Thursday 11 November 2010
[Mr Roger Gale in the Chair]
[Relevant document: uncorrected oral evidence taken before the Health Committee on Tuesday 12 and Tuesday 26 October 2010 on Public Expenditure, HC 512-i and ii.]
Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Simon Burns.)
It is a pleasure to serve under your chairmanship for the first time, Mr Gale.
I thank the Backbench Business Committee for allocating this slot. I sought the debate to allow right hon. and hon. Members the opportunity to examine the real impact of the Chancellor’s comprehensive spending review on the Department of Health, the national health service and, indeed, public health.
The coalition Government have set out a 0.4% real-terms budget increase over the spending review period. Although the numbers suggest that the Government are providing the NHS with a modest increase in its budget, the decisions they are making will mean cuts to services, staffing, capital spend, medicines and care. In truth, it is the worst settlement for the NHS in its 62-year history.
During the course of the debate, I want to challenge the Government’s claim that they have met their coalition agreement pledge to guarantee that health spending increases in real terms in each year of the Parliament. Right hon. and hon. Members should note that £1 billion a year is being taken from the existing NHS budget to meet some of the growing costs of social care.
Not only is the coalition failing to rise to the task of dealing with the growing crisis in social care but, by transferring responsibility for social care to local government, it is trying to rob Peter to pay Paul, and then pretending that Peter still has money. Both the Nuffield Trust and the House of Commons Library have confirmed that due to the transfer of money from the health budget to social care, there will actually be a cut in the health budget. The latest House of Commons Library research report confirms:
“Including the (social care) funding is critical to the description of the settlement as a ‘real terms increase’; without it, funding for the NHS falls by £500 million—0.54% in real terms.”
For social care, there are storm clouds on the horizon. Even with the additional money taken from the health budget, there will be a shortfall of at least £2 billion—as set out by the Local Government Association—to maintain current standards by the end of the spending review period. It seems like another broken promise to say that the coalition will provide sufficient resources to maintain current levels of social care.
On top of that, the Government are removing the ring fence from the personal social services grant and merging the social care budget into the local government formula grant. The NHS Confederation has noted that with councils facing a 26% cut in their funding from central Government, money for social care might not get to those who need it. In short, this means that there is no guarantee that the money will be used as intended, thus creating a postcode lottery in care and a Government who are washing their hands of their responsibility to provide dignity to the most vulnerable in our society.
Just to put the hon. Gentleman out of his misery, as he has prayed in aid the King’s Fund, would he care to comment on—and does he agree with—its briefing for the debate? It says:
“In the context of significant cuts to other Whitehall budgets, the settlements for health and social care are generous. The government has met its pledge to protect the NHS budget and has prioritised additional funding for social care.”
To help the hon. Gentleman, and because I would like an answer to the question, may I say that I am not quoting selectively? I suspect that he, too, has the briefing. The quotation is at the top of page 4. It is the first and only paragraph of the conclusions, so it cannot be out of context.
I will answer in a moment, if the hon. Gentleman gives me the opportunity.
I am also quoting figures from a recent House of Commons Library note—perhaps the Minister has a copy as well. It seems quite clear to me that, in terms of departmental expenditure limits and certainly in terms of capital, we are looking at a 17.9% reduction over the lifetime of the Parliament. Indeed, the Minister and I, and other colleagues from the north-east, have raised issues about NHS capital funding in the past—I want to mention those later in my speech. I am conscious that other hon. Members want to make contributions, so I shall press on for the moment and hopefully I can respond to the Minister in a little more detail in a moment or two.
To highlight some of the anecdotal evidence, at a recent meeting of the Community Practitioners and Health Visitors Association, which is part of the union Unite, front-line workers gave their feedback on the impact of cuts already in the pipeline. They expressed concern that a reduction in the number of practitioners was eroding the service to the public, that specialist staff were already being made redundant, that vacancies were being frozen, that case loads were getting bigger and that patients had to wait longer. They further pointed to a reduction in vital health promotion work, which has been highlighted before, and the fact that health visitors were now working significantly over their paid hours in chaotic circumstances.
I congratulate my hon. Friend on securing this important debate. Is he aware that, contrary to the Government’s claims that they will protect the NHS, many jobs have already been axed in our health service, including nearly 200 on Teesside alone in recent weeks? Is he also aware that, just this week, school nurses in that area are being targeted and asked to volunteer for redundancy due to the very real cuts being imposed?
I have a whole series of examples of hospitals and services that are threatened with closure or reductions in services from right across the length and breadth of the country, which was highlighted in a recent report in The Sunday Telegraph. I have the whole list, so I agree with the valid point that my hon. Friend makes forcefully.
