First, I should say something on the subject of the debate. Its title is slightly different from the one that I wanted, which would have included mention of the practices used for prescribing. Perhaps that is a debate for another day, so I have narrowed it down to how things are acquired and how they are valued in general.
To give a bit of background, the issue stems from the privatisation of what were the procurement services for the national health service in England and the establishment of a new structure. This price-driven model has tried to reduce costs in order to save £1 billion for the NHS in England. It has involved the use of a commercial contract with DHL—I am talking about the German parcel-delivery company—and its subsidiary, which I believe is based in New Jersey.
As someone will ask why I, a Member of Parliament from Wales, came to this issue, we should deal with the West Lothian question first. I came to it because I have been doing a lot of work on wound care and considering how we can introduce innovative processes into health in general, the standards that are applied, how the National Institute for Health and Clinical Excellence—NICE—works and how it evaluates things.
A factory in my constituency manufactures the basic elements of wound dressings. People might think that that involves just knitting together bits of lint or something from the past. It is anything but that; it is a high-technology operation, because silver-based dressings, honey-based dressings and all sorts of new technologies, gels and so on exist. The process is interesting. That factory is an employer in my constituency, so the question of how it gets its goods to market interests me too.
Wales has continued a process of buying in a different way. I need to see what the incidental effects of England’s changing that process dramatically are, because, in terms of the UK, what England’s NHS does has a huge incidental effect—it probably has a direct effect too—on the market and on how things are applied.
I am also interested in how we drive the quality of care forward and in protecting my party, because politics is also involved. I am interested in the politics: I do not want the leafy suburbs of England leaving us at the next election, because I have a direct interest in the continuation of a Labour Government. I hide none of those things, but they are the reasons for my coming to this matter.
I asked some basic questions about how the market process is meant to work, and because the answers that I received from the NHS merely stimulated my concern, I secured the debate. Irrespective of what one thinks about the idea of privatising the process in England and the debate on the question of whether or not it could or should be renationalised in some way in the future, this process will now operate, because there is a contract that will run for 10 years. I need to see what the health of that process will be.
Does my hon. Friend agree that it is perverse that in parallel with the alleged attempt to save £1 billion by outsourcing, we are seeing things such as the NHS Connecting for Health IT programme, which involves £12.5 billion, and the rampant private finance initiative, whose costs into the middle distance will far outweigh the savings that might be made? Does he hope that the Minister, whom I am pleased to see in his new role, will discuss the pharmaceutical price regulation system, which awards substantial and excessive profits to pharmaceutical companies, given that we are apparently moving towards a price-driven regime?
This is part of a broader discussion of issues, be they PFI contracts for physical buildings or the price regimes that my hon. Friend mentioned. We need to assess what constitutes long-term value as opposed to short-term price. In terms of how we deal with medications and drugs, I agree that similar issues need to be carefully monitored. In such areas, proper controls and transparency are needed.
One of the first things that I discovered in respect of this process was the lack of transparency. We started to get some of that through NICE in terms of evaluations of particular medical procedures, drugs and so on. That is becoming inconsistent. If we are to have the sensible debate about the rationing process in the NHS that is necessary, all those elements must be included. Today, I must concentrate on this particular issue, because otherwise you would discipline me, Mr. Olner. This is illustrative of a broader discussion that we need to have.
I examined what was said about what the controls and transparency would be in this new process and what the architecture would be to achieve those things. There is a hangover from the privatisation of the original system. I might get some of the titles wrong, because the NHS is like the British Army, in that everything involves initials.
The Purchasing and Supply Agency has a residual remit in relation to all this. I understand that its role was to set up procurement hubs, on a seemingly largely English regional basis, and to set up the Centre for Evidence-based Purchasing, which will be a central element in all this, and to examine compliance to some degree. From what I can see, that means compliance in the NHS or some way of finding a method of consensus, but it is not compliance in its general sense. One of the major elements of the body’s intended role is to help to establish the Centre for Evidence-based Purchasing, which relates to evidence-based medicine. Apparently, that is supposed to establish what are described as nationally agreed protocols.
That sounds all very well, but I thought that I would test the health and efficiency of it. The trouble that I have is that even if all those things were in place, what would the status of the protocols be, how would they come about and who would be involved in them? I understand that there are to be 12 dedicated evaluation centres in trusts and universities. Descriptively, it all sounds nice, but when the practice is examined, it starts to fall down. In order to achieve all those things, product councils are to be established. I asked further questions about that. Who will be involved? What will their deliberations be? What will the transparency be? The answer came back, “There won’t be any.” These will not be open processes.
The Medical Technology Group met Roger West, the procurement director of the NHS supply chain, on 27 June. He talked about all these things. He said that these bodies will be set up, but their composition will not be public. There may be additional product taskforces. He was unable to give any more information about that. There are seemingly no mechanisms to consult either with patient groups or with clinicians.
I am unclear about the situation. What seems to be being said to me is that patients and patient groups will in some way be represented by clinicians through the collaborative hubs or in the product councils. I examined how the product councils are to be set up. People could not really tell me how they are to be set up, but I have now seen the advert for the first one, which relates to nursing. That one is important to me, because it is where wound care and training comes in.
I am told that the trusts will in some way be represented by the individual nurses who will be appointed through a system of self-nomination. Who will choose them? They will be chosen by the NHS supply chain. The NHS supply chain is DHL. I am not quite sure about that. The company running the contract seems to be choosing the people who are going to be on the product councils to do the evaluation of the evidence-based medicine. That did not appear to be a healthy, open or transparent process, so I continued my investigations.
The hon. Gentleman is making an excellent analysis of and case about so many of the difficulties that a lot of us have encountered in trying to understand the new process. It all comes back to individual examples. Advanced Medical Solutions in Winsford in my constituency has, like the companies in his constituency, been developing a new dressing. It is seaweed-based and very effective, but the company has had the biggest nightmare possible trying to get anybody to recognise that it is worth while for patient care in England. In the end, we had to go to the Department of Trade and Industry to show that our country was losing a genuinely innovative opportunity. That was a better way than going through any Department of Health process.
I agree with the hon. Gentleman in that respect. One of the big issues that concerns me is the stifling of innovation. The new structure’s very aims include promoting innovation. It is also meant to promote the involvement of small and medium-sized enterprises—SMEs, to use the jargon—in supplying the NHS, yet what I see is a process that seems to exclude more people than it will include. There will be a smaller number of larger fixed-term contracts. There is huge tension between fixed-term contracts and opportunities for innovation as well as for involving SMEs. I shall address those questions a bit further later.
