Clause 69
Health and Social Care Bill
4:00 pm
Grahame Morris (Easington, Labour)
It is a pleasure to serve under your chairmanship, Dr McCrea.
At the last election, my experience was that members of the governing coalition parties made great play and political capital of campaigning against any hospital or acute service closure, or even possible closure. Does the Minister have anything to say to the experienced and dedicated staff who will face the full impact of his plans for upheaval and disruption? Will he describe market failure to them? There seems to be a reluctance to describe it to the Committee.
Many questions on the future of the bureaucracy in the NHS still need to be answered. Great play has been made of the fact that the Secretary of State has promised that this is not a top-down reorganisation of bureaucracy, but the abolition of it, and the Prime Minister said last Wednesday at Prime Minister’s questions:
“We are not reorganising the bureaucracy of the NHS… We are abolishing the bureaucracy of the NHS.”—[Official Report, 16 March 2011; Vol. 525, c. 292.]
In that case, how would the Minister describe the two thirds of the Bill that set out the rules for competition? Will he venture a guess or an estimate now of the cost to the NHS of the proposals both for failure regimes and for designation?
If Committee members are not minded to support my arguments, perhaps they might want to listen to the arguments being made by the hon. Member for Totnes (Dr Wollaston), a former GP who serves on the Select Committee on Health and who I understand wished to serve on this Committee. She said that the plans would result in the NHS going “belly-up”, not “top-down”. She went on to say that
“if Monitor, the new economic regulator, is filled with competition economists with a zeal for imposing competition at every opportunity, then the NHS could be changed beyond recognition. It is no use ‘liberating’ the NHS from top-down political control only to shackle it to an unelected economic regulator.”
We have not seen anything in the Bill that would rein in Monitor, and I hope that the Minister will look again at making significant changes to the current approach, which will result in service failures, a bureaucratic nightmare and an over-powerful economic regulator dictating local service closures—not based on quality or local needs, but on economics and competition.
John Pugh (Southport, Liberal Democrat)
It is a pleasure to serve under your chairmanship, Dr McCrea.
I was not able to pick out from fairly wide-ranging contribution of the hon. Member for Halton whether he opposes the principle of designation or whether he objects to the lack of apparent clarity in the designation process.
John Pugh (Southport, Liberal Democrat)
Okay. May I take him up on the first issue of the principle of designation? Presumably, if he is against the principle of designation, he is in favour of a system whereby all services, regardless of their value to the community or their indispensability, are judged by, broadly speaking, the same criteria when people make decisions on whether to use those services or not. I thought that we were all genuinely uncomfortable with that, and the legislation seems to indicate that most of us on this side of the Committee would be uncomfortable with that because we feel that some services in a special category ought not to fall due to any sort of market failure or commercial competition, and that other services are in a rather different category. I think the general public feel like that.
One has to visualise what the situation would look like if we were to take away designation per se. I think it would look similar to what it is now. As I understand it, there is no process of designation at the moment. If we compare, for example, the Co-operation and Competition Panel with Monitor, we see what Monitor would look like without designation.
Derek Twigg (Halton, Labour)
If I have misunderstood the hon. Gentleman, I apologise, but I understand that the Liberal Democrats were opposed to the proposals for competition in the Bill. [ Interruption. ] Will he let me finish? As we are opposed to the proposals in terms of competition, pricing and Monitor, why would we support the proposal for designation, which all fits into that mantra for the Bill, which I understand that his party is opposed to?
John Pugh (Southport, Liberal Democrat)
Basically, my argument is that if the hon. Member for Halton is opposed to competition, why in the previous Parliament did he support so many of those requirements that were put into health legislation and demanded competition? We have an organisation somewhat similar to Monitor, existing today, called the Co-operation and Competition Panel, which does similar sorts of things. It has to balance collaboration and competition. As far as I know, it was not tasked by the previous Government to do anything about health inequalities. It has similar functions to Monitor, although Labour wants Monitor to do something about health inequalities. It has to consider the impact and availability of choice and competition, which Monitor has as a parallel function.
Owen Smith (Pontypridd, Labour)
I go back to the point I made this morning. Are there not fundamental differences between the Co-operation and Competition Panel and Monitor, such as the extent to which competition law will apply and how the Co-operation and Competition Panel is not charged with promoting competition? It is charged with striking a balance between collaboration and competition, rather than promoting one at the expense of the other.
John Pugh (Southport, Liberal Democrat)
That is a fair point about stress. I acknowledge that European competition law and how competition law will apply is unfinished business, but if the hon. Gentleman will allow me to park that issue, I will develop my argument.
