The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, this is a Bill of profound importance for the quality and delivery of health and care in England, for patients and for all those who care for them. As such it has been, quite rightly, the subject of intense scrutiny, not only in another place, but also more widely. Indeed, the intensity of the spotlight directed at its content over the last few months is borne out by the number of your Lordships who wish to speak today and tomorrow. I look forward to the debate ahead of us.
In approaching this Bill, I believe it is instructive to look backwards to its roots as well as forward to what it seeks to achieve. In opposition, the two coalition parties asked themselves the same simple question: “How can we make the NHS better?”. In asking that question we were clear about several things. We were clear that the founding principles of the NHS—that it should be a comprehensive service, free at the point of use, regardless of ability to pay, and funded from general taxation—should remain sacrosanct. We were also clear that we should reject any system that discriminated between rich and poor. The NHS should aspire to the highest standards of service for all our citizens, but in seeking ways to make the health service better, it was necessary to identify the challenges that it faces. What are they?
The first, and most obvious, is rising demand for healthcare from a growing and ageing population and the increase in long-term conditions. The second is the rising expectations of patients about what should be on offer to them from a health service in the 21st century, including new drugs and technologies. The third is the financial challenge—the inexorably rising costs of providing services against an increasingly constrained budget.
Two key principles emerge from this analysis: the need for maximum efficiency in the way the health budget is spent; and the need to make the service patient-centred. For many years, politicians have spoken of the NHS as a patient-centred service, but how can a service be truly patient-centred if decisions about the treatments and pathways of care that are available to patients are taken at several removes from those who know best what the needs of patients are—namely, the patients themselves and the healthcare professionals who look after them?
How can a health service be patient-centred if the measures of its performance overlook what for patients matters most, namely the outcomes that it achieves and the quality of care that patients receive? What of NHS efficiency, when so much of its budget is consumed by layers of administration, when its productivity over the last few years has fallen, and when patients experience poor handovers between different parts of the NHS and between the NHS and social care?
There is a fundamental problem, too, in NHS accountability. The original National Health Service Act 1946 provided for a comprehensive health service, but it did so by employing a simple legal precept—that responsibility for everything that happened in the NHS should lie with the Secretary of State. That may have held good in the 1940s, when the challenges facing the NHS were largely the management of acute short-term conditions, but it does not hold good now. The Secretary of State has for decades delegated his functions for the commissioning and provision of healthcare services to other bodies. The reason for that is simple: managing the range of healthcare needs for our diverse population is now so complex that no one would argue that it is a task best carried out from Whitehall. This has resulted in a vacuum in NHS accountability, with no measures or mechanisms whereby PCTs and trusts can be held locally to account. We in Parliament can only turn to the Secretary of State: he in turn can only give one answer—PCTs and trusts are autonomous organisations, their decisions are taken independently, in accordance with local priorities, and it is not appropriate for these decisions to be subject to interference from the centre. So the fact that the Secretary of State is responsible for making sure that there is an NHS available to all clashes with the fiction—for that is what it is—that he is somehow responsible for all clinical decision-making in the NHS. This results in a poor deal for the person at the centre of things—the patient.
During the last few years, it became clear to politicians of all persuasions that there was another nettle that the NHS had to grasp: the need to improve quality. We know that, measured against accepted benchmarks, the outcomes experienced in the NHS sometimes fail to match up to those achieved in comparable countries. The OECD has reported that if the NHS were to perform as well as the best performing health systems, we could increase life expectancy in the UK by three years.
Towards the end of the previous Government, the noble Lord, Lord Darzi, sounded a clarion call to managers and clinicians around the quality imperative. The focus of the noble Lord’s work—to define what quality means and to drive forward that agenda by fostering innovation, transparency, and choice, by strengthening regulation and by encapsulating the rights and legitimate expectations of patients and staff in an NHS constitution—was unarguably right. But his time in office was short. There was much more that still needed doing.