There is also the question of what is meant by the evaluations. I fail to understand how self-nominated people chosen by the company can represent NHS institutions such as trusts. That is unfair to the individuals chosen, who will be motivated by good reasons, such as wanting to make a contribution to the evidence-based process and to innovation. What will they be asked to evaluate? How will they evaluate it?
Those individuals will be asked to evaluate on the basis of this driver—whether it costs less. That is what they will really be asked to do. The description says that they will do a lot more than that, taking into account all the various considerations, including the non-financial aspects of any evaluation required. However, my difficulty is that that will be done, one way or another, by the company, using the product councils and liaising with the Centre for Evidence-based Purchasing. What are their formal relationships? How will the guidance, and the remit that we decided elsewhere in terms of clinically-based evaluations, figure in that?
I am told that all the non-financial aspects—quality of care, and issues such as assessing whether a treatment will save nursing time or keep people from having to go back to hospital again and again—can of course be overridden. The problem is that I am being told that the process of NICE guidance—a whole different architecture that we established for the very good reason that we needed to evaluate new and existing processes properly—will still run alongside that programme.
I am told that once NICE decides that a treatment is safe and efficient—that includes both the health aspect and cost-effectiveness—it will accredit it and clinicians will want to prescribe it. However, another architecture will now evaluate it again to decide whether the NHS will buy it. The guidelines from NICE will be only guidelines. They will not run the structure.
I am told that as far as NHS commissioning authorities are concerned, the money should follow the argument. If the treatment is agreed by NICE and prescribed by a doctor, the patient should get it, and it should be paid for. Well, they will order it, and the authorities will say, “We’re not going to buy it,” because they will be able to override NICE. There will be no obligation for the authorities to have any consistent relationship to NICE advice, because it is only a guideline and the authorities’ remit will be to consider only price. To be polite about it, other factors seem extremely incidental. The NICE technology appraisals—this will not apply just to drugs—can be overridden.
How such non-governmental bodies will be established and run is crucial, as is their interrelationship. Ultimately, they might delay the introduction of good things. They might not destroy innovation, but they will not exactly stimulate or facilitate it. Maybe some people will get the right treatment, but they will get it later. Frankly, that is not good enough. It is inimical to the whole attempt to drive greater efficiency in the NHS. When the Prime Minister says to me, “I want ideas about how to do it,” I will say to him, “One of the ideas that you have established in England is potentially deficient—this one. It needs re-examining.” The Minister needs to establish some sort of ombudsman for that process in England. That is just a bit of advice from a boy from the valleys, but he ought to take it. It will have incidental effects on me, but it will also have direct effects on him.
I have some quotes on the matter from industry representatives who have written to me. The company Bardex says:
“There is still a large gap between the aspirations of DH procurement policy and their practical delivery.”
That is nice and diplomatic. In particular,
“there is a continuing failure to distinguish between cheapest price and best value”—
I think that that is at the guts of the whole issue—
“in the devices sector and prevarication about innovation resulting in slow uptake of new technology.”
Sir Christopher O’Donnell is apparently the retiring chief executive of Smith and Nephew and a man who has been running a large company in the sector. He has said:
“the company’s investment is now going into America, Germany and Japan”.
Why? Because
“the NHS is a slow adopter of innovation”.
The new structure will only stimulate that.
Another industry source says:
“Manufacturers have been forced to make drastic price cuts in order to be listed suppliers. As a result, valuable back up training and support which was previously provided free of charge has, in many cases, been withdrawn.”
That is crucial. When things are bought, they do not just come in a box. They come with support and training—training that the NHS cannot and does not offer. Perhaps the issue of how training in the NHS works is a debate for another day. I do not think that we have got it right at the moment. In 2006, ConvaTec, a company in my constituency, trained 10,500 nurses in the new wound care technology. If we are not careful, we will screw the manufacturer on price until he says, “Okay, we’ll meet your price by cutting the so-called incidentals.” That will create another cost that we will have to meet in a different way. The Minister should be careful. He might appear to save £1 billion, but he will end up spending not only that £1 billion but a lot more in another way—the least efficient way.
My hon. Friend has spoken about the impact on companies and on the health service, but will there not also be an impact on ordinary people? A gentleman in my constituency is desperate for the drug Alimta, which can hold back the ravages of asbestos-related diseases. If what is being said today is true, there might be yet another block to people’s access to such drugs. Surely that is not what our Prime Minister means when he says that we should listen to the voices of the people using the NHS.
My hon. Friend makes a point that we all understand. We all have people coming to us saying, “I want the best treatment. There is one available to me, but I have a difficulty in acquiring it.”
That is the whole point. That is exactly why we established NICE. That is why we decided to have a process to evaluate treatments. NICE was slow in the products area, and I have had previous debates about that. It was faster in the drugs area than in the technology area, but patients often require both. They do not come in boxes or live their lives in compartments. The NHS may work in its little silos and compartments, but the world does not. The difficulty is how to make a value assessment that gives the true and total value of something, rather than the separate price or cost of an individual item.
I referred to the excess profits being made by pharmaceutical companies, which the Office of Fair Trading highlighted in its report in February and to which the Government will respond later in the summer. Does my hon. Friend agree that we must give pharmaceutical companies, one of which is a major employer in my constituency, stronger incentives to invest in drugs for those who have medical conditions with the greatest need, not where there is the greatest profit?
As a general proposition, I could not possibly disagree with that. The short answer is yes. The business about how modern processes can drive us towards being up there with European standards—we have made that declaration—is important, but we must discuss how to get products on to a list.
There is another debate to be had about how to get old stuff off a list. The problem is that we have a way of adding to the list, but not of taking things away. I know clinicians who, for a combination of many reasons, prescribe older technologies. I do not want to traduce them, but it may be partly because they just do not know about new treatments and partly because of the way in which new treatments are presented financially. A new treatment may seem to be terribly expensive, but evaluation is deficient if it does not show the real value over time. The truth of the matter is that some diseases and processes, such as cancer, are ceasing to be acute and are becoming chronic, and we are keeping people alive, but they will continue to be patients for a long time. The new technologies may save costs because patients may not need to return to hospital if they are receiving medication. It seems that the NHS is incapable of seeing that. The point about the process is that it seems that the non-financial aspects can effectively be disregarded on the basis of price.
Is the hon. Gentleman claiming that if something is not supplied by the NHS supply chain but is approved by NICE, it cannot be obtained by a hospital, clinic and so on? I do not believe that that is so; I believe that it can be obtained from elsewhere.
The hon. Gentleman asks an interesting question, and I do not know the answer. I cannot say whether it is yes or no, because it would be different in different places. That is another aspect. The Minister will say that in England there are GP commissioning processes and so on. Who does the ordering is an interesting question, and the hon. Gentleman may be correct. If a GP orders something, he may get it because it comes through a different process, whereas the same doctor working in the trust might have to order it through the procurement process and might not get it.
