Health and Social Care Bill

I speak to Amendment 157 which is aimed at containing the number of clinical commissioning groups and their total operating costs. I have some sympathy with the remarks made by my noble friend, but before I go into the detail of these particular amendments, I want to give a little context. My Lords, there has been a great deal of concern expressed by many people who are well versed in the background and activities of the NHS about the number and small size of clinical commissioning groups that might emerge. I do not condone bullying, but we have a problem. The smallest population size for a CCG that I have come across is 18,000 for Radlett, near Watford. I asked the Minister for the Government’s latest estimate of the number of clinical commissioning groups likely to be operational in April 2013. In his answer to me on 9 November, he said: "““It is too soon to estimate the number of clinical commissioning groups that will be operational in April 2013. There are, however, currently 266 pathfinder CCGs covering 95% of GP practices in England””.—[Official Report, 9/11/11; col. WA 58.]" So it is possible that there could be about 280 clinical commissioning groups when all practices are covered. This is far too many to be effective, for reasons I will explain in a moment. We are getting into an extraordinary position. It seems almost an article of faith, or really bold ministerial courage, for the Government to be embarking on this massive NHS reorganisation, at a time of great financial challenge, without knowing, 16 months before they go live, how many clinical commissioning groups—the bodies that will be handling large chunks of this money—will be in place. That seems a pretty racy way to live with a national icon like the NHS. We will come to the competency tests for CCGs in later amendments. If those competency tests are to mean anything, a significant number of these groups could, presumably, flunk them. Or will all the geese suddenly become swans? What light can the Minister throw on the likely failure rate for clinical commissioning group applicants? When will we have more reliable data on how many clinical commissioning groups we are likely to end up with? For the purposes of discussing the amendment, I will assume that the Government anticipate having something of the order of 250 clinical commissioning groups by April 2013. For many of us, this would seem far too many, and totally fails to learn the lessons of history. As someone who had to learn the lessons of history in the area of commissioning the hard way, I want to share some of that experience with the House. In 2002, the previous Government set up 302 primary care trusts to undertake commissioning. To some extent, in doing this, it was following the course that this Government are trying to pursue—of getting commissioning closer to local populations. That was one of the arguments for doing it and it is not one which I would quarrel with, in principle. But, like clinical commissioning groups, small PCTs were expected to be able to carry out most of the functions of a commissioner. They needed to have all the skills to undertake commissioning, they needed to be effective demand managers, they had to have the muscle to stop acute hospitals gobbling up too much of the money and they had to be able to secure a more appropriate balance between community-based and hospital-based services in their delivery. They failed, and their failures were shown by a number of reports by the Health Select Committee in the House of Commons. They failed because many of them were simply too small and there were too many of them for the commissioning capability nationally available to be able to staff and run that number of bodies. We are heading down exactly the same path with clinical commissioning groups. The manifestation of the failure of the PCTs was the financial meltdown of the NHS in 2005-06. This meltdown occurred after several years of 5 per cent real terms growth in NHS expenditure and in the middle of a financial year with 5 to 6 per cent real terms growth. This is not the situation that clinical commissioning groups will be faced with. After the 2005 election I tried to reduce the number of PCTs. We got down to 150; we should have got down to many fewer. We have now ended up in a position where there are, effectively, 51 clusters of PCTs running commissioning in this country. So we have actually ended up, after rather a painful journey, at roughly the right number of bodies that have the effective capability to run a commissioning of services for this country. We are going to throw that away and have a go at doing it with clinicians—whose increased engagement I support—but starting all over again with a number which could be four to five times the number of the PCT clusters. That is a pretty risky strategy in current financial circumstances. Amendment 157 is an attempt to persuade the Government to have another look at all this and to get real about a credible, effective and affordable number of clinical commissioning groups. It is certainly not 250; it is probably not 150; it is probably nearer the number of PCT clusters that we currently have; it could be even smaller if you wanted to align them more with Health and Wellbeing Boards. The amendment only caps the number at the number of PCTs, but it does enable the Secretary of State to go lower which, in my view, he would be wise to do. If the Government do not get real, we will end up over the next few years —I am in the business of forecasting this afternoon—with a blizzard of mergers and failures, simply because we will not be able to run and operate that number of bodies. Fantasy football management is great fun, but there is no case for extending its approach to NHS commissioning which, on the whole, lacks an adequate supply of star strikers and defenders to keep 250 teams going. The second part of Amendment 157 tries to contain the overall management costs of clinical commissioning groups to that of PCTs less 20 per cent, with an NAO audit of the figures. This approach would also curb the enthusiasm for an excess of clinical commissioning groups. The Government seem to be struggling to establish what the management costs of clinical commissioning groups will be. In his Written Answer of 9 November, to which I referred earlier, the Minister told me that CCGs’ management allowance, "““could be in the range of £25 to £35 per head of population by 2014-15””. —[Official Report, 9/11/11, col. WA58.]" That is a pretty wide range and it could have significant budgetary implications. How would those range figures compare with current PCT costs and when will we have firmer figures and a clear global sum for the running costs of CCGs? I hope the Government will not simply brush aside amendments of this kind. It will give me no pleasure to say ““I told you so”” in a few years’ time.