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I know that Paul Boateng, one of our early Ministers for the probation service and prisons, reinstated that in 1997. The attrition of probation staff—the rate of turnover—is much lower in comparison with other areas of public service. Our feedback shows that the service is developing well; it is responding to different pressures within the criminal justice system; and it is meeting those challenges with confidence.
There was some criticism of the consultation process that was conducted prior to this statutory instrument. I willingly place in the public domain and confirm points made by the noble Baroness, Lady Anelay, and the noble Lord, Lord Avebury, and others that there was no formal public consultation exercise because we did not consider that one was required for this statutory instrument. That is not to say that we do not recognise the importance of consultation, because we do. However, we have consulted informally with a number of probation boards and probation members. We have sent correspondence to local authorities, to the Local Government Association, the Magistrates’ Association and the Probation Boards’ Association, in which we clearly trailed and explained the changes and actively encouraged councillors and magistrates during the application process to apply for positions as members of boards as part of the continuing recruitment exercise.
Lord Avebury: My Lords, on consultations, could the Minister answer my question about whether the Government will refer to the Cabinet Office to see whether a set of rules can be devised to cope with instances, such as this one, where a full consultation is not considered necessary? At least there could be reference to the heads of organisations whose members are principally affected by the changes proposed.
Lord Bassam of Brighton: My Lords, I was about to say that I thought the noble Lord had raised a very valid point. I had jotted that down in my notes. There would be some value in me referring the issue to the Cabinet Office. I know it is quite properly concerned about the way in which consultation operates across government. That point is very valid and I shall refer it forward. We need to give it some further thought.
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I have explained the recruitment process. As I understand it, the current exercise is to replace the 30 board chairs and around 300 board members who complete the second of their three-year terms on 31 March next year. That exercise should ensure that a broad range of interests is represented on the boards; that we have the proper focus on business continuity; that we bring in that added element to the board’s range of expertise; that we reflect on the value of the current magistrates’ appointments and counter-appointments; and that that experience is part of the broader board membership.
The overall aim is simply to achieve a rebalance while retaining in membership those with sentencing and other valuable local experience. That is a very important strength. Early indications on the recruitment exercise are that a large number of councillors and magistrates have applied to be board chairs and members. The early sifting reveals an apparently very high standard of applicant. We should take great heart from that.
I know “modernisation” is a word that many noble Lords do not greatly love, but this is a programme of modernisation and reform of public service and the probation service is part of that. It will require more partnership working and a greater familiarity with competitive and business environments within which they operate and skills in commissioning and contestability. By rebalancing the membership of the boards, improving their range of skills and competencies, we think we will improve the delivery of probation services. I would have thought that we could all sign up to that in order to prepare the service better for the challenges that it faces.
I understand the concerns that have been raised. We shall reflect on the voices raised on all sides of your Lordships’ House where a diverse group of noble Lords has been present today. The concerns and issues that have been raised will surface again when we debate the fundamentals of what is likely to be in the next legislative programme. I place on record my thanks to noble Lords who contributed to this debate and our thanks for the contributions of noble Lords who serve on the Merits Committee, take an interest in the probation service and are as passionate as I and our Ministers are to ensure that standards within the service continue to improve.