NICE was set up to address postcode prescribing and to provide consistency, but not uniformity, in the process with rules that everyone understands and works to, but it seems that the guidelines have no force. Something may be excluded if it is ordered through one process, but may be available through another process. That does not help us to square the circles relating to different practice and best practice across the piece. It seems that guidelines for specialist medical equipment will not be published, so how will we know what is best? Either there should be a structure—I would not have started from the present position, but as it exists the Minister should examine it—to provide consistency and to allow a contribution to the broader discussion, or there will be a contradiction, people will be excluded, and there will be no stimulation to prescribe and develop new products. That is the guts of the issue.
I may be ranging widely, Mr. Olner, but the matter must be seen in context. Either the Government want to reduce the number of suppliers, and to drive down prices, as Tesco does with baked beans, or they want to do something else. Descriptively, it looks very good, but when we drill into the process to see how it functions, it stops looking good.
I received a worrying answer from the previous Minister when I asked how the procurement process will produce long-term savings for patient bed days, nursing time and repeat procedures in the NHS. The answer cometh back:
“The contract…will measure savings based on the reduction to buy price”.—[Official Report, 16 April 2007; Vol. 459, c. 373W.]
I do not know whether that means, “I don’t know” or “It won’t”, but I think it probably means “It won’t.” It is only part of something that needs to do all those things. Currently, however, it is deficient. That is extremely worrying because it cuts into other processes that we are trying to establish to introduce better practice into the NHS.
The process will undervalue something that the NHS has taken for granted—the training and incidentals that come with contracts—and England will rue the day. At Currys, one can by cheap products from Taiwan. They come in a box, look similar to other products and will do the job immediately, but there will be no product support or training. The relative quality over time will be worse, and that must be considered.
I have asked the Minister questions, and he should consider value versus price. A decision should not be made nakedly on price. There will be inconsistencies, and I fear the consequences, such as lack of innovation and the effects in my constituency. For the Minister, however, the consequence will be litigation, and if I were a lawyer, I would be licking my lips. We have seen with NICE that when it makes a decision and there is a problem with the application, people resort to law.
There will be inconsistencies. NICE will agree something, someone will try to buy it, but it will not turn up because they will be told that they cannot have it—the rules do not have to be abided by—so people will go to law, which is not the best place to resolve such issues.
The hon. Gentleman may be right about the increase in litigation, but I am afraid that it is highly likely that that will be the preserve of bigger, established companies that can afford to take the risk of litigating to find an opening for a product that is complementary to a current product line. That will continue to bear down, and to crush innovation and the entrance of the small and medium-sized enterprises that we want to encourage.
It has all that potential, and I share that fear to some extent from the industry’s point of view, but I also think that individual patients will have to resort to the law. Clinicians and trusts will have to test where they are because they will be told that they are outside the law. There will be legal opinions from half a dozen people. If someone asks six lawyers for a legal opinion, they may end up with seven if they are prepared to pay. Those opinions will have to be tested, and they will be tested in the courts. That is a recipe for nonsensical and unnecessary litigation.
There is also a question of how the matter relates to the UK. The Welsh Assembly has announced a whole new process of transparency so that patients can have an easier way of raising grievances and addressing problems in the NHS, to try to avoid the need for them to go to law and claim compensation. Wales has a very transparent process. There is an individual for people to phone. They can ask her how the process works and who is assessing what, and the process is completely open.
I am not sure about the situation in Scotland, but I know that there is no need for secrecy, and every need for less of it. The more information, evidence and consistency there is in the process of understanding what is good, how value is really achieved, how standards can be driven up and how we get the industry working on the issue, the better things will be. The Minister will not achieve all those aims through the new process; it needs some sort of remediation.
Transparency is at the guts of the matter. It is not acceptable in any way for organisations—private contracted companies in particular—to argue that the processes cannot be both open and seen to be open. That argument will not run, and the Minister will be tested on it. The way to achieve openness might be to have an ombudsman process, because there is no current right of appeal except through litigation. There are huge contradictions between the processes that NICE and other evaluating bodies undertake, the guidelines that are to be established, and whose writ runs where. The hon. Member for Southport (Dr. Pugh) asked earlier what happens when somebody prescribes and about whether we go down one route or another. Innovation is another important point, and it will be delayed if not destroyed by the new process in many cases. Neither does the new arrangement do anything for SMEs.
The Minister has only been in his job for about 48 hours, so it is a little unfair to make requests of him today, but I am tackling the man with the ball, and he has it. Therefore, if he is willing to give it to me, I would like a commitment from him at least to consider re-examining the process. It is still in its early stages and is only partly formed, and I do not want to see its formation go badly. It would probably be unrealistic to argue politically to the Minister that he should scrap it and go another way. However, it is not unrealistic to consider a re-examination of the type that I have described, and to put in place processes that will avoid what I think is predictable damage—in relation not only to a particular organisation and patients in England but to patients across the United Kingdom generally, potential supplier companies that we all have in our constituencies, and all the people who do such a great job working in the NHS. Let us help them do that job, rather than adopting a process that effectively makes it more difficult for them to perform.
I congratulate the hon. Member for Merthyr Tydfil and Rhymney (Mr. Havard) on having secured a debate on a very important subject. I must admit that he has put his case extremely well. I welcome the Minister, who must surely have been on a crash course in NHS procurement in the past few days. I hope that his new responsibilities make a pleasant change from landfill and saving the planet.
NHS procurement is an enormous issue. It is not just about supplies but about buildings, staff services, drugs and medicines, and entire treatments. There is a huge volume of business and a huge number of transactions. There is a kind of urban myth that the NHS once spent without regard to anything—budgets were considered elastic, everything was affordable, the taxpayer was compliant, and success and cost were limited only by mortality and low expectations. According to the myth, the system spent funds without regard to cost. I am sure that such stories about the bad old days abound.
Change in the NHS came when medicine became more successful, when longevity increased, and when expectations rose and the wages of people servicing the NHS rose with them. The ratio between the working population and the ailing population changed for the worse. Procurement then became a live issue, value for money became a big issue, and counting the pennies became an important issue. There has since been downward pressure on procurement costs in many areas.
Value for money has not been the only factor at play, however: other variables have contributed. For example, in the case of PFI, which was mentioned earlier, there was a need to keep capital expenditure off the balance sheet. There has been recognition also of the need to sustain a profitable British pharmaceutical industry with a big research base in this country. Furthermore, the NHS needs to retain highly qualified staff and requires cutting-edge equipment.
