HC Deb 15 January 2002 vol 378 cc174-99

'(1) The Health Service Commissioners shall investigate the preparedness—

  1. (a) of Primary Care Groups to become Primary Care Trusts; and
  2. (b) of Primary Care Trusts to receive functions in accordance with this Act.

(2) If after conducting an investigation it appears to a Commissioner that—

  1. (a) a Primary Care Group is not ready to become a Primary Care Trust; or
  2. (b) a Primary Care Trust is not ready to receive functions in accordance with this Act
he shall lay before each House of Parliament a special report.

(3) If a special report is laid in accordance with subsection (2)(a) above, no action shall be taken by the Secretary of State pursuant to section 16A(1) or (1 A) of the 1977 Act for the period of one year from the date of laying of the report.

(4) If a special report is laid in accordance with subsection (2)(b) above, no functions shall be transferred or distributed to the Primary Care Trust referred to in the report for a period of one year from the date of laying of the report.'.—[Mr. Burns.]

Brought up, and read the First time.

4.38 pm
Mr. Simon Burns (West Chelmsford)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Sylvia Heal)

With this it will be convenient to discuss the following amendments: No. 6, in clause 1, page 2, line 11, at end insert— '(c) a Strategic Health Authority shall only be established under paragraph (a) above provided that there has been consultation with health professionals, local authorities and the general public in that area.'. No. 7, line 11, at end insert— '(d) Health Authority shall only be established under paragraph (b) above provided that there has been consultation with health professionals, local authorities and the general public in that area'. Government amendments Nos. 23 and amendment (a) thereto, 24 to 26, 74, 27 and 28.

No. 8, in clause 8, page 9, line 21, at end insert— '(2A) In determining the amount to be allotted to a Primary Care Trust, the Secretary of State shall have regard to any liabilities which have been conferred upon it'. No. 9, line 21, at end insert— '(2B) In determining the amount to be allotted to a Primary Care Trust, the Secretary of State shall have regard to the health needs of the population served by that Trust.'. Government amendments Nos. 35, 36, 54, 55 and 61.

Mr. Burns

We tabled new clause 1 because, as we said on Second Reading and in Committee, we believe that there has been an inordinate rush to establish strategic health authorities and primary care trusts. It would be a grave mistake, and the height of folly, to rush through reforms in such as way as to leave them half cocked and half baked, so that the Bill does not achieve the Government's aims.

The changes proposed in clauses 1 and 2 are extremely far reaching. Clause 1 proposes to abolish health authorities in England, of which there are approximately 95, and to replace them with strategic health authorities. There will be far fewer strategic health authorities than there are health authorities, and they will perform the key performance management role across the national health service in England. They will be responsible also for providing a lead in the strategic development of services, and for ensuring that all parts of the NHS work together effectively.

The new primary care trusts will have the critical responsibility of providing and funding health care. About 75 per cent. of NHS funding will be handed to the PCTs to provide health care for our constituents around the country. The concern is that there has been far too much of a rush over starting up a new system that is very complex and wide ranging.

I cannot understand why the Government are in such a rush to engineer the reforms. I question whether the structures to be put in place are ready to work without the whole edifice collapsing in confusion and disaster. The Government's rush to implement the changes reminds me of the adage, "Reform in haste, repent at leisure." The British Medical Association has warned that PCTs, where they exist, are relatively new organisations and that, as a result, the demands placed on them may be beyond their capabilities.

The BMA has highlighted the fact that existing PCTs already experience difficulties in recruiting clinical staff, and warns that those problems will be exacerbated. It is also concerned that the timetable within which PCTs are intended to be and up and running is far too ambitions.

As we heard on Second Reading and again in Committee, the Standing Committee considering the Health Bill in 1999—which became the Act that made possible the establishment of PCTs—was told by the former Minister of State at the Department of Health, who is now Minister for Police, Courts and Drugs, the right hon. Member for Southampton, Itchen (Mr. Denham), that it was important to emphasise that the Government did not intend a headlong rush to be made into PCTs". He added that it was not part of the Government's agenda to impose PCTs on the national health service."—[Official Report, Standing Committee A, 27 April 1999; c. 252-53.] In another place, the former Health Minister Baroness Hayman made exactly the same point and gave the same assurances that there would be no rush to create PCTs, but the Government have performed a complete U-turn and are now doing precisely what they said they would not do when the 1999 Act went through this House a mere two and a half years ago.

Not only Conservative Members are worried. Severe concerns have been expressed by members of the health professions that the proposals are being rushed through. A recent survey in the Health Service Journal showed that 46 per cent. of chief executives in NHS organisations believed that PCTs would be unable to cope with enlarged responsibilities, and that 33 per cent. of them thought that the time scale and scale of the changes were unrealistic and dangerous. One chief executive has called the reforms a recipe for disaster, and another has described them as the most ill conceived and poorly thought out set of changes in decades.

The King's Fund, in collaboration with the National Primary Care Research and Development Centre, has carried out a tracking survey on primary care groups and trusts. It suggests that there are many doubts about the ability of PCTs to absorb the pace of reform. Professor David Wilkin, the project director, said that the pace of change was being dictated by Government timetables rather than by a process of learning and of building on experience. He also pointed out: It is not merely a question of resources to sort out this issue … What is needed are managers with the right skills and experience coming through the system. Managers from trusts and health authorities can be taken on, but we are dealing with primary care and they don't necessarily have the skills needed".

The survey pointed out that the average number of managerial, financial and administrative staff employed by primary care groups was 6.8, compared with an average number for primary care trusts of 15.8—a serious discrepancy.

Equally worrying is the fact that one in seven PCGs or PCTs still has—or had at the end of last year—no financial director.

The Minister of State, Department of Health (Mr. John Hutton)

I am reluctant to interrupt the hon. Gentleman's measured flow, but he is aware, because he raised the same point in Committee, that primary care groups are sub-committees of health authorities and are under no obligation to employ their own finance director. They use the finance directors employed by health authorities, which is a perfectly sensible arrangement.

Mr. Burns

I appreciate what the Minister says, but PCTs will have to employ finance directors when health authorities are scrapped. It is by no means certain that the finance director of a health authority will become the finance director of a PCT. [Interruption.] The Minister says "obviously". I accept his observation, but I argue that it adds to the force of my case. I suspect that many PCTs around the country will have finance directors without direct experience of working in the health service, with all the nuances and differences that those responsibilities cover.

4.45 pm

According to the report, the situation with regard to information management and technology was perhaps of more concern. It states: Information to support core functions of PCG/Ts is inadequate and shows little sign of improving. PCG/Ts have made some progress in formulating development plans". It goes on to say: Increasing shortages of skilled staff and resources make it doubtful whether they will achieve key national targets. Of greater worry to the authors of the report, to the BMA and to many others is whether the changes in the Bill will divert activity and resources from front-line patient care. Three quarters of chief executives questioned believed that the reorganisation would delay delivery of the national plan, and a quarter thought that the delay would be severe. That would obviously have a critical impact on the delivery of patient care and the ability to provide the seamless flow of patient care when the changeover occurs.

Our new clause seeks to save the Government from themselves by laying down procedures to ensure that changes to the delivery of health care under clause, 1 and especially clause 2, are introduced smoothly, successfully and without undue haste. We propose that the health service commissioners should investigate the preparedness of PCGs to become PCTs and the preparedness of existing PCTs to fulfil the functions that the Bill places on them.

