do not deal with the substance of it. It will have little effect on England and Wales because it recognises the UK as a Member State and, therefore, is dealing with relationships between one Member State and others, so it is between us and the Republic of Ireland or France or whatever, rather than between England and Wales. As far as England and Wales are concerned that is regulated by domestic agreements and not by the EU Directive, and just to be sure that this is the case and that there is no involvement of the EU in that relationship, the Directive we have already negotiated will recognise the devolved nature of health in the UK and that is a domestic matter, not a matter for the EU.

Q48 Alun Michael: It is helpful to have that spelt out, but this is an area where healthcare is largely devolved but EU negotiations are a reserved matter. I have some experience of that on both sides of the fence in the field of agriculture, for instance, where ensuring that a UK position dealt with the different agriculture industries of the four UK nations, which is sometimes quite a sensitive issue. So in those negotiations, on which the Government has the lead, has the Department of Health been working with the Wales Office and with the Assembly on ensuring that any devolved issues are taken into account in our negotiating position?

Mr O'Brien: The straight answer to that is yes. We would engage with each of the devolved governments in order to ensure that their particular circumstances are taken into account. There are not substantial but nonetheless there are differences in terms of policies of some limited significance, and we need to ensure we take those into account when negotiating arrangements with EU partners. We would, therefore, liaise with not only Welsh Assembly Government but also with the other government administrations in order to ensure we take that into account in negotiations. So the answer is yes.

Q49 Alun Michael: But also with the Wales Office?

Mr O'Brien: And also with the Welsh Office, yes.

Q50 Mark Williams: In response to our report you referred to the establishment of the cross-border policy group and there was a reference to it meeting quarterly to address those policy divergences. Has that happened? I think you said it is happening.

Mr O'Brien: Yes. It has not happened yet.

Q51 Mark Williams: How advanced are we in getting that group established?

Mr Alexander: We would want to try and get that up and running in the New Year. The NHS in Wales has had some recent change in my opposite number, and we wanted to be able to get to a position where that group brought together the people who would be taking matters forward, rather than people who may be there at one time and then changing. We also wanted to allow the protocol to bed in a little bit so we can see how the protocol has operated for a number of months in this financial year, to then inform how we need to think about it going forward into future spending review periods, given what the Minister had said before about how this piece works until the end of 1011 and we want to look at then taking something on a more regularised cycle.

Q52 Mark Williams: Government response also referred to the local cross-border action groups building on the model of the Central Wales-West Midlands Strategic Forum, which we have heard about. How many of those groups have been created?

Mr Alexander: I do not have that information with me. I cannot tell you what the make-up is. What I can tell you is that all the relevant Welsh Board and PCT and SHA organisations are appropriately represented, but I am afraid I do not have the detail of meeting frequency here.

Mr O'Brien: What we have is essentially a group which represents North West, South West and West Midlands, the main border areas, who have joined up to meet with their Welsh counterparts, so there is a group that co-ordinates it. However, there will be meetings taking place between officials at official level - whether you want to call them a group it will be a regular liaison to resolve any local issues, they probably sometimes do not even meet but deal with each other over the telephone - so these contacts are frequent. I would not say they occur necessarily daily, because they probably do not have to occur that often, but extremely regularly.

Q53 Mark Williams: At the time of our earlier inquiry Wales was in the throes of the re-organisation of the Health Service. We have now seen the amalgamation of Welsh Trusts and Local Health Boards into three multi-purpose bodies serving north, mid and south-east Wales. What has been the impact of cross-border provision following that reorganisation? I know it is early days.

Mr O'Brien: Not a lot because when the protocol was negotiated we were aware that changes were taking place, and therefore the protocol took into account the fact that these changes would be taking place, and we do not anticipate that will have any significance in relation to the operation of the protocol itself.

Mr Woolas: First, for the North West, the PCT that leads, the Western Cheshire PCT, also acts as the link PCT for Welsh authorities as a channel, as it were, for North West Specialised Services which includes cancer treatment, Alder Hey, as I referred before, and the Mental Health link, so that if there is an issue in the North West on those areas specialising in mental health the West Cheshire PCT, as well as feeding into the larger body, acts as that link. There are a number of other - if I can use the phrase - organic links that we have and that we are developing underneath the protocol. For example, dentistry, and A&E issues. I have mentioned Alder Hey already, and it may be helpful if I mention in the West Midlands on behalf of my regional colleagues that there has been a review of services in Shropshire which includes that link across the border as well. The Telford and Wrekin PCT, Shropshire County PCT and Shrewsbury and Telford Hospitals Trust carried out a review of the configuration of health services in Shropshire last year with a mind to the cross-border areas. There are a number of others that I am aware of, including, importantly, the research in Gloucestershire that has been undertaken in GP relationships for Welsh people, and that research will also feed into the other PCTs down the border and falls under Mike's umbrella of the regional body, so there is an organic, non formal relationship as well, which, of course, Members will be aware of.

Q54 Mr Jones: Could I move on to the issue of the treatment of rare conditions? We are told that the National Specialised Commissioning Team has had discussions with colleagues in Wales about the feasibility of Welsh commissioners utilising the contracting model used for commissioning rare neuromuscular services in England. Do you know how those discussions have progressed?

Mr O'Brien: I will turn to Bob on the detail but it is right that the Welsh Assembly Government are looking at the contractual set-up in order to be able to have a flexibility in just dealing with the various methods used by the NHS in England, because having developed those contractual techniques it obviously gives them a choice as to how and where they decide to purchase particular kinds of services.

Mr Alexander: I have been informed that discussions are still going on: they are very inclusive: there is a lot of representation from not just Wales but the other devolved administrations, and there is a lot of clinical engagement. This might be an area we may want to follow up on with a supplementary comment to the Committee to be able to give you an accurate state of play at this point in time.

Q55 Mr Jones: What practical barriers are there to establishing a common contracting model across the UK for funding of treatment of rare diseases?

Mr O'Brien: There are differences in the way in which the two systems operate. The health authorities basically negotiate locally for the provision of particular level of services from different providers in Wales, and those are done on a direct local negotiation basis, whereas with the NHS in England there is, in effect, a market where providers may provide for a variety of services for purchasers who can come from a number of sources, so there is funding which can then be used to buy services. It is normally the PCT but it does not have to be a particular PCT; it can be PCTs from other areas. There are a number of ways in which the health market in England operates somewhat differently to the Welsh one. There were some issues in relation to that but if it were the case that the discussions which are on-going in relation to the use of contractual models by Welsh health authorities enabled them to have a greater degree of choice about where they purchased, then that would be helpful in just enabling them to directly engage and purchase various facilities as and when they needed them.

