Health Bill [HL]

Debate on whether Clause 12 should stand part of the Bill. I should like to spend a few minutes looking at Clause 12 in the round and, more especially, its policy rationale. Let me say immediately to the Minister that I have no difficulty accepting the argument made in the impact assessment that the NHS currently lacks an enterprise and innovation culture and that something needs to be done about that. The impact assessment advances a number of possible reasons for that situation: for example, a risk-averse mentality running through the NHS; short-termism in the way that priorities are set; a lack of the necessary leadership to support innovation; and little in the way of reward for either the innovator or the body for which he or she works. It is thought that a series of innovation prizes may make all the difference in turning that situation around. Once people know that there is a pot of money on offer, so the thinking goes, and once there is visible evidence that innovation is regarded as being important to the NHS, people will get excited and innovative thinking will be stimulated. The idea, as we have heard, is for an expert panel to devise specific health challenges for which the prizes will be awarded and to recommend the winners to Ministers. We are led to understand that at the moment there is a legal bar to a prize scheme of that kind, which is that, although the Secretary of State has the power to award money prospectively, as with a research project, he may not do so retrospectively for work that has already been done. I would very much welcome a more detailed explanation of that point. The impact assessment states that the Secretary of State's existing powers enable him to award grants "to backfill costs" in a research project. I am not sure what the difference is legally between backfilling costs and awarding a retrospective prize, but there clearly must be one. We are also told that it is intended to launch the first tranche of prizes during 2009, ""within the Secretary of State's existing powers"." If a prize competition for innovation can be launched in the absence of the clause being enacted, the natural question that arises is what practical difference the clause will make to a scheme of that kind. Why, precisely, is it needed? I have a difficulty with the general principle of public money being used to reward people retrospectively for having done something. My difficulty is the impossibility of demonstrating value for money. It is bound to be a completely hit and miss affair. You cannot know in advance of awarding the money what you are going to get for it. I know that that sounds like rather a purist view, but it is why, up to now, Treasury rules have prevented such a thing happening. In this case, at the point where the terms of the competition are set, there can be no way of knowing how many will enter or whether any of those who enter will be able to deliver innovation to a value at least equal to the value of the prize. If they do, that will be fortuitous. We must remind ourselves that we are dealing with public money. It is not the same thing as a private individual using his personal money, which he would be entitled to splash around as liberally as he wants, regardless of whether he gets value for it. My other doubt is whether the existence of a prize will of itself incentivise people in the health service sufficiently to imbed a culture of enterprise and innovation. I am not sure how many prizes there will be; that is to say, whether the money will be spread across several winners, in which case the amounts involved may be quite small, or whether there will be one or two bonanza wins. In either case, the degree for incentivisation of large numbers of NHS staff to launch themselves into innovation mode does not seem that great. The impact assessment talks about the prestige and kudos attached to winning and the attraction of associated publicity. I have no doubt that the Alan Johnson prize for innovation will indeed bring with it a lot of prestige and kudos, but will it imbed a culture of innovation? To my mind, much more is needed to do that than simply an annual prize. To be fair, I acknowledge that Ministers themselves have made that point and mention is made in the impact assessment of the regional innovation funds held by strategic health authorities, and the setting up of NHS Evidence. We need to register that there still does not appear to be an agreed Memorandum of Understanding in place for the health innovation challenge fund—the Minister may correct me on that—let alone any money distributed. Equally, one has to wonder about the Health Innovation Council, whose creation was announced in October 2007. According to the DoH website, the council has met only twice and the last time was in April 2008. Personally, I still feel that the introduction of quality accounts is an opportunity to start creating the necessary culture in a way that would reach all levels of the health service very rapidly. I have expressed my fears about demonstrating value for money and the risk of disappointing levels of incentivisation arising from the new innovation prize, but let us set aside those fears for a minute. The bottom-line question we need to ask the Minister is this: if the evidence is correct and compelling that innovators need to be celebrated and recognised for their achievements, and that by this means management and staff need to understand that innovation in the NHS really matters, why do we need public money to do this? Has the Minister considered private sponsorship for an innovation prize? If he has, and if for any reason that is not a possibility, has he considered whether any money at all is needed to achieve the desired results? Is it money that people are really looking for? In asking that question, I take my cue from paragraph 19 of the impact assessment, which argues: "The quantum of investment— in innovative projects— ""may far exceed the cash value of the prize itself … competitors (in other sectors) have been collectively willing to spend up to 10-16 times the cash value of a prize … to meet the objectives"." The document continues: ""This may be due to optimism bias; but it may also speak to the value of kudos in stimulating and rewarding effort"." Is not that the central point? Are not the recognition and kudos what people really value, and is it not that which prompts them to invest what some would see as irrational amounts of time and effort in a project relative to the financial reward on offer? It is the contest itself that fires people up. If it were possible to create a national award whereby a number of award winners were celebrated and feted for their achievements, would the existence of a pot of money make the crucial difference to the uptake? I shall be very interested to hear the Minister’s comments.