2.30 pm
Baroness Anelay of St Johns: My Lords, as always, I begin by thanking the Minister for setting out the Government’s stall. During this debate, he will have felt that there was a signal lack of support for him in the Chamber. There is strength of feeling, and it was expressed with military succinctness by the noble Lord, Lord Ramsbotham, who said that the regulations are “perverse, shoddy and unnecessary”. The noble Baroness, Lady Stern, who has professional expertise in these matters, said that the regulations were based on a profound misunderstanding of what makes probation services successful. I agree with the noble Lord and the noble Baroness. There was concern about the lack of formal consultation. All noble Lords echoed the belief that
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While the debate was going on, I reflected on the procedure with regard to statutory instruments, which was raised by the noble Earl, Lord Erroll, and by my noble friend Lord Eccles. This instrument was subject to the negative resolution procedure. When primary legislation goes through the House, we anticipate that the negative resolution procedure will be reserved for essentially non-controversial matters, technical matters or matters that been fully rehearsed in the legislation upon which they hang. Therefore, it can be said that when the House passes primary legislation it gives permission for what will follow that is foreseeable at that time. The trouble is that when the Criminal Justice and Court Services Act was passed in 2000, the way in which these regulations are now being used was not foreseen. Therefore, it cannot fairly be said that the House gave its permission then for this kind of development. That throws up what could be a matter of concern in our scrutiny of what should be left to the negative resolution procedure in future legislation. I will be very happy to discuss that with the noble Earl, Lord Erroll, on future occasions.
The Minister stated the Government’s argument about having a flexible board that responds to modern needs. Probation boards are not trying to be inflexible or wilfully to prevent the delivery of effective service. They are trying to deliver an effective service, but the Government are trying to steer them in a different direction by the way in which their membership will be set up. On the size of boards, the Minister said that the Government are trying to add expertise, but they are doing that by removing the right of magistrates and councillors to be on the board. There are a lot of contradictions here.
I find these regulations extremely unsatisfactory. In Lords’ language, that means I wish I could tear them up and throw them out. I have been tempted to do just that by one or two noble Lords who have asked about a Division today. I am not the usual channels, and I do not want to risk their wrath just yet; I would like to live a couple of days beyond the Queen’s Speech. Of course, it would be gross discourtesy to the House if I were to call a Division without giving prior warning of so doing, although by doing so, I could perhaps have had even more supporters for my Motion today.
The serious reason I do not wish to divide the House today is that I take consultation seriously. These matters need to be thoroughly discussed in the context of the new management of offenders Bill, when we ought to see whether the Government's premise today is as flawed as I believe it to be, or whether they can come up with any credible arguments.
I know that the noble Lord, Lord Avebury, was worried that if we allow these provisions to go through, the door is closed. I looked at the original
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NHS: Finance
2.36 pm
Lord Rea rose to ask Her Majesty’s Government what proportion of NHS finances are currently spent on the private sector; and what is their estimate of the likely rise or fall of this proportion in the future.
The noble Lord said: My Lords, I would like to start by thanking the noble Baronesses, the noble Earl and the noble Lord who put their names down to join this mini-debate on a Friday. I particularly apologise to Front Benchers who, perforce, have had to stay on a Friday. Unfortunately, it was the only slot available to me.
The increasing role of the private sector in the National Health Service is causing widespread concern, including to all the professional organisations in the NHS. That was expressed strongly at the TUC and Labour Party conferences this year, as well as at Wednesday’s lobby of Parliament. I declare an interest as a medical practitioner who spent most of his professional lifetime working for the NHS.
I expect that my noble friend will express the view of the Secretary of State that the use of the private sector by the NHS is not the same as privatisation of the NHS and that, as long as it is free at the point of contact and financed through central taxation, it has not been privatised. However, increasing the role of private profit-making organisations—often transatlantic—in delivering services and in the management of the NHS is expensive. The private sector may be useful in shortage areas, though costly, but it is frequently unnecessary and may eventually undermine the integrity and comprehensive nature of the NHS. Like the Secretary of State, my noble friend may think that supping with Mammon is safe if a sufficiently long spoon is used. I wonder.
Because of time constraints I will concentrate on only two areas—the private finance initiative and independent sector treatment centres. However, I would like briefly to list some other current examples of this increasing trend, such as outsourcing the commissioning function of PCTs, privatising the management of GP services, the unbundling of primary care services, the sale of NHS logistics—to a very doubtful new owner—and privatising oxygen supplies in the community, pathology services and non-emergency ambulance services. Then there is the fiasco of outsourcing the NHS IT system, but I think that that might defeat anybody.