Under our new clause, where it is found that a PCG is not ready to become a PCT or—possibly more important because of the unseemly rush of PCGs to become PCTs—t is found that a primary care trust is not ready to carry out its functions, a special report would be laid before both Houses of Parliament. There would then be a period of 12 months when no action was taken, so as to establish a breathing space to allow PCGs and PCTs to prepare themselves adequately to perform their duties and functions. I hope that the House agrees that our suggestion is eminently sensible and that it will avoid the confusion and chaos that will result from fragile new bodies carrying out immense new duties with too little or no experience.

If our Committee debates are anything to go by, Ministers will respond in an ostrich-like way. They will refuse to remove their heads from the sand and will try to reassure us that everything is proceeding satisfactorily, that there is nothing to worry about and that there are no problems. I am sure that they will trot out the same statistics as we heard in Committee at the back end of last year.

Ministers will tell us that by October 2002 PCT coverage in England will be 100 per cent. I was interested to note, when I re-read the Minister's comments, that during the early sittings of the Committee he told us that there would be 100 per cent. coverage by April 2002. During a few sittings of the Committee, that date seemed to slip back to October 2002.

Today, the Minister may be able to update us on the statistics that he gave us in Committee on the current progress of PCGs and PCTs. I suspect that, given the relatively short period that has elapsed since the end of the Committee proceedings, the figures will differ little from those that he gave us on 27 November last year.

The Minister seems rather cheerful, as though there had been a dramatic change in the statistics. I shall read the statistics that he gave us last November, and no doubt he will be able to update us during the debate. While he is doing so he may prove one of the points that I am making about the moral pressure that is being put on PCGs to seek PCT status. They feel under pressure to achieve that status as quickly as possible so as not to miss out, or to cause problems, before October of this year.

Unless the Minister has startling new figures, however, I suspect that we shall hear that 164 PCTs were established by April 2001; that a further 23 were—at the end of last November—likely to be approved shortly; that 23 of the remaining PCGs were approved for establishment from April 2002; and that 20 had been approved but had not yet received their notification of approval. I suspect that notwithstanding the Christmas post they will almost certainly have received that notification by now.

The Minister will tell us that 98 PCGs have submitted proposals for approval and were likely to be approved during December 2001 and January 2002. Of course, it is highly unlikely, given the Government's policy, that a PCG will not receive approval for trust status. He will tell us that a mere 11 PCGs are still consulting.

In the not too distant future the Minister will, no doubt, update the figures. From the look on his face, he may even be able to tell us that he anticipates 100 per cent. approval by April 2002. That remains to be seen. However, behind all those statistics and behind whatever new statistics the Minister may shortly give us, a simple fact remains: there has been undue haste because the Government have changed their policy on PCTs. In effect, they have moved from a policy that was wholly voluntary.

The Minister will say that there is currently no legal power to make any group become a PCT. That is true, but the pressure on PCGs to fall in line with the Government's policy and become PCTs is overwhelming, because they know that once the Bill is on the statute book the voluntary nature of becoming a PCT will be removed. We questioned the Minister on several occasions in Committee. He replied that he would ensure 100 per cent. coverage of PCTs in England by October 2002—if necessary, by using the legislation.

PCGs are now becoming PCTs voluntarily, but that masks the pressure they have been under—that of knowing what the future holds for them. Like all hon. Members in the Chamber, they have seen the Bill and know the Government's intentions. As a result of that pressure, many PCGs that were not in the first wave rushed into securing trust status, which they otherwise probably would not have sought within such a relatively short time scale. A great deal of pressure has been put on PCGs to achieve PCT status, and many of them might not be properly prepared to handle their new, highly complex and difficult responsibilities. For those reasons, tremendous problems could arise in the health care provided to our constituents.

My message to the Government is simple, and it is intended to be helpful: they are under no pressure—or only that caused by their own enthusiasm to put their Bill on the statute book to ensure that their proposals are up and running as soon as possible—and they should hold back for a short period. I suggest not that the proposals on trust status should be kicked into the long grass for a decade and a day never to happen, but that the Government should allow a little more time for the experience and expertise to be built up to ensure that, from day one, PCTs operate in a seamless and workable way and that our constituents encounter no hiatus, no teething problems and no other problem with their health care.

As my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) said in Committee, we do not disapprove of the PCT concept, but we want the Government to ensure that PCTs work properly and that they seamlessly fulfil their functions as soon as possible. If something is rushed, there can be no guarantee that that will be the end result. I warn Ministers now that if the transition is not seamless and it is bungled by the rush, terrible problems will arise. People's health will be directly affected by any hiatus in the supply of care. Ministers do not want that to happen, which is why I cannot fully understand why they seem to be reluctant to take well-meaning advice simply to delay things a little to give the system time.

Lynne Jones (Birmingham, Selly Oak)

I understand the hon. Gentleman's concern about the rush to create PCTs. I attended a meeting of the PCG in my area last summer and can confirm that pressure has been put on those organisations. Indeed, a PCT has been created in my area despite the fact that the majority of GPs voted against it. However, I am not so sure about the new clause. There should be a delay but, when the health authorities are abolished, who will carry out the responsibilities currently delegated to PCTs?

5 pm

Mr. Burns

The hon. Lady, who represents a Birmingham constituency, alludes to a considerable problem with primary care trust status in her area. There was a great deal of opposition to the proposal. As she knows, there could be serious problems if—God forbid it does not happen—there were to be a hiatus as a result of the change. As she rightly said, the health authorities that handle the funding for the provision of services will be abolished and replaced by smaller strategic health authorities that have a completely different function and role.

Most of the functions that health authorities perform will be transferred to primary care trusts. If they are in turmoil as a result of their lack of experience of running the new system, they will face a serious problem and there will be no way out of it. That is why I am desperately trying to impress on the Minister how sensible it would be to provide a little more time. We should not push the policy into the long grass never to be seen again; we should provide more time to allow expertise to be built up.

Mr. Mark Francois (Rayleigh)

I want to support my hon. Friend's argument with a practical example from my constituency. Rochford primary care group, which includes several GP practices from Castle Point, considered whether to apply for PCT status but declined to do so in the first instance for a number of reasons. It had general concerns about the Government's proposals, faced some organisational issues and also faced problems with timing. Some of the GPs who were consulted thought that they were being rushed into the change.

My hon. Friend's point is a real one, as evidenced by experience in my constituency. Leaving aside GPs' anxieties about the overall desirability of the proposals, many are anxious about the pace at which the change is being attempted.

Mr. Burns

I am grateful to my hon. Friend and next-door neighbour for a powerful point that backs up the examples that my hon. Friend the Member for North-East Hertfordshire and I have been given from around the country.

My hon. Friend the Member for Rayleigh (Mr. Francois) is absolutely right. He has first-hand experience in his constituency of a problem that is not unique to his area. I am glad that the Minister is here to listen to the very problems that my hon. Friend highlighted.

Amendments Nos. 6 and 7 would also affect PCTs, as strategic health authorities in England and health authorities in Wales would be created only once there had been proper consultations with health professionals, local authorities and the general public in the relevant areas in which the authorities are to be established.

I hope that Ministers in a Government who pay lip service to openness will find the amendments appealing. Before establishing a body that is responsible for strategic planning, it would be sensible that those who have to help to implement decisions and those who will be affected by those decisions should be consulted about the setting up of the authorities and about the crucial strategic role that they will play.

I am heartened and pleased that we tabled such timely amendments. I received on my desk at lunchtime the Secretary of State's speech to the New Health Network, which he gave this morning. I am not sure when you entered the Chamber, Madam Deputy Speaker, but it was interesting to see the Secretary of State for Health dragged here at half-past 3 to respond to a private notice question from my hon. Friend the Member for Woodspring (Dr. Fox). The right hon. Gentleman's interesting and important speech raised a number of issues on which we, through the good offices of Mr. Speaker, had the opportunity to question him, instead of leaving it to journalists.

