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National Institute For Clinical Excellence

Volume 403: debated on Thursday 10 April 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

[Relevant documents: Second Report from the Health Committee Session 2001—02 HC 515 and the Government's response thereto, Cm 5611.]

Motion made and Question proposed, That the sitting be now adjourned.— [Mr. Woolas.]

3.31 pm

May I begin by expressing my appreciation for the opportunity to debate the Health Committee's report on the National Institute for Clinical Excellence? It may be Thursday afternoon and some of us are subject to a one-line Whip, but it is always a pleasure to have the company of the Under-Secretary of State for Health, my hon. Friend the Member for Salford (Ms Blears), for two hours.

I begin with the usual formal expressions of gratitude to all who co-operated with the inquiry and those who submitted detailed written evidence, which was extremely helpful and informative. I particularly want to thank the oral witnesses whom we heard during the inquiry. It is appropriate to thank the representatives of NICE who co-operated fully with our inquiry, and I want to place on the record my thanks to the chief executive of NICE for his letter to me and other hon. Members earlier this week giving an update on the developments since our report was published and the Government responded.

It is also appropriate to place on the record my thanks and those of the Committee to Lord Hunt, who was the Minister responsible when the inquiry was undertaken. It is a matter of personal regret that he is no longer in the Government; I have known him for a very long time and have the highest regard for his integrity and for his knowledge of health and social care matters. In view of recent events, I hope that there may be a possibility of his returning to office in the near future.

I also want to place on the record the Committee's thanks to our two advisers during the inquiry: Professor Joe Collier of St. George's hospital medical school and Dr. Hilary Pickles, director of public health policy at the Public Health Laboratory Service.

It is particularly important to put on the record my thanks and those of my colleagues on the Committee to our excellent Committee staff. We have been very fortunate in being served by a first-class team on this inquiry and many others. We owe them a great debt of gratitude. In the current environment, in which Members spend a great deal of time together trying to agree a report on a certain subject that I will not go into, it is also appropriate to thank my Committee colleagues for their patience and work. That comment is addressed to members of all the parties that are represented on the Health Committee.

Let me turn now to the detail of our inquiry. It is fair to say that it was the first independent evaluation of NICE since NICE was established in 1999 to tackle the inequities of what has been called postcode prescribing in the national health service. All Members who were involved found that the inquiry proved to be complex but fascinating. It raised many questions about the process of prioritising health care spending, which strikes at the heart of many key debates about today's NHS.

From the outset, the Committee was clear about its support for the principle that informed the establishment of NICE: a desire to eliminate postcode prescribing by providing clear guidance on the supply of sometimes controversial treatments that would be applied uniformly across the country so that NHS patients, whether in my area of Yorkshire or in Bristol, London or elsewhere, could expect access to the same high standards of care. That was to be achieved through a central body that would provide independent, evidence-based analyses of treatments to inform the decisions of prescribing committees and clinicians. Treatments were to be assessed in terms of their clinical effectiveness but also their cost-effectiveness, so that clinicians would not be able to prescribe overly expensive treatments at the behest of pharmaceutical companies if cheaper, equally effective treatments existed.

As we took evidence, however, it emerged that the reality of the system was far from straightforward. Several key concerns emerged. The first task for any new NHS organisation is to establish credibility within the service and to work collaboratively with others in the field. We heard widespread concern that lack of communication between NICE and other established sources of pharmaceutical guidance already being used by the NHS, such as the British National Fortnulary and the Drug and Therapeutics Bulletin, was causing confusion among clinicians, who were suddenly faced with conflicting guidance from different sources. We were very pleased to hear from the Government's response that NICE now formally invites the editors of other relevant publications to comment on its guidance in draft form. A letter that I received recently from NICE goes into much more detail about how it is addressing the problem. I believe that we all welcome that.

The Committee also heard from several witnesses working in the NHS that NICE was not engaging sufficiently with NHS staff. NICE now has a representative from an NHS trust and from a health authority as formal consultees in its process. In addition, the Government welcomed the Committee's suggestion of creating a network of NHS clinicians and commissioners to maintain dialogue between NICE and the NHS and to promote the implementation of NICE guidance. We strongly welcome such developments.

NICE is charged with making difficult decisions on issues that are often highly emotive. Its decisions may have a profound impact on the lives of individuals. For that reason, it is absolutely vital that the process of establishing clinical and cost-effectiveness is, and is seen to be, entirely independent of intervention from Government or the pharmaceutical industry, and that the processes are completely transparent and open. As a result of the Committee's report, NICE is introducing further measures to improve the transparency of its decision-making process. It has also changed its arrangements for hearing appeals against its decisions, as they have attracted considerable criticism for a perceived lack of impartiality.

I was interested to see that the report recommended not removing the selection of topics from the Government's control. If NICE at least had a say in that, the process would be seen as more independent and open. Is it not a problem, therefore, given the consequences of selection for appraisal, that that fundamental step is not subject to the independence that many would like?

I will touch on that issue and a number of wider questions in the course of my remarks, because the more one looks at some of the issues raised by the role of NICE, the more one has to address the kind of point that the hon. Gentleman has just made.

I was talking about the independence of NICE. I welcome the steps that have been taken subsequent to the inquiry to address that issue, particularly in respect of the appeals mechanism, which was causing concern to many of the witnesses who gave evidence to the Select Committee.

As our inquiry progressed, we were continually struck by the complexity arid breadth of the guidance that NICE was expected to produce, and also by the tight time scale to which it was expected to produce it. It was therefore perhaps unsurprising that its work had attracted criticism from people who felt that the quality of its analysis was not: sufficiently robust. Although we were obviously not sufficiently qualified to assess those claims ourselves, we recognised in our report the huge importance of maintaining credibility among the clinicians at whom the guidance is aimed, and we were very pleased to hear that NICE is now working with the World Health Organisation to arrange an independent review of the technical quality of a sample of its guidance, as we recommended.

During the inquiry, we were faced with a multitude of technical concerns about NICE's very complex processes, and we attempted to address those as fully as possible. However, we felt it was important that our inquiry was not entirely consumed by those technicalities at the expense of the broader issues.

Perhaps most importantly, we considered what effect NICE was having on the NHS. At the time of our inquiry, we received a great many submissions, from both sides of the fence as it were—from patients and pharmaceutical companies—arguing that despite the existence of NICE guidance, patients were still being systematically refused treatments endorsed by NICE. Given the plethora of new initiatives, guidance and must-dos that have begin issued to the NHS over the past few years, it is perhaps unsurprising that guidance takes a while to filter down to ground level and does not translate into improvements overnight. However, more worrying was the apparent lack of any form of systematic assessment of the implementation of NICE's guidance. Our report recommended that appropriate monitoring of the implementation of guidance should be undertaken as a matter of urgency, and we are heartened to learn that the Government's Modernisation Agency is now taking a key role in driving that forward.

In December 2001, the Government issued a directive to the NHS making the implementation of all NICE guidance mandatory. Although the move may have been made partly in response to concerns about the implementation of NICE's recommendations, it has thrown the contentious issue of the prioritisation of health care spending into sharp relief. We received compelling evidence about that from many NHS managers, who told us that because NICE recommendations are mandatory but do not have ring-fenced funding, managers find themselves having to cut back on other services to fund NICE-endorsed drugs and treatments. We were told, for example, that for the cost of four implantable cardiac defibrillators of the type recommended by NICE, an NHS hospital could fund four extra nurses in the accident and emergency department.

The increasing use of technology in medicine will only compound those problems. Our inquiry into NICE persuaded us that, with so many competing interests vying for attention and funding in an area in which resources are finite, it is not sufficient to have prioritisation of health care services carried out, effectively through the backdoor, by an organisation such as NICE. That is why our report called for a more open debate on the issue, and recommended that the Government should work to achieve a comprehensive framework for health care prioritisation, underpinned by an explicit set of ethical and rational values.

Prioritisation of health care spending is an issue that lies at the heart of almost every debate on health care policy, because for each aspect of health care provision that is given priority on the NHS agenda, another aspect is deprioritised. We saw a graphic illustration of that during our recent inquiry into sexual health. The chair and chief executive of an NHS hospital told us that its sexual health clinic, which was turning away more than 300 patients a week and operating out of premises which had been condemned, could not be developed or improved because the trust's spending priorities had to be centred on meeting Government waiting list targets for elective surgery and routine out-patient appointments.