Q56 Mr Jones: The basic problem, put simply, is that Welsh commissioners do not pay at as high a rate as English commissioners?

Mr O'Brien: That is not quite the case. The Welsh health authority will purchase at its own local rate and it will not be necessarily the NHS tariff used in England. However, if a Welsh health authority purchases a service in England then it will be able to purchase it at the tariff rate in England and the £12 million you referred to earlier is in order to enable Welsh health authorities to purchase English services at other tariff rates from English hospitals.

Mr Alexander: If it would help, I think we need to remember that already there are Welsh agencies currently using specialist services in parts of England, Bristol and Liverpool being the obvious places. We also have to remember that clinically specialist services by their nature are best placed where you have large population sizes to ensure that your specialists really are able to develop and hone their skills, so even in England a number of specialist centres are relatively limited and are driven by the population bases which they cover. To clarify a point that the Minister was responding to, a number of specialist services do not come under the English national tariff system anyway just because they are so specialised it would be very difficult to produce a national price for what they do. These are local rates for treatment which are negotiated with English commissioners and Welsh commissioners, and the point of trying to get the national picture together is so people have a commonality about how they go about that process. My understanding is that that is going fairly well.

Q57 Mr Jones: Returning to the point about the £12 million, it does look from the outside suspiciously as if Department of Health has bailed out the Welsh Assembly Government in this area.

Mr O'Brien: It does not look particularly like that to us. The tariff where it applies will be generally at a higher level than the level normally used in Wales to purchase a similar medical facility or service, and that tariff is just higher. In order to ensure, therefore, that in effect there is not subsidy the opposite way, we make a payment to Welsh health authorities so they can basically purchase services in England at a tariff level where the tariff applies, which would be for operations and things like that.

Q58 Albert Owen: A good deal for Wales.

Mr O'Brien: I think it is a good deal generally from our point of view in England as well as from the point of view of people in Wales. When the protocol was negotiated we both took the view that this would work in a way that would enable patients to get service without all the hassle that sometimes accompanied these cross-border issues for a period of time.

Q59 Alun Michael: There has been a suggestion that the Foundation Trusts who serve both sides of the border in a number of places across England and Wales are not bound by the disputes resolution process that is in the cross-border protocol. Is that correct? If so, how do you intend to deal with that?

Mr O'Brien: It is a good question. We will double-check but, as far as we are aware, they are completely bound. Certainly it was the intention that they would be completely bound. However, you have raised something which I want to double-check and confirm.

Q60 Alun Michael: I would be very grateful and I am happy to leave it on that basis. It was the implication of some of the things that we were told originally, and if it is not true and that has been dealt with, then that would answer the --

Mr O'Brien: I have been handed a note saying "work is on-going to resolve this issue", so there are still some doubts about quite whether they are bound or not. It looks like they may not be in some respects, but we need to sort it out.

Q61 Alun Michael: I am grateful for you acknowledging that there is something to be resolved and it would be helpful to be updated on that.

Mr O'Brien: We will do that.

Q62 Alun Michael: Following on the questions asked about specialist services, in evidence that we have had previously there have been specific concerns raised in relation to specialist services for muscular dystrophy. In the evidence we had at one stage it was not clear whether this was an England-Wales situation or whether there were issues between different regions of England in terms of provision of services.

Mr Woolas: We looked at this, Chairman, because, as Bob mentioned, Liverpool is one of the two key centres along with Bristol. I am informed that as part of the national specialist care that neuromuscular services fall under there is also access to Great Ormond Street, University College London, Newcastle and Oxford Radcliffe. The National Specialised Commissioning Team is in discussion with colleagues in Wales about the feasibility of Welsh commissioners utilising the contracting model used for commissioning rare neuromuscular services for English patients, so there is a development in that regard, and I think this has been driven because of the connection with Liverpool as the major centre, and Bristol obviously further to the south. You have received evidence, I think, on this which we are aware of.

Mr O'Brien: Just to add to that, there are also four nationally commissioned centres providing specialised neuromuscular care at Great Ormond Street, University College London, Newcastle, and Oxford Radcliffe, so there are services which are able to be accessed just across the border in Bristol and Liverpool, as has been indicated, but also wider commissioning, because it is such a specialist service, particularly for neuromuscular provision.

Alun Michael: I was indicating it was a wider issue than just a cross-border one, but I am grateful for that and any information about the developments that we earlier referred to.

Chairman: We were very much aware in our earlier inquiry of the disparity between England and Wales on the issue of muscular dystrophy, and that was confirmed by the major report that came out in September produced by the muscular dystrophy campaign. No doubt you and your colleagues will have taken note of that.

Mr Jones: If I may say also, the muscular dystrophy campaign tells us that there has been a significant decline in services in Wales over the past year and that the provision of cross-border health and social care services varies greatly and there are many cases where an inconsistent haphazard approach by Local Health Boards and Health Commission Wales is evident. So I think there is a problem there that probably is still not being addressed and clearly where people are suffering from rare neuromuscular conditions it is a source of concern if they cannot access treatment.

Q63 Alun Michael: Phil Woolas has referred to a process addressing it, and I think we would be very interested in the outcome of that process.

Mr O'Brien: It is the case that we have opportunities for some of these services to be supplied in England. Obviously the Welsh Assembly Government will have to look at any facilities it wants to develop in Wales itself, but for many of the people we are directly discussing here along the border the capacity to deal with these issues. You do need, as Bob was saying earlier, a fair level of capacity in terms of sheer numbers of people to develop the specialism and keep that specialism constantly renewed and able to maintain skills. The specialisms are at Bristol and Liverpool and also in some of the other areas I have mentioned, and they are available to people in all the four areas.

Q64 Albert Owen: If I could go back to lessons learned from devolution, is there a best practice sharer between the nations since devolution and the Department of Health? You will recall there was big concern in Wales over the length of waiting lists, for example, and more recently the Secretary of State for Health has announced that car parking charges will no longer apply to England, which is something that happened in Scotland and Wales some time ago. So the general question is are all the components of the nations and the regions learning from each other under the umbrella of national health, and is there a sharing of best practice? I appreciate there will be different policy areas.