It was fascinating to see the right hon. Gentleman's reaction. The Benches were much fuller, and we had to look far and wide to find a Labour Back Bencher who was prepared to offer a crumb of support for the contents of his speech. It struck me that if the speech sets out his new philosophy and ethos—the word that he now uses—perhaps his Minister of State will be more amenable to accepting amendments Nos. 6 and 7, which encourage openness and consultation.

In the speech to the New Health Network, the Secretary of State said: All of these reforms although relevant to the health service more generally, they tie in with the amendments— involve government acting on behalf of patients in order to influence how the NHS relates to patients", as, indeed, the strategic health authorities should relate to patients. He went on: They are all about getting the NHS to put the needs of its patients first. But a service designed around the needs of patients has to hand over more power directly to them. So there are reforms to give patients a greater role and a stronger say in the NHS—patients forums in every trust"— we will get on to those later because my hon. Friends and one or two Labour Members are not fooled by that patients electing patients onto trust boards, the results of patient surveys helping to determine the ratings and the resources that trusts receive. And there are reforms too to introduce new procedures for informed consent because while patients have a responsibility to keep healthy, treat professionals respectfully and use services wisely, they have a right to be involved in decisions about their own care.

I welcome the Secretary of State's philosophy on that, but what gives patients a greater opportunity to be involved in decisions about their care than consulting them, with health professionals and local authorities, as part of the local community, before the important strategic health authorities are set up? I should have thought that he would be delighted that I am embracing that aspect of his philosophy.

Although the Secretary of State had to concentrate on surviving the questions put by Labour Members this afternoon and possibly has to brace himself for the publicity that he will receive from the national press tomorrow morning and on the airwaves tonight, I hope that he will find a little time to win back some of his lost ground by contacting his Minister of State, whose presence in the Chamber means that he is isolated from him, to explain that the amendments provide a way to involve patients in the process and enable us to do something constructive, which I have been outlining in a high-falutin' way in my important contribution.

Dr. Andrew Murrison (Westbury)

I wonder whether my hon. Friend shares my mystification about where in the Bill there is any reference to the plan that the Secretary of State outlined only a short while ago.

Mr. Burns

My hon. Friend raises a rather confusing point. No doubt he was present for the private notice question, so he distinctly heard the Secretary of State say that he had not been dragged to the House today and that we would have the opportunity, during this evening's debate, to discuss the proposals outlined in his remarks. I am not convinced that the Secretary of State is as well acquainted as you are, Madam Deputy Speaker, with the procedures of the House.

Mr. Oliver Heald (North-East Hertfordshire)

The Secretary of State has not read the Bill.

Mr. Burns

Certainly not. That is left to the Minister of State.

You, Madam Deputy Speaker, will tell me, rightly, that I cannot discuss the matters on which the Secretary of State was being questioned because they are not in the Bill, but my hon. Friend the Member for Westbury (Dr. Murrison) is right to be mystified. The only part of the Secretary of State's remarks today that is relevant and, more importantly, in order—

Madam Deputy Speaker

Order. The hon. Gentleman is right to say that he should be addressing his remarks to new clause 1.

Mr. Burns

I am extremely grateful, Madam Deputy Speaker, because before you correctly reminded me of that, I was about to say that the only remarks by the Secretary of State that are relevant to the Bill relate to the narrow amendments, Nos. 6 and 7, on the need to consult before setting up strategic health authorities.

I am optimistic that a crumb will fall from the table, as it did in Committee, and the Minister of State will ask, "Why didn't we think of this first?" If the Secretary of State had made his remarks earlier, we could have amended the Bill in Committee. The Minister of State would not have been so hard-nosed in Committee as to oppose our amendments on strategic health authorities. I hope that he will be more relaxed and more amenable to amendments Nos. 6 and 7, which would play an important role in empowering local communities before the establishment of strategic health authorities. They would make communities feel that they were part of the system, and people would be reassured that their opinions, ideas and recommendations were being taken into account.

Amendment No. 8 is straightforward. It looks modest but it is important, concerning as it does any funding and financial liabilities conferred on a new primary care trust under the new system. It may represent a belt-and-braces approach because I believe that the Minister of State said in Committee that, with one exception, health authorities do not have deficits. He may therefore argue, and I will listen carefully, that the amendment is not needed because when the new system is established, no deficits or liabilities will be conferred on the PCTs. However, this is an important issue that needs to be considered because nobody wants to strangle the new system at birth with debts that the PCTs did not incur.

5.15 pm

Finally, amendment No. 9—again, a straightforward amendment—states: In determining the amount to be allotted to a Primary Care Trust, the Secretary of State shall have regard to the health needs of the population served by that Trust. A modest proposal: I assume that few people in the Chamber would disagree with its sentiments. It is important that the funding of health care is based on the needs of the local population and, of course, there are different needs in different parts of the country and among different populations. Off the top of my head, in my own area of mid-Essex there is a pressing need for even more money than the increase because, as the Minister is all too aware, our hospital waiting lists have not fallen for a single day below the level at which they were when the Government came to power on 1 May 1997. I have said before, and have told the Prime Minister, who does not seem to have an answer, that there is a pressing need to take into account local considerations; for some reason, the Government cannot honour their promise to bring down waiting lists in mid-Essex.

There are other interesting criteria. I am sure that you are an avid reader of Hansard, Madam Deputy Speaker. One should look at the figures; I am choosing my words carefully because, I confess, I made a mistake 10 days ago in a written question. I asked the Government for health spending per head of population in Sedgefield, West Chelmsford, South-West Surrey and North-West Hampshire. Their response surprised me although, in another way, it did not. Funnily enough, Sedgefield receives noticeably more funding per head of population than West Chelmsford, South-West Surrey and North-West Hampshire—but not according to the answer, because, to be fair to the Minister of State, I was not specific and asked only for the amount. He gave me the weighted amount; his answer showed that the four areas, give or take £10 or so, each received about the same.

If one asks the question that I should have asked—"What is the actual spend?"—the amounts are significantly different. Sedgefield gets significantly more per head of population than the other constituencies. I do not imagine that that was the case 10 years ago and I imagine that, in a few years' time, it will not be so.

Dr. Evan Harris (Oxford, West and Abingdon)

My understanding is that the weighted capitation allocation formula was introduced by the Conservatives as a change from the one used by the old resource allocation working party. It was amended on the advice of the University of York by this Government or the previous Government. Nevertheless, the hon. Gentleman will find that it has always been the case that deprivation, because of greater health needs, rightly leads to greater funding.

Mr. Burns

I accept that. I thought that that was what I was saying about the amendment: different circumstances—including social deprivation, but others as well—determine the amount of health spending. We are trying to include that in the Bill; we must have regard to the population's health needs. To be fair, RAWP, for reasons that I shall not go into, was a flawed system, certainly for people in the home counties. My right hon. Friend the Member for South-West Surrey (Virginia Bottomley) changed the system to one that depended more on allocation per head of population. Indeed, when the Secretary of State first came to the Department as a Minister in 1997—

Madam Deputy Speaker

Order. The hon. Gentleman will now get back to the main point in his amendment.

Mr. Burns

Thank you, Madam Deputy Speaker.

When funding allocations are made to PCTs, it is important that the needs of the population served by that trust are taken into account, for health rather than political reasons. On those grounds, I hope that the Minister will accept the amendment. One lives in hope. It is a new year, and the Minister is a reasonable man.

Finally, I urge the Minister to consider carefully the time scale for the changeover to PCTs. It would be a crying shame if their introduction was marred by the fact that the system did not run smoothly. With the money that will be available, there is potential for PCTs to make a real difference to local people.