Those are tough decisions to make. However, I would find it hard to justify such a decision if it meant not being able to offer prompt treatment to a young person with a potentially life-threatening sexually transmitted infection who, once turned away from a service, would probably be lost to follow-up. Moreover, that young person would probably go back into the community and continue to have unprotected sex, further endangering himself or herself and others.

However, in its response to our report into NICE, the Government made it clear that they had already established their key priorities at a broad level through the planning and priorities framework and the national service framework programme. It is well accepted that once everything becomes a priority then nothing is, and we are already in a situation where that is a risk. The planning and priorities framework for primary care trusts covers nine key areas: reducing waiting times for A and E, out-patient appointments and surgery; improving services in cancer, coronary heart disease, mental health and services for older people, and improving life chances for children; improving the overall experience of patients; reducing health inequalities; and contributing to the Government's drive to reduce drug misuse.

In addition, national service frameworks now exist in six clinical areas and are about to be published in four more. That is a huge sweep of diverse concerns, and there is already widespread anxiety that primary care trusts, which are relatively new organisations, will struggle to meet such a broad range of targets. The mandatory implementation of NICE guidance, which is often not linked explicitly to any of those priority areas, will add to the list of must-dos that restrict the amount that primary care trusts can invest in so-called low priority services such as sexual health.

A glance at NICE's website shows that recent NICE guidance has covered a bewildering array of subjects, including obvious priority areas such as cancer and coronary heart disease, but also hip replacements, wisdom teeth extraction, the treatment of influenza and stress incontinence, the use of growth hormones, and the treatment of eczema. NICE is currently working on guidance on IVF fertility treatment, to be published in November this year. If it recommends that couples experiencing difficulty conceiving are routinely offered a certain number of cycles, at an average of £1,200 per cycle, that will have a considerable impact on prescribing budgets.

I do not want to pass judgment on what degree of priority should be afforded to any of those issues, but none of those areas appears to feature either in national service frameworks or in the primary care trust planning and priorities framework. If sexual health, or other services, must be cut to fund new technology recommended by NICE, such as implantable defibrillators or IVF treatment, there should be an open and rational framework for systematically addressing those trade-offs.

I will raise one further point about the local implementation of national guidelines, an issue that does not arise specifically from our report, but arises from my experiences in various parts of the country. Could the Minister comment, for example, on whether the Government believe that the strict numbers-based guidelines contained in the NICE cancer guidance have sufficient research justification for the current reconfiguration of services being proposed in some cancer networks? It is not clear to what extent they are factoring into their requirements the impact of the proposals on district general hospital services, when specialist skills are centralised to cancer centres.

The Committee's view, which I hope is shared by others, is that the inquiry was useful. It was certainly interesting and we learned a great deal from the experience. As I said to the hon. Member for Oxford, West and Abingdon (Dr. Harris), the issues raised in the inquiry took us to a range of other, more difficult issues which will not go away, whatever Government are in power.

I welcome the Government's positive and helpful response to the points that were raised. I want to place on the record my thanks and those of the Committee for NICE's constructive response to our recommendations.

3.50 pm

I apologise in advance as I have another engagement in my constituency, so I shall not be able to stay for the Minister's winding-up speech. However, I assure her that I will read it avidly in Hansard when I return on Monday.

I shall refer to three matters: first, the access to NICE medicines. The Committee was aware of something called NICE blight, a problem that has not gone away. NICE admits that, in an ideal, world a drug would be examined and appraised to coincide with its launch, and that would avoid the current time gap between the launch and the drug receiving NICE approval. However, that is a fudge, because there is nothing to stop anyone who can do so prescribing any drug, even if it has not been through the NICE process. However, when there is pressure on budgets, that process is often used an excuse by administrators, those who set the budgets and even doctors for not prescribing a drug or making it available. It would be useful if the Minister would say how that problem will be addressed and how she plans to speed up the process.

NICE has been disappointing because its work is incredibly slow. An appraisal takes a long time from start to finish and the rate at which drugs are examined is slow. The process needs to be speeded up—perhaps by increasing the resources available—if medicines are to be considered and decisions taken in good time.

I imagine that the matter also exercises the pharmaceutical industry, although I have not been lobbied about it. However, when it takes an ever-decreasing length of time for drug companies to take out a patent on a drug to recoup some of their investment, it must be worrying that both ends of the process are being squeezed. There are generic pressures at one end of the market and the delay in NICE approval at the other. In the middle are the patients, who suffer, first, because they do not get the drugs in the first place and, secondly, because the process makes supplying the drugs less cost-effective for the industry.

The process is particularly slow if there is an appeal. It is often frustrating for all concerned—most of us have been lobbied about visidyne and beta interferon; there are numerous examples—that the guidance is so slow in coming. I appreciate that that is because of the desire to try to get things right but, in the meantime, the patient's condition gets worse and their chance slips away.

I want now to put something else into the equation: I think that the first NICE determination was for the anti-flu preparation—I forget its name. [HON. MEMBERS: "Relenza."] That is the one. NICE lost a little early credibility when it produced interim guidance that did not seem to be very workable and that it reviewed a year or so later. Although a review process is built into the NICE appraisal calendar, it strikes me that, if new evidence proves that a drug is effective or ineffective, there does not seem to be an easy mechanism by which there can be a quick review and, accordingly, a review of any NICE guidance. It is important to work such a mechanism into the system somehow. I shall talk a little more about the process later.

The other hot potato is the implementation of NICE guidance and how it is monitored. Committee members raised the concern that there was no baseline other than drug industry sales figures. Although NICE is producing guidance on a drug, no figures are collected to show what the baseline for prescribing it is during that time. That causes a problem, because NICE issues a guesstimate of what it believes the take-up will be. That is not always accurate—the take-up has sometimes been greater than NICE said that it would be—and we have no easy way of looking back and asking if PCTs and hospitals are doing what they promised to do.

Our recommendation (p) suggested that practical systems and structures should be put in place. The Government's response was that they agreed in principle, which is good news. On page 9, they state:
"CHAI should be the principal external inspector of the implementation of NICE guidance, and the details of this inspection will be agreed between the Commission and the Department of Health."
They also mention the Modernisation Agency, which will work with NHS bodies, and the board development programme, with which I admit I am not entirely familiar. The response continues:
"NHS Boards are asked to check how NICE guidance is implemented".
It notes:
"The Institute has commissioned through the NHS Research and Development Programme an independent evaluation of the impact of the Institute's technical appraisal guidance."
I would welcome any indication from the Minister about how all that was progressing. Patients and the industry will be much happier if they are convinced that there is a robust monitoring system, although I hate to use the word "robust"—it is one that we tried to keep out of the report.

Much has also been said about the postcode lottery, although I am not sure whether that was why NICE was set up. As an Opposition politician, it is easy to jump on the bandwagon and decry the whole issue. However, I will not do that, because if we are devolving decision taking down to local areas, there will inevitably be some difference in the way in which PCTs in different parts of the country decide to implement guidelines. Any Government mechanism must ensure that such flexibility is still available to local decision makers. We cannot have our cake and eat it. We cannot have blanket NICE guidance that is implemented in exactly the same way everywhere and still say that local people will take local decisions. The two things do not square. There needs to be a loose framework in which both are taken into account.

Secondly, are we monitoring drugs in the right way? I ask that because I was especially struck by much of the evidence that we received that was very complimentary about the Scottish system called SIGN, which tends to examine a drug in the context of the wider disease, condition or whatever it is used for. That was coupled with alarming evidence from, for example, the Drug and Therapeutics Bulletin and the British National Formulary that there were discrepancies between the guidance issued by them and the guidance issued by NICE. Most people in the medical profession regard the British National Formulary as a bible. It is probably the first work that one looks at to get an initial picture of something. The Drug and Therapeutics Bulletin is also held in very high regard. There are moves for more consultation between bodies but, at some stage, we need to ask whether there is enough consultation and whether they are all singing from the same song sheet.

We consider drugs in isolation. That is the biggest problem with the way in which NICE tackles things. I do not mean that as an attack on NICE, because it was set up to work in that way. However, doctors are using outdated medicines for many conditions. On the face of it, they may look like the cheapest option, but if we factor in the costs of prescribing drugs for side effects and quality-of-life issues, the picture can suddenly change quite considerably. I should like more emphasis to be placed on a wider appraisal that considers new drugs alongside existing therapies and that comes to a balanced view about the relative merits of both.