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In the mid 1990s, public sector funding for capital projects became very scarce, and that continued in the first austere years of the present Government. By the time of Labour's success in 1997, the private finance initiative was up and ready to go—and there has been a virtual bonanza of PFI-financed hospital building, which has often been welcomed by patients and clinicians alike. The high cost of the projects has, however, led to the downsizing of the number of beds provided and it has increased the pressure on staff to reduce throughput times, often to a stressful level.
PFI costs over the whole of a contract will almost certainly be considerably greater than the public service comparator would be. PFI consortia charge a rate of interest well above bank rate on the capital that they raise. This interest represents a significant proportion of NHS finances, paid for by the trust concerned. It should be considered as money diverted to the private sector.
Andrew Lansley MP obtained Department of Health data giving a sum of £53 billion to be paid by NHS trusts over the next 30 to 40 years for completed PFI projects with a capital value of £8 billion. I would be grateful if the Minister could disaggregate this unitary sum of £53 billion into its component parts. What proportion represents the “availability charge”, covering rent, interest on capital, and maintenance? What proportion represents non-clinical service provision of the PFI consortium? I expect that profit is made in all these areas, but this will be difficult to dissect out due to commercial confidentiality. I realise that I am venturing into complex territory, but I also suspect that there is a deliberate tendency to present PFI statistics in an obscure way. The Minister may need to write to me about these details. I have a further question: how often does ownership of the assets revert to the trust at the end of a contract, and how often do the assets remain the property of the PFI operators?
PFI may have seemed an efficient way to get buildings up and moving quickly, with risk shouldered by the PFI consortium. However, this has been at considerable cost to the financial health of many trusts with large PFI schemes—as the Audit Commission notes in its report Learning the Lessons from Financial Failure in the NHS—and it has been a stone around the neck of the NHS as a whole. I suspect, like the eminent economists whom I have consulted, that the use of PFI has actually been the reverse of prudent. The repayments continue for half a lifetime and will therefore partly fall on the next generation—and, of course, the next few Chancellors.
The Health Select Committee of another place reported on independent sector treatment centres in July and the Government have recently responded. It is clear that some waiting lists were already falling rapidly before the ISTC scheme got off the ground, largely because of the decision to separate the treatment of elective cases from acute and emergency services. This was achieved within the National Health Service partly through the 46 NHS treatment centres. In the case of cataract surgery, for example, NHS operations increased from 62,000 a year to 210,000 a year in the five years to 2005, and the
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ISTCs are popular with patients, but there is no difference in the standard of clinical care given, according to a recent Healthcare Commission report. On that point, is my noble friend satisfied that inspections of ISTCs by the Healthcare Commission are as rigorous as those in NHS facilities? That has been questioned.
ISTCs can have adverse effects on the National Health Service. It is now a requirement that patients on referral must have a choice of at least one independent hospital. That has resulted in some NHS facilities being underused and the trust concerned losing money because of the payment-by-results scheme. The “take or pay” arrangement means that NHS trusts are virtually forced to refer patients to ISTCs and other private facilities. In its evidence to the House of Commons Select Committee, the Royal College of Surgeons said that there was “cherry-picking” of the more straightforward cases by ISTCs, leaving the high-risk patients with the NHS, which thus has a slower turnaround and loses payments.
The removal of straightforward cases to ISTCs has also had a deleterious effect on the training of junior doctors and nurses. The Government say that training will be increased in ISTCs, but training costs money. Will new money be made available for that, rather than requiring payment from the already stretched budgets of postgraduate and undergraduate deans?
I have more or less come to the end of my time, but I have just scratched the surface of the topic. I have tried to show that there are alternative ways of achieving the results claimed for the private sector. It is held that introducing competition and market discipline will increase efficiency to more than cover any profit taken. I want robust evidence of that. At no point has there been serious evaluation of any private sector scheme before it has been introduced into the NHS on a fairly wide scale. Innovative NHS alternatives, such as NHS treatment centres, have not been given the chance to demonstrate their full effectiveness. I very much hope that the Government will pause for thought before going further down a road that risks fragmenting and destabilising a much valued institution.