Dr. Evan Harris

I shall comment briefly on the amendments in the group and speak to my amendment (a) to Government amendment No. 23, before the Minister moves the amendment. The hon. Member for West Chelmsford (Mr. Burns) knows that I share his concerns about the speed of the change being imposed on the health service and the fact that there is to be yet more structural change. There seems to be no coherent strategy emanating from the Government under the Health Act 1999. As the hon. Gentleman said in Committee and repeated today, the national plan did not envisage that all primary care groups would have to become primary care trusts, no matter what.

As I said on Second Reading and in Committee, part of the motivation for the changes seems to be that the Government want to be seen to be doing something and are therefore substituting activity for action. I expect that the Government will resist the new clause for the same reasons as they have done before.

Amendments Nos. 6 and 7 may well be covered by provisions in the Bill. Government amendment No. 23 deals with consultation issues. There is little enthusiasm for yet more amendments on that subject, such as amendments Nos. 6 and 7, because of the consultation arrangements already included.

I recognise that Government amendment No. 23 is a response to concerns raised in Committee by the hon. Member for Leigh (Andy Burnham) and others.

Mr. Heald

The hon. Gentleman should give credit to my hon. Friend the Member for West Chelmsford (Mr. Burns), who spoke to the amendment. The hon. Member for Leigh then agreed.

Dr. Harris

I am more than willing to do so. I apologise if the hon. Member for West Chelmsford is deeply offended by not having had due recognition of the fact that he raised concerns about the degree of consultation. We all agree that there should be adequate consultation about strategic health authorities when boundaries and names are changed. I feel so strongly about the matter that I tabled an amendment to Government amendment No. 23, which would specify that the Secretary of State "shall", not simply "may", make regulations. I hope that the hon. Member for West Chelmsford will support that.

Under previous arrangements, when there were community health councils, there was a duty on the Secretary of State to consult on such changes. That duty had existed for 23 years, since the National Health Service Act 1977. It seems that the obligation to consult—that is, the Secretary of State's duty to make regulations—has not exactly fettered Governments in reforming names, structures or boundaries since then. We have been inundated with reforms over those 23 years. If the Government choose to resist amendment (a) to Government amendment No. 23, they must explain why they place a lower priority on consultation than in the past, making it a mere optional extra if the whim takes the Secretary of State.

The question is whether the Government will empower local communities by asking them what they think. I had a useful meeting with the Under-Secretary of State which touched on the matter. She kindly responded by letter, and I hope she will not mind if I quote it. She stated: The Government amendment specifies that the Secretary of State may make regulations, rather than shall. She said that the reason for that was: ensuring that there is scope for flexibility in the future. The only remaining flexibility relates to the ability not to make regulations on consulting local communities. If the Government want such flexibility, it can only be to water down obligations for which they should be providing. I hope that they will reconsider the wording of Government amendment No. 23. If they resist amendment (a) thereto, we will have to raise the matter in the House of Lords.

As I said in an intervention, I am not entirely sure of the purpose of amendment No. 9, or of what it would produce. I understand that allocations that are part of weighted capitation are sensitive to the health needs of the local community. My concern is that the Government often go too far in seeking to take parts of that cake for central allocation, which inevitably does not ensure that allocation is transparent. The formula is complex, but at least we know what we are dealing with and allocations move slowly towards that formula when there is growth in the system.

I look forward to hearing the Government's response to my concern about Government amendment No. 23.

Mr. Peter Atkinson (Hexham)

I should like in particular to address amendment No. 6, which relates to the setting up of strategic health authorities. I echo what my hon. Friend the Member for West Chelmsford (Mr. Burns) said about primary care trusts, as I believe that they have been established too quickly. We often attack the Government for dragging their feet and not producing the documents that we want. For example, in the north-east, we are waiting for a White Paper on regional government—indeed, we are waiting, waiting and waiting. However, in this case, the speed of the changes has been far too great.

An interesting example is the speed with which local health authorities in the north-east had to operate in order to set up a strategic health authority and carry out the consultation that was involved. The Department of Health launched the initiative on 7 September and it had to be finished by 30 November. That was a very considerable job for four health authorities covering a population of almost 2 million. Indeed, it was an enormous job. The chief executives of the health authorities that cover Northumberland, Newcastle and north Tyneside, Gateshead and south Tyneside and Sunderland joined together and set up a small project team in order to carry out the consultation, and it is worth considering what they achieved in that period. They held 38 meetings with the public, and dished out 6,000 copies of the consultation document and 33,000 copies of the summary leaflet. That was all done within the very tight space of time that I have mentioned. Moreover, 12 public meetings were held—one in each authority area. A proper presentation was given at each meeting, but sadly they were not well attended, as so often happens, especially when so little warning is given.

One of the results of such a rushed operation was that members of the general public did not have an opportunity to register what was going on and attend the meetings. We cannot blame the project board for trying, but given the Government's rushed timetable, it was impossible to interest very many local people. The board helpfully published a summary of the consultation process. As well as mailing all the usual suspects, including local authorities, parish councils and so on, it tried to seek publicity in the media and picked 4,000 people at random from electoral registers in order to write to them. The net result, however, was that the biggest attendance at any of the public meetings was in Gateshead, where 20 people attended. The worst attendance was in Ashington, where only one member of the public turned up.

I regret to say that in my constituency, where many people are extremely interested in what goes on, only six people turned up. I know my constituency well, so I am aware that there is very strong community spirit in Hexham. It seems inconceivable that only six people in Hexham were interested in attending a public meeting relating to a matter as important as the establishment of a new strategic health authority and all the primary care trusts that flow from it. Responsibility for what happened can be laid directly at the door of the rushed consultation process.

5.30 pm

It is worth dwelling on the results of the meetings, which comprised professionals as well as members of the public. The summary states: At most meetings comments were made about the pace of change and the enormity of the proposed changes. This was particularly in terms of the responsibilities for primary care trusts as new or developing organisations. That was much on people's minds. The major anxiety of those involved in providing health care in the north-east was that great change was being made extremely quickly. My hon. Friends have identified that, and I do not understand why Ministers have to rush all the changes.

The summary also concluded: At most of the meetings there were comments about the potential for public confusion with so many organisational changes taking place within the NHS. Again, members of the public, those involved in local authorities, health professionals and members of community health councils were worried that the process was being rushed and that more time was needed.

Another lesson is that most people wanted information about the operation of the new systems. They wanted reassurance that the process of change would not create instability in the health service and the health economy. Our amendments are important because it is not necessary to rush matters. I do not understand why the Government should launch a consultation process to set up a strategic health authority that will serve nearly 2 million people on 7 September and expect it to be in place by April 2002, when we are still discussing the measure that relates to it in January.

Mr. Francois

I want to deal with two specific matters: primary care trusts and strategic health authorities. In an earlier intervention, I gave the example of the Rochford primary care trust, which covers part of my constituency and several GP practices in Castle Point. I said that when it was a primary health group, it hesitated before applying for trust status, partly because some GPs were anxious about the pace at which the Government were attempting to push the process forward. I understand that the PCG has now applied for trust status, and that it has recently received formal approval from the Department of Health, or is close to doing so.

In the past few years, GPs have had to cope with a tremendous amount of organisational change, such as the abolition of GP fundholding and its replacement by PCGs. Just as GPs were adjusting to the changes, the Government decided that they wanted them to be organised in PCTs rather than PCGs. More responsibility is associated with the former. Today, the Secretary of State made a speech which, it is worth reiterating, was not delivered in the House. He said that there may be further changes to the organisation and responsibilities of PCTs. I cannot pursue that further now if I am to remain in order. However, it is fair to point out that there will have been three, potentially four, major changes in almost as many years to the organisation by means of which GPs deliver primary care to the public.