That is linked to the argument about cost-effectiveness and affordability. I admit that I was sometimes confused by the conflicting evidence that the Committee received. NICE considers cost-effectiveness. There was significant concern that there was an arbitrary cut-off rate in relation to quality-adjusted life years. It became apparent that this is an inexact science. Often, a medical model is examined. The quality-adjusted life year often does not take into account other factors, such as a person's ability to carry on working, not to have to claim certain benefits and even to live at home unaided. Such factors are important, but are not taken into account adequately in the process.

Recommendation (w), which is on page 12 of the Government response, was about greater clarity. However, it will be difficult for the Government and NICE to provide that until clearer guidelines are accepted by all. There was confusion about whether NICE decided on affordability, or whether that was a political decision. The consensus at the end was that it was a political decision, because clearly the Government fund the NHS and it is up to them to decide what is affordable. I sometimes think that NICE crosses the border between deciding cost-effectiveness and deciding affordability. Greater clarity as to who makes which decision would be welcome.

It is easy to pick on the negatives and on the things that are going wrong but, on the whole, NICE serves a useful purpose. If sufficient notice is taken of the Committee's concerns and some of the concerns raised today, and if there is a will to change, we can come up with a system that benefits patients and politicians alike.

4.4 pm

As our Chairman, the hon. Member for Wakefield (Mr. Hinchliffe), was kind enough to compliment the members of the Committee, I should like to compliment our Chairman on his incredible patience and sense of humour. His patience was tried excessively this morning, but it remained intact. I also want to compliment the Minister and say how pleased I am to see her. I know that she spent as much time working out the answers as I did working out the questions. I saw her in the Library yesterday, and I tipped her off about one of my questions—but only one.

I want to speak on three topics. I want first to welcome events that have happened since our inquiry, although I will not say whether they are a result of the inquiry or not. I will then raise a few matters that I am still concerned about, before speaking briefly about the future.

My first welcome concerns the "British National Formulary". As has already been pointed out, we were staggered at the lack of collusion between the BNF, the "Drug and Therapeutics Bulletin" and the National Institute for Clinical Excellence, even to the extent that the BNF at that stage was not a formal consultee. I had a word with the chairman of the BNF earlier today, and I am glad to report that he feels that satisfactory communication is now taking place between NICE and the BNF, so much so that the BNF now includes summaries of NICE recommendations in up-to-date issues.

The only disappointment is that the BNF is having trouble with its computers, just as every other organisation seems to do, which means that the current BNF is not out until the end of April and I have not been able to check it. The executive editor of the BNF said that they were almost overwhelmed with information from NICE, but I do not want that to detract from the fact that NICE is sending it all that information. The situation is improving with the "Drug and Therapeutics Bulletin" as well, although perhaps a little more slowly.

My second welcome concerns paragraph 104, in which we noted that NICE had plans to establish a citizens council. We know from the press that something like 30 people from all walks of life have been enrolled into the council. From the NICE response, we know that one meeting has taken place already. I regret that I have not had time to check on the web what happened at the meeting, but I am sure that the Minister will be able to tell us how those ordinary citizens are coping—I do not mean to talk down people when I say "ordinary". During the inquiry, one or two witnesses said that going up before the academics at the NICE inquiries was scary, and I want to know how the ordinary people are standing up to it. Are they finding it friendly or intimidating?

Paragraph 94 has been superseded because the citizens council has been appointed before the Commission for Patient and Public Involvement in Health has really got off the ground. Could the citizens council be affiliated to the commission in some way, because that would give it more strength and bring NICE into the same fold? The NICE response mentioned the feasibility study on the patient impact assessment, and I want to know how that is going.

My third welcome concerns paragraph 99, which mentioned the need for an independent, detailed peer review. The NICE response says that the World Health Organisation is being asked to review the work of NICE, which is a tremendous step. However, I am slightly worried by the wording, because the NICE response says that the WHO will carry out a review of the technology appraisal programme for 2003. Is that the same as our recommendation that the review should be of a random selection of actual guidance?

Those are my three points of welcome, and next are my three points that still concern me, the first of which is funding. We are told repeatedly that the Government's welcome huge increase in funding to the NHS is enough to cover the cost of NICE recommendations and many other proposed developments. I have never been convinced that that is absolutely realistic. PCTs are overspent already, and a vast amount of extra money will go into the overspend. The three PCTs in the county in my constituency are overspent to the tune of £14 million, and that will swallow up a vast amount of their extra money. That is emphasised by the health bulletin produced by the Audit Commission, "Primary Care Prescribing", which shows that on average PCTs have increased their drug budgets by about 10 per cent. Drug costs are forecast to rise by about 12 per cent., so 2 per cent. of the figure is not actually accounted for, and it is a puzzle where that extra 2 per cent. will come from.

Others have already mentioned implementation of NICE recommendations and it is a worry. If a 2 per cent. rise is not accounted for in PCT budgeting and the implementation is not full, something of a black hole will be exposed. The charity Schizophrenia First has done a lot of work on implementation of the guidance, particularly the use of atypical anti-psychotic drugs. Its work does seem to show a clear gap between the issue of guidance and the actual implementation. The health bulletin states that the increase in spending on the atypical anti-psychotic drugs is £39 million, or 32 per cent., and if implementation is incomplete there will be a swingeing total increase that may not be covered. I wonder whether full implementation is affordable.

What does the hon. Gentleman think of the Government's response to that point in recommendation (o) on page 10 of their response? The report raises concerns about not only the affordability of the NICE recommendations, but the distorting effects that they might have on privatisation for those treatments that are not NICE-approved. The Government simply state:

"The NHS does have sufficient funding to meet the cost of NICE recommendations."
If only inquiries were so straightforward that bald assertions could be made and weeks of work and evidence considered could just be dismissed by the stroke of an assertive ministerial pen.

That is exactly my next point.

My next point, which has been touched on, is the impact of NICE guidelines on service delivery. If one examines the health bulletin, one finds some extraordinarily interesting figures. It analyses the £540 million increase in spending on drugs from 2001—02 to this year. A figure of £250 million is spent on drugs recommended by national service frameworks or by NICE guidelines. That includes a vast amount of money spent on the statins that improve the health and prognosis for many patients with heart disease. It includes money for anti-hypertensives, diabetic drugs, and atypical anti-psychotic drugs. Nearly half of that £250 million goes on drugs that have the support of NSFs and NICE guidelines, and the other £290 million—just over half— covers the vast bulk of medicines that are not supported by NICE guidelines. There is a worry that there will be a skewing of prescribing in the initial phase in favour of the drugs that have NSFs or NICE guidelines behind them.

Finally, I shall mention briefly three aspects on which I would like clarification for the future. Paragraph 68 addresses the issue of legal status:
"We recommend that the Government and NICE should clarify the legal status of NICE guidance in relation to the other legal duties incumbent upon clinicians and commissioners of health care."
I understand that NICE, working with the Department of Health and the Welsh Assembly, is trying to make sure that the service is clear about the priority that should be accorded to the guidance. However, I still have worries. Clinicians have legal duties of care to their patients and the PCTs have a duty to remain within their budgets. Somewhere, there will be a clash between those duties. If treatments that do not have the NICE guidelines or the national service frameworks behind them are squeezed out, where does the clinician who wants to use something that is no longer funded stand?

Secondly—this point was mentioned by the hon. Member for Romsey (Sandra Gidley)—we should bite the bullet and spend now to save money in the future. Obviously, expenditure on statins is improving the outlook and will reduce the number of patients who are admitted. Thinking again about anti-psychotics, full implementation of those recommendations would almost certainly reduce the need to admit schizophrenics to hospital, which is the sort of economy that it is so difficult for PCTs to make. They have got the money now, but they cannot use it to make savings in the future.

Thirdly—this was mentioned by the hon. Member for Wakefield—paragraphs 134 and 135 raise the wider issue of prioritisation. We have to welcome NICE as the first brave attempt at prioritisation or even health care rationing. Paragraph 135 of its response states that
"NICE agrees that this is a key issue and it is a debate in which the Institute wishes to contribute. NICE's experience so far, as well as imminent developments (especially the formation of the Citizens Council) gives the Institute a special perspective."
Speaking personally and not on behalf of the Committee, I would welcome a more wide-ranging, open debate on rationing, which is what prioritisation really means—although "rationing" is easier to say. I look forward to hearing the Minister's comments.