Paul Burstow (Minister of State (Care Services), Health; Sutton and Cheam, Liberal Democrat)
There is one other distinction of which the Committee should be aware. When the Co-operation and Competition Panel was established, it was not subject to any form of parliamentary scrutiny.
John Pugh (Southport, Liberal Democrat)
We will accept that there has been a degree of mission creep in what it does. We are debating what Monitor can and cannot do. I am not aware that there was any parallel debate with regard to the creation of the Co-operation and Competition Panel, although it impacts in all our constituencies. Apparently, we cannot even abolish it, because officially it is not a statutory body. It is something that has emerged and been implemented by the previous Government; presumably it was implemented because the Secretary of State at the time thought that there was a purpose to it.
Most of the criticisms that the hon. Member for Halton has made of Monitor in this debate—there are others to be made, which I might share with him—are also criticisms that could be made of the Co-operation and Competition Panel. It is unaccountable. There is a huge issue about accountability, particularly of these organisations that are making important judgments with a balance of considerations, which have a strategic impact. There is a question mark over whether an organisation such as that is strictly speaking just a regulator, or whether it is more of a strategic body. None the less, I think he would accept that both bodies are unaccountable. I have never written to the Co-operation and Competition Panel, nor have I found a way of doing so, but it has impacted in my constituency. My hospital, to make ends meet, because it has a fairly substantial deficit, has had to work with other hospitals in a collaborative way and share pathology services throughout Merseyside. Before it could do that, however, it had to go to the Co-operation and Competition Panel to satisfy it that there was sufficient competition around.
Derek Twigg (Halton, Labour)
I want to clear up one point, so that I have no confusion in my mind. I am listening to what the hon. Gentleman is saying and I understand his arguments, but can he explain whether he is in favour of the proposals in the Bill for Monitor and the extension of competition?
John Pugh (Southport, Liberal Democrat)
I am not in favour in the totality of the proposals for Monitor. That is right, but that is not to say that the amendments that the hon. Gentleman has tabled have any relevance to why I am not in favour of it. He made the point that Monitor would be a local body. Well, I do not know where the Co-operation and Competition Panel lives, but it is certainly not local to me. It would be bureaucratic and top down. All those things could be said about the pre-existing institutions.
John Pugh (Southport, Liberal Democrat)
I know that. If the hon. Gentleman looks back through Hansard, part of his critique of Monitor doing its designation process was that it cannot do that properly because it is not in touch with the local scene. I do not know how far the Co-operation and Competition Panel is in touch with what goes on in the Southport and Merseyside health economy, but I doubt that it is not more in touch than Monitor would be.
If hon. Members look at the provisions of the Bill dealing with what Monitor will do, they will see that the additional clauses in the Bill make it fairly explicit that although the panel does not have to take on board financial aspects and consequences, Monitor will have to do so. In a sense, it is an attempt to finesse a model that already exists. That said, however, I take the point that if Monitor is to perform a series of complex processes—balancing considerations and working out what is designated and what is not—there is a genuine issue about accountability.
I accept the point made by the hon. Member for Oldham East and Saddleworth that the remit of the two organisations is not exactly identical, but the functions that they will perform within the health system have similar consequences. Members should not content themselves with the belief that there is a bad world ahead, and that the sort of things that they complain about are not happening now. In the past 24 hours, I have discovered that the dermatological unit at the local hospital in my constituency will be deprived of a contract, because Assura Medical has bid for and got it—presumably on price competition. It has got the unit although it does not have a consultant urologist, or a base to work from. That is what is happening.
There is a case for defining more clearly in legislation than we have done so far what fair competition is, because appalling things have happened. To cite another example from my constituency—I am not shy of citing examples, unlike the Minister—the urologists in my local hospital are working partly in a private hospital that also gets patients who are referred from the local community. In effect, they are using their talents and abilities to worsen the budget of the local hospital and create a financial problem. Simultaneously, they are paid by the NHS and getting NHS pensions. One hospital picks up their pension bill, and the other picks up the reward for their services, through the commissioning that the PCT gives it. That does not strike me as fair competition.
Both of my examples are current today; they are live at the moment. We have to recognise that, if we accept that there has to be a degree of competition, it has to be framed so that the competition is fair. The Bill must do that; simply leaving things alone is not an option. The Bill will not get rid of cherry-picking, because that is happening today in Southport.