Mr O'Brien: Yes, there are different policies areas and, indeed, in England itself between different PCTs there are different practices, so in a sense having a slightly different policy adopted by one PCT and another, or by a Welsh health authority and a PCT is not new - and, indeed, anywhere in England at least. There are significant national differences but they are not that massive, and in a sense we expect that as a result of devolution. It is right that different devolved administrations are able to make their own choices, as it is the English system. Is there a best practice? We are working our way through developing the best way of relating to each other. Relationships generally, indeed even in Scotland, where there is perhaps a more contentious relationship politically, in practice between officials and even between ministers are reasonably good, and certainly with the Welsh Assembly Government the relationships have always by and large been good.

Q65 Albert Owen: Can I push you on the two issues I raised? Very crudely some people have analysed the reason for waiting lists in Wales being far behind as that they had other policy areas such as free car parking, and one of your predecessors when giving evidence basically said: "We are concentrating on waiting times", et cetera. Here we have the Department of Health saying it is going to go down the road of free car parking. It is not either/or, is it?

Mr O'Brien: It is a choice. We are not going down the route of free car parking at all NHS hospitals but free car parking for in-patients, and we want to introduce that over a period of time. It is not our view at the moment that the key priority for us is having all car parks free, that is a choice for others to make, but in England we have taken the view that we might move incrementally now to start to give in-patients the right to a car park and also to have a certificate to allow a visitor to park a car in the car park without having to pay. But that is going to be phased in, and in the meantime our view is that the priority for us is providing the hospital services and getting waiting lists down. I think that is quite right and we have had remarkable success at doing that. The typical waiting time is now about eight weeks for an operation. It varies depending on areas but that is a typical waiting time in England, so that has been the result of intense funding and effort by NHS staff in England. Without both of those it would not have happened and it did require making some decisions, one of which was we would allow hospitals to continue to charge for car parking and we would not put subsidy in there because we wanted to put subsidy into another area. It is the sort of decision that ministers, whether in the Welsh Assembly Government or the UK Government - the English Government in the sense of this particular issue, the English Health Service - have to make.

Q66 Albert Owen: But you understand the consumer in Wales, the patient in Wales, who pays the same level of National Insurance and taxation, had to wait a lot longer. Was there intense dialogue between your officials and ministers and the Department of Health to learn lessons on how you have done it in England to get them down in Wales?

Mr O'Brien: I know that they are looking at the way in which we have done it. We have, however, taken some decisions about how we operate the whole service, which I know for policy reasons the Welsh Assembly Government has taken a different view about. They are less keen on payment by results and the various other mechanisms that have been introduced in the English health system. It is the case that funding for health in Wales is somewhat higher than in England, about £1639 for Wales per head compared to £1547 for England for '06-'07, so slightly out of date, but it is the case that people have to make different decisions, and that is right. We have no problems with that.

Q67 Mr Jones: As you rightly say, Mr O'Brien, it is a question of ministers making decisions and the decisions that the Welsh Assembly Government decided to make was not to adopt the payment by result model. The consequence of that, as we have heard in our earlier inquiry, is that there have been significant delays for Welsh patients seeking treatment in English hospitals. If I may I would like to come back to the £12 million that your Department has transferred to the Welsh Assembly Government to enable the Welsh Assembly Government, or Welsh commissioners, to pay by results, which is a model --

Mr O'Brien: To pay tariff.

Q68 Mr Jones: To pay the same tariff, but on a model which the Welsh Assembly Government had rejected. I come back to the point I made earlier, it looks suspiciously like your Department has bailed out the Welsh Assembly Government which was quite incapable of commissioning or providing funding for commissioning at a level that would assure a decent level of service for Welsh patients?

Mr O'Brien: You can choose to characterise it inaccurately like that if you wish, it is a matter for you, but as far as we are concerned we accept entirely that a Welsh patient should use services in England. However, we took the view that the tariff at which we would insist these services were paid for is higher than that for Wales, and that is the decision we made. It suits us and, therefore, for our reasons, for the reasons of the English NHS system, we took the view that rather than to have to go through the administrative hassle of negotiating each deal with the Welsh health authorities, it would be better to ensure that that funding was available because it enabled us then to run an administrative system which was less bureaucratic than it would otherwise be. It is a matter for Wales. If Wales does not want to adopt the PbR system and it works better for them in a different way, that is entirely a matter for Wales. However, as far as we are concerned, from our point of view, we took the view that this transfer of funding in that way enables us administratively to have a less bureaucratic, less difficult, more straightforward, approach to use of English NHS surgery by people from Wales.

Q69 Mr Jones: And it was not related in any way to the political embarrassment of Welsh people complaining they were receiving a second class service in English hospitals?

Mr O'Brien: It was the case that we wanted to ensure that Welsh patients who used English hospitals got the same quality of service as English patients, and we have always tried to ensure that that was provided. I am not sure why you characterise it in the way in which you do, there may be political reasons for that, but, as far as I am concerned, the English Health Service has always tried to treat patients as patients and not tried to distinguish in that sense between Welsh and English patients. The NHS has a professional obligation to treat people properly. There was, however, an administrative issue in terms of the funding arrangements which was the reason why the protocol has been arrived at.

Q70 Alun Michael: Turning to the positive side of differences rather than concentrating on perceived problems, would you agree that having different policy decisions gives an opportunity for evaluating their respective effectiveness and, for the benefit of patients in the longer term on both sides of the border, for those comparisons to be made, and in that context would you agree that we need more comparative research evaluating on a sound basis the healthcare approaches adopted in different parts of the UK, not just on the English and Welsh side of the border but in Scotland, Ireland and north of the border as well?

Mr O'Brien: It is the case if I go knocking on the doors in North Warwickshire, which is my area, I sometimes get people saying, "But in Scotland they get this ... " or "But in Wales they get that ...", to which the answer is of course that is them making the choice about the way in which they spend their taxpayers' money, it is a choice, but it does enable voters to, as you say, compare the different decisions that ministers made.

Q71 Alun Michael: Indeed, but I was going to a slightly different point which is --

Mr O'Brien: Effectiveness.

Q72 Alun Michael: -- to enable not just voters but Health Service professionals and administrators, ministers indeed, to evaluate effectiveness of different approaches, we need the data, we need the research. Is effort being made across the UK to have effective evaluation of the outcomes of different policy decisions, not in order to blame or say one is worse than the other but to learn from differences in terms of improving long-term care for all?

Mr O'Brien: There is no major project to carry out that sort of research. The acceptance at this stage is that the various authorities will take different decisions, and that is as it should be. It is sometimes difficult just in terms of data to make comparisons. The different UK countries, for example, collect data on waiting times in different ways and on different criteria.