4.18 pm

Of course, I join those who have already spoken in applauding the Select Committee, and in particular its Chairman, the hon. Member for Wakefield (Mr. Hinchliffe), for not only choosing to open the inquiry but conducting it so deliberately. Reading the report, looking at the amount of evidence taken and how it was weighed, I find that it has covered the issues very well. There are some areas or the report with which I disagree, but there are broad areas with which I agree. Even in those areas of disagreement, it is clear that the Committee has done the work, taken the evidence and reached a view, which it sets out and defends.

At the outset, it is important to say that the Liberal Democrats supported the broad purposes for which NICE was set up. They were to provide clear guidance to the NHS about the evidence on the clinical effectiveness and efficacy of a drug and its cost-effectiveness, not only in absolute terms but more important in relative terms compared with other treatments, and to allow decisions to be made on a consistent basis, as far as possible, across the country.

Does the hon. Gentleman agree that there were other reasons for setting up NICE? It was not simply to deal with postcode prescribing. People have argued for a body to consider clinical effectiveness, and perhaps cost-effectiveness, for many years. Does he welcome the body being set up, as I do?

I did not mention postcode prescribing. I was making the point that the hon. Gentleman made. There were reasons for setting up NICE other than abolishing the so-called postcode lottery. In that respect, I entirely agree with him. The rationale that I set out for setting up NICE has little to do with so-called postcode lottery. As my hon. Friend the Member for Romsey (Sandra Gidley) explained, there are difficulties in saying that one wants to devolve decision making to the front line, to local bodies, and then saying that there will be no geographical variation in the provision of services—that is a much better way of putting it than "postcode lottery".

Using the term "postcode lottery" is insulting to people who have to make tough decisions. In my area, the commissioners in Oxfordshire have painful decisions to make about what treatments they can afford to fund, and what treatments and quantities of those treatments they cannot afford to fund. They have no way of raising funds, so they have the blame and responsibility without the power to raise extra money and be accountable for it. Their decision may have a bad impact on some of my constituents, who will feel hard done by. Those who benefit from the money being used in other services will appreciate it. Different decisions are made in Berkshire and Buckinghamshire.

To call that difficult decision making a lottery is an insult to the work being done. For example, in Oxfordshire, there is a priorities forum in which community health councils and patient groups are represented. Academics and clinicians are present, consider the evidence on effectiveness and cost-effectiveness and make decisions.

Rationing is rightly touched on in the report. Rationing is a natural consequence of the need for health care being greater than the general ability of resources—whether we are talking about funds, beds, doctors, nurses, or accessibility in terms of geographically appropriate services—to provide for that need. That is what causes rationing. By rationing I mean the lack of provision of certain treatments that would benefit patients, but which cannot be accessed on the NHS.

I hope that the Minister will use the "R" word, now that it has been defined in that way, because it is not a bad thing. The NHS has always rationed health care. The question is not whether there is rationing; there should be no sudden realisation of the existence of rationing. There are two fundamental questions. First, how much rationing is taking place—in other words, how many effective treatments cannot be afforded in terms of the resources available? Secondly, how explicit is that rationing, and, therefore, how accountable is the system? The British public have been failed in relation not to the existence of rationing but to the lack of explicitness.

One of the tests for NICE, therefore, is whether, since it cannot increase resources, it can specify that certain treatments are not beneficial. That is rarely done, because NICE considers treatments that have licences, presumably for an efficacious use. However, NICE has helped in making certain rationing more explicit, which is important. For that reason, NICE has been a welcome innovation over the past few years—it seems like it has been with us for decades.

As I have said, the fact that NICE is an authoritative national body that reaches its recommendations in an open, transparent and detailed way will make it easier to understand why certain treatments are not available and why there is more pressure for certain treatments to be available. As far as it goes, the Select Committee report makes those points as well, and I welcome that.

Liberal Democrats have some concerns about NICE. One is the question of affordability and the politicisation of NICE decisions, which occurs in various ways. The decision about what technologies to appraise is not independent but a political decision made by the Government. When NICE says that the NHS will fund a certain drug or will not provide certain treatments, it gets the blame from patient groups or, on the other side, pharmaceutical companies. The Minister, who is the person who is ultimately responsible for providing resources to the NHS and for deciding which technologies are appraised, does not.

To that extent, I worry that NICE is the fall guy for decisions for which accountability should lie with the Minister. I have always been clear that if the Government were explicit about rationing decisions, there would be no criticism from us about them, although we could have a debate about the level of the resources. There is less of a debate now between the Government and Liberal Democrats, but there certainly was debate in the five years before the new resources were allocated.

I have listened carefully to the hon. Gentleman's thoughtful contribution. I am interested in some of the wider points arising from the experience of NICE. Bearing in mind the commitment of the hon. Gentleman's party to devolving decision making in the NHS, which I and, I believe, hon. Members from all parties share, I wonder how he squares the process with his concerns about who chooses the interventions that are analysed by an organisation such as NICE?

That is a very good question. I would be happy to send the hon. Gentleman more details about that matter.

I do not think that any detail would be too much for the hon. Gentleman.

It is a very important question, because simply devolving to the front line is not adequate. Those on the front line would take more blame for decisions that they are making without any get-out. Under our approach, commissioning decisions would be made locally, but the local commissioning bodies would be dramatically different in two ways.First, they would be democratically accountable. We propose to do that in the same way called for by the hon. Gentleman, which is by merging health commissioning directly with local authority-based social services commissioning and by having a health and social care board, social services committee or local authority executive with a strengthened and unfragmented public health function.

I will when I have finished answering the question of the hon. Member for Wakefield.

Secondly, those bodies would be able to raise resources locally in a fair and progressive way to add to the pot that comes from central Government. Clearly, equity is a key issue, and there would have to be redistribution of the resources raised locally to poorer areas. However, one can have a rational system of democratically accountable, locally based decision making on commissioning—it is the commissioning that is critical, not the provision—only if one ensures that there is an ability to raise or reduce the resources that go into the pot. I hope that hon. Members accept that that is a rational way to do it.

There would still be national guidelines, but they would be agreed by the regions. Under our system, the national service framework guidance and standards would be accepted, because they are clinically based. They are not political. Nor are they like some of the performance targets that are wholly unclinical and that work against patient interests. I hope that I am not provoked into that debate. Our proposal would involve a mixture of national standards and local decision making.

The hon. Gentleman spoke a great deal about political purity and health decisions, but I just heard him say that he would like local authorities to control spending decisions in the NHS democratically. Will he be absolutely clear whether it is Liberal Democrat health policy that local authorities should control commissioning decisions in the NHS?

Yes. It is set out in a paper that is available on our website. I am sure that the hon. Gentleman knows how to use the internet and will be able to access it to reassure himself even more completely. It is our policy that local authorities should control commissioning decisions in the NHS, which we have been saying for some time.

Judging by what the hon. Gentleman has said, he will agree that it might be a good idea if NICE were encouraged to consider some existing treatments and discontinue them—I believe that he used the word "discontinue"—rather than being forced by political interests or patient groups to consider the latest, most exciting product. I know that NICE wants to do so, because it said so when it gave evidence to the Select Committee. Does he believe that local decision taking would make that easier to achieve? Would there be more local pressure to make that happen?

I stress that I am keen to discuss the Health Committee's report, but, again, the paper that I just described says that we want NICE to be significantly expanded so that it can consider existing treatments. Some treatments have been shown to be less effective over time when used outside the purity of clinical trials, and have been superseded by newer treatments that may appear to be more expensive but that are cheaper in the long run because eventually one has to use them anyway. We therefore want the work of NICE to be expanded. I suspect that NICE would want it to be expanded if it could choose its subjects, which it cannot, to cover some existing treatments that, I am ashamed to say, are not rational. The "Drug and Therapeutics Bulletin' exposes that very well, and I know that the Select Committee carefully considered the work that it does.

Under the sort of scheme that I described, decisions would be made locally and in a democratically accountable way. Every local voter, patient and member of the public would receive a leaflet saying what services were not available, so rationing would be explicit, and if they objected to that they could apply for more funding through the usual democratic process. An obvious consequence of what I have said is that NICE decisions should be advisory, not binding.

