Restoring financial balance in the NHS was our top priority in 2006-07. There is now a stronger system for assessing the financial position of all NHS organisations and we are confident that these measures will help the NHS further to improve its financial position. At quarter 3, the NHS overall reported a small surplus, and we expect the final position to show further improvements.
I thank the Minister for that reply. The Government changes to the resources, accounting and budgeting rules have removed £6.3 million of projected debt from my hospital trust in Morecambe Bay, leaving it in the surprise position of having a break-even budget for the forthcoming year. So far so good, but the Westmorland general hospital stands to lose its excellent heart and stroke unit as a result of an acute service review that took place last summer, which was in part driven by the short-term financial pressures. Now that those pressures have been—
Order. The hon. Gentleman has done well.
I think that I can guess where the hon. Gentleman’s question was going. I also detected some hint of gratitude in his words for the extra £6 million for his trust this year, which will help to ease the financial position, and of course bring benefits to patients in his area. As he knows, a Cumbria-wide review of health services is being undertaken, which is expected to go out to public consultation in September. I hope that he will understand that I cannot make any concrete statements today about the precise proposals that will be made in that review, but I am sure that local health service planners will hear his words.
When the Conservatives were in power, there was a consistency to NHS funding: all the health boards and authorities were in financial difficulties. Today, only a small minority have financial problems. Does my hon. Friend share my puzzlement as to why that is the case?
It is not something that the Conservatives like to talk about, but when they left power the deficit, as a percentage of overall NHS expenditure, was far higher than anything seen in the last financial year. My hon. Friend is correct to say that the problems of overspending are now concentrated in a small number of organisations. It is the transparency of the financial regime that this Government have introduced that has enabled us to focus on that overspending and put in place measures to tackle it. As a whole, the NHS is benefiting. Last week, the Healthcare Commission reported that nine out of 10 patients say that the care they receive is good, very good or excellent, and that was in a year in which we have tackled the financial difficulties in parts of the NHS.
Given that health trusts such as mine in mid-Essex are having to take some difficult decisions to improve their financial position, could the Minister give an assurance that he and his colleagues will be sensitive when determining future independent treatment sectors—which may benefit patient care in some parts of the country—so that they do not cause a setback to those trusts that can fulfil their commitments and targets but would be adversely affected if the decisions were not taken sensitively?
The hon. Gentleman’s trust has benefited from the reversal of the resources accounting and budgeting rules as they affect NHS trusts. As predicted at quarter 3, his trust will post a surplus this year. Any changes to local health care will have to be carefully considered, but I can tell the hon. Gentleman that we will make changes when they are in the direct interests of patients. There is evidence to show that where independent sector treatment centres have been introduced, they have had the effect of challenging local NHS trusts, and waiting lists have fallen dramatically as a result. I would hope that the hon. Gentleman would support any solution that produces the best results in terms of access to the system for his constituents.
Is the Minister aware that the Royal College of Nursing has estimated that it would cost £60 million to pay the full award proposed for nurses by the pay review body? Does he accept that that is a price worth paying, and if not, does he have a strategy for dealing with the industrial dispute that may occur?
I know that my hon. Friend works hard on these issues and I hope that he agrees with me that the position of nursing staff under this Government is considerably better than what we inherited in 1997. I also hope that he accepts that the decision taken in respect of public sector pay was a decision taken across the public sector, with the exception of the armed forces, with regard to maintaining the strong economy that this Government have also produced. While those are difficult decisions, I hope that my hon. Friend will accept that they are taken for the best of reasons.
Over the past two years, my local primary care trust has received above average increases in spending, which are tremendously welcome and have helped to close the gap between the Government’s own target funding formula and the actual amount of money that the trust receives. Would the Minister agree that it would be folly to allow that process to go into reverse and that it is therefore important that the North Somerset primary care trust continues to get above average funding settlements in future?
That is an excellent question. It was missing the “Vote Labour!” bit at the end, but I think that it would have come if the hon. Gentleman had carried on. Yes, we are extremely proud of the money that we have put into PCTs like his around the country, and I am absolutely confident that the huge improvements in health care in recent years will be sustained. An extra £8 billion is going into the NHS this year, and that will produce substantial improvements for patients. I hope that he will continue to support the Government in working towards a well funded and improving NHS.
My hon. Friend will be aware that proper financial management has ensured that no PCT in the north-west will be top sliced this year to subsidise poor management in other areas. He will know too that many north-west PCTs receive less than the formula funding says they should. How is it that they can stay within budget, while others receiving more than their formula funding overspend?
I pay tribute to my hon. Friend for the persistent way in which he has raised matters relating to PCT finance. He is absolutely right: for reasons of basic fairness, we need the maximum health resources in areas where health inequalities are greatest and where ill health is entrenched—such as the borough that he and I represent. Also, I thank him for congratulating the north-west strategic health authority on ensuring that PCTs in the area are not being top sliced. That will enable PCTs such as his and mine to get on with the job of improving public health in our borough. The next funding allocation round will deal with the question of whether we can make further progress towards bringing all PCTs nearer their target allocations, but I shall bear in mind what my hon. Friend says.
This year, the Oxford Radcliffe NHS Hospital Trust must save £23 million, so will the Minister give some guidance about PFI repayments? Next year, the trust will have to make PFI repayments worth between £30 million and £36 million. Will the Department take PFI repayments into account when it sets the total sum for trust budgets, or will trusts have to make cuts to meet those repayments in future years?
When trusts plan new hospital developments, it is crucial that the decisions taken be sustainable and affordable in the long term. The Government have been reviewing all PFI schemes to ensure that they are precisely that—affordable, and the right size for future requirements. When spending is allocated to local health economies, we must take account of the population’s relative age, health need and deprivation. We will continue to do that when we make allocations to PCTs.