Q73 Alun Michael: Indeed.

Mr O'Brien: So you would have to do considerable research to bottom out that data and to try to make comparisons. How far it would get you and what you really learn from it I am not sure. However, what I think there is probably room for is some work on the effectiveness, the efficacy even, of different management techniques for delivering services themselves, and what really works. We were hearing earlier about payment by results, and that has been a source of a lot of controversy in the English system. There are some who say that the Welsh system of negotiating is more efficient and effective. The reason we adopted PbR was that every time a patient, in effect, goes over the car park entrance there, ker-chink, the money rolls in and the hospital knows it is getting that money and it is all very clear. There is no limit. However many patients come in it rolls in, so in a sense that creates a market. If there is room for some managerial comparisons, when maybe a bit more time has elapsed in terms of seeing how PbR operates and also how the Welsh system of negotiation operates, we will be able to see which is best.

Q74 Alun Michael: My proposition is that we should not regard variations in policy decision as merely a matter for blame but as an opportunity to ask what works best, and perhaps more research into that over time is something that we ought to look for. Can I just pick on one practical example which has affected my own constituency and which the former Secretary of State for Health and the former Home Secretary has acknowledged, which is in Cardiff? An approach that came from a medic has resulted in very considerable reductions in violence in the city centre, and the evidence for that is a 40 per cent drop in the number of people presenting themselves at A&E as victims of violent crime. Professor Jonathan Shepherd has received criminology awards as a result but it has resulted in a benefit for the Health Service in terms of the reduction of people needing services. Is that sort of outcome being properly evaluated and shared across the Health Service on both sides of the border?

Mr O'Brien: I am sure it is being looked at by the Home Office and organisations that deal with law enforcement. Certainly there is considerable pressure on Health Services in England in particular, and I am sure in Wales too, where on a Saturday night people end up there because they are worse for wear in different ways, some of them because they are simply drunk and it is a place of safety, the police deposit them there, but also because of various injuries they have sustained. I am sure that work is being done to look at ways of reducing that level of difficulty in anti-social behaviour but I am not aware that the Health Service as such is separately doing any work. I think that would be primarily located in the Home Office. But you are right to say that, of course, if there was reduction in people coming into A&E for those sorts of reasons on a Saturday night, that would be a tremendous help to the NHS.

Q75 Alun Michael: My point is that it was instigated as a result of a clinical or scientific evaluation within the Health Service followed by a clinical approach to data on the part of both the Health Service and the Home Office.

Mr O'Brien: I am afraid I am not familiar with Professor Jonathan Shepherd's work.

Q76 Alun Michael: You will be shortly!

Mr O'Brien: I will be shortly! I am grateful.

Q77 Mark Williams: The Government's response to the Committee Report, despite what you have said, talks in terms of commissioning research into the impact of devolution on patient experience. Has that work been commissioned yet? Has there been a discussion with the National Assembly Government on the commissioning of that report, and will they be working with you to draw up that document?

Mr O'Brien: Patient experience is slightly different. What we need to do is have a resolute focus across the NHS on improving the quality of patient experience. I say when I talk to staff that patient experience with the NHS is defined by how a tired nurse at the end of a shift deals with a patient with Alzheimer's who is in some difficulty. That is the patient experience, the difficult one that we really need to do some work on to ensure that it improves. The research in Gloucestershire, which I think you are familiar with, in particular showed the way in which we needed to see what patient experience was like. NHS Gloucestershire did a survey of its own residents who are patients of Welsh GPs, and you may be interested to know that only 5 per cent of them said that they would prefer to have a GP in England, for whatever reason. That is some of the research that has been going on, but one of the issues that we would want to take forward as part of the cross-border officials group that is going to be set up in due course which we mentioned earlier is looking at how we can research to look at comparative patient experience in the Welsh and English NHS to see where we can look at that patient experience at a basic level and see how it can be improved.

Q78 Mark Williams: Have you had that discussion with the Welsh Assembly Government yet?

Mr O'Brien: No, that discussion would not go on at Welsh Assembly Government level, it would be at official level, and one of the jobs for the officials group which we are hoping to set up will to be look at where best that research should be carried out. This patient experience level is an area I am particularly interested in because if I get complaints as a constituency MP it is often about the way in which sometimes the NHS deals with patients, and we need to improve the quality of that. 93 per cent of patients say their experience is good or excellent. However, 93 per cent is not good enough.

Q79 Chairman: When we have the Welsh Health Minister before us one of the issues we wish to raise is the question of support for servicemen and women and ex servicemen and women and the interface between yourselves and the Welsh Assembly Government and also the Ministry of Defence. This merits a separate inquiry really, but I wonder whether you and your officials could go away and provide us with a note describing the interface and the provision, the support, for servicemen and women, ex servicemen and women, with regard to rehabilitation, mental health and so.

Mr O'Brien: I would certainly be very happy to do that note for you. We are very conscious, and indeed I was talking to the Surgeon General of the Ministry of Defence yesterday afternoon about this, about some of the issues that we now need to develop. We now have a situation where life saving in Afghanistan and previously in Iraq by the medical services is so well developed that the people who previously, sadly, would not have survived are now surviving, coming back, and are able either to leave the military or remain in the military and carry on their lives, but many of these servicemen may well have multiple health issues which need to be resolved in a much more co-ordinated way and they also need long-term healthcare planning so that they know what is going to happen to them in the future, particularly if they have significant and sometimes multiple disabilities. There is, therefore, not only a note worth doing on what we are currently providing but also some of the issues where we need to do some more developmental work to ensure that the veterans who have come out of conflicts that we are now in, and have recently been engaged in, are provided with the best possible quality of healthcare that this country can possibly provide.

Chairman: On that very positive note could I thank you, and also could I say that many of my constituents have drawn my attention to the Royal British Legion manifesto that raises all these issues in a very positive and constructive way. Thank you very much, all of you, for your evidence this morning.

Memorandum submitted by the Department for Business, Innovation and Skills

Examination of Witnesses

Witnesses: Mr David Lammy MP, Minister of State for Higher Education and Intellectual Property Officials, Mr John Neilson, Director, Research Base, Mr Michael Hipkins, Director, Student Finance, and Mr John Landeryou, Director, Further Education, Department for Business, Innovation and Skills, gave evidence.

Q80 Chairman: Good morning, and welcome to the Welsh Affairs Committee. Could you introduce yourselves, please?