Liz Kendall (Leicester West, Labour)
Does the hon. Gentleman think that one key issue is to manage the consequences of competition? There is a debate about whether the evidence suggests that competition improves health outcomes, and the Committee has discussed that to some extent. There is also a debate about whether, in any system with competition, there are real consequences as patients and money move. One of the arguments that we have so far is that there will be no ability to manage those consequences under the new systems proposed in the Bill. Does the hon. Gentleman think that that is more important than having a more “pure” market?
John Pugh (Southport, Liberal Democrat)
I have heard the arguments made by the hon. Lady several times. It is a perfectly valid point—
William McCrea (South Antrim, DUP)
Order. May I say to hon. Members that, as you know, I am new in the Chair? Nevertheless, I am led to believe that you have already debated the subject of competition, so we have to stick strictly to the clause that we are dealing with at the moment.
John Pugh (Southport, Liberal Democrat)
I will conclude very briefly, Dr McCrea. I accept the point that the hon. Lady has made about a managed environment. It is a perfectly valid point that demands and requires further investigation. All I have to say is that, when times are hard and PCTs and acute hospitals are trying to cut their budgets, it does not look like a managed environment. It looks like dog eat dog.
Owen Smith (Pontypridd, Labour)
It is lovely to serve under your chairmanship today, Dr McCrea. Designation is another of the Orwellian phrases in the Bill.
Owen Smith (Pontypridd, Labour)
Designation does not feature anywhere else in health legislation, as far as I can tell. We have not seen it previously used, although it has been used in the context of energy regulation and some other such aspects—much of the regulation framework in the Bill comes from the energy sector, and so too does “designation”. It is a crucial term in the Bill and it is intimately connected to competition, because the reason we have that Orwellian term, “designation”, is precisely the degree of competition to which we are about to open the NHS.
Unlike my extremely experienced right hon. Friend the Member for Rother Valley, I understand absolutely what designation means. The Minister has told us on several occasions, effectively, what it means: it is about protectionism—a permissive protectionism within the NHS. It is identifying those areas of NHS services that are not too big to fail, but that are too important to fail, and therefore need to be protected from competition.
Mr Burns indicated dissent.
Owen Smith (Pontypridd, Labour)
The Minister is shrugging his shoulders, rolling his eyes and looking exasperated, but that is precisely what he has said on a couple of occasions today: that designation is about affording protection—[ Interruption. ] With respect, I am precisely mirroring the context. He said that it was about affording protection to vital services which need to be protected. The question therefore is: protected from what? Clearly, the answer is: protected from the impact of being competed with and competed out of the market; the impact on patients of a service either not having competition at all, and therefore needing to be preserved because it is the only service available to patients in that locale, or having other competitors coming into the market and potentially eroding and undercutting that service. [ Interruption. ] I am not going to go into price competition, no. We know precisely what the measure is about: competition, the interrelationship between designation and competition, and allowing protectionism within the NHS and ring-fencing certain services so that they are not undermined by competition. That is clear, and I think the public will understand it as well.
What is much less clear is how designation will work. We have already heard a lot of questions about how designation will work. We read in the Bill and the explanatory notes that local knowledge will be the key driver of designation. I assume that local clinicians who are commissioners, and the commissioners they employ, whether private sector or transferees from the primary care trusts and strategic health authorities, will be the people with the local knowledge to determine which services ought to be protected—in other words, designated.
The problem with such a system is that, as far as Monitor is concerned, the key criterion for allowing designation is whether there is competition—alternative providers. I understand how a commissioner and a clinician locally can judge whether his service is so intrinsically valuable to his patients that it absolutely ought to be designated, but I cannot understand—I ask the Minister to explain—how those local commissioners in their local hospital or GP consortium will have sufficient knowledge of the nature, type and availability of alternative providers out in their local marketplaces such that they can deem that their service need to be protected. I cannot see how that could be the case.
Also, in the Minister’s comments to date, I cannot see an answer to what he means by “local”. In a world where there are multiple entrants into the health care market, how are we to determine whether a service—radiotherapy or pathology services, or technical assays, which are vital to determining whether a patient ought to be given medicine x or y—that is being provided by a multinational corporation, or one operating on a pan-UK basis, but at a local level, constitutes the competition that means a service cannot be designated? If so, local knowledge will seriously be called into question, because it will not have sufficient insight into pan-UK issues.
