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Foundation Hospitals

Volume 408: debated on Tuesday 1 July 2003

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If he will make a statement on the accountability of foundation hospitals. [122425]

NHS foundation trusts will be fully part of the national health service and run locally, not nationally. The Health and Social Care (Community Health and Standards) Bill sets out various strands of accountability for NHS foundation trusts.

As currently drafted, the Bill provides for foundation hospitals to appoint their own auditor, with no public auditor—neither the Audit Commission nor the National Audit Office—and no public scrutiny of the annual audit reports. Given that foundation hospitals will be spending billions of pounds of public money, voted by the House, should not they be ultimately accountable to Parliament rather than to an amorphous group of local worthies? Does not the Secretary of State share my concern that, when things go wrong, as they always do from time to time, no one will be to blame and no one will be held accountable to Parliament for the billions of pounds of taxpayers' money that is being spent?

I am surprised, because the whole tenor of what has been said from the Opposition Benches is that foundation hospitals do not have sufficient freedoms and are over-burdened. I believe that is wrong, but it is interesting that some Conservative MPs are saying that the hospitals should have extra burdens and that there should be more intervention. The truth is that we have a fair balance; NHS foundation trusts will have more freedom to take their own decisions locally, while nevertheless being fully part of the national health service and accountable not only to those who commission health provision—mainly the local primary care trusts—but also to their members, to those in the area who use them, to the NHS foundation trust through the board of governors and, of course, to the new independent regulator. In addition, they will be accountable to the new Commission for Healthcare Audit and Inspection. That is a balance between the desire to have a diverse form of supply inside the NHS and maximising freedom. There is plenty of surveillance, oversight and transparency and we should not go further by interfering and inflicting more obligations on the freedoms of the NHS foundation trusts.

If Christie hospital in my constituency becomes a foundation trust, what will be the electorate for its governance?

I do not know specific details about my right hon. Friend's local hospital, but I can tell him that the electorate will include not only the locality but the patients who use the hospital.

Should not foundation hospitals be accountable to the rest of the NHS for their borrowing powers? In the Standing Committee, the hon. Member for Birmingham, Hall Green (Mr. McCabe) put that point well. He said that we needed to know

"whether the extra that the trusts can borrow comes off the NHS total. If it does, it suggests that there could be a preference for those trusts at the expense of other parts of the NHS. That is a pretty central anxiety for a great many of us".—[Official Report, Standing Committee E, 22 May 2003; c. 367–68.]
Even those of us on the Liberal Democrat Benches who support the principle of alternative providers for hospital services do not think that that should be at the expense of existing providers. Is not it unfair and unjustifiable for there—

Setting priorities is not a new phenomenon inside the national health service, or any other expenditure portfolio, and when priority is given to one subject, one area, one person or one operation, it can be argued that it has therefore been taken from another area or person. There is nothing new in that, but we have tried to ensure—I think, successfully—that foundation trusts will represent a new form of publicly accountable health service. They will be truly part of the NHS, but, alternatively, they will have freedoms that have not previously existed to meet the different needs, ambitions and expectations of today's working people.

We will have centrally provided resources and standards. We will have local decision making and, as far as we can, we will give patient power and choice to individuals, so that they can exercise it among the plethora of diverse suppliers of services. We have done so to get national standards, more capacity than has been provided in the NHS ever before and a range of diversity and choice for individuals because, at the end of the day, while every hon. Member so far has concentrated on the suppliers of health care, the benchmark for all our decisions should be the receivers of health care—the patients—and they should come first.

I warmly welcome my right hon. Friend to his new post, but may I ask him to cast a new pair of eyes on the views of the Public Audit Forum, which is made up of the Comptroller and Auditor General and the Auditors General for Wales, Scotland and Northern Ireland, who say that the proposed arrangements for auditors in foundation hospitals are, in fact, inconsistent with Lord Sharman's guidelines for public accountability and that the appointment of auditors should be independent of the foundation trusts, so that auditing is consistent and comparable across the NHS? As a minimum, will my right hon. Friend allow foundation hospitals to consider bids from public sector auditors, not just private firms, so that there is transparency and accountability for the taxpayer and no danger that the focus will be on presenting the accounts in the best light?