As we all know, GPs are busy. They can be expected to accommodate only so much change without its adversely affecting their ability to provide an adequate service to the patients whom they serve.

I shall give a practical example from my constituency. In the town of South Woodham Ferrers, a number of GPs have lists in excess of 2,000 patients long; one has a list in excess of 3,000. It defeats me how people who have to cope with that many patients can also realistically be expected to find the time to cope with yet more organisational change of the type alluded to earlier today.

All the strategic health authorities were originally meant to be going live by 1 April this year. The Government have said repeatedly that they intend to adhere to that deadline, despite being told by many people who work in these areas that it would be practically impossible to do so. We are now some two and a half months away from that deadline, yet the senior appointments have not yet been confirmed in many strategic health authorities. Even in those SHAs whose chairmen and chief executives have been confirmed, the principal directors who will report to them have, in most cases, not been. The senior management teams in a large number of the SHAs are not yet in place, even though they are supposed to go live some two and a half months from today.

There are other major issues to consider as well as the management of the SHAs. The place in which a number of them will be located has not yet been determined. Furthermore, the information technology systems that the SHAs will use has in many cases not been determined, particularly in cases in which perhaps two or three health authorities are being merged into one SHA. Funnily enough, in a number of cases, we find that they are all using slightly different IT systems, which will now require a great deal of work to make them all talk to one another. Alternatively, some of the SHAs might have to go back to square one, abandon the legacy systems that have been inherited and come up with an entirely new IT system.

These are all significant issues that will require a great deal of time and careful thinking. Yet, in theory, all these problems up and down the country will be solved in a matter of a few months. The people working in these areas are putting in tremendous hours to try to make all this happen in the allocated time, but realistically it is not enough. There is only so much that human effort can achieve.

It is worth stressing these points for one fundamental reason. Even leaving aside what has been said this morning and this afternoon, the creation of primary care trusts—and the movement of responsibility and, particularly, funding to those trusts—is a fundamental part of the Government's 10-year plan for the national health service. The creation of strategic health authorities is also an important part of that plan. If these elements are so important to the Government's overall conception, it seems ridiculous to rush them through in such an ill thought out way. If these key building blocks for the scheme are not launched successfully, the whole plan will be in danger of unravelling.

It is not unreasonable to point that out to Ministers, or to ask them, at the eleventh hour, to pause and allocate more time, to give these already overworked people a fighting chance of trying to bring this off.

Dr. Murrison

I am happy to say—and the Minister will be pleased to hear—that in Wiltshire, we are well ahead of the power curve in relation to turning PCGs into PCTs. I am conscious, however, of areas of the country in which that is simply not the case. I support PCTs; the Government have built a cogent way ahead for primary care and I welcome that. My concern is that this fundamentally good plan is, as my hon. Friend the Member for Rayleigh (Mr. Francois) said, destined to fail in many areas of the country if it is not given sufficient time.

This week, the Health Service Journal has told us that delays in publishing guidance on the roles and responsibilities of management boards running strategic health authorities are causing grief for 27 chief executives appointed so far. We naturally assume that those people would feel buoyed up by their appointment to new roles, or indeed relieved to have jobs at all at a time of uncertainty in the health service, yet they appear to be fairly critical and worried about the fact that there are aspects of the job about which they are not certain.

That suggests to me that Ministers have handed down an unrealistic timetable for implementing the changes. Indeed, the second national tracker survey of 71 primary care trusts and primary care groups, which was supported by the Government, says: Progress in commissioning, health improvement and partnership working is slower. Lack of reliability and timely information and insufficient managerial capacity remain". In other words, the system is creaking under the pressure of changes in the NHS, which is not in a state to accommodate these changes in this time scale.

May I deal with strategic health authorities, because they have caused considerable grief across the country? A principal reason for that is that they have been insufficiently explained to people. Although it is not for me to be an apologist for the Government, I have spent considerable time reassuring those who have written to me that the SHAs and the boundaries that they impose should not impact on clinical networks and people getting health care as they do at the moment. The fact that they are worried and have had to contact me suggests that the changes are being pursued in such a way and according to such a brief time scale that the message is simply not getting across.

We have heard from the British Medical Association how many loose ends remain, particularly in relation to SHAs. It is concerned about academic medicine, which is in a parlous state. We have yet to hear how SHAs will further the agenda for it. Insufficient thought has been given to that, which shows that insufficient time was available for Richmond house to get its head round the complexity of the NHS and how the proposals will melt into it and improve the situation.

We have yet to hear whether tertiary health services will be the responsibility of SHAs, how PCTs will fit in or whether the regions will have a part to play. In other words, there is confusion—we have not been told. Again, that is not so much the fault of Richmond house or of Ministers; it is just that these things take time to work through, but the time scale is far too tight for that. I fully support the creation of PCTs, which is a positive move for primary care that is to be warmly welcomed, but I share the concerns of my hon. Friends that, in their haste, the Government risk the whole thing tumbling down like a pack of cards.

It is ironic that we are discussing the pace of change and, indeed, change of this nature as a Gallup poll published today shows that 40 per cent. of people think that the NHS is getting worse. Admittedly, a cheery and fairly optimistic minority of 13 per cent. reckon that it is getting better, but the balance think that it has remained static. It is difficult to see how the Bill will improve health outcomes—health care to patients—and I have yet to work out how that will happen.

The Government are intent on driving the Bill through, but I urge them to revisit the timetable to which they have committed themselves. In that helpful spirit, I draw their attention to the new clause.

5.45 pm
Mr. John Baron (Billericay)

As the Minister is well aware from our deliberations in Committee, I, too, have reservations about the speed at which the reforms are being introduced. I am especially concerned because—if we are to believe the figures—by September 2004 75 per cent. of all spending will be dictated to a large extent by the PCTs. I am also in favour of the concept of localising health care as much as possible to ensure that patient care is given appropriate attention and meets required standards. My concern is that the speed of the reforms will put in jeopardy the foundation stones of the Bill, which in essence I support.

The National Primary Care Research and Development Centre, in collaboration with the King's Fund, has carried out a second national tracker survey of 71 primary care groups and trusts. Professor David Wilkin, the project director of the survey, has commented that there is a real danger the management of the organisational changes is going to divert attention from the core functions of improving care. He said that the pace of change was being dictated by Government timetables rather than a process of learning and building on experience. He believes that improvements can be made but that it's important to make sure we are not trying to do everything at once.

The PCTs, where they exist, are relatively new organisations and the demands outlined may be beyond their existing capabilities. The PCTs need time to bed in and to get used to the important roles that they will perform in the new structure of the NHS. PCTs are already experiencing difficulties in recruiting clinical staff and those staff able, willing and competent to participate in the new functions. I have visited PCTs—as, I am sure, have other hon. Members—while they are taking on those new responsibilities, and have heard their concern that they cannot find the required calibre of management to fulfil the functions envisaged in the Bill in such a short time. Whether the deadline is spring 2003 or October 2003—as mentioned in Committee—it is an ambitious timetable given the tasks involved. There are some 120 PCGs, many of which are in the early stages of converting to PCT status.

I have two specific concerns about funding, and I would appreciate it if the Minister would address them. First, will PCTs be saddled with the outstanding deficits of health authorities as part of the devolution process? That would leave the PCTs without the resources to implement their devolved responsibilities, let alone achieve the Government's targets. Arguably, with ever increasing central directives and no additional resources, there will be little opportunity to improve the provision of health care over and above that achieved by the authorities the PCTs are to supplant.

My second concern is that it is unclear whether PCT funds will be protected from the revenue consequences of any major building projects. If PCTs are not protected from those consequences, concerns will arise in areas where boundary changes following the establishment of strategic health authorities mean that PCTs may retrospectively become liable for the revenue consequences of a major building project.