Secondly, we have heard repeatedly from the Minister that quality will be the key arbiter or determinant of decisions—not price, but quality. How on earth can we expect local commissioners, who are the people who have to determine whether a service ought to be designated, to understand and to have sufficient insight into the quality of the alternative providers’ offers such that they can determine that the provision will not be sufficiently robust, safe or worth while for their patients, and therefore ought not to be allowed to compete for the delivery of that service? I cannot see how they would have any insight into the quality of the alternative providers’ services. Monitor, too, from its lofty heights in London, will likewise have very little insight into the relative qualities of the local provider and the new competitive entrant into the marketplace.
Thirdly, why are all of the changes happening? The language is absolutely clear. Most of the phrases in the Bill and in the mouth of the Minister today, including about inefficient providers being bailed out wholesale, market mechanisms not working properly and poor providers being subsidised, would be more familiar in the mouth of the Chancellor or the Secretary of State for Business, Innovation and Skills in the context of economic regulation than they are in the mouth of a Health Minister. They reveal the economic drive behind all the changes—the financial drive and the drive to see competition delivering quality and improvements in the NHS. The Minister has not persuaded us that quality is the key driver. He has not persuaded anyone that the Bill is well thought through, because in this instance as in so many others, there are more holes in it than a Swiss cheese.
Jeremy Lefroy (Stafford, Conservative)
It is a pleasure to serve under your chairmanship, Dr McCrea.
I have two brief points about the definition of words in the clause, and I would appreciate the Minister’s help. First, it is extremely important to have clarity on what constitutes a service. Services can be salami-sliced down to very small items or, as others have said, they can be an agglomeration. One could say that, in an acute hospital, a service is not only the accident and emergency, but some—not necessarily all—of the other wards associated with it. That might constitute a block of service or, under other definitions, several services. How will Monitor interpret that word?
Liz Kendall (Leicester West, Labour)
As a first step, does the hon. Gentleman agree that not only is it the GP commissioners who need to say whether a service is essential and cannot be allowed to fail, but that, to determine that, they need to understand what the knock-on effect of the failure of one service would be on other services? Not only Monitor, but GPs must have that understanding. Does he believe that GP commissioners fully understand the integrated nature of all the available services?
Jeremy Lefroy (Stafford, Conservative)
That is a good point. In most cases, GP commissioners probably do, and clause 69(1) states that the
“commissioner of a health care service for the purposes of the NHS may apply to Monitor”.
The ball is therefore very much in the GPs’ court and I expect them, particularly as they grow used to the idea of commissioning services, to pick that up quickly. Certainly, in my experience, local GPs have a very good understanding of the need for a core block of services. What that block constitutes might differ from a district general hospital to a major teaching hospital, but it is extremely important that Monitor appreciates that and does not take a nit-picking approach to what constitutes a service. I would welcome the Minister’s comments.
My second question—apologies for being tedious about this—is on the definition of “alternative providers”. To take an example from my own area, stroke services used to be provided by what is now the University hospital of North Staffordshire, by New Cross hospital in Wolverhampton and by Stafford hospital. Stroke services are no longer provided by Stafford hospital for various reasons—not only economic but quality reasons, I understand—although I hope those services will return at some point.
As all Members will know, what is vital in providing a stroke service is how quickly the patient can be got to where the service is provided. The location, the road network, the density of traffic and whether there are constant traffic jams—as there are in certain parts of the west midlands, so that it can take half an hour to travel two miles—are all extremely important in defining who is a willing provider. A hospital 10 miles down the road may be a willing provider, and on the map it may look to Monitor as though it is an extremely good provider, but in realistic terms a patient would not have a hope of surviving a stroke if it was the local provider because all those road transport factors would mean that the ambulance service, as the hon. Member for Leicester West will know, would not be able to guarantee to get the patient to that hospital in time.
I am looking for some assurance from the Minister on both those points. Can he assure me that Monitor will not take a desiccated accountant’s—I am an accountant myself—approach to what constitutes a service, but will take a realistic approach, informed by local commissioners, to what a local alternative provider is and what constitutes a block of services that makes sense for an area?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
It is a pleasure to serve under your chairmanship this afternoon, Dr McCrea. You will not be aware of it, but this is probably the longest debate we have had on a clause; it certainly seems to have been the longest. I will speak swiftly and deal with the questions that have been raised. I fully understand that we need to make progress because there are some other important clauses that need to be discussed tonight.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
I will do that, too.
Clause 69 provides for commissioners to make an application to Monitor for services to be designated. Commissioners can be GP commissioning consortia, the NHS commissioning board or the Secretary of State exercising his powers under new section 13V of new chapter A1 of the National Health Service Act 2006. The provision is intended to be similar to other engagement processes run by other regulators in other sectors, such as the energy sector, and has been modified for the health sector to effect the role of commissioners.
