HC Deb 03 November 1976 vol 918 cc1584-94

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Graham.]

12.21 a.m.

Mr. Robert Banks (Harrogate)

I am particularly grateful to Mr. Speaker for giving me this opportunity of raising the extremely important subject of the cost of the White Hart training centre in Harrogate to the National Health Service, not only because it is a matter of very great concern in my constituency but because of its significance in the NHS picture.

This debate takes place against the background of several factors. Expenditure by the NHS has risen since 1971–72 from £1,981 million to an estimated £4,564 million by 1975–76. The Government are borrowing something over £10,000 million this year to finance this rate of expenditure in the NHS and in other departments.

This increase in the rate of Government spending has drawn people from the industrial productive sector of our economy into the non-productive sector of Government administration. It has meant the mortgaging of the young generation to the yoke of indebtedness and vast borrowings. It has brought about a deep and worsening financial and productive crisis, with a serious loss of confidence in the Government here at home and abroad. These conditions dictate careful and restrained expenditure and the placing of emphasis on sustaining productive industrial growth.

The White Hart was built as a hotel in the 1840s, and in 1952 it emerged as a hospital for patients having physiotherapy treatment. It later became an annexe to the Royal Bath Hospital, having 120 beds for rheumatic patients. In 1970 it was closed because it was said that the building was unsafe and its repair too expensive.

In 1974, when I had the honour to be returned as the Member of Parliament for Harrogate, the future of the empty building was in doubt. I supported those who valued its architectural and landscape importance to the town. Therefore, when the announcement was made later in the year that the Secretary of State had decided to recondition the building and convert it into a 54-bedroom centre for training senior administrators, I shared the general feeling of relief that some useful purpose had been found for the building, which was already owned by the NHS.

Work became apparent early in 1975, and when I sought information by letter from the Minister I was told that the cost of conversion would amount to approximately £290,000, that the centre would open in April 1976 and that the estimated running cost would be in the region of £80,000 per annum.

I wrote again in July of this year for confirmation of the figures given earlier. Owing to the delay in obtaining a reply, I tabled a Question and ascertained that the estimated running cost was now £235,000—an increase of £155,000 per annum in one year. The conversion cost was later estimated to amount to £297,728 in a letter which I received on 10th August.

The Under-Secretary has a duty now to explain this gigantic increase in estimated running costs and to say whether a proper costing of this costly enterprise was worked out before the scheme was approved. Whether the running costs are paid entirely by the Department in London or partly by health authorities sending students on courses at the centre is neither here nor there. The fact is that the cost has to be borne by the National Health Service as a whole and paid for by the taxpayer. I should be grateful to know how the capital and running costs are funded and whether cash limits on the centre apply

The overriding question is how this expensive scheme came to be given priority over other expenditure in the NHS and how such an expensive project was justified in the first place. How is it that it is so necessary to spend this amount of capital and to burden the NHS with an overhead of nearly £250,000 a year, which will rise with inflation, to train senior staff in the five-star hotel conditions that I have seen at the White Hart? It has brought yet more bureaucrats and staff into the NHS to train senior administrators with management responsibilities, and there is now yet one more building to be maintained and administered.

I am told that there are 38 members of staff at the centre in all, and they include our porters. Will the Under-Secretary please clarify this and indicate the salary and wage scales applicable?

The significance of this case for the country is that it is an example of where expenditure should have been cut to reduce overall expenditure and the National Debt. Above all, it is an example of misjudged priorities. I have the impression that the money was there in the appropriation and that the Minister was determined to spend it. The scheme was undertaken by the Department in Whitehall, and I understand that the regional health authority held only a watching brief on the conversion works.

I visited the White Hart on 29th September when a course was being held for district dieticians. This was shortly after the centre had opened. There are 94 district dieticians in the NHS, and I cannot help wondering whether those who were on the course were in the senior administrative bracket that the centre is designed to train.

