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Internal Contracts

Volume 171: debated on Tuesday 1 May 1990

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9.

To ask the Secretary of State for Health whether the National Health Service has any experience of the use of internal contracts.

15.

To ask the Secretary of State for Health what experience there has been of internal contracts within the National Health Service.

The recent document "Contracts for Health Services: Operating Contracts", which is in the Library, contains examples of contracts between NHS bodies. Most come from various district health authority pilot projects supported by my Department to prepare for the implementation of our reforms of the National Health Service. They demonstrate how contracts will benefit patients by specifying the services and quality of care to be provided.

I am grateful to my right hon. and learned Friend for his reply. As most health authorities have experience of internal contracts, is not it nonsense to suggest that the schemes are untested? Will my right hon. and learned Friend assure the House that he will not delay his reforms until all the pilot schemes have been implemented?

A clear majority of authorities have experience of contracting with various bodies; the figure is well over 60 per cent. There are some established and running internal contracts. For example, the contract between Harefield hospital and South Glamorgan, has run without controversy for some time. I agree with my hon. Friend that we must continue to pilot contracting by continuing to finance the work being undertaken at present so that we can be ready by April next year. There is no case for delay because active preparation is well advanced.

But does my right hon. and learned Friend accept that the National Health Service is not necessarily the swiftest organisation to take on board new ideas and bring them into practice? A number of authorities are slightly concerned that a blockbuster approach may be used. Does my right hon. and learned Friend agree that a simple and more evolutionary approach would be better in the introduction of this method, and would benefit patients?

I agree with my hon. Friend, and I reassure him that we have been urging a simple and evolutionary approach on health authorities since last summer. We expect the majority of health authorities to begin with block contracts with straightforward specifications of what they want. We envisage that health authorities, hospitals and GPs will begin by getting their existing pattern of referral of patients in place within the contract system. Thereafter, they will know what they will spend on each part of the service and what quality they are getting and they can work together to make the system more sophisticated and improve the quality of care that they give to patients.

Does the Secretary of State accept that the National Health Service is far too important for the same mess to be made of it as the Government have made with the poll tax? Before he spends one penny on training staff, will he ensure that the public have the chance to have their say through the ballot box, or is he frightened of democracy?

I certainly agree that the National Health Service is far too important for us to make a mess of reforms intended to improve it, although I do not accept the hon. Gentleman's comparison. We certainly do riot intend to make a mess of the National Health Service reforms. The answer lies in the supplementary question asked by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). There will not be a sudden transformation of the world next April or a blockbuster change to the system. We shall have improvements for which everyone has worked and prepared. Thereafter, we shall see steady improvements throughout the 1990s, as the benefits of better management work their way into the service and we concentrate on quality.

I am all in favour of consulting at every stage—for example, over the National Health Service trusts—but I do not think that the rather foolish local ballots being organised by the trade unions and the Labour party are helping to explain the issues or allay public concern.

Does the Secretary of State agree that if he is to push ahead with the contracts, everybody will want to judge how well they are operating, and that a key factor in making that judgment will be the flow of information available which will depend heavily on the ability of hospitals and health authorities to introduce proper and full computerisation? Will the right hon. and learned Gentleman therefore pay heed to the point that I have raised with him before—that many people in the National Health Service are saying that the money and time required to computerise to the level of sophistication necessary to monitor the system and make it work as the Government want it to are not available?

I hope that the hon. Gentleman will agree that the Health Service needs to be computerised and that it needs information systems to enable everyone concerned to run it better. That would have been needed whether or not we reformed the Health Service and it will take some years to achieve a good up-to-date level of information systems.

However, I do not accept that we cannot start the process of reform until we have completed that investment. The experience of contracting was not based on modern information systems. We are allocating a lot of money to update those systems, but we can begin with the basic contracting system next year on the basis of the information that we already have. We can start it simple and then sophisticate it afterwards as the information systems come along.