Report (2nd Day)

Part of Health and Social Care Bill – in the House of Lords at 6:15 pm on 13 February 2012.

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Photo of Lord Warner Lord Warner Labour 6:15, 13 February 2012

My Lords, I must congratulate my noble friend. He has obviously had an extremely good weekend and is in very fine fettle. He has done a great service in moving the amendment, because it gives us a chance again to air the continuing concern in many parts of the NHS and the outside world about the cost of the organisational changes that flow from the Bill and the risks of those administrative costs escalating in future.

I recognise that nearly all organisational changes have transitional costs, and I do not doubt the Government's genuine belief that their changes will lead to savings in what they call bureaucratic costs. As the Minister knows, I moved some amendments in Committee to try to cap management costs and their annual increases. He told me in the politest possible way and with his normal, reasonable manner that that was unnecessary.

However, I remain concerned about the Government's ability to keep under control the costs of the organisational changes that they have set in train with the very large number of new bodies that can play in the NHS game, as my noble friend Lord Hunt made clear. I do not intend to go over them again, but there are a lot more of them than there were before. Whether we call them bodies or ill-defined entities, such as the senates, they are still people who will be involved in the administrative processes, and I have never found anyone able to engage in administrative processes who does not incur costs and increase the cost of those services. Some of us have been around the public sector quite a long time. Those bodies can use the age-old arguments to grow their organisations over time. Those growths of organisations are, of course, always in the interests of the public. It is always for the best of purposes that they expand.

I see nothing in the Bill that enables those costs to be contained from escalating in future. It is not just about the start-up costs of the national Commissioning Board or Monitor in the early stages; it is a question of where this whole system will end up in two, three, five or 10 years' time, when we see, in its full glory, how it works in providing our NHS.

My scepticism rests on how the Government have modified the Bill as it has progressed through Parliament. It would be easier to be more confident about containing those costs if, after the pause and as the Bill has progressed, we had not seen modification, often done with good intentions and often moved in amendments from other parts of the House. However, we have ended up with a model that looks jolly different from the one that we started with when the Bill began its passage through Parliament.

I have also been struck by what I can only describe as the naivety of the language of some of the Government's supporters, who seem to equate eliminating managers with reducing bureaucracy. As my noble friend said, we badly need managers to make this system work. There is a growing belief that somehow, after all these years, clinicians will suddenly be efficient, cost-cutting commissioners of services and we can forget about the quality of general managers. I am pleased to see the noble Lord, Lord Fowler, in his place because he was, if I may put it this way, the father-or grandfather-of the general management that was introduced into the NHS, and he deserves a lot of credit for that. In the 1980s, the Conservatives decided that what the NHS needed was a good dose of general management, and that is what it had. However, managers suddenly seem to be equated by some of the Government's supporters with the cause of the problem. They are the people whom we seem to need fewer of while we undergo a massive organisational change and have to save £20 billion over four years. How that is all to be done with a new set of organisations and with many of the most experienced managers being lost to the NHS slightly eludes me.

The Government turned their face against using existing legislation to reduce the number of PCTs significantly, reconstituting them with more members from local authorities and more clinicians. Some of us have reduced the number of PCTs and SHAs and have substantially reduced the number of ambulance trusts without any primary legislation at all. I am still waiting to hear convincing arguments as to why we could not have done some of that under existing legislation without inflicting much of the organisational change relating to commissioning. I support in principle more clinician involvement in commissioning, but why could that not have been done within the existing legislative framework without this plethora of new entities being created? These new bodies will have to learn how to run the NHS and will incur quite a lot of costs while doing so.

In the current public expenditure climate, we cannot afford to have what I would call youth training scheme approaches to managing the NHS. A lot of new people will have to learn on the job. If we do not introduce into the Bill some constraints on these costs, they will escalate out of control. That is why I do not think that my noble friend's amendment is the perfect solution, although it is an attempt to try to curb costs and stop them running out of control. However, I fear that that is what we shall see when the sets of changes in the Bill are implemented in the real world.