I could not find one example anywhere to show that some small expense had been spared. Each bedroom has piped radio equipment, and my impression was one of expense, quality and prestige. A visiting delegation from a foreign Parliament would undoubtedly be immensely impressed to stay there. The cost of conversion includes, I trust, all equipment, furniture and general furnishings, and I look to the hon. Gentleman for confirmation of the final conversion costs and running costs and the cost of those items separately of which I have given prior notice in other questions.

The building is carpeted throughout, and my impression is that this is the sort of luxury to which even our best hotels do not run. How much carpeting was supplied and at what cost per square yard, on average?

I was surprised to see a television studio and to hear that an element of the training was in making television appearances. How much did this cost, and why is public money being spent to train management in the art of television rather than to obtain greater efficiency in their jobs—or is it that it is fun for the course members? I hope that the hon. Gentleman will answer this.

The principal's conference room on the ground floor is furnished in a style and quality which might be featured in the glossiest international magazine to illustrate the most sumptuous style of the top British executive. Nothing in embassies that I have seen abroad can match what I saw as a way to impress. No doubt the hon. Gentleman will be able to give us an example of the cost of just one elbow chair, for instance, the cost of this room and the furnishing of it.

I received a letter a few days ago in the course of which the writer said: When we saw the bar … we were amazed. It is all like 'Alice in Wonderland'. There are hospitals where two operations cannot be done at the same time because there is only one set of instruments. It is obvious there is no check on public money. Many people have similarly expressed amazement and wonder at the sight of the bar. They are taxpayers' and as such they have the right to know the cost. I ask the Under-Secretary to satisfy that curiosity tonight.

How right the writer of that letter is. Is it any wonder that people are disillusioned with the National Health Service or with a Government who direct spending in this way? There is a little boy in my constituency who has been told that he must wait a year for an important ear operation because of the waiting list for surgery cases. How can the Under-Secretary justify the scheme when there are cases such as that, when there are doctors and consultants who are exasperated with the National Health Service, when phase 2 of the Harrogate district hospital is still waiting to be built and when other similar schemes in Yorkshire are in the same boat? Similarly, the question is raised as to why the scheme came to be put into operation when there are 980 other NHS training establishments already in existence. Was it impossible to utilise some of those facilities? Was it necessary to embark upon this capital and overhead cost of the White Hart when so many hotels, private colleges and universities are able to provide facilities and accommodation?

The Under-Secretary knows that this was an expensive error of judgment. I hope he will earn our respect by admitting it. Training, if it is the right training, is important in improving efficiency. That was always the case, before and since reorganisation. But the country has been brought to its knees financially, and to set up a training school at this cost when so many cheaper alternatives are available is a scandalous disgrace.

The White Hart is only part of the story. Bureaucracy has a natural tendency to spread, and four houses were purchased close to the White Hart. Why were they bought and what did they cost? How much has been spent on them and what is their future?

At the end of this sorry tale, what can we hope for? I trust that the debate will serve as a check on other schemes in the Minister's mind. I hope that every economy will be made to reduce overheads at the centre. I hope that the expensive furniture will be put to more productive use in our embassies abroad and that a utilitarian sense of proportion will result in replacing furniture by something which is more commensurate with the function of the centre.

Ultimately, it is the will of Ministers to respond to Parliament which is the strength or weakness of our democracy. It is little use Sub-Committees of the Public Accounts Committee reporting critical findings on expenditure by Ministers if they are ignored. I trust that the Under-Secretary will take notice of the debate tonight and of the need to spend on necessity rather than superfluity.

12.33 a.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins)

I am grateful to the hon. Member for Harrogate (Mr. Banks) for having given me some notice of the detailed points he would raise. That enables me to deal with the matters in a fairly short speech.

The issues which the hon. Member has raised are important ones. Good financial management and a proper sense of priorities have always been important in the administration of the NHS: they are doubly so today in our constrained economic circumstances when we can no longer look for the same pace of growth in this service as in the past. I am glad of the opportunity, therefore, to put the various questions about the White Hart Training Centre into perspective.