We had two reasons for objecting to the fact that NICE guidance is made mandatory without earmarked funding being made available. First, it makes it very difficult for there to be local prioritisation, especially when there is a suspicion that the treatments chosen for appraisal by NICE are chosen for political reasons because they are imposed on NICE by the Department of Health. Secondly, while that situation pertains, as the Select Committee said in its report, treatments that are not appraised are likely to have their funding cut to fund a mixture of NICE must-dos and less worthy Government must-dos. That is what I have described as a tyranny of the appraised over the non-appraised. The more things that NICE covers, the greater that tyranny will be. The treatment areas that remain are not subject to compulsory funding in that way. The Government's response has completely failed to deal with that distortion of resource allocation from the must-dos, but the Government must deal with it. I hope that the Minister will do better than the response set out in her report.

I was interested in the Select Committee's discussion of affordability. When NICE was established, the statutory instrument made no mention of affordability when it described its functions. In the summer of 1998, the Government snuck out an additional statutory instrument that said something to the effect that NICE would take account of the resources available to the NHS when it took its decisions. That was asking NICE to factor in affordability.

Of course affordability is important. My objection is that those who control the amount of resources available on one side of the equation that I described should be the ones who take the blame or get the credit for recommending the use or prescribing of a treatment or drug. However, if NICE decided that there was a very effective drug that was also cost-effective but that allowing the drug to be widely used on the NHS would have an impact on NHS budgets, that drug could not be recommended. That may be the right decision, but it is a decision for Ministers to make.

Perhaps the only good thing about the decision made on Sildenafil, or Viagra, by the Government is that they made that decision in pre-NICE days. It was, and remains, wholly unethical that a drug should be rationed according to the disease process behind the disability or condition, rather than according to the ability to benefit. That is not the sort of thing that we should be seeing from those with the responsibility for making decisions.

In long conversations that I have had with the chairman and chief executive of NICE, they have said that they do not make decisions based on affordability, so why that statutory instrument was introduced, debated and passed, I do not understand. I know that the Select Committee has withheld its judgment on whether that is the case, because it is hard to find examples. I hope that the Minister will make it clear that it is the job of NICE to discuss effectiveness and cost-effectiveness.

The question of cost-effectiveness is interesting because of the other issue raised about NICE—whether it has set a ration for the health service in terms of an amount of money per quality-adjusted life year. In the old days, when we discussed rationing, Ministers refused to accept that there was rationing. Notoriously, in the first half of the previous Parliament, Ministers would say at the Dispatch Box, "If you mean by rationing that there is a certain ration of treatment that everyone has, as with wartime food rationing, then there is no rationing in the health service." However, that was not what most people understand by rationing in the NHS. Curiously, the process of NICE's evaluation has tended to create, by iteration, a limit of cost per QALY, which it will judge to be cost-effective enough to recommend.

I am not saying that that is a bad thing—it is rational, understandable and a rule that can be followed. It allows a standard to be set and decisions to appear less perverse. Clearly, if something costs £80,000 per quality-adjusted life year, and it is rejected, and something costs £20,000 per quality-adjusted life year, and is recommended, people can see the reasons. It is important that, despite the difficulty of getting good data, some attempt is made to cost such decisions. It allows vigorous debates about whether the right studies have been used and whether the right time scales, particularly in respect of QALY, have been used.

However, in its evidence to the Committee, NICE still denies that there is a threshold, and I am not sure that it does not deny that what is involved is the process by which it says that it will recommend a treatment that costs £20,000 but will not recommend one that costs £200,000. I would expect that it would do that, and why should it deny that that is the case? I would be interested in the Minister's view. Does she expect to see decisions understood in that way?

As I said in my intervention on the hon. Member for Wyre Forest (Dr. Taylor), the Government have said that they think that there is no problem about the affordability to local health economies of positive recommendations from NICE. However, they just state that baldly, without providing any evidence, on either a national or a local level, about the overall cost of the funding, and how that can be afforded together with everything else. I tabled some parliamentary questions and, in the end, got some figures about the Government's estimate of the cost to the NHS of NICE guidance. When that is added to the cost of meeting the clinically correct standards in NHS frameworks, which I endorse, that creates a new figure. When that is added to the cost of implementing some of the political targets that the Government impose on local health economies, it is clear, as we can see by the enormous deficits in health economies, that it simply cannot be done, even out of the growth money that, in the last year only, has been at the sort of level that we would have liked to see some years ago.

The Government must recognise that that is the case and say that they will not be able to achieve everything very quickly because if money is going on cancelling deficits on health economies, it cannot be spent on investing in new services. That is just a fact of arithmetic, and if the Government accepted that, we would have some common ground. In fact, the Government do hint that there may be a problem here. In response to recommendation (k), where the Committee calls for
"an increase in NICE's capacity"
to look at treatments as whole rather than at individual drugs—a wise recommendation—the Government say:
"As the Government made clear in its response to the Kennedy Report, it agrees that over time NICE guidelines should cover all major conditions".
Again, I worry about what happens to minor conditions under the tyranny of the appraised. They continue:
"However, the pace at which guidelines are produced must take account not of NICE's capacity but the ability of the NHS to act on them."
Is that finally a little honesty about the impact of making NICE recommendations that are expensive to provide?

Those are some of the key issues in the Select Committee report. One final point concerns the setting up of the NICE citizens council. Although it looks as if that is a sensible move that makes decisions more accountable, I believe it to be the opposite. When I asked NICE how it could defend making decisions about whether QALYs should be used—in a sense, they are age-discriminatory—and allocating decisions on that to 30 people who are in no way democratically accountable, or indeed accountable at all, rather than expecting Parliament to make a decision, its response was, "It's in the NHS plan."

If what NICE does is subject to what the Government decide in the NHS plan, and that does not come before the House in the shape of regulation or even primary legislation so that we can debate it and vote on it, NICE is not truly independent. It was not NICE that set up the so—called citizens council—the Government forced it to do so.

There is a question that we have to answer about QALYs. Is it right that a seven-year-old should have treatment, but not a 70-year-old when they could both benefit equally? Logically, more quality-adjusted life years are saved by treating the seven-year-old rather than the 70-year-old. The question about whether that is discriminatory or appropriate is a decision for which the House must be responsible. We must debate it and we must be accountable, and there must be a full public debate. Using 20 or 30 people, however interested they are in the subject and however varied their background, as a barrier behind which to hide when such decisions and judgments are made means that there is less accountability for such decisions—it is a sham.

I should be grateful if the Minister told us whether she feels that QALYs are satisfactory as the basis for making key decisions on cost-effectiveness and therefore recommending whether treatments are available or not—it is a binary decision once NICE makes the decision. If she feels that that is so, can she tell us when that has been debated in the House and the Government have been responsible for that decision?

The report is an excellent start on probing NICE, health economists and the Government on some of the issues but, without the Government engaging in debate, it can be only part of what needs to be a wider process.

4.43 pm

I join the Chairman of the Committee, the hon. Member for Wakefield (Mr. Hinchliffe), in his generous and appropriate comments about Lord Hunt, who was associated with the Committee, as he conducted our inquiry.

The hon. Member for Wakefield has a justified reputation for being able to talk the talk fluently, but in his bluff Yorkshire manner he also has a reputation, to which the Secretary of State would certainly testify, for walking the walk.

In the light of the hon. Gentleman's comments on Lord Hunt, I may be able to help him. I draw to his attention early-day motion 935, which says:
"That this House recognises the personal commitment made by Lord Hunt of King's Heath to the NHS over many years and fully accepts that his decision to resign over the issue of Iraq is one entirely of personal conscience."
In the light of the hon. Gentleman's comments, he might like to join seven of his hon. Friends, not all of whom are the usual suspects, in adding his name to that early-day motion that I and my hon. Friend the Member for Woodspring (Dr. Fox) tabled. Moreover, if he is tempted by that, he may want to walk the walk a step further and turn the knife and sign early-day motion 936, which says:
"That this House deplores the derogatory comments by the Deputy Prime Minister in relation to the resignation of Lord Hunt."
I hope that—

Order. I hope that we are coming to the subject of NICE, eventually.

We are indeed, Mr. Deputy Speaker, but it seemed appropriate to go down that cul-de-sac to start with, because the Chairman of the Health Committee was so eloquent and appropriate in his comments about the loss to the Government of Lord Hunt, given the tremendous work that he did in assisting the Committee during its investigation of NICE.

I listened to the speeches today with great interest, and two things struck me as unusual. I listened carefully to the hon. Member for Romsey (Sandra Gidley), who said, in connection with one of the issues that she raised, that she would not jump on a bandwagon. I commend her for that. She is the first Liberal Democrat that I have encountered who has not jumped on a bandwagon when appropriate, or even sometimes on two different bandwagons at completely opposite points.