Not surprisingly, the result is that a variety of procurement solutions has been used in the NHS, depending on whether supplies, staff, buildings, drugs and medicines, or IT were being talked about. However, every NHS cost centre must now deal seriously in some way or another with procurement, and become—in current jargon—a smart procurer.
There are across-the-board opportunities in each field. One that I am sure the Minister will mention is e-procurement, which involves the electronic inspection of the supply base. Everybody is now looking also at the possibility of shared services and commissioning. Outside that, every single area of NHS procurement has its own distinctive profile, most of which have been examined in some depth by the Public Accounts Committee, whose reports I have with me—although now is not the time to read them out.
Supplies were the main thrust of the hon. Gentleman’s speech. They cover everything from simple bandaging to complex imaging machines. There has been an essentially two-pronged attack in that area. One approach is to have customer clusters or procurement hubs, as I think they are called, and the other is to have DHL and the NHS supply chain, which is essentially catalogue shopping. Those are traditional solutions that have been used also in local government. The distinctive feature of the NHS variant is that it is linked to a sophisticated delivery network in the form of DHL.
There are serious problems that the hon. Gentleman signposted well. First, the listing must be fair and open; at present there is no certainty that that is the case. Secondly, in whatever way the listing is done, there must at the end of the day remain a variety of suppliers. It is not obvious that that will be an effect of the new system. Some suppliers that are not listed and some of the smaller firms might simply be driven out of business, in which case we shall become dependent on the remaining core of firms.
The system should not stifle local initiative. There must surely be some cases in which people might wish to venture outside the limits of NHS supplies and use a local supplier with whom they have a good relationship. The system should allow also for legitimate clinical discrimination—that is a genuine concern. If doctors prefer something that is not on the catalogue for which they can make a reasonable case, they should be able to get it. The hon. Gentleman highlighted a further crucial point: the system should allow for fair access to drugs right across the country that does not depend on the contractual arrangements that exist with the main supplier of the hospital or clinic.
None of that can be achieved by concentrating just on the magic figure of £1 billion savings. There is a need to build in safeguards, appeals and genuine transparency, and it is fairly self-evident that the so-called product councils do not currently provide those elements.
There are similar wrinkles that need to be ironed out in other areas of procurement. There are appreciable savings to be made by the NHS on staff services.
Let me ask something before the hon. Gentleman progresses down a different route. I do not know whether he is a medical doctor by training.
A philosopher, then.
Exactly.
Patient choice is very much a matter of discussion. The hon. Gentleman mentioned that doctors should be able to make different choices. I raised the question about evaluations of the best and most modern treatments by, for example, organisations such as NICE. What does he think about where the choices to be made by all the stakeholders—including patients—might rest?
Choice is not one of my major themes when I talk about the NHS in general. One thing that could be said is that certain choices that people believe themselves to have even within the NHS are not genuine choices. That is the case to some extent in relation to drugs, for example. They are choices between scarcely distinguishable alternatives. We must not build into the system a false choice whereby the preference of a GP for a particular brand—because someone has sent him the latest brochure—becomes more dominant than clinical effect. However, if people are being denied products that are genuinely clinically different and make a difference to how their treatment goes, the choice should exist, and it should not be precluded by any supply contract that is put in place simply to save money.
I am interested in how the hon. Gentleman envisages that situation happening under the new process. There are product councils, and, it would appear, an evaluation-based process is being established. However, as I tried to illustrate earlier, the non-financial aspects of quality of care and choice could be avoided in the process to drive the situation simply by price.
The hon. Gentleman made a very good case during his speech, and I share his scepticism about product councils and the extent to which they can be neutral arbiters of what ought to go into the brochure. However, it is for the Minister rather than me to answer those questions.
On the subject of staff procurement savings, the National Audit Office has conducted some trailblazing work on the extent to which agency costs can be reduced. It supports and advocates the idea of a national bank of NHS professionals, as the Department of Health does. As in the case of supplies, there is still a desire to apply local solutions where effective, and if a centrally driven alternative neither drives down costs nor produces the £38 million of staff services savings that the NAO believes can be found, it ought not to be used.
On buildings, the Government have recommended PFIs, but they are not a solution for keeping down costs or for reducing procurement. Often, they lock people in to high, long-term maintenance costs. There are only partial solutions to the problem, and there is a clear link between hospitals with PFIs and hospitals with substantial debts. The partial solutions include cutting tendering costs so that more people become involved in the game, because one great problem with central solutions is that they tend to drive down the number of players in a market. Market-testing clauses are being included in PFI contracts, recognising that they do not provide value for money on procurement. Benchmarking clauses are being included, too.
Drugs are another key area in which procurement can make a substantial difference. We must recognise that the Government have been successful in their drive to make more use of generic medicines, which is wholly good. They have been relatively successful in securing a better deal on branded goods, although they are still covered by the price regulation scheme, which results in some of the highest-priced drugs in Europe. The same drug can cost much more in the UK than anywhere else.
The invention of NICE and better ethical guidelines have done something to drive down procurement costs, but the NAO still estimates that there is £200 million to be saved. Even when considering that global figure, however, one must take into account the fact that clinical quality is an issue, and that genuinely different drugs must be made available. Professional discretion is crucial, and generally speaking cost is not the only imperative.
IT procurement is a favourite topic of mine. The NHS used to specialise in piecemeal procurement, and a variety of schemes emerged, but it has been replaced by “Connecting for Health”, about which the hon. Member for Eddisbury (Mr. O’Brien) and I know a good deal. It is a very aggressive model of procurement. Richard Granger, the man who ran the procurement programme, specified that his attitude towards his suppliers is the same as a husky driver’s towards his huskies: when one of them fails, he kills them and feeds them to the others. That procurement model has not been totally successful, and it has led to a limited number of regional suppliers, because some have been toppled and only the cash rich remain. There is no evidence of a more competitive market, and some fear that we will get a proprietorial lock-in to the certain limited number of suppliers that are still running.
Does the hon. Gentleman agree that the common thread in what he says about the NHS IT procurement programme and the subject of this debate is the absence—be it in the product groups, or in the various systems within the NHS IT system—of genuine participation, consultation and action, as a result of listening neither to patients nor to users at the bottom end? Such action would make the system organic, adopted and owned by users, rather than being imposed on them from the top, which most people say they do not want.