First, let me deal with the basic facts. The centre comprises a Georgian building originally designed as a hotel. This was acquired by the National Health Service in 1952 and was used as a hospital for rheumatic diseases until 1971. The centre provides 53 bedrooms and full related training facilities. The centre is a national one, the only one of its kind in the NHS. Its primary purpose is to provide training at national level for senior staff—earning from around £4,000 to over £10,000 a year—with important management responsibilities. The main focus of the training provided at the centre will be the effective management of particular "functional" services—for example, supplies, catering, domestic services, pharmaceutical services and so on—the more effective working together of these different functional services and the study of new or developing NHS problems and policies.

The cost of converting, furnishing and equipping the building for use as a training centre was funded by the Department as a special development under the Health Service Capital Building Vote. Conversion and structural alterations, including making good serious structural defects which had contributed to the building's closure as a hospital, cost £298,000. In addition, some £102,000 was spent on furniture, furnishings and equipment, including £11,000 for television and related equipment required for training purposes.

Four houses were also purchased at a cost of £50,000 on the basis of local advice that the centre would require to provide residential accommodation for a proportion of its catering and domestic staff. Owing to a change in the local employment situation in the area since this advice was given, the need for such accommodation has proved to be less than was estimated. One of the houses provides bed-sitting accommodation for four members of staff; two of the houses have been put on the market for sale; the future of the fourth house is still under consideration.

The centre opened for business in September of this year and its estimated gross running cost per annum is £235,000.

In order to clarify the situation in the light of figures quoted by the hon. Gentleman, I should say that the figure of approximately £80,000 was the forecast of the net annual running costs of the centre given to the hon. Member in June 1975. At that time the gross running costs were estimated at £195,000 and it was expected that an income of over £100,000 would be received from health authorities as contributions to the cost of courses their staff were attending. Price increases since the gross figure was calculated have largely contributed to the current estimate of £235,000. Although some activities at the centre will be rechargeable, in drawing up the programme for the first full year it is now envisaged that a larger proportion will be financed centrally from existing funds available in the overall training budget.

The running cost represents a cost per student week of about £150, which splits roughly equally between training costs and hotel costs. The approved staff establishment for the centre is 45 and the number of staff at present in post 43. I am providing the hon. Member with details of the staff establishment and salary and wage scales.

The need for such a centre as the White Hart now provides had been recognised since at least 1968 and plans had been prepared for a considerably more expensive project in Cambridge. These were rejected in 1973 and the decision made to seek an alternative location. The White Hart was chosen after inspection and assessment of some half-a-dozen buildings in various parts of the country.

The decision to provide a national training and studies centre for the NHS was a direct recognition of the importance attached by my Department to its management effectiveness in the NHS its provision was certainly not an error of judgment. With its total of some 800,000 staff, the NHS is the largest employer in the country, and NHS services cost about £3,068 million per annum, of which £717 million is accounted for by the family practitioner services and £1,793 million by salaries and wages. The NHS does not direct the clinical treatment of patients by doctors, but the facilities required for the purpose and the services needed to support it together constitute an immense business enterprise, which calls for management skills and expertise of a high order if its resources are to be used cost-effectively for the intended objective, namely, the prevention and treatment of illness.

A few figures can illustrate the scale of NHS operations. For example, hospital domestic services, an unglamorous but vital service, cost some £160 million a year. A district catering manager will typically be responsible for a budget of £1 million a year. In supplies, where annual expenditure exceeds £600 million, a systematic effort is being made to improve the training of staff and to examine new methods of procurement, stores development and organisation. These are but three examples of a much wider range of services. But in these alone a 1 per cent increase in effectiveness could secure economies of £9 million per annum.