I listened with incredulity to the hon. Member for Oxford, West and Abingdon (Dr. Harris) because, if I understood him correctly, he said that to use the term "postcode lottery" is insulting. I took that to mean the general use of the term, as well as its use in connection with the report. I find that staggering, because although I would agree with him that it is an insulting misnomer, I suspect that that has not stopped most of his colleagues, and probably the hon. Gentleman himself when he was a parliamentary candidate, from using it ad nauseam in the mid-1990s.

I should be grateful if the hon. Gentleman could find an early-day motion that I signed that includes the term "postcode lottery" or any leaflet of mine that uses the term, because I have been reasonably consistent. If the hon. Gentleman finds it an unreasonable term because it is too simplistic, he should look at how often he has used it and not try to have it both ways.

I do not want to go too far down that cul-de-sac, but I do not think that the hon. Gentleman was listening. I said that his colleagues were likely to have used the term, and that he is likely to have used it when he was a parliamentary candidate in the 1990s. It defies belief for a Liberal Democrat politician to claim that he or his colleagues have not used the term "postcode lottery" during their political careers. He knows as well as I do that they have, and have done so with a vengeance, but "on the one hand or on the other" is the Liberal Democrats' position.

The report by the Select Committee on NICE is welcome, because, as you will be aware, Mr. Deputy Speaker, NICE is a new body. It is therefore important that an in-depth assessment is made of its operation in the initial stages after its establishment. That is why I think it was appropriate that we, as a Committee, examined the organisation at that stage. We were able to see it working through some of its teething problems at the beginning of its existence, and to examine some of the controversy associated with it in certain areas because of the statutory instrument on affordability, and the whole area of cost-effectiveness to which the hon. Member for Oxford, West and Abingdon referred.

This is in no way a criticism, but it is fair to say that setting up such a body, a move that the official Opposition welcomed and supported, raises expectations, sometimes unrealistically, because of the nature of its work. It is certainly not the fault of Government that expectations were raised, and by definition it would be unfair to make criticisms because those expectations have not been met. I suspect that some if not many people thought that a body of this nature would in some respects be a blank cheque, but of course that was never going to be the case, and nor should it be, because that is just not realistic.

I should like to deal with two issues arising from the report that to me, as a member of the Select Committee on Health, were of particular concern during our investigations. The first issue is the length of time that it takes for an appraisal to be carried out. In some cases, that has led to what has become known as NICE blight. In paragraph 63 of the report, NICE states:
"We have been playing a lot of catch-up at NICE. We have been looking at anti-cancer drugs that were first launched in 1994. This is not a tolerable situation. What we do need to do…is to be proactive. We need to be starting the appraisal process a year before a drug is licensed. It is perfectly feasible to do it."
That is a very valid point. The Minister may argue, with some justification, that at the beginning of its life, a body cannot play by those rules because of the heavy work load of a new body. I would accept that, but I hope that, as time progresses, NICE's comment can be acted on more speedily.

An early problem has been that NICE has had to carry out two different roles: the catch-up role and carrying out appraisals of new drugs. It has not been easy for NICE to combine both roles in the early life of the organization, because of the sheer scale of the catch- up involved. That is no one's fault, but an inevitability of creating such an organisation. However, that situation has caused serious problems and, in some cases, possibly avoidable suffering to patients who could have benefited from drugs that were being appraised.

During our hearings, we took important evidence on that problem from Mr. Campbell-Morrison from the Campaign for Effective and Rational Treatment. CERT's submission was critical of what it described as "unplanned and unexplained" delays in some appraisals. It gave in graphic terms the example of the drug Herceptin, whose appraisal had been inexplicably delayed by six months, even though the drug can have a dramatic effect on the survival chances of women who have an aggressive form of breast cancer, and can improve dramatically the quality of life of those sufferers. Such delays have adversely affected the quality of life of too many individuals who might have had an improved quality of life if they had not been victims of those delays.

I warmly endorse our recommendation in paragraph (1):
"We recommend that for all new technologies, NICE's work programme is arranged to facilitate publication of guidance at the time of launch. When this is not possible, NICE should conduct rapid "interim" appraisals of clinical and cost-effectiveness to be published at the time of a treatment's launch … Although the amount and type of information available at time of launch may be less than ideal, an 'interim' appraisal would provide useful guidance until a more detailed appraisal of the treatment is conducted as part of NICE's expanded main function of developing clinical guidelines."
In retrospect, perhaps there should have been more of an awareness of a split in NICE between dealing with existing drugs that needed appraisal, and the new drugs coming on to the market in order to minimise the problems of catch-up. Perhaps the Minister can reassure me that there was and tell me what was done to minimise the problems. I would be grateful to the Minister if she could update hon. Members on what has been happening since the Government's response on the issue was published last September.

My second point concerns recommendation (w), which talked about great clarity in the criteria for evaluating clinical and cost-effectiveness. It states:
"Whether or not Quality Adjusted Life Years are used, we"
that is the Select Committee—
"recommend that NICE should consider the wider societal costs and advantages of particular treatments and in particular the wider costs and benefits to the public purse of reduced benefit dependency and improved ability to work both for patients and their carers."
We came to that conclusion because of the numerous concerns raised about cost-effectiveness. We received criticisms from one witness in particular, Dr. Crayford of the Croydon health authority, over NICE's alleged inconsistent approach to the use of quality-adjusted life years. I know that other hon. Members have referred to that problem, but I noticed that in the Government's response that—possibly rather surprisingly—they have said:
"wider costs and benefits should be taken into account."
I welcome and agree with that, but the Government went on to say:
"The Treasury will shortly"—
this was published last September—
"be issuing new guidance on economic appraisal which will broadly meet the Committee's point".
I would be grateful if the Minister could update us about that commitment in the Government's response.

I have not been able to find any new guidance published by the Treasury, but that may be due to an error on my part, or it may be because that there has not been sufficient time for the Treasury to publish that guidance because of the work still required on it. I would be grateful if the Minister could tell us of the current status of either the guidance or its preparation. If it has not been issued, when does the Minister expect the Treasury to issue it?

My final point returns to a point made by the hon. Members for Wyre Forest (Dr. Taylor) and for Oxford, West and Abingdon, which is the response that the Government gave to recommendation (o):

"The NHS does have sufficient funding to meet the cost of NICE recommendations."
As the hon. Member for Oxford, West and Abingdon said, that is a very bald statement. I would expect the Government to say that; I would not expect them to say anything else. It is, to my mind, a somewhat glib response, and what one would expect from the Government. If one talks to PCTs, they would not all necessarily accept the Government at face value on the matter because there are considerable budgetary problems with drug bills in PCTs. As other hon. Members have mentioned, there are problems in relation to deficits in some PCTs. If the Minister could just flesh out that statement, it would be extremely appropriate and helpful.

I welcome not only the report, but the fact that we have had the opportunity to debate it this afternoon, question the Minister and hear her response. All too often, through no fault of anyone, Select Committees produce reports to which the Government respond—within two months if we are lucky, which we usually are—but there is no opportunity to have a follow-up debate in which we can quiz the Minister following that response.

5 pm

I am delighted to discuss what is an excellent report from the Select Committee on Health. We have had a thoughtful and stimulating debate, and because the National institute for Clinical Excellence plays such a pivotal role in exercising judgments about clinical and cost effectiveness and, increasingly with the introduction of the citizens council, value, we have inevitably managed to raise some fundamental and wide-ranging issues about the NHS itself, as well as those purely related to the technical operation of the institute. I hope to be able to respond to all the issues raised but, at a quick glance, there appear to be at least 30. I ask hon. Members to forgive me if I do not manage to respond to every one, but I will follow up on them in correspondence if that happens.

I want to make two preliminary points before I embark on the detail of hon. Members' contributions. The first is to note at the outset the extent to which NICE makes its own decisions. It works independently from the Department of Health, which was a key point for us in setting up the institute. As we said in our response to the Committee's report:
"The Government made clear from the inception of NICE that the Institute would determine its own methodology and formulate advice without interference from Ministers, subject only to its Framework Document and founding Statutory Instruments."
It was a courageous decision by the Government to embark on this dangerous territory and say clearly that the institute should be independent. It was a departure from how things were run in the past, and I believe that NICE has repaid the Government's confidence. That all means that many of the Committee's recommendations are matters for NICE, and I know that the institute's chairman has responded in detail to some Members. My replies and the Government's response will also reflect the actions taken by the institute.

