Health Bill [HL]

Amendment 128, tabled by the noble Baroness, Lady Meacher, seeks to remove the current private patient cap that applies to foundation trusts. In its place, the amendment would introduce a new requirement for both foundation trusts and NHS trusts to, ""demonstrate the benefit to their NHS patients"" of any income that they may derive from private patients. The noble Baroness introduced this discussion with her customary thoughtfulness. NHS providers should always focus their efforts on the provision of care to NHS patients. Any private work that they undertake should not compromise this fundamental objective, but there are different types of providers and so there are different ways to achieve the same end. NHS trusts are subject to the Secretary of State’s direction. For example, he can direct them on their powers to provide services to private patients. NHS trusts are also performance-managed by strategic health authorities, which will expect them to follow national guidance on private provision. Because NHS foundation trusts are not subject to these powers of direction or performance management, it was felt important that from the outset there should be some other protection in place. That is why, when we introduced the concept of NHS foundation trusts, we included in the 2003 Act an explicit restriction on private income—the private patient cap—for reasons that have been outlined by Members of the Committee. Members of the Committee will know that the introduction of a cap addressed a concern in Parliament that NHS foundation trusts would represent a step towards privatisation and destabilisation of the National Health Service. As Members of the Committee may be aware, the way in which the law has been interpreted is the subject of an application for judicial review. The Government are an interested party in the legal proceedings. In those circumstances, I do not propose to comment in detail on the interpretation of the current provisions. Instead, I will restrict my remarks to the practical effect of the current law and of the amendment which has been tabled. I understand that, in tabling the amendment, the noble Baroness seeks to highlight two issues. First, that the cap on private income does not apply to NHS trusts. Secondly, because the cap is based on levels of activity in the financial year ending on 31 March 2003, there is wide variation between one NHS foundation trust and the next regarding the proportion of private work that they can now undertake. I have already touched on the first of these issues. NHS trusts do not have a cap because their accountability arrangements are quite different from foundation trusts. There are different but no less effective safeguards in place. It is perhaps an oversimplification to suggest that there is a great disparity between NHS trusts and NHS foundation trusts in this respect. However, it is more difficult to ignore the second issue, that the variation in cap levels means that there will be some NHS foundation trusts with very low caps, or whose cap is set at 0 per cent. This is plainly true. What is the practical effect of those low and zero caps? One consequence may be the risk that continuity of care for some patients may be fragmented, as described by the noble Baroness. For example, if repeat cycles of IVF, for which a patient pays, mean that the cap is exceeded, the patient must go elsewhere to continue her treatment. More generally, some NHS foundation trusts may be unable to develop new patterns of service delivery, as outlined by the noble Baroness, which could potentially support our efforts to improve health and well-being, make services more widely accessible and available, and support innovation. We want NHS providers to be able to reach out into their communities, and work seamlessly and in partnership with their communities, the voluntary sector, employers and so on. This is especially, but not exclusively, true of mental health trusts. That this progress might be impeded by the private patient cap is a matter of some concern. The Government’s position is that we seek to maintain and strengthen the protection of NHS services for NHS patients, which is non-negotiable. We cannot ignore the fact that the current cap locks some providers into historic levels of income derived from private charges, irrespective of what may be considered best for patients and public. For that reason, we are already discussing with a variety of stakeholders their views and concerns about this issue. The interpretation of the current law is a matter for the courts and I have no desire to influence this. But we would like a broader debate about the longer term direction, as mentioned by the noble Baroness, Lady Barker, and about how to strike the best possible balance between protecting services for NHS patients, while at the same time creating maximum flexibility for NHS providers to serve the best interest of patients and the public. There are good reasons for keeping this approach under close review. I turn now to the specifics of the amendment tabled by the noble Baroness, Lady Meacher, which seeks to replace the cap with a new requirement for NHS foundation trusts and NHS trusts to demonstrate how any private income they earn benefits NHS patients. We have significant concerns about this approach, which would remove the restriction on NHS foundation trusts to grow their private provision. We recognise that income from privately funded work can be used to improve and widen the services for NHS patients. However, we believe that this amendment could potentially allow a market to develop in competition with the NHS. A test which simply requires private income to be used for the benefit of NHS patients could, in principle, allow an NHS foundation trust to generate almost half its income from private charges yet remain within the law and compliant with its terms of authorisation. We would not wish to see unrestricted private income in an NHS foundation trust leading to a poorer service for NHS patients—for example, for this to interfere with its ability to carry out its NHS functions and obligations under NHS contracts with commissioners. It is not clear how the proposed approach—demonstrating benefit to NHS patients—would work and be overseen in practice. Demonstrating benefit could be a highly subjective approach. I appreciate that the noble Baroness raised this matter in order to open the debate, but this proposal raises as many questions as it answers. Members of the Committee will understand that on this issue we are particularly keen not to introduce ambiguity and uncertainty. I want to assure the Committee that our goal is to ensure that NHS foundation trusts remain focused on the provision of the high quality services they deliver for NHS patients. As part of this, we are committed to their ongoing development and share their desire to promote innovation, enterprise and partnership working. I do not believe that it would be sensible or timely to prejudge this debate, nor should we attempt to make changes to the current law while it is subject to an application for judicial review. Therefore, I would ask the noble Baroness to withdraw her amendment.