I am sure that the House would appreciate clarification from the Minister on those two issues. We all know that the devil is in the detail with a Bill of this sort, but those two examples give rise to the legitimate concern that the reforms—especially the establishment of PCTs—are being rushed through without due consideration for the consequences. I for one would much appreciate the Minister's clarification on those issues.

Mr. Hutton

I start by referring to Government amendment No. 23 and the Opposition amendments that relate to it. As hon. Members who were members of the Standing Committee will be aware, I agreed in Committee to reflect further on the need for an amendment to provide statutory provisions concerning consultation in respect of the names, boundaries and mergers of strategic health authorities. It is clear that the Bill should now make statutory provision for such consultation and Government amendment No. 23 has been tabled to give effect to that.

I would like to place on record my gratitude to the hon. Member for West Chelmsford (Mr. Burns) and to my hon. Friend the Member for Leigh (Andy Burnham) for drawing my attention to the issue in Committee. It will come as no surprise to the hon. Member for West Chelmsford that I do not think that amendment. No. 6 is necessary. It would restrict the requirement for consultation to health professionals, local authorities and the public.

Amendment No. 23 allows for much wider consultation than the hon. Gentleman is proposing. I have concluded that, given the level of detail required, it would be best to deal with this issue by means of regulations rather than in the Bill. This is in line with, for example, the provisions for consultation on NHS trusts set out in the National Health Service and Community Care Act 1990—legislation introduced by the previous Conservative Government.

In part, that addresses some of the arguments that I wanted to deploy against amendment (a), tabled by the hon. Member for Oxford, West and Abingdon (Dr. Harris), which would put a duty on the Secretary of State to make regulations. We have also already carried out extensive consultation in relation to the first wave of SHAs—the hon. Member for Hexham (Mr. Atkinson) and others have referred to that—and we do not want to have to re-run that process. That would not be in anyone's best interests.

The vast majority of other regulation-making powers in primary legislation—concerning consultation on, for example, health authority structures and boundaries—do not put a duty on the Secretary of State. We have followed the standard pattern in drafting our amendment, which I hope is acceptable to the House.

The hon. Member for Oxford, West and Abingdon was in some confusion about the Government's intentions. I want to make it clear to him that the Secretary of State will make the regulations about consultation for SHAs. There would be precious little point in tabling the amendment if he were not of a mind to do that.

I also want to make it clear that we certainly do not place a lower importance on consultation in the new NHS. It is very important that we involve and carry with us the public, who will be affected by the direction of reform that is being implemented through the NHS. They have a democratic legitimacy and an entitlement to make their voices and views heard at all levels when change is being proposed to health organisations and structures and to local health services.

Rather than preview some of the arguments that the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears), will go through later, I shall say that it is clear that the reforms that we are asking the House to support today will strengthen and not weaken the role of public participation and involvement in the NHS.

Dr. Evan Harris

As the Minister has been so clear, it is likely that I will suggest that this matter is not pursued in the House of Lords if the norm in these circumstances is that there should not be a duty to make regulations, but that the Secretary of State "may" do so. Will he reflect, however, on whether the Government—rather than he himself—are very good at consulting? We have heard announcements today about the structure and functioning of NHS trusts, on which there has been very little consultation.

Mr. Hutton

There is an established and democratic procedure for how these things are done. It would be an unusual constitutional innovation for Opposition Members—I know that it is not being proposed today—to impose a statutory duty on a Secretary of State to consult before he was minded to announce any change of policy or to look at a way in which reform might be taken forward. There is a reasonable case for saying that when substantial reform is proposed to the NHS, there should be consultation. That has always been the spirit and practice of the Government; it is one that we intend to take forward. It cannot be argued—in terms of either the Bill or the amendment—that the Government in any way diminish the role of the public, or the voice of the public being heard effectively in the affairs of the NHS; far from it.

Amendment No. 7 would impose a duty to consult before a health authority was established in Wales. However, it is clear that health authorities in Wales will only continue to exist until they are abolished on 31 March 2003. The policy intention in Wales is to create local health boards, as covered in clause 6. The only practical effect of the amendments would be to fetter the devolved powers that the House has already granted to Wales under the Government of Wales Act 1998. While there is no requirement to consult on the establishment of a health authority, the Welsh Assembly has conducted a full and open consultation in relation to the establishment of local health boards in Wales.

The remainder of this group of amendments deal with technical issues to do with the boundaries of primary care trusts. Following the consultation on the new SHA boundaries, it has become clear that a small number of PCTs—perhaps two or three—will cross the new SHA boundaries. Current legislation does not explicitly state that PCTs which cross health authority boundaries must not be established, but there is an underlying assumption in the way in which the Bill has been drafted that all PCTs will, in fact, fall within one health authority. It remains our intention that, in the vast majority of cases, PCTs should not cross the boundaries of SHAs.

There is an argument to be made about the value of consultation and the importance of listening to local voices about where boundaries should be drawn across the NHS. For local flexibility to be maintained, and so that clinical networks—rightly referred to by the hon. Member for Westbury (Dr. Murrison) as important—should not be disrupted, it is important that, in those exceptional cases, it should be possible for PCTs to straddle SHA boundaries, if those boundaries have strong local support and make obvious sense.

The Government amendments make provision for allowing PCTs which straddle SHA boundaries to be established—putting that issue beyond doubt—and provide for each SHA to receive the PCT's annual financial, patients forum and other reports. In essence, this group of amendments will serve to preserve maximum flexibility around PCT boundaries; that supports the principles of local decision making, which is fully consistent with shifting power and responsibility to the front-line. There are a number of points in primary legislation that need to be amended to allow for this, and that is why this group of amendments is relatively large.

Amendment No. 25 makes a number of amendments to schedule 5A of the National Health Service Act 1977: to allow any SHA in whose area the PCT is established to meet preparatory costs; to allow any SHA to make available premises and other facilities during the preparatory period; and to provide for the PCT's annual financial and other reports to be sent to all SHAs in whose area the PCT is established.

Amendment No. 26 provides for any SHA in whose area the PCT is established to give directions to that PCT. Amendments Nos. 35 and 36 make provision for the reports of patients forums to go to all SHAs in whose area the PCT is established. Amendments Nos. 24, 27, 28, 54, 55 and 61 make minor, consequential and technical amendments that are necessary to give full effect to the policy intentions.

The bulk of our time this evening has been spent on new clause 1. I understand fully the concerns expressed by Opposition Members about the pace of change and the way in which the reforms are being handled. However, as was the case when the previous Administration attempted organisational reform of the NHS, there will always be those who say that that should not be done. There will be those who say that it is being done too quickly; some will say that it is the wrong reform.

We have heard all those arguments this afternoon. Of course, when deciding the pace at which change should be made, the Government have to weigh the upheaval and disruption that a change of this scale and magnitude will inevitably cause against the benefits that we envisage that it will bring.

6 pm

The Government have to find the balance between those two competing arguments, and we cannot pretend that they can be spirited away somehow. We therefore must be clear that the reforms, whose potential benefits for the NHS were questioned to some extent by the hon. Member for Westbury, will bring about substantial improvements in the performance, management and delivery of health care services. We are clear about that, and I hope that Labour Members in general are too.

As my right hon. Friend the Secretary of State made clear today, the NHS is a large organisation. It has more than 1.2 million employees and treats more than 20 million patients a year. It operates in all our constituencies, at a number of different levels of intensity. It is inconceivable in this modern age that the sort of care that we want to be available could be delivered by the structures that presently exist, given the pressures on services, the introduction of new technologies and the speed at which things change in the delivery of medical services.