Mr Lammy: I am Minister for Higher Education, and was a former Minister for Skills. I am joined by John Neilson, who is the Director of our Research Base; Mike Hipkins, who is responsible for Student Finance in the Department, and John Landeryou, who has responsibilities for Further Education in the Department.

Q81 Chairman: Could I begin by asking questions about Higher Ambitions? To what extent has the interdependence of higher education in England and Wales been taken account of in the directing of that document?

Mr Lammy: Officials liaised consistently in the process of writing Higher Ambitions with the Welsh Assembly Government, and indeed we feel that Higher Ambitions was a very good product of the most extensive consultation that you could undertake, because the process began 15 months ago with a debate across higher education, so there was maximum opportunity, if you like, to be engaged with the subject areas, and it was led initially by academics. Indicative of that, and I know that Jane Hutt gave evidence to you a few days ago, is that it is absolutely consistent with For our Future. Clearly the central themes, particularly of how higher education assists the system in this downturn and how we make the economy, and therefore the strategic direction and focus of research, important is reflected in both documents. So is employability and so is access. These documents mirror each other notwithstanding particular issues important to Wales, like Welsh language.

Q82 Mark Williams: Given the importance of cross-border flows of students between England and Wales, how will the consequences for Wales of any changes to the fee regimes be taken into consideration in Lord Browne's inquiry into fees?

Mr Lammy: Lord Browne has already indicated, of course, that he intends to take evidence and be in liaison with colleagues in the Welsh Assembly Government, and he has written, or is just about to write, to that effect. It is, of course, an independent review of fees, independent of Government, so I do not know what conclusions he and his Panel will reach. However, they have indicated that they wish to be as open and inclusive as possible, and clearly they will be cognizant of some of the cross-border issues across that bit of the country.

Q83 Mark Williams: And they are very significant, as we appreciated from the Westminster Hall debate when Jane Hutt was here. My constituency alone has about 18000 students, the vast majority of whom are from England. It is really quite fundamental.

Mr Lammy: All I would say is there was some anxiety last time around in 2003/4 upon the introduction of fees. We have only had the first cohort of students come out but if you look at the evidence there has not been substantial change between the cross-border flow, which remains more or less equivalent with many English students choosing to study in Wales. Indeed my predecessor, I think, was at Cardiff.

Q84 Mr Jones: Your Department has announced a review of non-departmental public bodies such as Research Councils and the Technology Strategy Board. How will you be taking the Welsh perspective into account when you conduct that review?

Mr Lammy: This is a wider call across Government to continue to examine the effectiveness of non-departmental public bodies and arm's length bodies. Clearly there is a distinction between those that affect England and those that have a UK-wide remit. My view is that the role of the UK Commission for Employment Skills is important; it is also patently obvious that the Student Loans Company plays a very important role and, of course, the Research Councils have a historic role, so you would expect absolutely the appropriate discussion and liaison to continue, not just at official level but at ministerial level, if there was particular concern.

Q85 Mr Jones: HEFCW has expressed concern as to any changes to structures or processes that, while they may make sense from an England-only perspective, could have unintended and perhaps also undesirable consequences for Wales. Are you able to assure HEFCW that their concerns will be taken fully into account?

Mr Lammy: Yes, I am, because as a funding agency of importance, of course, their views particularly in relation to their position and Funding Councils and others would be seriously considered.

Q86 Mr Jones: Higher Education Wales has suggested that now might be an appropriate opportunity for a Joint Ministerial Committee meeting to consider higher education and possibly co-ordination in the light of various reviews that are going on at the moment. Do you think it with be a good time now to have a Joint Ministerial Committee meeting?

Mr Lammy: I am hoping, if that is considered to be of merit across the piece, but I think that the last period has seen a lot of joint working. The Minister, when she was here, spoke about the Heads of the Valley initiative that mirrors our new University Challenge programme. As I have said, her document For our Future and the centrality of the economy within that and strategic funding and contestability of funding mirror Higher Ambitions; and collaboration across institutions is another area we are seeking to bring out in our system after a very competitive period, so across a range of fronts in relation to higher education, policy outcome demonstrates quite a lot of cross-working. I am absolutely open, however, if people feel that the presence of such a Ministerial Council would add value, to that.

Q87 Alun Michael: You have referred to collaboration between higher education institutions, and clearly that is becoming more and more important all the time at a whole series of levels both within the UK and between UK institutions and institutions abroad. As far as your policy is concerned in respect of higher education institutions in England, and obviously we have to ask a mirrored question to the Welsh Assembly Minister, is it your policy to encourage cross-border collaboration between higher education institutions in England and Wales?

Mr Lammy: What I have indicated is that the fiscal climate over the next ten years will be much tighter than it has been, and that is the whole thrust of Higher Ambitions. We are obviously hugely proud across the UK of the position of higher education institutions on the international league tables in both England, Scotland, and indeed Wales. To maintain that competitive edge it does mean that we have to be absolutely focused on excellence; we have to be absolutely focused on the importance of multidisciplinary and interdisciplinary practice in this important age; and we have to be focused on growth areas. We have indicated that the digital economy is a growth area, and so has Jane in Wales, and we have indicated that the low carbon economy is important and that has been replicated. Life science has also been key. That means also greater collaboration, and I welcome the collaboration that exists currently between Cardiff and Bristol and between Bangor and Reading, between Glendower and Chester. All of this is indicative of the journey that we need to continue to go on. For institutions in England more collaboration over this next period, more co-operation and more working together is the thrust of what we are saying in Higher Ambitions, and that must include, of course, institutions in collaboration with institutions in Wales.

Q88 Alun Michael: In simple terms, therefore, the answer would be yes and the rest of your answer is demonstrating how that is the case, would that be correct?

Mr Lammy: Well, I tread a little gently because, of course, it is not for me as Minister to dictate to individual autonomous higher education institutions the nature of their collaboration, who they collaborate with and how they collaborate, but the overall fiscal envelope demonstrates the merit of collaboration if we are to underpin excellence.

Q89 Alun Michael: That is such a comprehensive and diplomatic answer that you must be planning to move to the Foreign Office! Is there a case for increasing UK research funding for higher education institutions in Wales, particularly to promote economic recovery, bearing in mind that Wales has specific problems in relation to the impact of the economic downturn?