Our plans for the NHS therefore focused on three main themes: accountability, efficiency and quality—keeping at the centre the most important theme of all, the interests of patients. Modernisation of the health service, we were clear, had to involve a fundamental shift in the balance of power, away from politicians and on to patients themselves through increased choice and information, and on to doctors and health professionals, giving them real budgets and empowering them to use those resources in a cost-effective way to drive up quality. That shift would have two advantages: it would serve to depoliticise the NHS; and it would promote efficiency and quality by making those who take clinical decisions on behalf of their patients responsible for the financial consequences of those decisions. Both GP fundholding in the 1990s and, more recently, practice-based commissioning showed that empowering clinicians directly could improve the quality of care that patients experience. The potential is truly enormous: allowing doctors, nurses, hospital specialists, social services and other professionals the freedom to design care pathways that are integrated, and to commission them on behalf of their patients, will, we firmly believe, transform the quality of care and treatment that the service delivers.
At the same time, the clinicians on whom this greater autonomy is bestowed should be held accountable as never before—not only for their use of public money but also for the outcomes they achieve for patients. Unlike the largely illusory accountability of the present system, we were clear that doctors should be held to account in a transparent way by the patients and the communities whom they serve. Success and failure have to be measured in better and more meaningful ways, by reference to outcomes, not processes. For their part, elected politicians should be held accountable in a dual fashion: first, to Parliament, for the performance of the health service as a whole, defined principally in terms of outcomes; and, in parallel, for directly overseeing and delivering the public health agenda so critical for the long-term health of the nation—an agenda which, too often, has tended to assume a lower priority for government at times when the NHS budget has come under strain.
The fruits of this deliberation were laid out in various Conservative and Liberal Democrat publications from 2006 onwards, including a White Paper, in our manifestos at the last election, the coalition agreement and, finally, a government White Paper from which this Bill directly stems. The democratic mandate for our proposals is absolutely clear.
This brings me to the amendment tabled by the noble Lord, Lord Rea. It is important that we remember what the Labour Party manifesto said on health at the last election:
“We will continue to press ahead with bold NHS reforms. All hospitals will become Foundation Trusts … Failing hospitals will have their management replaced. We will support an active role for the independent sector working alongside the NHS in the provision of care … Patient power will be increased”.
Even Labour accepted at the last election that doing nothing is not an option for the NHS. Many of the principles in this Bill were ones that they wholeheartedly embraced. But the nature of the change must be different. Instead of putting in tiers of management and controlling everything from the centre, we are removing bureaucratic structures so that the front line is empowered as never before to deliver better patient care. This Bill achieves that by means of a better framework which allows power to be devolved from the centre so that innovation is unleashed—
Lord Clinton-Davis
Why was none of this mentioned in the Conservative manifesto at the election?
Earl Howe
I commend the manifesto to the noble Lord because our plans were very clearly set out in it. It allows power to be devolved from the centre so that innovation is unleashed from the bottom up, supported by clear lines of accountability. It is, in fact, the inverse of a topdown reorganisation.
The Bill is long and complex because for the first time in statute it seeks to define the functions and duties of every element in the chain of accountability within a reformed healthcare system, and to join up those functions and duties into a coherent whole. Whereas in the past it has been possible for a Government to change the NHS simply by direction, in the future it will be impossible to do so without recourse to Parliament. Much that was defined in regulations and directions is now to be covered clearly in statute. Daunting as it may seem to some of your Lordships, we were clear that this was an ambition whose realisation was well worth the effort. At the same time as introducing change, it is a Bill which seeks to build on much of the existing and therefore familiar features of the NHS architecture put in place by the previous Administration. Noble lords will know of the Nicholson challenge: to deliver up to £20 billion of savings in the NHS over the next four years, all of which money will be ploughed back into patient care. Savings on this scale are not possible to achieve without system-wide change, and the measures in this Bill are inseparable from that process.
Let me now focus on its content. This Bill is about several things. It is about liberating the NHS and those within it to enable them to work better and more accountably in the interests of patients. It is about streamlining the architecture of the NHS to make it more efficient and transparent. And it is about creating a public health service that is configured to tackle the major challenges to the nation’s health and well-being that face us over the years ahead. The key to achieving this, we believe, is a strengthened and more logical spread of accountabilities. Put simply, the Bill provides that the Secretary of State should remain accountable to Parliament, as he has been since 1948, for promoting a comprehensive health service and for the funds voted each year by Parliament for the health budget.