Therefore, the change has to happen. It is necessary, although of course it will be difficult for some. That is always the nature of any substantial and radical reforms. These are radical reforms, but our judgment is that they will benefit patients, and therefore all our constituents.

I was interested to hear Opposition Members say that they supported the reforms in general terms, but that their primary concern was about the speed at which the reforms were being introduced. As I said, I fully understand those concerns, but I think that the Government have got the balance and the judgment right.

I am sure that the hon. Member for West Chelmsford moved new clause 1 with the best of intentions, but I do not believe that he has thought through the new clause's implications. First, it would create a new and I believe rather inappropriate role for the health service commissioner, which would add considerably to his already substantial work load. It would also be beyond the role envisaged for him under the Health Service Commissioners Act 1993.

Also, new clause 1 could disrupt the provision of health care services, as it would create a vacuum while PCTs were being investigated, especially in relation to their new responsibilities for family health services. That point was made by my hon. Friend the Member for a Birmingham constituency that I cannot call to mind just now—

Dr. Evan Harris

Selly Oak.

Mr. Hutton

I was referring, of course, to my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones). It is a very fine part of Birmingham, and I have visited it.

It is not clear from the new clause who would be responsible for commissioning and delivering health care services. Moreover, it assumes that all the functions being allocated to PCTs will be new to them. That thread of misconception underlay most of the arguments presented by Opposition Members, as many of the functions to be directly conferred on PCTs are being exercised by them already, on behalf of their health authorities.

The main difference is that the Bill will mean that PCTs will assume responsibility for all family health services. I accept that that is a substantial change, but many of the arguments about the readiness of PCTs to discharge their new responsibilities overlook the fact that many have already been established successfully, and have been delivering their wider commissioning responsibilities for some time.

In Standing Committee, I made it clear that we anticipated that all primary care groups will have gained PCT status before October 2002. In fact, 86 new PCTs have been approved by Ministers for April 2002, and 58 further applications are still with Ministers for approval. I expect that the vast majority of those will be approved in the very near future. Therefore, given that 164 PCTs are already in operation, it is clear that the majority of the country will be covered by April 2002.

In Committee, I referred to 11 primary care groups that were still consulting on the proposals. Of those, 10 have now applied for PCT status. Their submissions are with Ministers and have been included in the figure of 58 applications that I mentioned earlier. The remaining PCG intends to apply for PCT status, and that application will be considered as soon as possible.

Therefore, to suggest that PCTs lack the capacity to deliver their new responsibilities simply ignores the truth of the matter. Better support is already being given to practices and clinicians, and services are better integrated and more effective. There is better access, and decision making is carried out closer to patients and local communities.

In the debate, an extensive reliance was placed on the tracker survey commissioned out by the national primary care research and development centre at Manchester—another excellent academic centre—in collaboration with the King's Fund. As Opposition Members rightly noted, the survey covered 72 of the 481 primary care groups established in 1999. The survey covered a three-month period between October and December 2000.

I do not dispute the accuracy of the data at the time, but it is historic information. The Opposition rested their entire case for new clause 1 on the results of a tracker survey, and I think that that was a total mistake. Given the information available, and the concerns that have been raised about the performance of PCGs and PCTs, the hon. Member for West Chelmsford would have had a reasonable argument if the Department of Health had done nothing. However, no mention was made of the effort that has been put in since the tracker survey was published to provide better and more effective support to PCGs and PCTs, as they take on their new responsibilities.

Those efforts continue to be made. The new leadership centre proposed in the NHS plan will play an important role. In addition, Barbara Hakin, an outstanding PCT chief executive from Bradford, is leading the management development programme for new PCT senior managers. Her excellent services are beginning to make a significant and positive contribution.

Some people will always say that a reform of this magnitude is wrong, or a source of concern. I do not doubt for a second the legitimacy of such arguments, or the right of people to express them. Of course people who are worried about reform should express their unease, but the view should not be formed that other people—equally eminent and respectable—have not expressed positive and supportive views about the pace and direction of change.

The argument this afternoon has been very one sided, as it was in Standing Committee. It is fine for Opposition Members to express their concern, but they should also acknowledge the positive developments that have taken place and the progress that has been made. If the Conservative party wants to be an effective Opposition who scrutinise legislation properly, Conservative Members must be able to make both sides of the argument, as that would certainly improve the quality of legislative scrutiny.

It would also be wrong to assume that PCTs are not getting the support that they need, as I have tried to make clear. Therefore, I believe that new clause 1 is mistaken, and I am not entirely sure of the motivation that lies behind it. It was designed as an amendment that would help the Government's reform programme, but we must beware of Greeks in that situation.

With respect to the hon. Member for West Chelmsford and to other hon. Members, the arguments in favour of new clause 1 are not persuasive, and I cannot ask Labour Members to support it.

Mr. Francois

Either by accident or design, the Minister has said very little about strategic health authorities. Does he accept that it is integral to the Government plan that the SHAs must succeed? Is not it also a part of the plan that merging other health authorities into SHAs is a deliberate attempt to reduce head counts and thus to free up more money for patient care? Everyone realises that there will be job losses as a result of the mergers. Is not the Minister asking people to work flat out, on an incredibly tight timetable, to get the SHAs up and running, even though those same people have no idea whether they will have a job in the surviving organisation in a few months time? Is not—

Mr. Deputy Speaker (Sir Michael Lord)

Order. The hon. Gentleman has made his point.

Mr. Hutton

The hon. Gentleman has certainly done that, but I was not referring in detail to SHAs, as the amendments are about PCTs. I was trying to explain the Government's thinking about the establishment of PCTs, and about whether that should be delayed. I have mentioned the duty of consultation on SHAs—

Mr. Francois

On a point of order, Mr. Deputy Speaker. This group of amendments comes under the heading "Establishment of Strategic Health Authorities and Primary Care Trusts".

Mr. Deputy Speaker

That is not a point of order for the Chair.

Mr. Hutton

I do not want to delay our proceedings. We are talking about new clause 1; the hon. Gentleman interrupted me when I was talking about new clause 1, which is about primary care trusts and not strategic health authorities. I dealt with the arguments on strategic health authorities when I referred to Government amendment No. 23 and the amendment that has been proposed to it. I am not short-changing the House, nor am I gnoring the arguments that the hon. Gentleman has been trying to deploy.

The hon. Gentleman is right that organisational changes may mean that people lose their jobs as a result. The NHS has a responsibility; we will discharge it to make sure that we act fairly in relation to the employees at all times during the process of change. There are exciting new opportunities presented by the reforms for which we seek the House's support, particularly in relation to the new roles and responsibilities of primary care trusts. The hon. Gentleman, who takes a close interest in these matters, will know that many currently working in health authorities are looking towards employment in the new primary care trusts and will find employment in that area.

The hon. Gentleman's wider point about what should motivate the Government as they consider these reforms is fair. What motivates us is a simple desire to improve the quality of the national health service. We will do that, in this instance, by making the NHS more streamlined, less bureaucratic, more focused on patient care and making sure in the process that we get better value for the record investment in the national health service. That is an entirely appropriate responsibility for the Government and Ministers to discharge, so I shall certainly not apologise to the hon. Gentleman or to anyone else for those considerations.

Amendments Nos. 8 and 9 deal with funding arrangements under the new system. Amendment No. 8 would require the Secretary of State to take into account the assets and liabilities contained in the balance sheet when determining allocations to primary care trusts. This area is inevitably technical and complex, but I will try, as far as possible, to keep the issues simple, not only so that the House can understand them but so that I can.