I could not agree more. We are picking on a central flaw of all centrally driven systems of this scale. There has been a failure to recognise the transition costs to individual hospitals, primary care trusts and so on, but there has also been huge legitimate professional protests by people who are supposed to use the equipment with which they will be endowed, as the hon. Gentleman just emphasised. Those are not just the selective concerns of a few disgruntled people, but genuine concerns about the way in which the system will operate. To be fair to the Government, they are getting the message, and a concession that there should be local flexibility, which is defined around open standards, to ensure that there are a larger number of suppliers and a better market to deal with small IT issues, is creeping in.
I really do not think that the hon. Gentleman needs to be fair to the Government, because they were warned up front, and the consequences have all been intended, not unintended. We have now come full circle, and if the Government are listening, they should have got matters right first time. They should be criticised for all the wasted time and money in between.
It is a congenital vice of mine to try to be fair, but whether I should be fair in this case, I shall leave for others to judge. In all honesty, the people who are endeavouring to run the project are receiving the message, because they see the system running into the ground. If they have non-compliant users who are appalled by what is happening, the system will become a catastrophic disaster of immense proportions.
In sum, the NHS and every NHS cost centre must mind its costs. They should be and I think are motivated to be smart procurers. However, in the field that the hon. Member for Merthyr Tydfil and Rhymney laid out, and in all the other fields about which I have spoken, there is a sharp learning curve for individual hospitals, clinics and PCTs, and they have not always been assisted by the Government’s advice, so in the situation before us, there will be a substantial and sharp learning curve for the Government, too.
May I congratulate the hon. Member for Merthyr Tydfil and Rhymney (Mr. Havard) on securing this incredibly important debate? He has done much to make the Government accountable for the privatisation of NHS purchasing and supply, and by my rough calculation, between us, we are responsible for having tabled about 90 per cent. of all parliamentary questions on the issue. We have been right to identify it as an area in which the Government owe us answers. I am glad that, as a result of his successful application, we have the opportunity today to debate the issue—an opportunity that has been denied the House, despite considerable pressure from Opposition Members. I was very interested in his effective speech. It covered themes, which I hope to develop, about price versus value, transparency, and the effect on innovation and small and medium-sized enterprises He raised the issue about whether there should be an ombudsman process. I shall not cover that issue; I shall leave it to the Minister to respond to him directly.
With that in mind, I welcome the Minister to his new role. He is very welcome to the world of health policy and practice. This is the first of two meetings that he and I will have today, the other being on the Floor of the House at the close of the first Opposition day debate, which is about access to NHS services. As a result of the absence of parliamentary debate, it has been interesting to hear how the hon. Member for Merthyr Tydfil and Rhymney has been supported by some effective interventions from his colleagues, who have now left their places, and by the hon. Member for Southport (Dr. Pugh).
The outsourcing of the NHS Logistics Authority and the NHS Purchasing and Supply Agency was last touched on on 5 July 2005. I do not say debated, as it was only the outsourcing of NHS Logistics that was debated here in Westminster Hall. The then Health Minister, now Financial Secretary to the Treasury, said:
“Three options are under consideration. The first is what we have been debating today—the option to outsource NHS Logistics only. However, there are two other options. One is to integrate NHS Logistics and the NHS Purchasing and Supply Agency into one organisation; that is the recommendation of the arm’s-length bodies review. A third option is to market test the whole supply and procurement chain. We are not considering that option now”.—[Official Report, Westminster Hall, 5 July 2005; Vol. 436, c. 20WH.]
In the absence of any such market testing, that statement was later clarified. We might feel that “clarification” is a somewhat generous word in such a context, because in a letter that was sent only to the hon. Member for Amber Valley (Judy Mallaber), who secured that debate, and not to any other participant, the then Minister revealed that the market testing of NHS Logistics
“also involves the consumables procurement activities that are currently managed by NHS PASA.”
That is the point that could have done with clarification—indeed, correction—but there was no joy there.
After considerable effort on my part throughout the last summer recess, when I fear that Ministers and some of their advisers were sunning themselves on beaches in various parts of the world, the letter was made available only in October 2006, more than a full year later and, most significantly, a month after the contract with DHL was signed, notwithstanding the questions that had been raised, and just before we came back after the recess. When I complained about that to the then Leader of the House, now Secretary of State for Justice, he had the temerity to claim that the delay was due to an oversight. I have not yet had an explanation, despite repeated questions, of how that oversight came to be. The former Leader of House wrote to me at great length, having carried out a full and formal investigation, to try to explain, but the note that he gave me from the Department states
“a copy should have been placed in the Library, but [David Nicholson’s private office to complete]”.
Unfortunately, it never did. Perhaps the Minister will enlighten us today. The Department of Health gets bad marks for that.
I am well aware that there was more than a little discussion about the establishment of this organisation and the dissolution of the previous organisations. The trade unions—Unison, the GMB and so on—and my hon. Friend the Member for Amber Valley, who cannot be here today because she is away from the House, have sent me a lot of information. Does the hon. Gentleman agree that a spotlight trained on exactly what would be established in the first place would have helped the health of the process to be established and avoided some of the discussions that we are having today?
The hon. Gentleman makes one of the conclusions that I shall draw later. That is absolutely right.
It is worth noting the magnitude of the difference. The initial Official Journal of the European Communities procurement notice stated that the contract would cover procurement and delivery in respect of goods the value of which, in 2005, was projected to be £715 million. Under the contract as it stands, DHL is managing non-pay spend in the NHS worth an estimated £3.7 billion per annum. An explanation that has been given for the difference, which the Minister will no doubt repeat later, is that the £715 million is the value of goods and services that went through the NHS Logistics Authority in 2005, whereas £3.7 billion is the value of the market in those goods and services in the UK health sector and so marks the possibility of expansion for an enterprising supply chain contractor. Will the Minister now reveal what share of the market DHL has, and what percentage share he expects it to take by the end of the contract?
A number of concerns were expressed at the time about the involvement of the US company that has already been mentioned, Novation. It was certainly suspicious that it went from being in a consortium with DHL, and was therefore named up front as a prime party to the bid, to being relegated to a contractor when stories arose of the group purchasing organisation inquiries in the United States of America. Have the American investigations into Novation concluded, and have the results been communicated to the British Government, as the issues about the inquiry were communicated to Ministers at the time that the matter was considered? What decisions have been made in the United States and what decisions have our Ministers made as a result of the information that has come their way? If we do not have any news, when will we?
When will the product councils be established, and when will their terms of reference be published? Obviously, I make that point to reinforce those made by the hon. Member for Merthyr Tydfil and Rhymney. On 27 June this year, Roger West, the procurement director of the NHS supply chain, stated that the composition of the product councils will not be made public. Why? How can the Minister suggest that that does not impede accountability in procurement decisions, particularly because the lack of transparency—a theme that has been clear throughout the debate—does not meet the Nolan principle? Under the new Prime Minister—never mind the last one—surely that is something on which a Minister would want to keep an extremely close and careful eye. In “Transforming government procurement”, the Office of Government Commerce states that
“each procurement should have a clear, fair and transparent process and evaluation criteria”.