After only six months in power, the coalition is putting the proud record of the previous Labour Government on the NHS in jeopardy. On top of this, feedback from the front line shows that the Government are removing the safeguards and patient guarantees that drove down waiting times and assured the same quality of care irrespective of where a patient lived. This is not a Government protecting the NHS. It seems as if this is round 2 of what the Tories never managed to accomplish in the 1980s: to break up and privatise the service.
On 20 July, in evidence to the Health Committee, the Secretary of State said that he wanted to
“entrench the sense of greater ownership on the part of patients”—
that is ownership of the NHS. Is it not the case that the reforms will give ownership of the NHS to the private sector, and that only the NHS logo will be left behind?
My hon. Friend makes a valid point. The White Paper “Equity and Excellence: Liberating the NHS” certainly seems to be setting out in that direction.
Certain projects, and particularly one in my area, have suffered as a result of the departmental expenditure limits that I mentioned earlier, which will result in a decrease of 17.9% over the four-year life of the Parliament. A new hospital in the north-east of England at Wynyard was to have served the southern part of my constituency of Easington, as well as the constituents of Stockton North and Stockton South, and those in parts of Sedgefield and Hartlepool, but it was an early casualty of the cuts.
In the longer term, the coalition partners seem to want not a capital budget, but to pursue a roll-out of private finance initiative hospitals. They want to place every privately built hospital into competition in the private sector so that they can be commissioned by GPs controlling the entire health budget in the private sector. The direction of travel for the health policies of the present Government is clear, but it is my belief that the duty of the Government should be to protect essential public services such as the NHS from the distorting effects of the market.
We need to learn lessons from recent history. It is ironic that my party’s efforts in government to incorporate market conditions in health showed that that could drive costs up rather than bring about efficiencies. Such an example was recently cited in the media. The Coventry University hospital was built under a PFI scheme. As we all know, PFI allows private companies to build public sector infrastructure, but although it gives the benefit of delayed costs to the public purse, those companies are entitled to levy huge interest rates, fees and services charges in the longer term. Treasury figures show that when the contract for Coventry University hospital is paid off in 2041, the estimated cost to the taxpayer will be £3.3 billion. If the state had built the hospital, the cost would have been a fraction of that sum. Indeed, the hospital at Wynyard was costed at £464 million—that is an incredible difference. Market discipline and privatisation do not automatically produce value for the public purse.
The Minister is right, but I was making the point that important lessons from history need to be learned. We are reacting to evidence that PFI does not necessarily provide value for money. Each case has to be considered on its merits.
Given the real-terms cut to health spending, an agenda of wholesale management reorganisation and the effective privatisation of the NHS budget, the impact of the comprehensive spending review and the Department of Health White Paper will not only alter the principles on which the NHS was founded, but squeeze health provision, increase costs, allow hospitals to go bust if they are failed by the markets, and create a postcode lottery of health services. There is widespread opposition to elements in the White Paper among health care professionals, including from the British Medical Association, which is not noted as radical left-wing organisation. The BMA states that it has
“opposed the increased commercialisation and competition imposed on the NHS in recent years and there is little evidence of any benefits to patients. It brings with it additional costs as well as disincentives for collaboration and co-operation.”
Staff costs account for more than half of NHS expenditure. Future decisions on pay will have a great impact on the health budget. The Royal College of Nursing has already highlighted short-sighted cuts by NHS trusts to their work force and services. The RCN is aware that about 10,000 nursing posts have been earmarked for removal in anticipation of cuts to front-line services. What consideration has the Minister given to the pressure to increase staff pay in coming years? By 2013-14, GPs will have had their pay frozen for four years; consultants for three years; and NHS staff earning more than £21,000 for two years.
Is my hon. Friend aware that despite the two-year pay freeze on public sector pay for those earning above £21,000 a year, which was announced by the coalition in the emergency Budget, the King’s Fund notes that the NHS payroll bill is likely to increase by up to £900 million a year due to the increments that are built into most NHS contracts? Does he agree that that reinforces the inadequacy of the NHS settlement for patient care?
I do indeed. My hon. Friend makes an important point. Another is the impact on the NHS budget of the VAT increase that is to be implemented on 1 January 2011.
