Health and Social Care Bill

My Lords, this is an important issue and one that I recognise is of considerable interest to the Committee. To start at the beginning, the Government are clear that NHS providers should always focus on the provision of care to NHS patients. However, we cannot ignore the fact that the private patient income cap, which Clause 162 would remove, is damaging to the NHS and to patients’ interests. We think that there is a very strong case for removing the cap, because doing so will allow NHS patients to derive even greater benefits from foundation trusts. At the same time, we understand the sensitivities. The key to addressing those sensitivities is to have adequate safeguards to ensure that NHS patients and resources continue to be prioritised and protected. I reassure the Committee that we believe we can achieve that through the Bill and through the government amendments, and I shall explain why and how in a moment. The words ““private patient”” in the cap’s title may have unfortunately given the wrong impression about the substance of the argument. My noble friend Lady Noakes was quite right in what she said. The cap’s scope goes far wider than just private patients. It captures income from activities such as innovations involving research, joint ventures and the sale of medicines and intellectual property to private healthcare providers in the UK and abroad. This means that innovative partnerships of the kind that the noble Lord, Lord Warner, indicated might happen are being hampered, and the ability of foundation trusts to earn more income to help to bring in leading-edge technology to the NHS faster—for example, for cancer treatment—is unnecessarily restricted. Foundation trusts have told us that the cap is detrimental to care offered to NHS patients. They have welcomed our move to remove what they and we see as an outdated, unnecessary and arbitrary legal instrument that locks them into maintaining income from private charges below the levels that applied in 2002-03. Perhaps I may remind noble Lords of the compelling reasons for removing the cap. As I am sure the Committee will agree, the rule itself is unfair. Some foundation trusts have much higher caps, and hence much more flexibility, than the majority. In 2010-11, around 75 per cent of foundation trusts were severely restricted with caps of 1.5 per cent or less. Meanwhile, the Royal Marsden benefits from a 31 per cent cap and is the country’s highest private patient income earner. It has also been consistently rated as a highly-performing NHS provider.