Let me be clear—the Bill does not undermine the Secretary of State’s ultimate accountability for the NHS or the responsibility that he carries for a comprehensive service. I am fully aware of concerns raised on this point, and I respectfully refer your Lordships to the response we published yesterday to the Lords Select Committee on the Constitution on this very matter. We are unequivocally clear that the Bill safeguards the Secretary of State’s accountability. However, we are willing to listen to and consider the concerns that have been raised and make any necessary amendment to put the matter beyond doubt.
The duty to commission and provide healthcare day to day, which hitherto the Secretary of State has delegated to the NHS, will instead be conferred on NHS bodies directly. Clause 6 proposes that below the Secretary of State there should be a new body, the NHS Commissioning Board, directly responsible for holding and distributing the NHS commissioning budget and for assuming many of the functions now performed by strategic health authorities and patient care trusts, which will be abolished. But the board will not operate without political oversight. The Secretary of State will issue a mandate detailing the outcomes for which the board will be held accountable. The mandate will be subject to public consultation and laid before Parliament, creating a clear line of political accountability. Unlike the current operating framework, the Bill gives the Secretary of State an explicit duty to report on how the board has performed against the mandate. But, as an independent body, the board will be a buffer against the short-term, politically motivated whims of government.
Clause 7 creates clinical commissioning groups as statutory bodies authorised by the board which will commission local healthcare services. CCGs, consisting of groups of GP practices and with doctors in control, will be stewards of the bulk of the NHS commissioning budget and will be held transparently and rigorously to account for the use of those funds against a set of quality and outcome measures. The defining characteristic of CCGs as compared to PCTs will be their clinical ethos. It is doctors and their fellow clinicians, not managers, who know the needs of patients best. By making clinicians financially responsible for the clinical decisions that they take, we will not only drive efficiency but also achieve a step change towards a genuinely patient-centred service.
Real accountability to the patient will be achieved in a number of ways. It will be achieved by empowering patients with information and involving them in decisions around their care. But it will also be achieved by empowering local groups of patient representatives to be involved in how services are commissioned, provided and scrutinised. Clauses 178 to 186 propose the creation of HealthWatch. Local HealthWatch will be based on the existing local involvement networks, or LINks, but with added clout. Funded through local authorities, they will act as the independent eyes, ears and voice of patients and service users in a local area. At the national level, a new body, HealthWatch England, will be established to support local HealthWatch and to act as the national care watchdog wherever quality of care is called into serious question. By making HealthWatch England a committee of the Care Quality Commission, as is proposed in the Bill, we will enable the voice of patients and the public to be heard at the very heart of health and social care regulation.
But liberating the NHS goes further. It means enabling the governors of foundation trusts, who represent the public, patients and staff, to exercise more meaningful influence over strategic decisions made by their trust boards. It means freeing foundation trusts from the private income cap; a constraint which they repeatedly tell us is arbitrary and unnecessary, and whose removal will enable them—without jeopardising their NHS focus—to generate income which can be deployed for the benefit of NHS patients. Clauses 148 to 177 cover these proposals. Noble lords will recall the debate we had on this subject two years ago.
In developing healthcare provision, the previous Government began to champion the cause of patient choice as a driver of quality, and in doing so moved us in the direction of a more plural service with the introduction of independent sector treatment centres, social enterprises and charities operating alongside mainstream NHS providers. We have long agreed that this was the right direction of travel. Competition and choice will no doubt prove a major theme in some of our later debates on the Bill, but let me say for now that we are absolutely clear from past evidence that where competition can operate to improve the service on offer to patients, or to address a need that the NHS fails to meet, we should let the system facilitate it. However, competition only has a place when it is clearly and unequivocally in the interests of patients.
This is where we were critical of one aspect of the previous Government’s policies. The playing field was levelled against the NHS. ISTCs were given guarantees and price subsidies that were not available to public sector providers. That is why we want to ensure that all providers of healthcare operate to the same clear rules. This, in turn, necessitates an independent body capable of holding the ring. That body, we propose, should be Monitor in its new guise as a sector-specific regulator for the health service, with functions and duties framed to enable it to bear down on unfair competition, conflicts of interest and unsustainable pricing. It will operate in accordance with the principles and rules for co-operation and competition, which were introduced by the previous Administration.
