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Report (6th Day)

Part of Health and Social Care Bill – in the House of Lords at 11:38 am on 8th March 2012.

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Photo of Baroness Thornton Baroness Thornton Shadow Spokesperson (Equalities and Women's Issues), Shadow Spokesperson (Health) 11:38 am, 8th March 2012

My Lords, I start by wishing everybody in the Chamber a happy International Women's Day.

We turn to the discussion about the private patient cap. We have three amendments in this group, and I will talk to each of them.

Amendment 218A seeks to ensure that proper information is available on private patient income-that is, more than just the final line of total income. This is relevant to ensure that there is no possibility of cross-subsidy from the NHS to the private sector, either directly or by some accountancy magic. There needs to be absolute clarity. As we see new foundation trusts emerge that are neither mental health nor acute-based trusts-ambulance trusts, for example-the issues may be different but the need for transparency and accountability is just the same. This is important for openness and transparency and makes easier the kind of considerations that the governors need to apply. It is also a means of sending a signal that this activity is separate and, at least in some sense, subordinate to the principal purpose, which is to treat NHS patients.

The amendment seeks to delete the part of Clause 163 that brings in the 49 per cent test, which is a new way of making explicit the "principal purpose test" that all foundation trusts have to meet. I think we could all agree that the reaction to the figure of 49 per cent shows how strongly many believe that this is an obvious signal that there should be a great increase in private income that is neither anticipated nor desired. We know that in reality very few foundation trusts even get to 5 per cent, let alone 50 per cent, and there is no immediate prospect of them doing so. It is therefore difficult to see why the Liberal Democrats or indeed Mr Lansley would be so crass as not to see how the 49 per cent figure would be greeted.

There are several dangers with this late pre-Christmas addition to the Bill. It sends the wrong message. We believe that it may tempt bureaucrats and quangos charged with funding to say that some foundation trusts should get less funding as they have not done enough to push up their other sources of income, as we have seen with local authorities that rely heavily on other income. This would be totally wrong and an inappropriate target for the NHS. We also think that there is a danger that high levels of foundation trust income may exacerbate fears of queue-jumping and charging.

There is a serious argument that when private patient income is as the result of innovation and intellectual property, as we all wish to be the case, then high levels of benefit should be shared more widely rather than being kept in one trust. Since the NHS as a whole will have nurtured that opportunity, the NHS as a whole should benefit. A high-performing trust with little or no private income is certainly no worse than any other, and some may argue that it may even be better if its focus is in the right place-that is, NHS patient care. We suspect that this might be an attempt to shift foundation trusts from being NHS providers that focus on NHS patients to some sort of multinational health business, and that their success or otherwise will be measured against a new benchmark of how much private patient income they generate.

Of course we recognise the special place that some of our leading hospitals have in the high private patient cap that they need to reflect their partnerships with research and other institutions across the world. None of these amendments seeks to diminish that-indeed, quite the reverse-but those hospitals will only ever be a small number, and the amendments address the majority of foundation trusts.

In Committee I asked the Minister for any evidence of benefits to NHS patients. It seems that the Government were just relying on claims made by a number of foundations trusts eager to expand. One day perhaps a proper independent study will be carried out. Some would say that independent studies into claims that foundation trusts are more innovative or that they improve faster than non-foundation trusts have been disproved by evidence. The real test is how private income benefits NHS patients, and that is not the same as benefiting the organisation or the prestige of some of its senior staff. Removing the 49 per cent and relying on the principal purpose, plus the role of governors, is a much better route to providing the flexibility that is needed to change private patient income caps. Our Amendment 220C addresses that issue, and it has been the subject of much discussion. I hope that the misrepresentation of that amendment, particularly by the Prime Minister, will not be repeated here. We accept the need for flexibility, and were looking at this matter when in office.

We do not propose to reduce any FT cap from where it is at the moment; that is not what that amendment is about. Our principles encompassed in that amendment are that there is a cap set on authorisation; that it is foundation-trust specific, and therefore local, which is completely in tune with the Bill; that it may be changed by the foundation trust board in agreement with the governors after proper consultation with the members of the trust; that it should be changed only after consultation with local CCGs and health and well-being boards; that regulations should set out the basis for consultation; and that major changes should only be additionally agreed with the regulators. In other words, if one of those foundations trusts already has a high cap and wants to increase it, we do not say that that should not happen, but we do say that the regulator should be involved in that discussion.

That amendment accepts that the cap can change up or down, and that a cap can reflect local circumstances. That is not a bar to change, nor is there some arbitrary upper limit. To avoid any other misrepresentation, if a foundation trust is already above the 5 per cent level, it can still increase its cap but would require the approval of Monitor. That seems to me to be a sound case that could not unreasonably be refused. We are not inhibiting the Royal Marsden or any others.

I would like the Minister to clarify something in his amendment: is his "5 per cent" 5 per cent of 5 per cent, or is it 5 per cent of the total figure? It is not completely clear to me what is being proposed there.

These principles are sound. I beg to move.