§ 4. Mr. Eric Illsley (Barnsley, Central) (Lab)
If he will make a statement on the progress of outstanding applications for foundation hospital status. ,
§ The Secretary of State for Health (Dr. John Reid)
Applicants for NHS foundation trust status in wave 1a are due to submit applications by mid-June for my approval. I expect to take a decision shortly after publication in July of the NHS performance ratings. I approved 25 wave 1 applications earlier this year. Ten applicants were authorised on 1 April and the independent regulator will make his own decision on whether to grant authorisations for the remainder.
§ Mr. Illsley
My right hon. Friend will know that Barnsley district general hospital has applied for foundation status to take effect from October this year, but unfortunately the hospital now faces a financial deficit of around £3 million. To make matters even worse, the primary care trust also faces a deficit of £15 million and has difficulty providing any further financial assistance to the hospital, which has itself undertaken a recovery programme to try to balance the budget. Can he indicate whether the financial requirements for trust status will take account of those deficits? Can the Government take any further action to ensure that the foundation status application will go ahead from October?
§ Dr. Reid
Lest anyone should have gained the false impression from the details provided by my hon. Friend that the Barnsley trust has somehow been starved of funding over the past few years, let me remind him and the House that, in fact, Barnsley PCT received an increase in funding of more than 31 per cent. over the past three years. That is much higher than the national minimum. Like every other organization—not just every trust—in the NHS, the PCT has to ensure that it achieves financial balance. Every pound wasted in the NHS means that someone dies earlier than they should or that someone lives longer in pain. Of course, when it 131 comes to foundation trusts, we an aware of the huge benefits that foundation status will bring to local providers of health care, so there is the most rigorous scrutiny—not just by myself, but by the regulator—of financial and other matters.
§ Mrs. Marion Roe (Broxbourne ) (Con)
Does the Secretary of State believe that the fact that many trusts are dropping or deferring their applications for foundation status because they do not understand the financial implications of the new system suggests that foundation trusts are unworkable and burdensome?
§ Dr. Reid
The answer to both questions is no. Trusts are not deferring in any large numbers and, secondly, applications are subject to rigorous scrutiny by the independent regulator, whose background, as the hon. Lady may know, includes not only knowledge on the medical side, but knowledge of the retail and banking sector. Above all, the regulator is well versed in assessing the financial requirements necessary to embark on freedoms for the frontline of NHS foundation trusts, which will result in far better, move sensitive, quicker and more efficient service to patients. Surely that is what we all want—more patients having more treatment, more quickly and of greater quality than ever before.
§ Mr. David Hinchliffe (Wakefield) (Lab)
Will my right hon. Friend outline the steps taken by the Government to encourage greater membership of foundation trusts, in view of the disappointing figures on membership of the first wave? On public involvement in health, can he clarify what is happening with the Commission for Patient and Public Involvement in Health? It has been suggested that it will be either abolished or merged with the NHS Appointments Commission. Can he give an assurance that in any future arrangements for patient involvement, the independence of the various bodies concerned with patients will be defended and retained?
§ Dr. Reid
There were three points there. The first was about the openness to registration of members of foundation trusts. Of course, the lists do not close and they build up over a period of time. In Barnsley, for example, the trust has recruited more than 2,000 patient and public members. We would all like to see 20,000, but nevertheless, that is 2,000 more people involved in the local trust than have ever been involved before. Secondly, as far as the future of patient involvement and our commitment to it is concerned I can give my hon. Friend the guarantee that we will remain committed. Thirdly, with regard to the arm's length bodies, while we retain our commitment to involvement and to fulfilling their functions, I am going to bear down hard on the number of such bodies and organisations and the amount of money that goes to them. I have authorised a 50 per cent. cut in the number of arm's length bodies, with a 25 per cent. cut in the number of personnel in them. I have also authorised £500 million being taken from them, which will be put into front-line services. On top of all the other increases, another £500 million will be invested in nurses, doctors and better treatment.
§ Dr. Richard Taylor (Wyre Forest) (Ind)
The Secretary of State has promised an independent review 132 of foundation trusts. Will he confirm that the review will be held and that it will report after waves 1a and 1b have taken place?
§ Dr. Reid
Yes, the review will go ahead and it will be honest, independent and objective. If it concludes that we have made mistakes or that there are shortcomings in the foundation trust idea or status, we will amend the errors. Equally, however, it might conclude that we have not extended enough freedoms to the front line of NHS foundation trusts. In that case, we will act on those recommendations.
§ Mr. Peter Mandelson (Hartlepool) (Lab)
Is my right hon. Friend aware of the disappointment felt when Hartlepool's general hospital failed to gain immediate foundation trust status and that the Tees health review may put a question mark over the hospital's long-term future? Will he reassure my constituents that that will not happen and that the town will retain a full and proper hospital service, for their benefit and for that of people in the constituency of my hon. Friend the Member for Easington (Mr. Cummings)?
§ Dr. Reid
My right hon. Friend is right to say that a review is under way. In respect of the application for foundation trust status, I shall say only that an initial failure does not mean that reapplication cannot be made in the relatively near future. I do not wish to prejudge matters, but I can tell him that Hartlepool will still have a full and proper hospital service after the review has taken place.
§ Mr. Andrew Lansley (South Cambridgeshire) (Con)
The Secretary of State will recall that, during the passage through the House last year of the Bill establishing foundation trusts, the Opposition said that all NHS hospitals needed genuine freedom if the best service was to be delivered. We said that, without that freedom, we would get a two-tier system. However, the Minister of State, the right hon. Member for Barrow and Furness (Mr. Hutton) has told the Health Select Committee that £127 million will be available this year to compensate primary care trusts and foundation trusts for the introduction of payment by results, and that the Department has £104 million in capital to support the prudential borrowing limits of first-wave foundation trusts. That adds up to £231 million and to a two-tier system. How will the right hon. Gentleman defend that to his colleagues and to the Opposition? We said that we wanted a single tier of genuinely free NHS hospitals to deliver the best service to patients.
§ Dr. Reid
I am deeply moved by the hon. Gentleman's concern about my discussions with my Back-Bench colleagues. I am sure that they will be deeply moved as well by his concern about the two-tier system that could develop. I can tell the hon. Gentleman, in case he has missed the fact in his young life, that there has been a two-tier system in this country for 60 years. One tier has been the NHS, whose patients were treated with disdain by the previous Conservative Government for 20 years. Another tier was available for those who had the money, which allowed them the quick access to hospital care in the private sector that the Opposition have always supported.
133 NHS foundation trust status will be allocated over the next few years to every hospital. As a result, every hospital and trust in the country will have far more resources in terms of money, doctors, nurses, equipment and buildings, and far more power to meet patients' needs. However, I am far too much of a gentleman to point out that the hon. Gentleman was the first to tell me that he supported his hospital's application for foundation trust status.