Mr Lammy: Well, again, the Haldane Principle, of course, underpins the Minister's approach to this issue which means that these issues must be taken independently, either by the Funding Council in England through our QR funding, or, indeed, by the Research Councils, and the underpinning of that funding is one that concentrates on excellence. My view, if I may, is that the Welsh Assembly Government and Jane Hutt were absolutely right in the statement that she made to really target these key growth areas of the Welsh economy, and doing so signalled the importance of excellence in those areas of economy. If that is followed through I would assume de facto that that would certainly mean retaining, if not building, the research funding that Wales is able to attract.

Q90 Alun Michael: I understand why you are being careful about the independence of both the institutions and the funding bodies in terms of decision-making, but I would like to tease out a little further the relationship between UK-wide decision-making and decision-making that is specific to England or, indeed, to Wales. In Higher Ambitions there is a clear steer towards greater concentration of research. Is that a strategy that is across UK or for England only?

Mr Lammy: What we are indicating principally is QR funding from the Funding Council in England in relation to concentration, and we are saying, of course, that we do have to support excellence - and excellence is found in different places, in collaboration and working together - but also we have to support institutions in England into not feeling that they are somehow diminished without an emphasis on research. We think the balance is about right and we have to be really looking very carefully at that over the next period. In relation to how that affects Welsh institutions, as I have said, excellence is found in Welsh institutions. The similar process in Wales found 14 per cent of institutions with internationally excellent research, so clearly the future means collaboration on both sides.

Q91 Alun Michael: Sure, but where you have a specific steer within Higher Ambitions towards a greater concentration of research, that must have implications for research funding which is UK, and certainly England and Wales, rather than purely funding for England, and that is why I want to be clear whether there is a problem in relation to higher education in Wales being fully integrated to a UK-wide approach to the funding of research. So that is why I am asking whether the steer towards greater concentration of research in Higher Ambitions is an England-only approach or a UK approach?

Mr Lammy: It is for me to talk about England; it is for me to liaise with colleagues in Wales about the journey, I believe.

Q92 Alun Michael: Yes, but your Department and some of the institutions for which the Department is responsible - and this is not new, it has been in place with the previous DTI arrangements as well - is for funding on a UK basis, or certainly an England and Wales basis, so yes, your responsibility for institutions is England but your funding responsibility and that of institutions accountable to you is much wider than that?

Mr Lammy: Yes, in the sense that the Research Councils have a UK-wide remit, that is the case. In Higher Ambitions, however, what we indicated was that concentration would be important over this next period: we did not go into greater detail really than that. It is vital now for both Funding Councils and, indeed, Research Councils to reflect on this over the next period, recognising, of course, that we had an RE assessment just really very recently, or what would be in England an REF assessment, and there will not be another for some few years, so this is a journey in that document that we were indicating over the next decade, and it must be proper for both Funding Councils and Research Councils to reflect on that. As I have said, and I think as Jane has said, Higher Ambitions was not a document that simply came down from my Department. Quite the contrary. It was considered work largely from academics that began 15 months ago, and we have been in a lot of liaison with our Welsh colleagues on that.

Q93 Alun Michael: I accept both what you say and the spirit in which it is said, but I think I would be grateful if you would take that question away. It is not a question of just what the words say in Higher Ambitions but, as you say, it is an iterative process, a journey, and perhaps you would look and advise us on how that UK- and England-only aspect will be developed as that journey continues. I wonder if I can ask one other question in relation to that? In the area of linking applied research to business development, which is something I very much welcome, Higher Ambitions refers to involving RDAs. Is that an England-only policy and, if not, why is there no mention of the Welsh Assembly Government, because the Welsh Development Agency is integrated into the Assembly rather than being a separate body, as it was previously, and indeed the other devolved administrations and their respective economic development polices and agencies?

Mr Lammy: It is probably because we were in close liaison with our colleagues in Wales that we knew they would shortly be announcing their own For our Future document, and in a sense, in relation to applied research and proximity to business, the two documents should be read alongside each other. It is my sincere hope and belief that the CBI and others are doing just that.

Q94 Alun Michael: If I can just say, having at different points in my ministerial career had responsibility for the Welsh Development Agency at one time and the Regional Development Agencies in England at another, how will you and your officials ensure that that aspect of your strategy does not, unintentionally perhaps, drift into an England-only focus when it should be a UK-wide approach? The Regional Development Agencies do co-ordinate a lot of their activities, they have lead responsibilities and so on, so I can see that there might be a danger of drifting into that and leaving out the Wales, and indeed possibly Scotland and Northern Ireland aspect of what is obviously a UK-wide concern?

Mr Lammy: I recognise the concern because it is one that has come up at different points, and I recognised it previously as Skills Minister in relation to the workings of Sector Skills Councils, for example, on different sides of the border. My own view in higher education is that the sharpness of economic priority and future job growth in both Wales and Scotland is very well understood and developed, and that both on a regional basis in England and into Wales the system understands that very well.

Q95 Alun Michael: So the remit of officials in taking this forward will be very much to ensure that it does not narrow down to an England-only approach?

Mr Lammy: It would be in none of our economic interests were that the case. We would all lose out.

Q96 Mr Jones: I am interested in the process of developing and producing Higher Ambitions. Was it developed in close concert with the Welsh Assembly Government? Was it run past Welsh Assembly Government before final publication? How was it developed?

Mr Lammy: It was developed in consultation with it, is probably the best way of putting it.

Q97 Mr Jones: So the Welsh Assembly Government had input into this document?

Mr Lammy: Well, no. Input to the extent that you will see, as I have said, that much is replicated in both For our Future and Higher Ambitions.

Q98 Mr Jones: But there are distinct differences too?

Mr Lammy: Well, there are distinct differences because there are differences that are important to Wales.

Q99 Mr Jones: I understand that.

Mr Lammy: Wales, for example, has traditionally done slightly better on access issues recently in terms of figures; it is prioritising Welsh language and it has big issues that it will want to reflect on, so of course there are differences but in the end what is important is that there are no surprises. I do not think our document came as a surprise at all to the Welsh Assembly Government.

Q100 Mr Jones: But, to clarify the point, did the Welsh Assembly Government play any part at all in the development of Higher Ambitions?

Mr Lammy: Yes.

Q101 Mr Jones: To what degree?

Mr Lammy: Well, it depends what you are talking about. How do I articulate "degree"? Do you want me to give you a percentage?

Q102 Mr Jones: No. I would like you to tell the Committee to what extent there was input from the Welsh Assembly Government in the production of this document.

Mr Lammy: I think I have already said that.