I will certainly look again at my hon. Friend's request, but as of today, I am satisfied that there is in place sufficient oversight, which balances the need for transparency and accountability to the public sector. For example, the foundation trusts will be overseen, among other bodies, by the Commission for Healthcare Audit and Inspection. Given the 14 days that I have been in my new job, I am not truly versed in the minutiae and every detail of Lord Sharman's advice. Why not? Perhaps it has been laggardly of me not to put that at the top of the pile, but I have been trying to deal with a number of other issues, such as people who are sick. They come at the top of our priorities, but I will certainly look at the issues raised by my hon. Friend.

How much will it cost to elect foundation hospital boards and to maintain foundation hospital membership? Will that money be top sliced or come from individual trust budgets?

It will be a lot less costly than either reducing the NHS budgets by 20 per cent. or adopting a policy of providing health care in this country largely through the private sector. We will not go down either of those roads, and we will make sufficient financial provision to ensure that the NHS foundation trusts' freedoms are balanced by accountability, locally and nationally.

The new Secretary of State will have to do an awful lot better. When the previous Secretary of State did not know the answer, it was a lot less obvious. No doubt he will pick up that skill in time, but since he does not know how much his proposals will cost, let me help him. It is estimated that the cost of advertising for membership will be about £60,000, that the cost of running an initial ballot will be about £17,000, and that the cost of servicing the membership thereafter will be between £145,000 and £250,000 per trust. Those figures are based on the current estimates, by the foundation trust candidates, that it will cost between £4 and £5 a year to service each member of the trust. How does diverting £250,000 per trust square with the Government's pledge to put money into front-line care, not the bureaucracy?

Since the hon. Gentleman thinks that I am not sufficiently well versed in deception, I promise him that I will study those on the Opposition Front Bench in an attempt to improve myself; but if I have a degree of honesty about my presentation at the Dispatch Box, I do not regard that as a disadvantage. We in the Labour party do not think that a disadvantage, but perhaps those in other quarters do.

If the hon. Gentleman would stop intervening, I will try to answer his question.

The expenditure laid out in the estimates that the hon. Gentleman gives is as nothing. Some £250,000 is as nothing compared with the thousands of millions of pounds that would be taken from the NHS if Conservative Members had their way. I have to say—

Order. We cannot go into what Opposition Members would do if they were in government; they are in opposition.

Thirty-five thousand people voted in the ballot that I called on proposals to downgrade the accident and emergency department at Bassetlaw hospital. If all those 35,000 people choose to join the proposed foundation hospital as members, will they have the power to vote out the chief executive and the board if they ever come back with such ill-advised proposals in future?

Those powers will reside with the governors, who will be elected. I hope that my hon. Friend would, like me, welcome the introduction of further decentralised accountability and democracy inside the national health service. I also hope that he would support me in saying that patients are ultimately the arbiters of whether the health service works as well as we want, which is why we are committed to both decentralisation and a patient-centred health service.

Would not the most effective way to raise the quality of care in our hospitals be to make them directly accountable to patients by giving them the right to choose any NHS hospital in this country and ensuring that taxpayers' money follows patient choice by giving them a patients passport equal to the cost of the operation that they need? Therefore, why have the Government removed, for the first time in the history of the NHS, the right of patients to choose any hospital other than the one to which their local primary care trust has contracted to send them? When will the Secretary of State repeal circular—

I was almost on my way to agreeing with the right hon. Gentleman when he said that we should extend real choice to people, but he reverted to talking about the theoretical choice that is always espoused by Conservative Members: people may have the right to choose to buy a Rolls-Royce, but it is a pity if they do not have enough money to exercise that right. Labour Members want to give patients real choice by putting the necessary financial resources into the health service so that—in London, for example—if people do not have an operation of a specified type in six months, they will be able to choose to go to another national health service, or private, hospital. Indeed, if the operation is not provided in this country, people could go abroad to have it done because the patient is the centre of all our considerations. I want to roll that out. Mrs. Thatcher said several years ago that she wanted the choice to have the treatment for her family that she wanted, at the place and time that she wanted. I half agree with her, but the difference is that I want that for every family in this country.