Personal Injuries (NHS Charges) (Amounts) Regulations 2006

I thank the Minister for introducing the regulations. The regulations look routine and rather dull, but they are not. They are the latest manifestation of the Government’s push to levy indirect taxes on the public through the medium of higher insurance premiums and, in so doing, effectively to introduce new charges for NHS treatment, which they have consistently denied that they would ever do. They have done so twice, as the Minister explained. Provision was made in the Health and Social Care (Community Health and Standards) Act 2003 for NHS hospitals to receive reimbursement for the cost of treating those people who have suffered a personal injury and have been compensated under an insurance policy. That measure represented an extension of the scheme introduced by the Road Traffic (NHS Charges) Act 1999, under which all hospitals treating victims of road accidents would be reimbursed by motor insurers for the cost of doing so. It has taken some time for the Government to lay regulations to implement the extended scheme. The reason was apparently the concern expressed during the consultation exercise about whether the employers’ liability compulsory insurance market was sufficiently robust to cope with the additional demands to be made on it. The Government undertook not to put the scheme in place until they had carried out a study of the ELCI market. The study was published in late 2003, and it recommended that the new injury cost recovery scheme be postponed for a year. A year later, there was another public consultation, which again excited concerns about the fragility of the ELCI market. Therefore, the first issue on which I should appreciate reassurance from the Minister is whether her department is absolutely satisfied that the ELCI market is now stable and strong enough to sustain the impact of the new ICR scheme. If it is so satisfied, I should be grateful to know the grounds on which it has reached that conclusion. What sums of money do the Government believe that the NHS will recover from the scheme once it is fully operational, if one excludes the amounts to be collected from motor insurers under the existing scheme? What will be the costs of collection? At present, claims against motor insurers are collected on behalf of NHS trusts by the Compensation Recovery Unit in the Department for Work and Pensions. Can the Minister confirm that the CRU will also be charged with the work entailed by this order? I believe that she said that that was the case. If I am correct about that, can she tell me why the contract has not been put out to competitive tender? Why have the Government not sought to achieve best value? If they believe that the CRU represents best value, how do they know? I ask those questions somewhat pointedly because when the Road Traffic (NHS Charges) Act was brought into force in 1999, no competitive tendering was done then either, despite the fact that the Government had previously issued 12 guiding principles for market testing and contracting out. They stated: "““The choice of the means to deliver best value for money, should be based on a robust assessment of the options in each set of circumstances ... Departments should regularly and systematically review what services they provide and how they are delivered to ensure better quality services at optimal cost””." Are those guiding principles still applicable today? If so, can the Minister confirm that a review of the performance of the CRU has been carried out and that Ministers have concluded, on the basis of an objective assessment, that the in-house route offers best value for money? The Government’s conduct in 1999 was particularly reprehensible. For a number of years, the National Road Traffic Accident Claims Centre, NARTRACC, a company run by Mr Frank Adlam, had been collecting fees from motor insurers for the cost of treating victims of road traffic accidents in NHS hospitals under Section 157 of the Road Traffic Act 1988. NARTRACC was engaged by 132 hospitals in the UK to undertake that work and was extremely successful in doing so. In 1996, and again after the election in 1997, Mr Adlam approached the Government to propose that the reimbursement scheme should be rolled out nationally and, through his Member of Parliament, passed extensive amounts of advice to the Department of Health on how that might be achieved to the best advantage of the NHS. The Government decided to legislate. The legislation passed in 1999 put NARTRACC out of business without a penny of compensation. Its entire workforce was made redundant. Mr Adlam received not so much as a thank you from Ministers who, from that point on, refused to see him. Had NARTRACC lost out after a competitive tender, that would have been one thing, but no tender for the work was ever issued. The collection work was placed in-house. That decision by Mr Frank Dobson, the then Secretary of State, has never satisfactorily been explained. NARTRACC submitted an indicative quote to the Department of Health which showed that it would be able to collect fees at a much lower cost than the CRU. It was ignored. Mr Adlam has asked for sight of the background papers supplied to the Chancellor of the Exchequer when he made his Budget announcement in 1997 about the national roll-out of NHS charges. He was told, almost unbelievably, that no such papers existed. He has asked the Department of Health for sight of policy advice submitted toMr Dobson when the decision was made not to market test. The department has refused to release the papers on grounds of cost. When Mr Adlam offered to pay the additional cost, he was told that that was not allowed. Considering that government legislation brought Mr Adlam’s legitimate business to an end, it would not have taken much to provide him with some measure of compensation, in accordance with the spirit of the European Convention on Human Rights. Fur farmers were put out of business by government legislation at very much the same time and provision was made to compensate them. Mr Adlam, whose company provided a public service to the NHS, was kicked out into the cold. The whole story of NARTRACC has been one of obstructive and, frankly, less than honourable conduct by the Department of Health and, not to put too fine a point on it, mean and shabby behaviour by Ministers. Having followed the saga for the best part of eight years, I will take some persuading that what we see being rolled out in this order represents best value for money for the taxpayer or a well thought through means of achieving the Government’s policy objectives. The amounts of money collected by the CRU have consistently fallen short of predictions—well short. When the CRU began to implement its responsibilities under 1999 Act, the operation was little short of chaotic. To be sure, it is more efficient now, but I am not sure how much more. In 1999, there was a huge backlog of cases to be followed up. All indications that I have—and I would welcome confirmation or correction—suggest that the bulk of those cases were never pursued. The financial loss to the NHS by reason of that failure by the CRU would have been significant. The scale of the workload entailed by the order will be considerable. The CRU estimated that in 2004-05, more than 77,000 claims were made against employers and that there were nearly 87,000 public liability claims. Doubtless, not all of them involved hospital treatment, but a great many will have done. If the CRU is now to undertake the collection of fees from personal injury cases, I hope that a very close watch will be kept on its efficiency and effectiveness, including cost effectiveness. I hope that the Minister will be able to furnish me with some satisfactory replies on all these matters, if not today, then in writing. I am, of course, very willing to talk to her further.