Will that be fulfilled?
Let me make one more point about a subject that is often prayed in aid—I would not be surprised if the Minister were receiving a quick note to that effect at this moment—namely, commercial confidentiality. We are dealing with the private sector, and there must always be commercial confidentiality. The Cabinet does not contain one person with even an ounce of commercial experience—I do not know whether the Minister has a commercial background—and, of all the Members in this House, I have done commercial. The Minister knows that; everybody knows that. It has nothing to do with commercial confidentiality. It has to do with accountability and transparency to get a fair price that considers value as much as commoditisation. I fear and suspect that the words “commercial confidentiality” are used as a Harry Potter invisibility cloak to hide Ministers’ embarrassment and ineptitude at every opportunity.
I share some of the hon. Gentleman’s concern. I asked the Minister direct questions about the contract and was told that it was commercially sensitive, and so I could not be told. It seems that the argument is about the price caps that have been established and the fact that a certain amount of savings are made and then the profits are capped. We cannot be told what that cap is because, apparently, it is commercially sensitive. As he rightly says, there are other aspects, too, and I do not understand why those elements cannot be made public when they do not seem to be commercially sensitive.
The hon. Gentleman makes a fair point. The reason why I am sure that there are no commercial confidentiality issues is that it is not commercially sensitive and confidential to expose why someone is most competitive. Above all, someone would certainly not want that to be confidential—unless they had something to hide that showed that they were not the most competitive and that the system was failing the taxpayer and the care of patients, who are the end users.
If the Minister intends to persist in describing all that the NHS supply chain is purchasing for the NHS as commodities—we have had all sorts of examples, such as syringes and toilet paper, and various things can be thought of as commodities—what is the remit for a product council? Surely the only question is price, not quality—other than a minimum assurance.
If, however, NHS supply chain is to procure unique medical supplies—perhaps the product that the hon. Gentleman mentioned from his constituency experience—is there not a role for a body akin to NICE, as was argued earlier, if not NICE itself? What do the product councils add to the cost-benefit mechanisms already available in the NHS?
The point has been made repeatedly that there are no mechanisms in NHS supply chain to consult patient groups and include their views and needs or those of the public in product councils and taskforce evaluations. Does the Minister support that, or does he regard his new appointment as a grand opportunity to have a jolly good, thorough review to ensure that we do not go down another cul-de-sac? We would thoroughly support him in that.
In December 2003 the chief medical officer announced the establishment of the rapid review panel to assess new technologies in the fight against hospital-acquired infections. In August 2004 the panel was set up, following criticism of the delay from the National Audit Office. In December 2004 the panel announced its first set of results, including a top-level recommendation 1 for Bardex IC, which was mentioned earlier. Nevertheless, despite a favourable cost-benefit analysis from a departmental economist, the product was not even listed by the NHS Purchasing and Supply Agency until September 2005. Two and a half years after the panel’s recommendation 1, the net effect has been modest uptake of technology. I am putting that as generously as I can. It is patients who suffer from the delay.
Will the Minister tell us why NHS supply chain is not required to comply with the evaluative decisions of NICE, the Medicines and Healthcare products Regulatory Agency and the Centre for Evidence-based Purchasing to ensure that clinicians have access to the best equipment and medical technology and that patients are empowered to choose the treatment that benefits them most?
On savings and benchmarks, the Department of Health has given NHS supply chain a clear remit to make £1 billion of savings in NHS procurement. That is the basis on which its success will be measured, and all of us will be thinking about it. What year-on-year targets has the Department set—goodness knows, it likes targets—and what savings has DHL delivered thus far?
Is the Minister, although new to his brief, in a position to deny the widely held understanding, which I share and which makes sense to me from my commercial experience, that the Department of Health signed up to all this in a rush, just before we all came back, to avoid our being in session? The vast majority of the £1 billion that is promised over a 10-year period is projected to be saved only in the last two to three years of the contract. Who will be accountable? Will the Minister still be in position? His predecessor who made the original claim is not. If Parliament is to have genuine accountability, we need to ensure that we have benchmarks and milestones along the way. Otherwise, it will always be a promise for the future and never delivered.
Consistency across time is absolutely vital. As the hon. Gentleman says, the individuals who are making promises and are involved in the process now will be well gone, I suspect, in 10 years’ time. The Ministers involved will doubtless have rotated, if no one else. Given his commercial experience—I find it interesting that, as a member of the Conservative party, he knows the difference between price and value, and I suspect that he is one of the few—how does he think the contracts should be structured, and what processes should be run to ensure consistency over time?
I am grateful to the hon. Gentleman, who shows that my speech must at least have a thread of logic to it. The very next words in my prepared script are to ask the Minister whether he agrees that a counterbalance that measures both value and the competitive strength of the market is needed to make savings sustainable, and whether the performance of DHL is being measured in that way. To gain something just in price does not give sustainable supply for the future, nor necessarily best value for patients.
I shall give an example from way back that we can all remember. When Freddie Laker set up his airline, my goodness it was the cheapest price, but where did he get his pilots? From among those who had been through the expense of being trained by what was then British Overseas Airways Corporation and British European Airways. They were trained at those companies’ expense and then poached by Laker. It was not sustainable, because over time a business owner must fuel the business and reinvest in it. Value requires the recognition that price cannot simply mean the cheapest contribution to the margin at the time of supply; the full lifetime costs must be recognised.
Would the hon. Gentleman apply the same logic to the further privatisation of the NHS, which I understand his party might want to do if it ever got back into government?
At this point, the hon. Gentleman and I completely part company—he has obviously not been listening. Even if there had been any credible suggestion that there was any wish to do that on the part of anybody in the Conservative party, which I deny, the dropping and scrapping of the so-called patients passport policy, which some suggested would mix the sources of funding, should give him all the assurance that he wants that he has nothing to fear from the arrival of a Conservative Government, within, I hope, the next couple of years. The health service will be much safer in our hands, as the public polls have been telling us in the past 18 months.
I wish to mention a couple of botched procurements. It is always helpful to see what has gone wrong to ensure that one knows how to do things right. The Department’s commercial directorate issued its original consultation on the revision of part IX of the drug tariff in the autumn of 2005. It covers items such as incontinence appliances that cost the NHS about £631 million a year. Various consultations are yet to report, but in the meantime, product prices are frozen and will remain so until 2008.