Usually only those assets and liabilities associated with the functions assumed by the PCTs will transfer to them. The process is that PCTs agree with the relevant health authorities and, where appropriate, NHS trusts the balances that will transfer. These amounts will normally be straightforward and attributable to specific PCTs. However, there may be cases in which that is not appropriate or practicable. That might include any small outstanding health authority running cost charges which cross boundaries—utilities bills, for example—or there may be circumstances in which an under or over-performance on service agreements, such as maternity services, might have arisen. In these circumstances, other equitable methods will be used, such as a simple apportionment.

Turning to the financial consequences of transferring a liability to a PCT, as we would expect in any public or private sector body, there will always be amounts due in income and amounts due to be paid at the year end. In the case of health authorities, most of those sums will be moneys owed to and from other NHS bodies. PCTs will inherit these balances from health authorities. I think that that is fair and reasonable. The overall resources available to PCTs for spending on health care in-year, however, will be unaffected by these inherited balances.

Cash will, of course, be required by the PCT physically to discharge the liability at some point in the future. However, that is largely a question of timing and can be taken into account if necessary when agreeing the cash financing of the PCT. As a strict consequence, the amendment is unnecessary.

The practical effect of amendment No. 9 would be to require the Secretary of State to take into account the health needs of a primary care trust's population when he makes an allocation. We all accept that different parts of the country and different localities have different health care requirements and needs. I agree with the hon. Member for Oxford, West and Abingdon on that. It is partly a reflection of deprivation but may also be a result of geography. The national resource allocation formula that we use to determine fair shares for health authorities and primary care trusts recognises this. It is already used to establish fair share targets for primary care trusts, and while allocations are still made to health authorities, they are required to pass resources on to primary care trusts in accordance with national guidance.

We have asked the Advisory Committee on Resource Allocation to review the operation of the formula at primary care trust level. When in future we allocate resources direct to primary care trusts, we will have a national formula that takes into account the health needs of a primary care trust's population. We will have a pace of change policy to bring primary care trusts towards their targets, or fair shares, determined by the formula.

6.15 pm

Allocations to local authorities—probably the most obvious and direct comparison that we could make in this context—are determined on comparable formulae, which also need to take into account many different issues. As with those for health authorities and PCTs, and in order to preserve maximum flexibility in a rapidly changing area, the formulae used by the Department for Transport, Local Government and the Regions are not set out in primary legislation. Neither is the formula for allocations to NHS organisations. It has never been the policy of successive Governments to specify part or all of the detail of the formula or the issues that should be taken into account in determining allocations to NHS organisations, whether PCTs, trusts or health authorities. There are powerful and convincing arguments for not doing that.

To some extent, amendments Nos. 8 and 9 are contradictory. Amendment No. 9 wants health care needs to be the basis upon which allocations should be determined to NHS trusts and PCTs, but amendment No. 8 wants the Secretary of State to take into account the financial liabilities of those organisations as well. I do not want to make a meal of this, but the hon. Member for West Chelmsford is to some extent pointing in two different directions on this. Is it a question of need or of a range of financial circumstances? He cannot have it both ways.

One could play devil's advocate and raise the question of surpluses. If one is to take account of liabilities under the hon. Gentleman's formula, why should the Secretary of State not take surpluses into account as well? I think it best to make sure that the allocation formula to trusts is based on health care needs. Meeting the health care needs of local people should be the exclusive determinant. That is precisely how we are addressing those issues.

There is an argument, which the hon. Gentleman raised, about whether his health authority or trust is fairly funded compared with a range of others. Most Labour Members would find it difficult to see the fairness of the comparison between West Chelmsford and Sedgefield and other parts of the country that he was trying to identify. It is on the basis of equity and fairness that the NHS should be funded according to the health care needs of local people. So I cannot accept amendments Nos. 8 and 9.

We have had a fairly full debate about these issues. We have gone over territory which is very familiar to those of us who served on the Standing Committee that considered the Bill. Conservative Members have raised a perfectly reasonable set of concerns, but my response to them, and to new clause 1 in particular, is that they have not acknowledged the progress that has been made since the second tracker survey was published. They have not weighed up, as we are required to do, the balance between the necessary changes, the organisational upheaval that they would impose on the service and the benefits to patients and the wider national health service. It is a complicated balancing equation, but our responsibility in government is to act first and foremost in the interests of patients. That is precisely what we are doing and why I do not want the House to accept the new clause.

Dr. Murrison

I am concerned about the Minister's dismissal of the second tracker survey, which is only months old. The work may have been carried out in the latter part of 2000 but it was published some time after that. If the right hon. Gentleman is so dismissive about the survey such a short time after its publication, why did he support it in the first place?

Mr. Hutton

I am not dismissive of the tracker survey. We think that it is a very important piece of work. It has helped us to respond to the concerns and criticisms made at the time. That is why we have put into place a substantial programme of primary care trust development work right across the NHS. I am not dismissing the contribution that the tracker survey has made. I am simply disputing the use that Conservative Members are making of it for the purposes of this argument. That is a very different issue.

In relation to these provisions, as to others, the House has an important decision to make tonight. These reforms are important and I accept that they are radical. However, they are motivated by a clear, simple and transparent principle—to make sure that as much responsibility, power and authority in the national health service is devolved as close to the front line as possible. That will allow the innovation, enterprise and experience of NHS managers to be used to the fullest possible benefit of staff, patients and the public as a whole. That is why the Bill should be supported by the House and the new clause, which has been considered carefully, should be rejected.

Mr. Burns

I listened to the Minister with great care. As a humble Opposition Member, I should like to say how grateful I am that a crumb has fallen from the Government's table and that the Minister has seen the strength of the argument put by my hon. Friends and me in Committee, and that he has in effect accepted amendment No. 6—albeit by substituting it with Government amendment No. 23. I am delighted that he has seen common sense and accepted the wisdom of what we and—to be fair—the hon. Member for Oxford, West and Abingdon (Dr. Harris) were trying to do and has drafted an amendment of his own. We have to be grateful for small mercies and this is one of those occasions, so I thank the Minister for that.

The Minister said that amendment No. 8 was horribly technical and that he did not want to go into the minutiae of its detail in case he confused my hon. Friends and me and, indeed, himself. Unusually I shall take the Minister at his word; I shall not press either amendment No. 6 or amendment No. 8 to a vote. I, too, am not qualified to argue on the minutiae of the amendment. Having listened to the Minister, I shall also not press amendments No. 9 and No. 7.

I listened carefully to the Minister's remarks on new clause 1. Although the drafting of the provision might have been flawed and it might indeed have been improved, I am disappointed that the Minister is not minded to accept it. The new clause was a genuine attempt to try to help the Government, as I said earlier. If the House is to change a crucial system that relates to two pillars of the NHS—its funding and its seamless provision of care—one obviously wants to ensure that the service works smoothly during the changeover from one system to another.

From the evidence that my hon. Friends and I have provided, both in Committee and during today's debate, we believe that there could be problems. As many of us pointed out during the debates on the Bill, we are not alone in expressing such concerns: health professionals and respected professional bodies such as the BMA have all expressed concern. However, I accept that the Government have the whip hand.

We have made a genuine attempt to try to help them, but they feel that our help is unnecessary and that things will be all right on the night. The jury is out on that. As a responsible Member of the House I hope that I am wrong. No one wants the system to be fraught with problems and mistakes. No one wants a hiccup in the provision of health care for our constituents, so I hope that I am wrong.

I do not know whether I am wrong; equally, I am not convinced that the Government know that they are right—we shall see. I reiterate that I hope that we are wrong. I hope that the system is seamless and that our constituents do not experience disruption or problems. We have tried our best.

As the Government are not prepared to take the lifeline of help that we are responsibly offering them, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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