Health Bill [HL]

My Lords, Amendment 15, tabled by the noble Baroness, Lady Meacher, and supported by the noble Baroness, Lady Barker, the noble Lord, Lord Warner, and the noble Earl, Lord Howe, seeks to maintain the existing rules governing the private patient income cap for NHS foundation trusts. The amendment would allow the Secretary of State to make regulations to permit exceptions to the general rule. An exception could be permitted only if it was in the interests of the NHS to do so. The regulations can specify other conditions and principles on which such exemptions may be permitted. The Government recognise the concerns which have been presented to us. We have also listened carefully to the views expressed in debate, not least that caps set by reference to historical income levels appear increasingly arbitrary. The Government sympathise with and understand the intention and spirit behind today’s amendment. In our previous debates on this issue I made clear the Government’s desire for a wider debate on the cap. Following the outcome of the judicial review on the current legislation, it is our intention to begin a review to address precisely how to strike the right balance between protecting NHS services for NHS patients and allowing NHS foundation trusts the flexibility they need to operate effectively in the best interests of patients. This would mean a review of the cap and appropriate action to follow. I turn to the specifics of the amendment. It is quite right that to change the cap would require primary legislation. However, I have genuine concerns about the approach that the amendment takes and about rushing into any quick legislative fix. I would like to take a few moments to set out some of the issues raised by the amendment and explain why a broader review following a clear process would be a better and more practical route to take and be in the best interests of the NHS. As your Lordships know, this is a complex policy area. The fact that we have already discussed it twice, in Grand Committee and on Report, highlights both the range of views that need to be taken into account and the difficulty of crafting legislation. The amendment would enable the Secretary of State to make exceptions to the current cap. However, it would not remove the cap’s underlying principle that the private income of a foundation trust should be restricted according to levels set in 2002-03. The Secretary of State would be able to use regulations under the amendment to create exemptions to the cap; for example, to allow mental health foundation trusts to carry out private patient work. However, legal advice is that those regulations could not be used to such an extent that the effect of the underpinning primary legislation was nullified. In short, we could not use exemptions to get rid of the underlying rule. The level playing field which was described in Committee by the noble Baroness, Lady Meacher, with a new system having an equal impact on both NHS and foundation trusts, would not be achieved. As noble Lords will be aware, a judicial review is currently considering what income counts towards the cap. The Government are an interested party in the legal proceedings, so I will not comment on the interpretation of the current provisions. However, noble Lords will wish to be made aware that, even if this amendment were accepted, there would still be the issue of what income counts towards the cap. The court will give a judgment on that issue. We might best describe this as a quick-fix solution, and I understand why people would be tempted by it, but it would not address the issues and underlying problems with the cap that we have discussed. We need a wholesale review of the underlying rule. The Government believe that the best way to reform the cap would be to create a new test or set of principles that would apply equally to all foundation trusts, reforming the rules so that they are clear, logical and work well. We are keen not to replicate the current situation with the cap from the 2003 Act by bringing in new primary legislation without first discussing and testing it thoroughly with the NHS—the people who will put the new arrangements into practice. We have heard in our discussions the wide range of views on the issue. Key stakeholder organisations inside and outside the NHS should be given the opportunity to contribute to a debate on the design of the new framework which should begin as soon as the judicial review is complete. We should not try to reach a consensus quickly on what the future framework should look like without consulting foundation trusts from the outset. The reform of rules that impact directly on them, in the context of an evolving health policy framework, needs to be considered in the round. We agree that private patient activity should not lead to a poorer service for NHS patients and that private income should subsidise NHS care and, therefore, be used to improve and widen NHS services. We also agree that NHS foundation trusts must above all preserve and promote the values of the NHS. We therefore need to go through a clear, fair, practical process to develop fully the best policy solution before we legislate—which we will of course do at the first opportunity once the approach has been agreed. I repeat our commitment to take forward a review following the outcome of the current judicial review. This is the most sensible way of making sure that any new approach reflects the views of those affected and enables us to test those practical solutions. With this assurance in mind, and with thanks to noble Lords for the valuable contributions they have made to the discussion, I hope that the noble Baroness will withdraw the amendment.