Clause 34 - NHS contracts and financial provisions
Health and Social Care Bill
2:30 pm
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Thank you, Sir David. That requires me to have my wits about me.
In relation to clause 34, I should like to address the broader issue of NHS contracts versus conventional commercial contracts. Although we have now agreed that clause 33 stand part of the Bill—no amendments were tabled to it and no one objected to it—there is an issue to explore, which I touched on earlier, about the nature of the contracts that will be involved when a pilot scheme takes the form of an arrangement between a health authority and a private sector partner, typically a pharmacy chain or a supermarket chain.
In the normal course of events, the contracts would give the private partner the ability to make the necessary investment. The Minister acknowledged that there would be a problem if the termination provisions allowed for the contract to be terminated by a health authority on a whim or by direction of the relevant authority as no private sector partner would be able to raise the funding or be prepared to risk capital.
Clause 34(1) provides that a company or private body that wishes to enter into a pilot scheme may apply to be treated as a health service body. I understand the reason for the provision—they would then be party to an NHS contract, which, as with so many double speak exercises in the health service, is not a contract, but simply an arrangement that exists so as long as it reflects the will of the Secretary of State. It is not a contract in the legal sense or in the sense in which any commercial entity would understand the term; nor would any banker or financier lend for investment in such a project.
I cannot imagine that the Minister is seeking to undermine his own scheme first by providing in clause 33 that contracts may be terminated at the will of the Secretary of State and, secondly, by suggesting in clause 34 that people who would usually expect to enter into normal, legal, binding contracts should for these purposes become health service bodies and enter into arrangements that are not contractual or binding. Those provisions seem to undermine the principle that the Minister has outlined in mapping out the possibility of a partnership between health authorities and private sector entities particularly in relation to developing services in areas where they do not exist or where they are under-provided and require investment. Will the Minister address what will happen in those circumstances?
If a pharmacist who is currently providing part II services enters into a pilot scheme using existing premises, facilities and assets and the pilot scheme can be terminated in accordance with clause 33, and there is a return-ticket provision allowing them to go back to providing part II services under the 1977 Act, I accept that there is no particular problem and that in those circumstances it may make perfect sense to allow private pharmacists to become NHS bodies for the duration of the LPS pilot. However, that will not bring in the new resources and the new capital to which the Minister referred. Can he reassure the Committee that, where it is appropriate, there will be an opportunity within the pilot schemes for proper contractual arrangements that are bankable and will allow capital to be invested, that there will be a mechanism for effectively contracting them out of the provisions of clause 33 in order to make them bankable and that in those cases it would not be necessary for pharmacists to become health service bodies in order to enter into NHS contracts, which are rather less attractive from a banker's point of view?