The clause provides that commissioners may apply for a service to be designated only if, first, the commissioners can demonstrate that the service is necessary to meet the health needs of their populations and that there is no alternative provider of that service. [Interruption.] The hon. Member for Leicester West looks at me in that smiling way, but the reason I am saying this is because I think there has been a misunderstanding—the word I originally used was “misconception”—of what the clause will do, and I think it would be helpful to the Committee if I reiterate it.
Derek Twigg rose—
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
May I make a little progress? All I am doing at this stage, before I reach the hon. Gentleman’s questions, which he is anxious to hear me answer, is explaining exactly what the clause will do. Hopefully that will clear up some of the misunderstandings.
Secondly, commissioners must have consulted providers, local authorities, healthwatch and other key stakeholders before determining which services should be designated. In practice, that will mean the commissioners have to show that they have made an assessment of patient needs and local provision. Commissioners will be expected to share that evidence with Monitor when applying for a service to be designated and will be required to provide copies of consultation responses they have received on the question whether to designate a service.
In addition to commissioners’ overarching duties on effectiveness, efficiency and continuous quality improvement, the clause requires commissioners, in deciding whether the criteria for designation are met, to have regard also to the current and future need for the provision of the service; whether the removal of the service would significantly reduce equality of access to the service; and any other matter that may be specified in Monitor’s guidance.
The clause requires Monitor to grant an application for designation if it is satisfied that the criterion in subsection (3) is met, and if the commissioner has consulted as required under subsection (2). The clause then requires Monitor to give notice of the designation of the service to the commissioner and every person who has been consulted on the application, and to explain the right of appeal.
Derek Twigg (Halton, Labour)
What does “future needs” mean in that context? Does it mean future need over a year? There are time scales of one year and 10 years in the Bill. Is that over a year, over 10 years or more?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
The future needs of the local health economy are just that—one cannot set a time scale on that. The hon. Gentleman refers to time scales of “not until after the first year of designation” and “within 10 years of designation”, but that relates to the requirements to review the designation decision taken. What he was talking about just now is future needs in a generality of what should be designated, which is slightly different. I do not think there is much further we can go on that.
Derek Twigg (Halton, Labour)
There is actually. It is a very important point. I do not know whether the Minister has been given any inspiration yet, but he said that a lot of the detail will be drawn up by Monitor—
Derek Twigg (Halton, Labour)
Is the Department giving no advice or guidance to Monitor about the time scale on future needs? Is that entirely left to Monitor?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
The requirement on the reviewing of designation after the first year and within 10 years is in the Bill, as the hon. Gentleman knows, but if we are talking about what services specifically are to be designated where, by definition there has to be the flexibility for Monitor, and particularly the commissioners who will be driving the process, to be able to do that as and when relevant. I do not understand the difficulty with that; it seems common sense. No doubt, he disagrees.
Let me try another tack and start answering some of the hon. Gentleman’s questions, starting with a series of questions on the designation process: how it would happen, how much it would cost and how long it would last.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
I will take the hon. Gentleman’s word for that. My response will reflect what I have already said. It will not be for Ministers to define how and when the designation processes will be run. It will be for Monitor to give guidance on the process, based on the clear criteria in the Bill and building on best practice in other sectors. Monitor will be required to run a full consultation on its guidance, on the designation process and on the methodology to define how much designated services providers will pay into the risk pool. In that, as in other functions, Monitor will be under a duty to promote the economic, efficient and effective provision of health care services and to avoid imposing unnecessary burdens.
The hon. Gentleman asked whether GP consortia will have the skills required to run a designation process. Anything that is relatively new to some GPs will of course offer some challenges, although they will be aided by Monitor’s guidance. However, we believe that GPs are ideally placed to make decisions on which services need additional regulation, as they have the hands-on clinical knowledge and expertise regarding the needs of their patients. The designation process will be a key part of the commissioners’ role, which they should be gearing up from the start to deliver effectively.