The second point that is worth remembering is the report's first conclusion:
"It is clear that expectations of NICE have been high, and in addition to the challenges of its remit, NICE has also faced the same logistical and operational challenges as all nascent organisations. In this context, we welcome the support we have seen for the establishment of NICE, and we recognise that this represents an improvement on the previous situation."
All hon. Members who have contributed to today's debate have welcomed NICE and seen it as an improvement, and that conclusion reflects the complexity of the task that we have set up NICE to undertake.

I would go a little further than the Committee's conclusion and say that I believe that NICE has done a very good job. It has tackled some tough issues and has been prepared to learn from its experience and interact with a range of people both in and outside of the service. There has been some criticism, some of which has been justified, but the way in which NICE has listened, responded and learned about its future work is tremendously encouraging for the health service as a whole.

I shall now turn to Members' specific points and first to the contribution of my hon. Friend the Member for Wakefield (Mr. Hinchliffe), who is the Chairman of the Health Committee. I echo his kind remarks about Lord Hunt of Kings Heath, who was an excellent Minister and tremendous colleague. He is severely missed in the Department, not least because I am now dealing with a matter that was previously his responsibility, although I am delighted to do so.

My hon. Friend raised the issue of the institute's credibility, which is extremely important. The organisation's integrity and credibility are fundamental if the institute's recommendations are to command widespread consensus and agreement. I know that the Committee raised its concern that there was not enough interaction with outside bodies such as the "British National Formulary" and the "Drug and Therapeutics Bulletin". Those points were well made and I am delighted to tell the Committee that there have been formal meetings between NICE and those organisations, which will have opportunities to make formal comments.

On credibility, the hon. Member for Romsey (Sandra Gidley), who is not present because she has had to attend another appointment, raised the specific issue of the Committee's change of guidance on the drug Relenza, which was highlighted in evidence presented to it, and I should like to explain what happened. NICE issued preliminary findings in 1999 and the results of its full appraisal in 2000. NICE's task is to appraise the clinical and cost-effectiveness of treatments based on the available evidence. When it first issued its guidance in October 1999, it said twat it would review the guidance after the flu season in the following year.

The 2000 guidance was different from the 1999 guidance because new evidence had become available. At that point, NICE said that the treatment would benefit small, at-risk groups. The guidance was not that the treatment was good to use across the board, but that it might be useful for particular at-risk groups. That the experts could not agree on the precise guidance reflects the complexity of the issues. I should not want that specific, one-off issue to undermine NICE's credibility. Hon. Members are right that credibility is very important.

My hon. Friend the Member for Wakefield went on to raise the issue of inclusiveness. Trying to ensure that as broad a sweep of stakeholders as possible is involved in discussions with NICE is a fundamental tenet of the institute. There have been some improvements to try to ensure greater dialogue such as the change in the topic referral system, the widening out of the stakeholders from the NHS and the increase in stakeholders from patient and carer groups. We welcome the Committee's recommendations on involving stakeholders. In March last year, consultation, which is due to be completed in November this year, began on how NICE involves stakeholders. The review will take account of the recommendations from the Select Committee on Health. The widening of stakeholders is extremely important.

My hon. Friend raised the issue of independence, which, as I said at the outset, is extremely important. The Committee has recognised the difference, which goes to the heart of the independence debate, between what the institute decides on cost-effectiveness and what the Government decide on affordability. That demarcation needs to be extremely clear. We always intended that NICE should look at clinical and cost-effectiveness because it has the expertise and the evidence base to do so. Decisions on affordability are rightly a matter for the Government and for Ministers in setting the overall budgets for the NHS and in trying to negotiate the delicate area of priorities, a point that I shall further explore when I comment on the contribution from the hon. Member for Oxford, West and Abingdon (Dr. Harris).

Several hon. Members raised the issue of the monitoring of advice, which is an important subject. It concerns examining who takes up NICE's guidance, whether the guidance is widespread across the country and whether it is managing to ensure, as it is intended to, that there is equal access to new treatments and technologies. We want to ensure that the legal requirement on PCTs to make funding available to follow NICE guidance is implemented across the country. I should like to make the distinction, although it is perhaps a fine one, that the legal obligation on PCTs is to make funding available where clinicians decide that it is appropriate. We are not simply saying to PCTs that every clinician must implement the NICE guidance. The position is that once the NICE guidance is issued, clinicians must take it into account, but it is not an absolute, mandatory instruction. At the end of the day, the decision will always be for clinicians, but PCTs have to ensure that there are sufficient resources in the system to allow treatment to be made available on the indication of a clinician. The distinction is fine, but it is also important.

In terms of implementation, it is our view that the Commission for Health Audit and Inspection should be the principal external inspector of the implementation of NICE guidance. The details of that inspection will need to be agreed between the commission and the Department of Health. I expect that CHAI's work will cover clinical guidelines, as well as the appraisals that are integral to the clinical governance agenda in the organisation.

The hon. Member for Romsey raised the question of the role of the NHS Modernisation Agency in seeking to support the boards of trusts in making sure that they can also play a role in monitoring the implementation of NICE guidance. I understand that the national clinical governance support team is working with 215 NHS boards, right across the system. Executive and non-executive directors are being trained and supported in carrying out an analysis, in their organisation, of whether NICE's recommendations are being followed. So there is a mechanism at local level to try to ensure that that happens.

I thank my hon. Friend for a helpful reply. She may be coming on to the point that I raised towards the end of my speech about the mechanisms for monitoring the impact of NICE guidance where that guidance is affecting existing services, particularly in relation to requirements to reconfigure existing services that, if implemented, would threaten the future of existing services. Who would be responsible for monitoring such a development? Would it be the new CHAI body or the strategic body?

I am coming on to address that point. I am sure that my hon. Friend will appreciate that I am not in a position today to give a definitive answer, and it will probably be a complex answer, as things in the NHS tend to be. Getting the position right will not be the responsibility of single body.

I wanted to deal with the points that my hon. Friend made about prioritisation—several hon. Members have raised that issue—and whether there should be a more explicit framework. The recommendation of the Committee in paragraphs (ee) and (ff) were around whether there should be a more explicit set of ethical and rational values and a framework for making decisions. Through the national service frameworks, NICE, the NHS plan and CHAI, we try to set a national framework for the national standards that should be available across the NHS.

There will inevitably be a tension between national standards and local devolution in terms of having a framework within which people can see what it is that they are entitled to expect and what the priorities are within the system. The analysis from the hon. Member for Oxford, West and Abingdon about the tensions between the national and local levels was simplistic. We are on a rolling programme towards having an explicit framework, through NICE work.

In his evidence to the Committee, Lord Hunt said that he envisaged, over the next five to 10 years, that the NICE work would be likely to cover the vast majority of treatments and services available within the NHS, but it had to be an incremental process. It would not be helpful to try to concertina that process by setting out the prioritisation at this point. As NICE goes on, and covers much more of the service, as it interacts more closely with the national service framework, as it produces its guidelines around treatments, we shall begin to see emerging a more detailed framework.

At the moment, it is not possible to create the kind of explicit framework of prioritisation that the Committee has asked for. I am sure that, as time goes on, that framework will become more populated by the empirical data from the individual appraisals that NICE has conducted, and we shall start to see much more of a comprehensive picture across the piece, but we are certainly not there yet, and we do not have the data to be able to do that now.

Is the Minister saying that there is no role for Government in setting priorities in the health service and that there will just be an accretion of national service frameworks and NICE guidance? If the Government do not have a role that is based on ethical values, as the Committee recommends, why do they keep setting priorities and demonstrating them by earmarking central funds for them, or by earmarking a certain condition for appraisal or for a national service framework?

The Minister cannot have it both ways. Either the Government are involved, in which case they should be explicit and operate within an ethical framework, or they should leave the health service to the gradual gathering of prioritisations through standards.

Clearly, the Government have a role in setting priorities. That is why we issued the NHS plan and the planning and priorities framework for the next three years to PCTs. They set out the Government's priorities and what we expect PCTs to deliver through their local delivery plans. My hon. Friend the Member for Wakefield discussed nine different aspects of the planning and priorities framework.

The hon. Gentleman's analysis is simplistic. He repeats the phrase, "You can't have it both ways," but in politics, as in life, the art of achieving a satisfactory resolution is striking the right balance between competing issues, which are not black or white, right or wrong, all of one and none of the other. It is a matter of bringing together complex factors and seeking to create from them a synthesis that meets the vast majority of the needs of the greatest number of people through the services that we provide.