Q103 Mr Jones: I may be slow but I am not gleaning from you the extent to which the Welsh Assembly Government participated in the production of this document?

Mr Lammy: Let me try for the fourth time to answer the question. As Jane Hutt said, her liaison over the last year has been good and strong. My officials meet on a regular basis to discuss top agenda items. Higher Ambitions, which is our ten-year vision document, is absolutely one of those; the Funding Councils on both sides have been absolutely tied into the process and are on week-to-week contact with one another, so across all of the issues there is a lot of collaboration. The most important theme that makes this document perhaps different from a document that would have occurred two years ago is the centrality that we are placing on strategically important priority areas in our economy, and the importance of higher education in delivering that. That is replicated - not word-for-word, with different nuances - in both documents, and is indicative of the degree of collaboration.

Q104 Mr Jones: Briefly, if I may, and lastly, did Jane Hutt approve of the section in Higher Ambitions that deals with research funding?

Mr Lammy: Certainly there were no representations made to me about concerns in relation to that.

Q105 Mr Jones: And she was aware of its content before publication?

Mr Lammy: Yes.

Q106 Chairman: Minister, what the Committee is driving at is, in the drafting and reporting of documents like this, we ask the question "Does it pass the devolution test? Is there someone who reads through the document who is conscious of the need to reflect on the fact that when we talk about the UK or Britain we are talking about the UK and Britain and when we talk about England we are talking about England, and there is, as Michael has said, sometimes a slippage in the style which will have unintended consequences.

Mr Lammy: I think it is important for the Committee to indicate, when it talks about concentration, what it is concerned about in that sense. The point is this. Excellence is found in large number in Welsh institutions, and I would have thought that all higher education ministers across the UK are keen to retain that excellence, to support it, and to grow that excellence in what is a highly competitive, higher education market, in which Asian countries are investing heavily and also the United States. So that must be the centrality of what we are seeking to do, and that is certainly what I am doing in my Department.

Q107 Alun Michael: If I may, Chairman, the Minister is asking us to clarify what our concern is, and it is the sort of example I gave a few moments ago in relation to Regional Development Agencies. They do not apply in Wales so it looks by implication as if you are looking at the situation in England without engaging the situation in Wales. Everything you have said has indicated a wider perspective and a greater engagement and good co-operation across the border, but it is the question of unintended consequences - which we have seen in other Departments. The Department for Justice is responsible for devolution, yet they managed to overlook the fact that criminal justice was not devolved in one piece of legislation last year. That was not an intention on the part of any minister or, indeed, senior official in the Department, but devolution inevitably means that one has to look at separate areas and then find ways of joining them up again, just as departmental restructuring within Government means you put areas into a different set-up and then order them back again. For example, the Home Office being split up meant that areas that were in one department are now in different ones, and devolution is no different from that. So the concern is to make sure that an understanding of devolution is built into the practices of the Research Councils and the bodies of your Department as effectively as it has been built into your responses, and I acknowledge it has been built into your responses in the way we would expect.

Mr Lammy: All I want to emphasise is that if you look at the second page of Jane Hutt's statement, at her emphasis on the greater proportion of £400,000,000 of funding being targeted at specific strategic outcomes and at her emphasis on different providers with different strengths and different initiatives working coherently together, and also if you look at her emphasis on access and her building on the Heads of the Valley initiative, these were able to mirror each other because we are constantly talking about the issues. Frankly, it is not my expectation that in terms of publishing her vision for Wales I should have to check the text. I do not think that is an appropriate expectation and I am not sure that my Welsh colleagues have that expectation of me, but they do expect the issues to be discussed and the issues to mirror one another in areas where you would expect them to. On the second page there are issues very specific to Wales in relation to Welsh language, a slightly different approach on regional partnerships and a different approach on bursaries, and that is absolutely about devolution. We are aware of those differences; we are able to discuss those differences; but there is no suggestion of clearing text.

Q108 Mr Jones: When I referred to clearing text it was in the context of those elements of the Higher Ambitions document that are applied on a UK-wide basis. You rightly say it is not up to you to check every word of the Welsh Assembly Government's document, but it does seem to me that it might be at least a courtesy to run that particular text past the Welsh Assembly Government because it is a UK-wide policy.

Mr Lammy: Well, as I say, it is an indication of a direction of travel. The specifics of that are very much down to Funding Councils and research bodies. I do not think there is any difference between us, but the nuance is simply that I am seeking to be careful about what is appropriate for a minister and what must be appropriate for independent autonomous universities, and the very lengthy process of RE or REF assessment, to determine the proportion of funding that they get dependent on the quality of their research, and that assessment of quality is not made by me or my Department. That, I suppose, is the nuance.

Q109 Chairman: We are about to start an inquiry on Wales and Whitehall where we would be exploring these kind of issues, and we may return to the question of higher education there, possibly, but could I give you two examples where your document fails the devolution test? On page 66 Regional Development Agencies are referred to as "science cities". There is no mention of the Welsh Assembly Government or the other devolved administrations. In the paragraphs following on the same page the document goes on to talk about the Technology Strategy Board and Research Councils, which clearly have UK coverage. Then on page 56, Research Councils, the Technology Strategy Board and Regional Development Agencies are all mentioned in one paragraph, so just note those and perhaps you could give us a response to that in writing.

Mr Lammy: Yes.

Q110 Mark Williams: There is a quote from your Department on the Technology Strategy Board, "In terms of collaborative R&D, the figures suggest that the total of grants going to Wales from the Technology Strategy Board is around 3.5%of UK total. This is less than what might be thought their fair share, and has been the subject of discussions between the Technology Strategy Board and Welsh Assembly Government". What has been the outcome of those discussions?

Mr Lammy: May I ask John Neilson to cover this?

Mr Neilson: You can, but it is not my particular area, so I think we had better send you a note because I am not informed about what those discussions have included.

Q111 Mark Williams: But there was recognition by your Department that Wales was getting an insufficient share?

Mr Neilson: There was recognition that there was a very strong desire to have good collaboration right across the UK for the Technology Strategy Board. It is a relatively new body and it has been working with all parts of the UK to build up strong relationships, and that is a continuing process.

Q112 Mark Williams: But it is more than that. "This is less than what might be thought their fair share". That is a rather clearer affirmation that Wales is not getting its fair share of that funding?

Mr Neilson: The issues about how the UK-wide bodies award their grants are based on excellence and UK-wide criteria, rather than about shares in particular pots in the UK.