Derek Twigg (Halton, Labour)
Again, that differs from what the hon. Member for Southport has said. Monitor is in charge of the whole process, not the Government—the Minister says it will be up to Monitor to decide. Will he put on the record that the Government, who are putting the Bill through Parliament, have no idea when the process of designation will start, how long it will take, or how much it will cost? [ Interruption. ]
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
The right hon. Member for Rother Valley laughs, but it is out of frustration, I think, because I have dealt with the hon. Gentleman’s questions. When we started answering his questions we said, in effect, how much the process would cost, how long it would last and how it would happen. I do not want to sound like a record going round and round, but it will not be for Ministers to define how and when the designation process is run; again, it will be for Monitor to give the guidance based on the clear criteria in the Bill and building on best practice in other sectors. Monitor will be required to run a full consultation on its guidance on the designation process.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
No. I want to deal with these matters or we will be here all night. I do not see the problem, unless it is that the shadow Minister does not want to understand.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
I think I have answered it twice, consistently. He may not like my answer, but that is a different matter.
Let me try the next lot of questions. The hon. Gentleman has asked whether GP consortia have the required skills to run the designation process. As I have said, that will be challenging, but aided by Monitor’s guidance and that of existing PCTs in the run-up to the changeover, GPs will have the relevant expertise or will develop it. I do not share the hon. Gentleman’s doubts. As he will appreciate, the designation process will be a key part of commissioners’ roles, which they should gear up to from the start to deliver effectively. Help from the PCTs, guidance and some GPs’ experience of commissioning will enable an effective and efficient system of commissioning for patients.
The hon. Gentleman suggested that designation would lead to some kind of free-for-all for management consultants. On the contrary, Monitor will learn how best to design the process from the experience of other regulated industries. I would be happy to get into a debate on management consultants with him, given the previous Government’s record of using them and the fact that this Government have introduced a moratorium on public sector use of management consultants; however, I would not like to fall foul of you, Dr McCrea, by straying beyond the remit of the clause.
The hon. Gentleman asked about separating designated and non-designated services in a provider, as the same equipment could be used. There is no reason why equipment cannot be used by both designated and non-designated services, as designation is not about closing services but about deciding which ones require additional regulation. It will be for providers to decide how best to use their staff and equipment. In doing so, they can build on the experience of other sectors: health services are different from other services, but there is valuable experience to draw on in other areas. I get the feeling that if we had not looked at the strengths, weaknesses and relevance of other areas from which to draw best practice, or anything that would help to make the proposals far more effective and efficient, we would be criticised for not having done so, so in that respect, where the hon. Gentleman is concerned, it is a lose-lose situation, because he will not accept anything that does not fit into his criteria.
The hon. Gentleman asked why some essential services may not be designated. I shall repeat a point I made earlier, as it is at the heart of this debate. Whether a service is designated is not the same as whether it is essential. Non-designation simply indicates that alternative providers are available. Where services are not designated, the mechanism for securing service continuity will be led by commissioners through legally binding contracts.
The hon. Members for Halton and for Easington raised concerns about how others will be involved in commissioners’ decisions on designation. Commissioners will be required to run a full consultation on what services they wish to designate, as set out in clause 69(9) to (11). Those subsections require commissioners to consult service users, local authorities and healthwatch, so there is significant scope for local involvement in the designation process.
The hon. Member for Halton suggested that service designation would be a top-down exercise imposed by Monitor. On the contrary, the decisions will be made locally by commissioners in consultation with local patients and communities. Monitor’s role— I hope the hon. Gentleman listens to this—is simply to ensure that the criterion for designated services is met and that there have been proper consultations.
It is, to my mind, somewhat ridiculous to suggest that Monitor would somehow become omnipresent, as the hon. Gentleman implied. The Bill opens up decisions about services to an unprecedented degree of transparency and democratic scrutiny, and it ensures that those decisions are made locally. I have to tell the hon. Gentleman that that is a huge improvement on the current situation in which an unaccountable, hierarchical bureaucracy is free to intervene in local decisions with very little transparency at all. Let me be clear: our proposals will put an end to the hidden subsidies that have been used in the past to prop up failing and inefficient providers taking money out of the budgets of successful providers or forcing commissioners to pay artificially high prices to reward poor management elsewhere.
Derek Twigg (Halton, Labour)
Just for the record, so that I am absolutely clear—who will draw up the guidance?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
Monitor will issue guidance. I also have to tell the hon. Gentleman that we will not force patients to use or taxpayers to subsidise poor-quality, inefficient services or providers.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
May I make some progress, please? Rather than propping up failing providers, there will be a transparent mechanism for managing provider failure that protects essential services and allows commissioners to replace services with higher-quality or better-value options.