2.47 pm
Lord Selsdon: My Lords, it is extraordinarily difficult for me to be sandwiched between two great people from St Thomas's. My only activity relating to that great hospital opposite is that, for 10 years, I was a director at a construction company who built the
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Today, I want to try to evaluate what we mean by private sector. I start with the simplistic terms that we are all private people who are members of the general public who voted at an election and, in general, believe that there are certain essential services—we can call them public utilities—which should be provided by the state in the most appropriate manner. The greatest of those by far is health. I stand fair and square behind the principle that healthcare in this country should be free at the point of delivery. The question is: who pays for the infrastructure, who pays for the services and who pays for the support?
Have the Government effectively mortgaged their souls and bodies for the future? The word mortgage means death grasp or death wish. I am concerned about that as an ex-banker because I never support any word that begins with “p”, or “PFI”. To respond to some of the questions raised by the noble Lord, Lord Rea, the PFI structure was set up with the best of intentions. Before, there was very little public expenditure on new buildings. Frankly, I preferred the original Ministry of Public Building and Works; I have always preferred public procurement for public buildings. Today, however, we have £2.5 billion of expenditure under the first PFI stage, and expenditure under the next two PFI stages will come to about £12 billion. That is an enormous amount of money.
The structures that were set up for this were set up in good faith because they estimated that there would be an adequate cash flow into these hospitals to meet the costs and to provide a margin for development and maintenance. Unfortunately, however, there is a shortage in that cash flow because there is a shortage of patients. There is a shortage of patients because there is a shortage of finance to finance the operations of the patients. An extremely serious situation is developing. Added to that is an amazing factor; we do not need as many hospital beds as we thought we did. I have spoken in your Lordships’ House about the strange comparison with international figures. We have a million people working in a health service with 200,000 beds, the French have 500,000 people in a health service with 400,000 beds, and the Germans have 650,000 people in a health service with 500,000 beds. Do we have too many people? If we do, do we have too few facilities?
The Government’s 2005 plans to reduce waiting times were that every patient should have four to five choices of hospital for operations. They also declared that, by 2008, the waiting time would be only 19 weeks and that everyone would have freedom of choice. That meant freedom of choice everywhere. Will the Minister say whether that means that, under EU regulations, it is now possible for a patient who cannot get an operation in the United Kingdom to seek an operation in the EU and be funded by the United Kingdom?
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There is another worry. We had a great health service, and we have great people, but this division between the private and public sectors is strange. Every consultant whom I know, and I know a fair number, works both privately and publicly. He works in National Health Service hospitals or in private hospitals, but he spends a large amount of his time dealing with bureaucracy or on teaching and training, and the waiting lists seem to be getting longer. I made a few inquiries, and found that it is true that the waiting time to see a GP is now probably two weeks instead of four. The moment you see a GP and ask for a referral to a consultant, you are given the option to choose four hospitals, two of which may be near to you and two that may be specialist, but by the time you get through on the telephone, you find that there is no hope of ending up with an appointment. It generally takes between 45 and 47 days to get an appointment but, having got that appointment, you may need a scan or other equipment which leads to a longer delay before you get on to the official waiting list. According to the last waiting list figures given to me by the Government—the best way in which to get figures from the Government is to go to the House of Lords Library; it is much quicker—the waiting time for a knee operation is 39 weeks once you are on the waiting list, and 20 or 25 weeks for other things. I believe that these are the longest waiting lists in the world.
At the other end of the scale, the hospitals do not have enough patients. They are also restricted from taking international patients. I am not suggesting that international patients should replace British ones, but if sufficient funds are not being made available to the primary care trusts so that they cannot pay for their patients to be treated in the United Kingdom, we should be looking for extra business. If we have mortgaged ourselves and our bodies for the future, we should at least be looking for the revenues that can make our hospitals economic and viable.
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