The procurement of new oxygen supplies in 2005-06 was another gross failure by the Government in which I got deeply involved. They failed to procure efficiently and effectively, leaving many users extremely worried about the security of their domiciliary oxygen supplies. It was only the great good will of community pharmacists like Ian Littler of the Tarvin pharmacy in my constituency, who were prepared to go out in the middle of the night to supply oxygen, despite having just been kicked in the teeth, that enabled many patients to proceed with their treatment.
The recent Association of British Healthcare Industry and Ernst and Young survey of small and medium enterprises in the medical device sector revealed that their UK sales growth was 2.2 per cent. in 2005-06, compared with export growth of 10 per cent. That has resulted in a fall in UK revenues as a percentage of total revenues from 66.9 per cent. to 65.2 per cent.—a significant fall. Of course that partly reflects the difference in health service needs between the UK and other countries, but it raises concerns about the continued appetite or ability of medical device manufacturers to continue to invest in the UK market. Losing our highly innovative SME base will damage the UK economy.
Sir Chris O’Donnell, whom I have not met, was quoted in The Sunday Times the day before yesterday as saying that his company’s investment is now going to America, Germany and Japan
“because the NHS is a slow adopter of innovation.”
It is not for the Government to interfere unduly in the health procurement market, which is an oligopsony, to use the technical term, but the NHS is by far the major buyer, rather than supplier. The Government must therefore take into account the future viability of the market. What appraisal has the Minister made of the impact on that market of NHS supply chain, as it is currently construed?
If the Government had had more respect for Parliament as they were putting together the outsourcing of NHS supply chain, the questions raised here today might have been settled before it took place. I submit that the process would have been the better for it. I believe that the Government were too embarrassed by the word “privatisation” and under too much pressure from many on their Back Benches and from the unions. They have been effective in keeping the matter away from Parliament—at times suspiciously effective—and in keeping manufacturing organisations roughly within their “big tent.”
Does the hon. Gentleman agree that this is a prime subject for a future NAO report?
The arguments are on the record, and I dare say that such a report will now be considered. It would be a useful and helpful addition to the debate.
Perhaps the Minister, fresh from ducking badger problems and dealing with bovine TB in my constituency, could stamp his mark on his new job by being the first Health Minister with whom I deal who is open and transparent, not defensive, and who does not hide behind the false pretence of commercial confidentiality. On 23 January just this year, Her Majesty’s Treasury published “Transforming government procurement”, which explicitly recognises that good procurement is not just about driving down contract costs, but about championing the need for transparent processes that encourage innovation and take account of whole-life value for money.
The major question is around the lack of balance between value and price in the NHS supply chain set-up, which, of course, must be addressed. I hope that the new Minister will do so. I also hope that he has taken many clues from what I hope he will regard as constructive criticisms in this debate and that he takes account of the fact that perhaps a Government without any commercial experience should buy some in to ensure that the interests of NHS patients are properly and truly served.
I thank my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Havard) for securing this debate and apologise to him and hon. Members in advance that they have a Minister who is so fresh in the job. Clearly, a lot has gone on in the past, and I undertake to look into it. I have discarded the speech that my officials prepared for me because my hon. Friend and the other hon. Members who contributed clearly have followed the issue closely and know much about the process that has brought us to where we are now.
I shall endeavour in a moment to respond to as many of the points and questions as it has been physically possible for my officials to give me advice on in the course of this sitting, but perhaps I could suggest a helpful way forward. Hon. Members who have not already availed themselves of the opportunity could come to the Department and get a detailed briefing from one of my officials at the appropriate level who has followed the process through from the start. If they then felt that there were still unresolved and unanswered questions, or if they still had criticisms of the process, they could come back and have a meeting with me in which I would try to address the issues.
I should like to say just one thing about the criticism that the hon. Member for Eddisbury (Mr. O'Brien) made about the parliamentary process. As he well knows, the Government do not control it. If hon. Members feel that there has been insufficient scrutiny and questioning on the subject, that is a matter of regret; but of course, the parliamentary process and the timing and selection of debates is a matter for Mr. Speaker, quite rightly. It is my understanding that there have been many debates, including several in Opposition time, on the health service in general, and they would have provided an opportunity for hon. Members on both sides of the House to scrutinise and question the decisions that were made. I should like gently to rebut his criticism.
I shall try to deal with as many of the questions that were raised as possible. As I said, I will look again at the process that has taken place, and if hon. Members remain dissatisfied after meeting with my officials to sort through the matter, I will endeavour to meet them and/or write to them and respond to their points.
The hon. Member for Eddisbury suggested that the inclusion of purchasing and supply in outsourcing was not made clear at the time of the outsourcing. My understanding is that the original advertisement in the Official Journal of the European Union that invited suppliers to bid for the service clearly included purchasing and supply. What was not clear was the scale, which became clear only in the negotiations that happened subsequently.
The hon. Gentleman asked what our current estimate of the DHL market share is. I am advised by officials that the national health service spends £17 billion a year on goods and services. Initially, DHL took on £800 million of consumables listed in the old NHS Logistics Authority catalogue, plus £800 million of direct delivery contracts previously managed by the NHS Purchasing and Supply Agency, so that amounts to £1.6 billion. The intention is to grow that to £3.7 billion by the end of the 10-year period.
The hon. Gentleman also asked how much the DHL contract has saved. The estimates are £6 million so far this year. He said that it was a year after the Bardex catheter device was given a recommendation 1 by the rapid review panel that it was listed in the catalogues. My understanding is that, although the RRP gave the product a recommendation 1 for clinical evidence, it was not clear whether it was cost-effective. The new centre for evidence-based purchasing has been working with the NHS to undertake further research studies to establish the evidence. It has become clear from that episode that the industry itself is not always as good as it might be in providing good evidence to support innovative products. It is important that we are convinced by the evidence before a product gets widespread adoption by the NHS.
Will the Minister give way?
I shall give way, but I very much doubt that I will be able to give the hon. Gentleman any more information than I already have.
I ask the Minister to give way because it is helpful to get some figures, and perhaps his officials will be able to pass him a note to confirm whether this is correct. As I understand it, the £6 million saving so far appears to have come from one contract, which is for the NHS antenatal foetal anomaly ultrasound screening programme. The savings relate to only one programme.
I cannot give that clarification, but I undertake to write to the hon. Gentleman after this debate.
The hon. Gentleman also asked about part IX of the drug tariff. My understanding is that it has not been reviewed for more than 25 years, but a review is being undertaken with full consultation. On home oxygen, it is true that there was an underestimate of demand for it in the early days of the contract—we accept that.