For a long time now, the idea of a local democratic mandate for healthcare provision has been a pipedream of many. For the first time, this Bill imposes duties on local authorities that will see the creation of health and well-being boards, bodies charged with assessing and addressing the health and social care needs of a local area. This represents a huge opportunity for improving the commissioning of health and social care. Health and well-being boards will consist of, as a minimum, representatives from clinical commissioning groups, social care, public health and patient groups including local healthwatch, plus elected representatives. They will provide a forum for joined-up decision-making on service configuration and local priorities. Joint health and well-being strategies will not simply inform clinical commissioning in a local area, CCGs will also be required to have regard to them when preparing their commissioning plans, with safeguards in place should they fail to do so. The democratic underpinning this gives to service provision is a major and exciting change.
At the same time, the Government’s clear focus on public health will usher in a new public health architecture. At a local level, for the first time since 1974, local authorities will become the hubs for commissioning and delivering public health services, led by directors of public health and supported by a ring-fenced budget. At the centre, under the direct auspices of the Secretary of State, a new executive agency, Public Health England, will bring together health protection functions currently distributed between a number of different organisations. In driving forward public health strategies at a national level, it will inform and support local authorities in their work, thus ensuring a joined-up system. We believe it is of vital importance that public health should receive the emphasis due to it, if we are to tackle the long-term challenges to the nation’s health and well-being that currently face us.
Alongside this, we will modernise and streamline the Department of Health’s arm’s-length bodies. The Bill abolishes bodies that are no longer required, thus releasing more money to the front line. At the same time, NICE and the NHS Information Centre will have their future secured by being established in primary legislation for the first time.
The changes we have set out will be introduced in measured stages over a period of years, and our plans for transition will ensure that the health service is well prepared; for example, no clinical commissioning group will be authorised to take on any part of the commissioning budget until it is ready and willing to so; Monitor will continue to have transitional intervention powers over all foundation trusts until 2016 to maintain high standards of governance during the transition; and to avoid instability, there will be a careful transition process on education and training.
In framing the provisions of this Bill, Ministers have talked and listened to a great many people; not only before the election but since, with a public engagement on our White Paper in 2010 and, in the spring of this year, the very productive two-month listening exercise. Throughout this time we have encountered consistent and widespread agreement for the key principles underpinning our policies; in particular, since the listening exercise, a shared view among professionals about the way those principles should be put into practice. At the same time, reform of the NHS is seen not just as an option but as absolutely essential for its future.
In addition to this consultation and engagement, this Bill has also undergone significant scrutiny in the other place. The Bill’s first Committee stage lasted 28 sittings—longer than any Bill in nine years. Following the Future Forum’s report, the Bill was recommitted for a further 12 sittings. The Bill was therefore scrutinised over more sittings in the other place—40 in total—than any other Public Bill in the whole period from 1997 to 2010. I direct that point in particular to the noble Lord, Lord Rea.
I conclude with a brief word about the Motion tabled by the noble Lord, Lord Owen, which I shall speak to in detail when I wind up the debate. Suffice it to say for now that while I fully recognise the strength of his concerns, I regard the proposal he has made as posing an unacceptable risk to the passage of this Bill and hence to the Government’s programme for the health service. He is proposing an unusual process. The only basis on which such a process might be workable would be with the prior reassurance, for the Government, of a strict time limit on the Bill’s Committee stage as a whole. Regrettably, I was unable to reach agreement with the noble Lord that this was a reasonable basis on which to proceed. I therefore do not think that his Motion should be supported.
The case for change is clear and compelling, and I am personally in no doubt that the changes set out in this Bill are right for our NHS and—more importantly—right for patients. I hope very much that your Lordships, in reserving your powers to scrutinise the detail of the Bill with your usual care, will wish to endorse the ideas and the vision that it presents. This is a Bill with but a single purpose: to deliver, for the long term, a sustainable NHS, true to its founding principles. It is on that basis that I am proud to commend the Bill to the House, and I beg to move.
Amendment to the Motion