Health Bill [Lords]

Somewhere or other, hon. Members may well have heard me do so, as the hon. Gentleman says from a sedentary position. The aim of the new clause is to enable a designated mental health NHS foundation trust to earn up to 1.5 per cent. of its total income from income that it derives from private charges. The clause also contains a definition of mental health foundation trust for this purpose. In the course of the Bill’s passage through the House, we have had several debates on the private patient cap. That debate was, I understand, reflected in the other place, too. The Government recognise the various concerns that have been set out, both here and in the other place, about the issue. We understand some of the frustrations that have been expressed. However, securing a consensus on an alternative approach is not easy. People have differing views about the private patient cap. Some say that there should not be one, some say it should be at zero, and there are a variety of views in between. We take the view that the way the system operates now is not the way we want to see it operate. It is not fair. We concede that argument immediately. There is a strong case for reform, but let me be clear: the Government are committed to maintaining and strengthening the protection of NHS services for NHS patients first, while allowing NHS foundation trusts a degree of flexibility to operate effectively in the best interests of patients and communities, and in the context of evolving health policies. The Government are committed also to a full review of the patient cap—based upon those principles. We want to ensure that any private money that goes into the health service is directed in the best interests of the patients and the NHS as a whole. Evidently, reforming the rules so that they are fair, logical and work well is far from straightforward, and opinion about how the cap should be reformed is, as I have said, very divided. Any new approach should therefore be developed in partnership with the NHS and other key stakeholders to ensure that it is pragmatic, workable and achieves our fundamental purpose without any unintended consequences. The Government are already committed to a full review of the cap, following the conclusion of the judicial review of the current legislation. However, I can confirm today that we will bring forward that review process to start as soon as possible, within a month. It will begin with a call to the NHS and other key stakeholders for evidence to inform the review, and it will seek feedback by January. To review the policy effectively, we will approach our stakeholders throughout the NHS—the people who operate by the current rules and who would put any future new arrangement into practice. Our aim, therefore, is to undertake a very fast review, to give people the opportunity to put in their various submissions and to look to come to a conclusion early in the new year. We expect that the policy review will begin in the new year and report to Ministers in the spring. By having a meaningful and considered review, the Government will be able to undertake a consultation on options for the best and most appropriate solution that we can act upon at the earliest available opportunity. Some Members of this House and of the other place will be keen to see action sooner, and I understand that view. We are committed to reforming the rules, but equally, we cannot risk a repeat of the situation with the existing legislation, whereby we introduce new legislation without, first, a proper and full engagement with the NHS as a whole. After various discussions on a previous occasion, a compromise was reached. At the time it looked like a relatively fair compromise, and perhaps it was, at the time, but it subsequently developed a number of anomalies that spread, and now the compromise is not working in a way that anyone would regard as entirely satisfactory. Our debates here and in the other place have highlighted a specific and immediate concern, however, for mental health NHS foundation trusts—all of which for historical reasons have a 0 per cent. cap. They have no ability to access any private income at all, and they have no flexibility to earn private income and thereby support their NHS service users. We have received representations about how 0 per cent. caps constrain the ability of trusts to develop a broader range of innovative services and to support key facets of Government policy on health and well-being—for example, by providing specialist help for back-to-work schemes or employees at risk of mental ill health. Some mental health foundation trusts might want to work with private services that aid employees in private sector organisations, or help people who want to get back to work. Such a trust is currently able to provide assistance and medical advice, but not to accept any remuneration for doing so. That work could, however, be in the interests of its recipients and in the long-term interests of the NHS, because it could help with some of the mental health problems in society as a whole. If we allow some private income to be earned, we may be able to find ways for mental health trusts to do much more with the private sector. The current situation denies trusts the opportunity to enhance care to their NHS service users, and that concerns us. The measure is therefore an attempt not to move the private sector artificially into the NHS, but to ensure that the NHS is able to earn private income to provide services to parts of the private and voluntary sectors, to work with other Departments and to ensure that we work with those private sector organisations with which other Departments work. The situation was not anticipated when the Health and Social Care (Community Health and Standards) Act 2003 was put in place, but, pending the review of the cap for all NHS foundation trusts, the new clause will establish an interim solution. If we enable a cap of 1.5 per cent. for those trusts, high-performing providers of NHS mental health provision will have room to innovate and to support the development of further high-quality services for the NHS. I stress that today’s proposal is an interim measure. Our review of the cap will seek to address the wide variation in cap levels that exists between NHS foundation trusts, and to establish a uniform test or set of principles that can apply equally to all NHS foundation trusts. Let me be clear: today’s new clause applies only to mental health foundation trusts and those that become such trusts in the interim. As part of a wider review, we will look more broadly at the way in which the whole foundation trust area would operate, the range of private caps and how they ought to be reformed to bring about a much fairer situation. We agree that private patient activity should be used to improve the service for NHS patients; that private income should subsidise NHS care and, therefore, be used to improve and widen services; and that NHS foundation trusts must above all preserve and promote the values of the NHS. Our review will consider those points. In other words, private patient income should be deployed for the benefit of the NHS and NHS patients. Our aim is not that the measure be a way for NHS hospitals just to earn some private income; there will have to be a purpose, and that will have to be taken into consideration. Our review will in part consider how that has developed. New clause 10, which was tabled by the hon. Members for Eddisbury (Mr. O'Brien) and for Hemel Hempstead (Mike Penning), would introduce a clause that was added in the other place but removed in Committee. We removed the clause because we believed that it offered the wrong solution, even though it was seen as an interim measure. Allowing exceptions only introduces further uncertainty for the NHS and will simply lead to more claims of unfairness. As I recently said, if such exemptions were allowed there would be many debates. We must try to avoid setting up a system in which we create even more unfairness. Our view is that the Conservative proposals would lead to greater unfairness. An exemption-based proposal would not remove the cap’s underlying rule for the vast majority of NHS foundation trusts—that their private income should be restricted to levels set in 2002-03. A level playing field would not be fundamentally achieved at all; it seems to me that we would just produce greater unfairness and concern. Any regulations created using the powers in new clause 10 are likely to provide only for a simple exemption from the cap. If the new clause were accepted, some trusts would, apparently, get an exemption from the cap. How far would they raise their private patient income? That, it would appear, would be entirely for them. I am not sure that Conservative Front Benchers are proposing such a measure, but perhaps they are—it is not clear from their new clause what they are proposing. I look forward to the contribution from the hon. Member for Eddisbury setting out what they are in fact proposing. If the cap were entirely removed from some trusts, they would have no obligation to deploy their money for the benefit of the NHS or NHS patients, and the deployment of NHS resources to bring in private sector money could not be monitored or overseen—the Opposition new clause would, apparently, not allow that to happen at all. However, the Government’s proposals for a policy review would, I hope, pave the way for a long-lasting legislative change in the future. The Government’s new clause offers a pragmatic solution to the immediate concerns highlighted by hon. Members and those in the other place regarding NHS mental health foundation trusts, in respect of which we accept that there is an issue that needs to be dealt with now. It is very unlikely that most mental health trusts could breach the cap, even if they tried, within the next year or 18 months; raising such income would require a very significant effort. New clause 13 gives those trusts the freedom they need. They can engage with the private sector when that is in patients’ interests, and they can ensure that they deploy effectively the resources they earn from that. Combined with the Government’s commitment to bringing about a review of the cap as soon as possible, the new clause provides a clear way forward on addressing the practical difficulties of the cap while maintaining its core principles.