My hon. Friend the Member for Merthyr Tydfil and Rhymney asked about accountability. Members of Parliament will be able to monitor performance in very much the same way that they can monitor the performance of the current service providers: the logistics division of NHS Business Service Authority, or BSA, and the NHS Purchasing and Supply Agency, or PASA. Like now, both PASA and the BSA and their divisions will be subject to an annual audit by the National Audit Office.
Senior officials in my Department sponsor the BSA and PASA. The officials report ultimately to the permanent secretary and to Ministers. Both PASA and the BSA will lay their respective reports and accounts before the House of Commons each year, and the Department of Health, BSA and PASA will continue to answer parliamentary questions. I hope that that reassures my hon. Friend somewhat. I shall reflect on his request for an ombudsman process. Unfortunately, on my second day on the job I cannot give him the assurance that he seeks—I hope he will accept that that is reasonable—but I shall certainly reflect on the issue and discuss it with my officials and ministerial colleagues.
My hon. Friend also raised questions about the accountability of DHL and the contract. The contract sets out clear key performance indicators, and the BSA will be responsible for managing the contract and reporting on the performance to my Department. Financial penalties will be charged to DHL if it falls short of the minimum service levels required, and the contract between DHL and the NHS has built-in failsafes, particularly for any action that could be deemed to be in breach of contract. A sustained breach of contract could result in the operations being brought back in-house.
I was asked by my hon. Friend and by the hon. Member for Eddisbury about the progress that is being made on setting up the product councils, and exactly how transparent the process will be. My information is that the first two councils are expected to be established in the autumn. They are intended to provide a forum through which DHL can interface with the NHS.
It is intended that such councils will be open and transparent in several ways. First, DHL will arrange contracts using public sector processes and will be subject to normal EU public procurement rules and probity. Secondly, the councils will engage key customers in the NHS to ensure that decisions are based on what the NHS needs and wants. Thirdly, it is my understanding, contrary to what was suggested during the debate—I cannot remember by whom—that the names of council members will be in the public domain.
I am grateful to the Minister for explaining that there will be accountability through the usual processes of scrutiny in the House and that no one will act outside the law. Frankly, I would not expect anything different. The latest information that I have is that the advertisement has gone out for one of the first of the product councils in relation to nursing. In the advertisement, there is no description of how the stakeholders that he mentions will be actively involved. As I explained earlier, it seems that there is an open self-nomination process, yet the advertisement states that the nurses who will be appointed through that process by the supply chain, not by anyone else,
“will represent the views and interests of the NHS by acting as a reference, resource and sounding board to the NHS supply chain”.
Frankly, I do not know what that means—other than what it says on the paper as a piece of English. I fail to understand how someone who is self-nominated and has been chosen by the supply chain can represent the NHS.
I will write to my hon. Friend to try to reassure him on that point. I have not seen the advertisement myself and have not had a chance to discuss the details of it with my officials, but I will do so and if he is not satisfied with the reply that he receives, I invite him to come back to me.
My hon. Friend also raised concerns about product availability.
Can the Minister confirm what the proceedings of the product councils will be? Presumably, they will have meetings, debates and input from a variety of sources. Will there be public documents in any shape or form that we can access?
I am afraid that I do not know, but I will find out and let hon. Members, including the hon. Gentleman, know.
On product availability, the contract with DHL enables the Department of Health to instruct DHL to list specific products in the catalogue and evaluated products will be made available. On range, because the catalogue will need to expand to achieve targets, more rather than fewer products will be available to the NHS. I hope that that will be of some comfort to my hon. Friend as he mentioned a company in his constituency that manufactures dressings for wound care. The question was asked whether, if a product is not listed in the supply chain catalogue, the NHS will still be able to obtain it. The answer was helpfully given by the hon. Member for Southport (Dr. Pugh): yes, people will still be able to obtain it because trusts are not mandated to use DHL and can purchase direct if they chose to do so. The second point is that it will not be in DHL’s interest to limit products, as it is driven by volume and growth, so it will work with the NHS to secure what clinicians want and need.
My hon. Friend the Member for Merthyr Tydfil and Rhymney and the hon. Member for Eddisbury raised the issue of value versus price and whether there is an inherent conflict between a price-driven approach and what real value is considered to be in a health context. We accept that there have generally been problems with public sector procurement in relation to that because it tends to be price focused. That is exactly why we established the health care industry task force, where we have been working with industry to do two things. The first aim is to create a centre for evidence-based purchasing to devise a common definition of value and to assess products from a value perspective, not simply a price perspective. Secondly, we will create a new integrated procurement framework that will ensure that value, rather than price, is properly assessed in the procurement process. Part of that framework is the development of a new benefits framework that will look at broader value issues, rather than simply price.
On the relationship between the DHL and the NHS, the DHL must partner trust to deliver the contracted service. It has recognised that clinical engagement is essential to that process. The contract is only nine months old and, as I have mentioned, product councils will build on existing consultation mechanisms, such as the clinical nurse specialist group that already exists.
It is perfectly reasonable that we should not expect the Minister to give us definitive answers, but it is, at last, very helpful for us to put these issues in his inbox. Perhaps he would like to reflect on why there was such a rush to get the whole thing going before the product councils were established, whether that was entirely wise and whether there might have been a more useful way to ensure that the process was kicked off in the right way.
I hope the hon. Gentleman will forgive me, but I have only been in this job in working terms for less then 48 hours and have not yet become an expert in what has gone on with this issue in the past two years. I have done my best to grasp the bare essentials of this subject in the last day and a half and to do all the other things that one has to do in the first day and a half in a new job. I will endeavour to come back to this issue, and I offer an invitation to him, my hon. Friend the Member for Merthyr Tydfil and Rhymney and the hon. Member for Southport to come and have an in-depth briefing in my Department. If they still have outstanding concerns, they are welcome to come back and talk to me about them.
I thank the Minister for that invitation, and I am sure that we will find a way to take it up, because this important issue will roll forward over some time and will need monitoring; it does not just relate to a single incident. He mentioned the process of how the supply chain will involve itself with the NHS, and I will remind him of something that I said that he may have missed. As I understand it, the director of procurement of the supply chain says that he will be under no obligation to take notice of the guidance and technology appraisals of the National Institute for Health and Clinical Excellence or the recommendations that come from CEP, which is the organisation that he says has been established to do that.
Again, if my hon. Friend is not satisfied that his questions have been dealt with, I will have to clarify the issues that he has raised in writing, following a briefing in the Department. I apologise to hon. Members for being unable to answer all their questions. I have endeavoured to answer as many as I possibly can, but it would helpful—not least for my own knowledge of this subject—if they were to have a full briefing with officials in my Department. They are welcome to bring any further questions to me for clarification.
Sitting suspended.