The hon. Gentleman asked how major reconfigurations would be handled in future. My fellow Minister, the hon. Member for Sutton and Cheam explained that to the Committee in detail when we debated clause 175, and I do not propose to re-open that debate, Dr McCrea. I will simply add that I entirely agree with the point made that reconfiguration will not happen if left to market forces alone, as I think the King’s Fund recently argued. The Government have never suggested that approach. Consortia will be able to work together and with the commissioning board to make strategic decisions about services across large areas where that is necessary. Where there are interdependencies between services or a need for integrated care pathways, that is something that commissioners will be able to plan for.
The hon. Member for Easington asked why we have not estimated the likely failure rates of providers. As I said earlier, to give accurate failure rates is not possible. International comparisons are not suitable, as there are no international health systems that are the same as our NHS system.
Liz Kendall On that point, will the hon. Gentleman give way?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
I will give way in one minute. Let me finish the point raised by the hon. Gentleman. Bandying about failure rates in America is, as I said to him previously, misleading and likely to be highly inaccurate because of the huge difference between the two systems.
Liz Kendall (Leicester West, Labour)
I am delighted that the Minister has given way. He says that services will not be propped up any longer. There is not a single member of this Committee who does not have a service in their constituency that at some point has been in debt or deficit or—not my words—“bailed out” by primary care trusts. Is he saying that that will no longer happen?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
Let me repeat what I said, so that there will be no misunderstanding. The hon. Lady is a serial offender in that respect. What I said was that we will not force patients to use, or taxpayers to subsidise, poor quality, inefficient services or providers. Rather than propping up failing providers, there will be a transparent mechanism for managing provider failure that protects essential services and allows commissioners to replace services with higher quality or better value options.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
No, I will not.
Put in context, that is somewhat different from the abridged intervention from the hon. Member for Leicester West. I will now move on to the number of other questions that were asked, starting with the hon. Member for Pontypridd, who will have to wait a minute.
Derek Twigg (Halton, Labour)
I am sorry if I missed what the Minister said, but one of my questions was on whether GP services would come under the designation.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
I will provide the answer to that as I get through the pile of questions.
The hon. Member for Pontypridd asked a number of questions. One was on how often services would be reviewed for redesignation. We will deal with that in later amendments, as I said earlier. It would be sensible to wait until we get to that part of the Bill, which will be soon. The hon. Gentleman raised the perfectly valid point of what counts as local. It is simple. The local population is that which a commissioner is responsible for. Local services are those available to the local population to meet their needs. In that way, commissioners would review the availability of services to meet the needs of their population and would apply to Monitor where additional regulation was needed to secure continued access to services in the absence of alternative providers. The hon. Gentleman also said that designation is the protectionism of services that are too important to fail. I would not altogether agree with that. Designation is about the protection of services that are provided by a sole provider in that locality. If such a service should fail, and the impact of that failure would cause significant harm to patients, that service needs additional regulation to ensure the continuity of that service.
My hon. Friend the Member for Stafford asked what the definition of services was for the purposes of designation. I hope I can reassure him on that point. It would be for the responsible commissioner to determine what constitutes a service, or block of services, for those purposes. As I said this morning, commissioners would need to have regard to any interlinkages between services, as well as the availability of alternative providers of those services. Those considerations would be different for emergency stroke care, compared with elective specialities such as orthopaedics or dermatology.
Kevin Barron (Rother Valley, Labour)
This is on the same point, because this is about designating a service as opposed to an institution. Can the Minister see a situation where a department in a local hospital—for example, radiography—was not designated, so the commissioners ask for it to be designated and Monitor says no, because it does not think that it is up to standard and because radiography is available elsewhere in the area? I say that because I represent an urban seat and there are plenty of hospitals with radiography services within travelling distance of my house. Can he envisage a situation where a service was not designated and so would not be offered by that department?
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
With regard to the right hon. Gentleman’s specifics about radiography, I will resist the temptation, because the experience with A and E has taught me that it is most unwise. I am going to be consistent. However much Opposition Members try to tease it out, they are not going to get it, because I have learnt.
My hon. Friend the Member for Stafford also asked me to state what an alternative to the NHS provider could be. It could be the private sector, the voluntary sector or, in certain circumstances and depending on the service required, the charitable sector. I hope that that helps him.
The hon. Member for Pontypridd asked how quality will be built into the designation process. Monitor’s guidance will be key in explaining to commissioners how quality should be built in. Monitor will run a full consultation on its guidance, and it will seek responses from the Care Quality Commission to ensure that quality is built into that guidance.
