Q466 Grahame Morris: My question is in relation, Secretary of State, to the role and the costs of Monitor. On 8th February, I received a written answer about the costs of the new economic regulator which were estimated to be between £50 million and £70 million per year. As recently as last week, that estimate was revised and figures that were given to the Health and Social Care Bill Committee now indicate that that figure has been doubled to £140 million. Does this square with the Government’s commitment to abolishing bureaucracy? Would it be fair to say that what you are doing is removing clinical bureaucracy, with the SHAs and PCTs, but you are replacing it with a competitionbased and economic bureaucracy?
Mr Lansley: It is fair to say that, as compared to the past, we are intending to reduce the overall costs of administration in those parts of the NHS which are responsible for commissioning and regulation. Strictly speaking, I don’t have the power, and I am not intending to impact on the administration costs in hospitals directly because, like foundation trusts, they are their own management organisations.
As to the NHS management costs, we start with a total of £5.1 billion, of which £3.9 billion are in primary care trusts and strategic health authorities, £600 million are in arm’s length bodies and £500 million overall in the Department of Health. We are intending to reduce those management costs in total by a third in real terms.
Grahame Morris: In relation to the sections we are dealing with here in Monitor-
Mr Lansley: What you describe in Monitor is consistent with that because, of course, the estimate in Monitor is comprised within that total.
Q467 Grahame Morris: With respect, the costs of Monitor at the moment are £21 million per year. That is £100 million over the lifetime of a Parliament. Contrast that with the new role Monitor is given on both the provider and commissioner side-an expanded role as economic regulator-and the costs over the lifetime of a Parliament are going to be £500 million. A Member of this Committee said, "Are we liberating the NHS from topdown political control only to shackle it to an unelected economic regulator?" Is that a fair assessment?
Mr Lansley: I will gladly send a note. We have been assiduously seeking, through the impact assessment on the Bill, to set out the best estimates of what these running costs look like. As far as Monitor is concerned, I understand they fall within the range £50 million to £70 million. They are, of necessity, more than the current costs of Monitor, and entirely because Monitor has a completely extended role in relation to where we are at the moment. It comprises not only the responsibility for all foundation trusts-and we are intending all NHS trusts should be foundation trusts-but it will have a broader set of responsibilities that are currently being exercised through the Cooperation & Competition Panel, through a number of strategic health authorities and in the Department of Health. As you would expect, the costs of an organisation under circumstances where its functions are substantially increased are also relatively increased.
Q468 Grahame Morris: You have given various assurances that competition on price will not happen, and Members of the Committee have raised issues about what might happen in the future given the powers that are on the statute book, or will be shortly, when the Health and Social Care Bill passes its final stages. Why spend £500 million on an economic regulator-and the figures were revised last week-if we are not going to have price competition?
Mr Lansley: Where did £500 million come from? I thought I said £50 million to £70 million.
Grahame Morris: Up to £140 million a year, over the lifetime of a Parliament, is £500 million, isn’t it?
Mr Lansley: If you aggregate years together.
Grahame Morris: Yes.
Mr Lansley: I see.
Grahame Morris: As opposed to £100 million-
Mr Lansley: I think you would have to aggregate about eight years together in order to arrive at the-
Grahame Morris: Not if you use the "up" figure of £140 million a year-
Then I read Norman Tebbit in The Mirror: Yes!!! The Mirror!!!
IT is not often the Daily Mirror and I find ourselves on common ground but we are both staunch supporters of the principles of the NHS, whatever its difficulties and problems – some of them, I fear, of its own making.
I have known the Secretary of State, Andrew Lansley, for 30 years. In his day he was a very able civil servant, and it seems to me that if anyone could unravel and reform the tangled bureaucracy which holds up the devoted professionals of the NHS, it ought to be someone with his experience.
What worries me about the reforms however is the difficulty of organising fair competition between the state-owned hospitals and those in the private sector.
………. I believe there is nothing wrong with people choosing to spend their own money, or pay outs from health insurance companies, on health care in private hospitals. It simply eases the load on the NHS.
But it is different when the NHS or the taxpayer (you and me) pays for NHS patients to be treated in private hospitals on anything more than a very small scale in special circumstances.
One problem is that within the NHS there are teaching hospitals, often centres of excellence, which apart from treating patients, also have the responsibility of training doctors and nurses. That all takes time and costs money.
Private hospitals are under no obligation to do training and do not have to carry those costs.
…………Even worse for the teaching hospitals, if the private hospitals can hoover up all the straightforward routine surgery, like hip joint replacement, where can the young surgeons gain the experience which would allow them to move on to more difficult surgery?
Another problem for the NHS hospitals is that they cannot refuse to treat patients. Whether it is a drunken fool with a cut face from a street brawl, or a young mother with cancer or a heart attack, no one can be turned away, but the private hospital can pick and choose.
Norman Tebbit wrote of PFI:
In recent years, Gordon Brown’s attempt to hide public expenditure by Enron style off-balance sheet financing has landed many NHS hospitals with PFI, or PPP contracts with huge costs of capital and absurdly high running costs. Telegraph
It looks like Andrew Lansley should at least listen to someone from his own party but would he!!!
Is there really a numeracy and listening problem here? No, it is just that he is the Rt Hon Andrew Lansley CBE MP, Secretary of State for Health.
The health select committee heard evidence from many experts; they do not all agree and it would be naive to think there is some mythical “third way” of complete harmony in health care policy. But railroading through the current plans may result in four years of dissatisfaction, with the Tories taking the blame for any failures.
It seems unlikely that it would be acceptable in its current form, so it is surely better to amend now with good grace than slug it out with a grudging trickle of amendments.
One surgeon summed it up as follows: he was committed to the National Health Service and happy to work far beyond his contracted hours; he would not feel the same about a Commercial Health Service. We fragment the NHS at our peril.
Norman Tebbit again:
That is no reason for my friends to follow Blair’s bad example. We need to listen and persuade, especially those who treat patients, that we have got it right, or to change it where we cannot.
The inefficient NHS is a long way from perfect. There is much it could learn from the private sector, but there is a lot of good in it that should not be put at risk.
Tristram Kenton Guardian