A great deal of money is at stake, therefore, in efficient management of the NHS, and training for managers and potential managers must play a vital role in securing this and related economies and improvements. There can be no question, of course, of centralised training for the very large numbers involved, and most management training within the NHS is arranged or commissioned by the authorities concerned at district, area or regional level as appropriate. But most large organisations within the public and private sectors—for example, the National Coal Board, the clearing banks, and large industrial and commercial companies—also see very good reasons to supplement local training requirements by a national centre designed specifically to meet the training needs of senior management staff. Before the opening of the centre at Harrogate, the NHS was almost alone as a major national organisation in lacking this facility.

The centre's current programme includes courses for catering and domestic managers, personnel officers, regional pharmaceutical officers, regional statisticians, directors of nurse education and staff of the remedial professions. It will be noted that the total gross running costs of the centre amount to less than one-hundredth of 1 per cent. of the total cost of NHS services.

The hon. Gentleman has also suggested, however, that, whatever the justification for the decision to establish a national training centre at Harrogate, due economy was not exercised in the arrangements to give effect to it. This is a view which I cannot accept.

It is important to recognise that the very intensive work undertaken at such a centre is not simply, or even primarily, a matter of classroom instruction and formal study. A national centre brings together senior staff with a wide range of experience in practical situations, and to provide the means of sharing this experience and the lessons which can be drawn from it is one of the essential objectives of the training. Common rooms which provide the right sort of atmosphere for discussion of problems in an informal and social environment are therefore an integral part of the requirements for a senior staff training centre, and they need to be equipped with this in mind. Use of such descriptions as "luxury" is obviously a matter for subjective judgment. But the appointment of the rooms for general use must be such as to provide an attractive and comfortable environment. The furnishing of a centre also has to take into account that rooms and furniture will be subject to a good deal more use, wear and tear than would be expected in an ordinary home. It would be false economy to buy cheap furniture, furnishings and equipment which would need relatively soon to be replaced.

All these points were taken into account in the brief to the planning team and the consultant architect to aim for a reasonable but not extravagant standard. It was understood that the aim should be a standard equivalent to that of a three-star hotel. The present appearance of the centre must, of course, be influenced by the architectural quality of the building, the good proportions of the rooms and the fact that the furnishings are still in a new and unworn state. The cost both of the conversion work and of the furnishing and equipment was generally consistent with this brief. For example, despite price inflation, ruthless pruning by the architect and project team reduced the actual conversion cost by 17 per cent. compared with the original budget estimate. Most of the bedrooms have no shower or bathroom attached, most of the walls are simply emulsion-painted and considerable expense which would have been involved in making good poor-quality floors was eliminated by the decision to provide instead a thick carpet underlay.

For one room only, intended for use on special occasions and referred to by the hon. Gentleman as the principal's conference room, the project team decided that a special standard of furnishing was required. Furniture for this room cost a total of £4,168, which included the cost of 12 elbow chairs purchased at a cost of £101.70 plus VAT each. As to the other particular matters asked by the hon. Gentleman, I understand that the contract price for the bar fittings and seating was £3,468.09 and that a total of 3,484 sq. yds. of carpeting was purchased for the centre at an average price, inclusive of VAT, of £3.66 per sq. yd.

Catering standards at the White Hart are also modest. Students have to make their own morning and late night tea or coffee in a communal utility room, and, of course, all drinks provided from the bar and any wine taken with meals have to be paid for by the students.

I have also compared the overall running costs of the centre at Harrogate with information provided confidentially about costs for a sample of other national training centres within both the private and public sectors providing training for senior managers. Costs in all the centres in the sample appear to be markedly higher than at Harrogate, with a cost ranging from about £200 to £276 per trainee week for the other centres as compared with our estimate of £150 for Harrogate.

Having given those detailed statistics, I hope that I have clearly explained to the hon. Member, the House and the world outside the reasons for having this centre, how we have arrived at the costs, and the measures taken to keep them within a reasonable level.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to One o'clock.