The hon. Member for Easington asked how many organisations will fail. I suspect that the hon. Gentleman can anticipate from past experience what my answer will be. I will most certainly not speculate on what may or may not happen in the future. However, it is beyond doubt that the previous Administration presided over a system in which successful organisations were forced to bail the same failed management out year after year. The evidence is for all to see in the published NHS accounts. Apart from not being transparent, the problem with the old system was that it maintained the wrong incentives. Successful organisations were penalised, failing organisations could duck difficult decisions, and patients and taxpayers ultimately lost out.
Grahame M. Morris rose—
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
May I just finish giving the hon. Gentleman the answer?
Our proposals would put that right by strengthening incentives for improvement and removing the bail-outs for failed management, while protecting patients’ interests and securing continuity of essential services. I will give way to the hon. Gentleman, but I will then make some progress, because otherwise we will be here all night.
Grahame Morris (Easington, Labour)
If that is the assessment, why is it that the west Cumbria practice-based commissioning model, which has been wheeled out numerous times by the Government Front Bench, is in fact running at an £11 million deficit and had to be bailed out by the SHA? If that is a model of good practice and a harbinger of what is going to happen as other practice-based commissioning units come on stream, it is a recipe for disaster.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
To all intents and purposes, the hon. Gentleman is actually describing the previous Government’s system. Through the Bill, we are trying to bring in a system that will avoid the problems that I have just mentioned, so that we can move forward and ensure that good quality commissioning leads to enhanced health care and outcomes for patients. That is the purpose of the Bill, and, as I said, I will now make some progress.
The hon. Member for Southport mentioned that there should be greater control over Monitor’s competition duties to safeguard patients’ interests. The Bill provides the legal framework within which Monitor must operate. It must promote competition only where appropriate in exercising its functions. It must have regard to the need to maintain the safety of people who use the NHS. Importantly, Monitor may promote competition only when it is in patients’ interests.
Finally, one hon. Member asked if bail-outs would stop under the new system. Forgive me, because I cannot remember which hon. Gentleman it was.
Liz Kendall (Leicester West, Labour)
I cannot remember if it was among the many questions that I asked.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
To be fair, the hon. Lady has not asked that many questions during the course of this particular debate, but I have taken interventions from her, and it is always a pleasure to do so. I could not take too many, however, because we have spent a considerable amount of time on what, to my mind, is a straightforward, sensible clause.
Our proposals would protect patients’ interests by securing the continuity of NHS services in the absence of alternative providers. The Bill makes express provision for funding to be given to sustain provision of designated services under clause 111, but the payments would be transparent, in the form of grants or loans. What we will not do is continue the practice of paying non-transparent bail-outs that may reward failed management at the expense of successful services. For those reasons, I strongly believe that clause 69 should stand part of the Bill, and I urge my hon. Friends to support it.
Derek Twigg (Halton, Labour)
I will take only a few moments to make a couple of points. We have asked many questions about the fact that, continually, the Minister will not give examples to back up his arguments, which is really poor. If the Minister has an argument, and he feels that there are plenty of examples of where things have failed, have not been done properly, are not being supported, or where guidance is not being followed in terms of procedure and support, he should say what they are. Interestingly, on designation and non-designation, he says that Monitor will stick to what the guidance says. It is Monitor, however, which draws that guidance up. That will be crucial in terms of how this process works, and we have no sight or idea of it, which is frankly, appalling. I hope that the Minister will look again at whether he can give us more information.
The Minister also does not know how long the process will take, when it will start, or when it will end. There is no guidance on that, which is incredible. This is a major change to the health service, but we do not have that information. Finally, perhaps the Minister will write to me, because he did not answer my question about whether designation in the clause applies to GP services.
Simon Burns (Minister of State (Health), Health; Chelmsford, Conservative)
Sorry, I did forget that. I apologise—I had forgotten initially, but I have the answer now. Will GPs be designated? In principle, they could be, but I do not want to go into too much detail on what services will or will not be designated, because it will be for the commissioners to decide—[ Interruption. ]
William McCrea (South Antrim, DUP)
Order. If Members want to intervene or make a speech, they can do so, but if we have exhausted debate on the clause, we will move on.
Division number 69 - 13 yes, 10 no
Voting yes: Steve Brine, Simon Burns, Paul Burstow, Dan Byles, Stephen Crabb, Nick de Bois, Margot James, Jeremy Lefroy, Nicky Morgan, Daniel Poulter, John Pugh, Anna Soubry, Julian Sturdy
Voting no: Debbie Abrahams, Kevin Barron, Tom Blenkinsop, Liz Kendall, Grahame Morris, Owen Smith, Emily Thornberry, Karl Turner, Derek Twigg, Phil Wilson