Health Bill [HL]

I emphasise at the outset that this is a probing amendment. The aim is to initiate a discussion and explore how best to reform the private patient cap in such a way as to uphold the following fundamental principles. First, private patient work will not change the public service nature of foundation trusts; secondly, private patient work will in every case benefit NHS patients and will not cause detriment to NHS patients. It is not good enough in my view to benefit some NHS patients if you cause detriment to others. One needs both safeguards. Thirdly, the approval of boards of governors will be required for any significant new private patient expenditure, to ensure that the fundamental principles and specified safeguards are adhered to. That would fulfil the requirement for local accountability. The boards of governors would be extremely effective in protecting the resources and position of the NHS, which is why I believe it is the way forward. Currently, the private patient work of foundation trusts is dealt with through the private patient income cap. This was introduced in the context of the establishment of foundation trusts by the Health and Social Care (Community Health and Standards) Act 2003, and was restated in the National Health Service Act 2006. The cap was imposed by Parliament in response to understandable fears that allowing an open approach to income from private patients may radically change the nature of the NHS. I think that these fears remain valid today. I declare an interest as chair of a foundation trust. Most Members of the Committee will be aware of that from previous debates However, I emphasise that our trust in east London has no interest at present—I cannot say what it will be in 20 years’ time—in developing private patient services. I am not coming here to plead for something from which my trust would benefit. I was approached by the Foundation Trust Network to raise this issue, which I was content to do. The network has received expressions of concern from foundations across the country about the detriment to their work caused by the PPI cap as it is currently structured. I hope that in the minutes available to me I can capture those concerns and persuade the Committee that there is a case for reform, whatever that reform looks like. The proposed new clause would not abolish the cap. Rather, subsection (1) would require that whatever the framework is in the future—we do need a new framework, in my view—it must be the same for NHS trusts that are not foundation trusts and for foundation trusts themselves. There are six problems with the current private patient cap. First, and most obvious, is the uneven playing field. Those NHS trusts which are not yet FTs are not subject to any cap and can provide services to private patients without limit. At the other end of the scale, a mental health foundation trust has a zero cap and cannot provide any private patient work. As I have said before, that is not a problem for me, but it is a fact. In the middle are foundation trusts that provide acute care. The level of the cap depends on the amount of private work that a trust did in 2002-03, the year before the first foundation trusts were authorised. The cap varies because of that slightly odd way of doing things. One FT has a 30 per cent cap, whereas many others have a 5 per cent cap. It just depends on what proportion of their work was private in 2002-03. Over time, the inequities are likely to have perverse consequences. Trusts may elect not to become foundation trusts because of the private patient cap on the FTs, but not on NHS trusts. That would thwart the Government's public sector reform agenda. The aim is that all provider trusts should become foundation trusts. Secondly, Monitor has expressed the concern that there are real administrative problems in basing the level of the cap on the 2002-03 earnings from private work. As we extend further into the future, even getting hold of the data could be a problem. Thirdly, the Foundation Trust Network is concerned that the structure of the private patient cap is preventing a substantial and growing part of the NHS family from gaining income from privately funded work, which could be invested in improving NHS services. For example, apparently, a mental health foundation trust wants to set up a mother and baby unit. Through its business case, it has established that in order to be cost-effective the unit needs to have 20 beds. It has also estimated that NHS demand for these beds is 15 beds. The mental health foundation trust’s argument is that, if it could have five private patients in its mother and baby unit, the unit would be cost-effective and, thus, it could have one. It says, without that, it might not have one. A further example is that of an NHS foundation trust which is concerned that the private patient income cap will impact on the development of its cancer services.