My Lords, the noble Lord has raised an important question about the capacity of the NHS to handle the extra resources that it has been given. My experience is that the NHS has been good at handling less than adequate resources and still keeping the show on the road. The tremendous challenge now is for it to go through an enormous culture change to use the extra resources to the best effect. I agree that it would be a tragedy if those resources were not used to achieve a significant change in NHS provision and a significant improvement in what the public receive.
There are four ways of ensuring that the money is put to good effect. As I said in the Statement, we are moving to a management philosophy that we call earned autonomy. For many years, there have been complaints about too much interference from the Department of Health in the affairs of local health authorities. We are trying to develop a way of working that rewards people who are meeting their priorities and doing good work. They will receive additional resources and will be given more freedom to use those resources well, because they have proved that they can be trusted.
However, for health authorities with real problems we shall have a more interventionist approach. We have a modernisation agency and the Commission for Health Improvement. We can intervene if we are not happy with the performance of local management. We can bring in people who have done well elsewhere to help the authority to make changes, while keeping a close eye on developments.
Overall the health service has good management, although it is variable. We need to invest in it more. Our proposal for a leadership centre is designed to identify the health service leaders of the future and to give them the support, training and monitoring that they require.