Q113 Mark Williams: But that quote came from your Department - well, there we are. Just following what has been said before, the Welsh Assembly Government has obviously been wise to the concerns about Research Council funding, and it has produced a very positive report talking about measures to improve Wales' share of Research Council income. Notwithstanding what you said about the independence of those funding councils, would your Department be responding to that report from the Assembly Government?

Mr Lammy: In what sense? Bill Rammell said last time, and I have to repeat it, that that criteria is based on excellence not on regionality, so the issue is how one continues to support institutions to be better and better. Jane's document sets that vision out in relation to Wales, and that will be the litmus test for improvement in future research rounds, but it must be based on excellence.

Q114 Mark Williams: It is also about recognising the potential basis, and that is part of the debate we have had in the past.

Mr Lammy: I think that is a fair point, yes.

Q115 Mark Williams: That is the benchmark looking at this percentage of funding that is coming into Wales. We are looking to the future, and you have said that in your comments and I appreciate that, but that is what has to be reflected in those decisions of those independent funding councils?

Mr Lammy: Have you taken evidence from the Funding Councils? RCUK?

Q116 Mark Williams: Not on this occasion, no. Could you say a few words on the national Science Technology Engineering and Mathematics programme? Should that provision be considered in a UK-wide framework in conjunction more with the devolved administrations?

Mr Lammy: Again, our decision to underpin Science Technology Engineering and Mathematics is based on historic underfunding in those areas under a previous administration and also on an assessment of the importance of those areas to our future economy, so we believe that it is important to emphasise that within the system, and that underpins the New Industry, New Jobs strategy in my parliamentary report by Peter Mandelson. In Jane Hutt's statement, however, it is clear that in relation to the digital economy, life sciences and other areas, science technology is hugely important for the future innovation of Wales, and Welsh colleagues are choosing to make that an area of strategic priority over the next while. So there is mirror between us, I think.

Q117 Chairman: On that point, given your responsibilities in Wales with regard to research, science and technology, have you been invited to Wales at all to visit any of the universities?

Mr Lammy: Yes, I have been invited to Wales. I should have been in Wales last week and were it not for having two toddlers who get ill frequently and sometimes get their father ill I would have been there, but I am looking forward to going in January.

Q118 Chairman: I take it you would welcome more invitations?

Mr Lammy: I tend to be very keen to go to universities, yes.

Q119 Chairman: When Jane Hutt was before us we were commending to her the work in widening access to universities here in England, particularly London South Bank and Birkbeck, and the need to learn from one another, and I am sure you endorse that.

Mr Lammy: Yes, and one of the other things I would seek to do when I am at universities, if you like, that have traditionally been good at the partnerships, and I am talking about Bristol, Reading, Chester, is to look closer at the nature of the collaboration and how that can be built on.

Q120 Mr Jones: Turning to further education, the Young People's Learning Agency is due to publish the consultation for the National Commissioning Framework. Is it anticipated that the Framework guidance will enable further education learners to cross the border, either if it is more convenient or if there is a specialist course they want to access?

Mr Landeryou: The current arrangements do enable that sort of traffic to occur. The last records we have indicate that there were around 10,500 learners with Welsh post codes who studied in English colleges, but that that was not restricted to 16-19. The intention that that freedom of movement for those types of courses should continue, and that the arrangements that are put in place should, as far as possible, replicate those that already exist. The detail of the Commissioning Framework I am not close to because that is now a matter for the Department for Children, Schools and Families because their responsibility covers the 16-19 age range. If you want specific information we would be happy to ask our colleagues there to provide a note, but the intention is as I have outlined.

Q121 Mr Jones: Are you aware that there is difficulty sometimes for Welsh students to obtain support for maintenance and accommodation whilst attending courses in England?

Mr Landeryou: I am not aware of difficulties in regard to support because the Learning and Skills Council currently works closely with the Welsh Assembly Government to ensure that reciprocal levels of support are available. Accommodation I believe is a different issue and that is treated on a case-by-case basis.

Q122 Mr Jones: I understand that the Learning and Skills Council would provide support for accommodation and maintenance to English students but that, of course, is not available to Welsh students. In fact, I had a constituent who had precisely that difficulty and was unable to follow a particular specialist course because of that. Were you aware of that?

Mr Landeryou: I was not aware of that individual case, no.

Q123 Alun Michael: When will the review of Sector Skills Councils capacity be completed?

Mr Landeryou: I believe in January. Four of the five tranches of relicensing are already complete, and I believe the fifth concludes in January. I am not sure where we are up to in terms of recommendations from the UKCES to ministers because that is the final part of the relicensing process. You will also be aware that through the tranches different Sector Skills Councils have fared differently and in some cases have been asked to go back to review what they are doing and to resubmit, so there are varying stages in the journey. Some are through and are fine; others are yet to have this final verdict, so to speak, and a third are refining their plans in line with the Commission's recommendations.

Q124 Alun Michael: I believe in some cases there were issues of capacity. Is that process likely to lead to a rebalancing and, in some cases, an increase in resources?

Mr Landeryou: You will have seen that through the recent Skills White Paper that was published we have asked the UK Commission to consider the configuration of Sector Skills Councils for the future and whether the current 25 are fit for purpose. That thinking is driven, certainly in part, from the fact that some developing sectors of the economy that are important like low carbon do not naturally fit within a Sector Skills footprint, and we believe it is sensible now to review those boundaries so we have a coherent response. How that process pans out in terms of capacity that is available in separate Sector Skills Councils is very difficult to determine this time. It is also worth noting that individual Sector Skills Councils do not only derive their income from the UK Commission: they derive it sometimes from separate contracts with other UK governments and sometimes from their sectors themselves, so there is not a specific pattern that one can point to.

Q125 Alun Michael: Can you tell us, then, how the specific needs of sectors within Wales and their respective Sector Skills Councils would be taken into account when reviewing the issue of capacity at the end of this process?

Mr Landeryou: There is an SSC Reform and Relicensing Working Group which meets every fortnight and the Welsh Assembly Government are members of that Working Group. Then, when it comes to the decision-making process, the Welsh Assembly Government Minister - and it has been Jane Hutt until now although I think it will be John Griffiths in the future - are asked to sign off the recommendations, and at that point, of course, they would be able to take account of the issues that emerge from their particular perspective in terms of capacity and if they are not content they will be able to signal that. Thus far they have approved all the Commission's recommendations.

Chairman: Minister, thank you and your colleagues very much for your evidence this morning. It has been a most productive session.