That is a proper, grown-up, realistic and mature analysis of priorities in public services. The hon. Gentleman's insistence that it has to be either this or that, and that we cannot have a blend of national standards and local devolution of priorities is an extremely simplistic analysis and one that does not help in setting priorities.

The Minister says that it is important to have a blend, or synthesis, to ensure that we benefit the greatest number of people in the most effective way—I agree with her. What work are the Government doing—academically, through research or, indeed, philosophically—to demonstrate the values and rationale that underpin the strategy, which she claims to have developed through a synthesis of various factors, by which we seek to benefit the most people in the most equitable way by the most effective treatments? Is any work being done, or is "no" her answer to recommendation (ff)?

An important part of our work is exactly exemplified by the work of NICE, which is going through that very process of examining clinical and cost-effectiveness. I shall later deal with the important point that was made by several hon. Members about quality-of-life years.

The hon. Member for Romsey expressed her concern about the time that it takes to carry out appraisals. Most appraisals take just over a year, which is, admittedly, an extremely long time. The hon. Member for West Chelmsford (Mr. Burns) said that the institute is trying to catch up with many existing technologies. We hope that it is possible to learn from experience and that perhaps future appraisals can be accelerated.

On NICE blight, the health service is under guidance to consider clinical effectiveness before NICE guidance has been issued. There is no bar to using drugs and services simply because they have not been appraised. I acknowledge that there are tensions in the system. PCTs sometimes say that they are reluctant to use something that has not been appraised. However, there is no technical bar to their continuing to prescribe and use products that have not been subject to a NICE appraisal.

Several hon. Members discussed the timing of guidance. Clearly, NICE would like to be able to issue its guidance at or very shortly after the launch of any new product. That would make the most sense, because people would then know exactly what the judgments were. The recommendation about interim guidance has been rejected, and rightly so. It would be dangerous to arrive at interim views that later have to be reversed because there was not enough information to make a proper decision.

We then return to the problem of the credibility of NICE if it were able to make anticipatory judgments that were later found not to be robust or to have integrity and had to be varied. We must ensure that the appraisals are carried out as early and as quickly as possible. When we can horizon-scan and anticipate new developments, the timing will coalesce much better than in the past.

The hon. Member for Wyre Forest (Dr. Taylor) raised a number of important points and I am delighted with his welcome for NICE's work. He forewarned me of his intention to speak about the citizens council and I know that he has a particular interest in public and patient involvement in the NHS. I hope that he feels that we are making significant progress towards greater involvement of the public and patients in the design of services. I am delighted to be able to tell him that the first meeting of the citizens council was in November, when it met for three days of solid consideration, which is a lengthy commitment for the members. I am delighted that it had its first meeting in Salford, which is not quite the home of public and patient involvement but I like to think that we have a tremendous amount of experience. The panel consists of 30 people, balanced in factors such as age, gender, ethnic background and so on. I am told that there were around 5,000 applications for membership of the citizens council. Some people say that there is apathy in the community and that people do not want to come forward and take part in such bodies, but the number of applications give the lie to that.

I am told that the members took control of the first meeting and were incredibly articulate. Their agenda for the first meeting was to consider what factors should be taken into account when defining clinical need. Their views were preliminary, but they suggested that NICE should not take account of self-induced or inherited illness when deciding priorities and that voices should be prioritised, the first being that of patients and health professionals, the second being that of carers and the third being that of manufacturers. They had a clear view of the sort of priorities that should be taken into account.

I am unaware of that, but age may be a factor. I am sure that during subsequent discussions they will consider the difficult issues surrounding quality-of-life years and put their valued judgments to NICE.

The process is incremental. In the past, we had no such views in the system and I am sure that the citizens council is not the perfect answer to every democratic consideration, but it is a significant improvement on not having the voice of patients and the public heard at all.

I am sure that it is a sophisticated focus group and the Minister referred to it making decisions, but what are the implications of its decisions? If my constituents want to object to a view that self-induced illness or any other illness should not be priority, how will they do that? Will the Minister ensure that there is democratic accountability in those important issues? In what way will that focus group be democratically accountable?

I do not think that it has ever been asserted that the citizens council is a democratic body. Its purpose is to find out whether there is a way of ascertaining people's views. I do not think that a democratic element is always possible. We should work towards introducing as much democracy as possible into the national health service, but if it is not possible that is no reason for not trying to use citizens councils, patient forums and the other mechanisms that we have set up. I hope that the hon. Gentleman welcomes the citizens council as another step forward in trying to introduce other values into the system.

The hon. Member for Wyre Forest asked about the cost of the NICE guidance. Its appraisal guidance accounts for £521 million in recurrent costs, £21.8 million in one-off costs and in 2002–03 that represented less than 1 per cent. of annual NHS expenditure. Several hon. Members asked whether the cost of NICE guidance is included in the NHS budget. There are constraints on PCTs, which are under enormous pressure to try to meet all the standards set out, but the cost of NICE recommendations has been included in the spending review settlement that was allocated to the NHS. Hon. Members must accept that those costs are within the context of the biggest-ever increase in resources for the NHS, doubling the amount of money spent on it by 2008; which means average PCTs getting a 30 per cent. increase over the next three years. Inevitably, hon. Members will ask for even more resources, but at present the increases are in the context of a very favourable climate for the NHS.

We will not be able to do everything overnight, which is why there is a three-year forward-funding programme, within which we expect PCTs to start thinking about service redesign, about operating in a different way and about how to create more of a margin for health improvements and to start to work on that creativity. I do not know about the hon. Member for Oxford, West and Abingdon, but when I visit PCTs throughout the country, I find that they are increasingly working more creatively to find the flexibility to improve services in their local communities and I would encourage them to do so.

The hon. Gentleman raised the issue of topic selection. Some witnesses who gave evidence to the Committee argued that external organisations should be able to decide what topics go forward. The Committee rejected that. It said:
"We feel that this very high-level prioritisation is rightly the job of Government".
We believe that to be the case. However, NICE has four representatives on the new advisory committee and senior members of NICE meet as the joint planning group. NICE is free to propose topics in its own right; it has proposed atypical anti-psychotics for schizophrenia and the use of cannabis in treating MS, which it has fed into the programme. We expect NICE to continue to do so in the future.

The hon. Member for Oxford, West and Abingdon raised the issue of conflict between national standards and devolution, which I hope that we have already dealt with. He either wants targets and standards and the progress that goes with them or he wants a free for all at local level. I am not sure which it is.

The hon. Gentleman wants no targets, but without targets there will be no mechanism to see whether the system is improving. A managed system is the way forward, to try to resolve the differences between the national standards and local devolution. Managing that process is the most sensible way to get the most benefit from our investment for citizens throughout the country.

I shall turn briefly to the matters raised by the hon. Member for West Chelmsford. He thought that NICE might raise unrealistic expectations because of its work. I can tell him that the Government are tremendously ambitious for the health service.

I do not think that the Minister understood; what I said was that at the time of NICE's creation, some unrealistically high expectations were established in the community.

The public now have extremely high expectations of all public services, and rightly so. NICE is helping us to meet those expectations and to manage them properly.

The hon. Gentleman expressed concern about the length of time taken to carry out appraisals. As the programme progresses, I hope that the time taken will come down, although that will depend upon the complexity of the appraisals and the amount of evidence available.

Several hon. Members mentioned the need to consider issues such as the wider societal costs and the benefits of NICE, and it is right to do so. The Treasury will be issuing guidance on a new and improved way of carrying out an economic appraisal. The guidance was published on 16 January and has just been received by the NHS. It will be discussed with NICE to discover whether there is a better and more appropriate way to measure the wider costs and benefits involved. The Treasury will be concerned to ensure that we do not do any double counting; it wants a fairly rigorous appraisal and we shall ensure that it is.

NICE decisions are not based just on QALYs. It pays full attention to all the evidence that is presented to it by patient and carer groups, too. It is not a mechanistic process in which an appraisal has to get over a QALY threshold. It is more complex than that; there are more judgments to be made in the process and NICE does an excellent job of bringing all the issues together.

I thank the Select Committee for an extensive and extremely constructive report. Many of its recommendations have been helpful to the Government and to NICE. I thank all hon. Members who took part in the debate and managed to improve the Government's policy by their cautious and careful deliberations.

It being half-past Five o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.