Kieran Walshe, professor of health policy and management at Manchester business school, has criticised the coalition Government’s approach of making change without evidence. The implementation of the massive reorganisation that is set out in the White Paper will need at least another £3 billion in addition to the sums already identified, such as for wage costs, inflation, and the increase in VAT. That is at least another £3 billion from the NHS coffers, and the plans were still being altered after the coalition agreement was published. The decision to abolish primary care trusts seems more like a last-minute whim of the Secretary of State than a well-thought, evidence-based approach to health service reorganisation.
Professor Walshe said:
“the transitional costs of large scale NHS reorganisations are huge…projected savings from abolishing or downsizing organisations are rarely realised.”
Those of us who have been involved with local government will appreciate how true that is. He continued:
“Closing down or merging organisations produces a round of expensive redundancies, early retirements, and redeployment, while new organisations find new premises and appoint lots of new staff.”
I echo the concerns of Mencap—I am grateful for its briefing—which states
“As the government have still been unclear about the transitional and ongoing costs for moving to the new commissioning arrangements, this settlement may not be sufficient to deliver against needs.”
In contrast, the Secretary of State still believes that he can save money by carrying out the biggest reorganisation in the history of the NHS. Indeed, on 2 November, he said:
“We are cutting management costs in the NHS by 45%. We will cut total administrative costs as well, and in total that will save £1.9 billion a year by 2015.”—[Official Report, 2 November 2010; Vol. 517, c. 759.]
Will the Minister tell us what account has been taken of the unknown costs of the reorganisation?
Professor Chris Ham is the chief executive of the King’s Fund—the Minister’s favourite organisation. He questions why the Government would
“embark upon such a fundamental reorganisation as the NHS faces up to the biggest financial challenge in its history.”
Is it not the case that Ministers should be honest with the public? The impact of the spending review will mean deep cuts to vital services in the NHS. When the Health Secretary delivered his White Paper to the House, he said:
“The dismantling of this bureaucracy will help the NHS realise up to £20 billion of efficiency savings by 2014, all of which will be reinvested in patient care.-—[Official Report, 12 July 2010; Vol. 513, c. 663.]
Coalition Minsters are trying to give the impression that health provision has somehow been protected by a real-terms increase in the health budget, but that myth is starting to unravel. The coalition Government have admitted that current levels of health care will not be maintained. They are undertaking a massive reorganisation and all the evidence suggests that the projected savings will not be realised.
Edward Macalister-Smith, the chief executive of NHS Buckinghamshire, said:
“the amount of money that is available from administrative savings, management savings and the financial back office, is a very small proportion. Most of the money is spent on clinical care. If you want to reduce your spending, make your spending more efficient, that is, I am afraid, where you have to concentrate.”
It is simply not possible to achieve the sort of savings that the Government have outlined. The settlement for the NHS will come no way near maintaining current health care levels. Some £1 billion is being taken to plug the hole in social care. Many more billions are being wasted on a wholesale reorganisation, and the coalition seems to have agreed to take a gamble with the £80 billion NHS commissioning budget.
According to research carried out by the King’s Fund, the VAT rise to 20% from January next year will cost the NHS an additional £250 million a year. Furthermore, additional pressures will be placed on the NHS, thanks to the massive cuts that are being levied on local government budgets. There are also serious concerns that cuts to local government will lead to a shortage of hospital beds as the elderly and vulnerable are left without local care, thus placing even greater pressures on the NHS. The 26% cut in central Government funding for local authorities will pile on the pressure for the NHS. Nigel Edwards, the head of the NHS Confederation, has warned that the pressure on beds could mean that hospitals will be unable to admit patients “who badly need care”.
It is wrong for Ministers to pretend that their reorganisation will improve service delivery or that it is possible to save £20 billion through efficiencies alone. They should be honest about what they are doing to our national health service. The Government are not keeping the promises that they made to patients and staff to protect NHS health care funding.
I would hate the hon. Gentleman to escape from his earlier promise. He said that he would comment on the quote I cited, which, I repeat, has not been taken out of context. Let me remind him what it:
“In the context of significant cuts to other Whitehall budgets, the settlements for health and social care are generous. The government has met its pledge to protect the NHS budget and has prioritised funding for social care.”
Does not the hon. Gentleman agree with that element of the King’s Fund briefing; he seems to agree with anything that suits his argument?
Yet again, the Minister is quoting one specific element of the evidence. The King’s Fund evidence is quite extensive. It is logged on the Health Committee’s website and is open for the public to see. Many commentators and respected organisations take a view that runs counter to that expressed by the Minister.
I shall conclude because I know that other hon. Members wish to speak. Political and NHS leaders need to be realistic about the implications of the financial situation for patients, the public and staff. There are no pain-free options for the NHS. It is time that Ministers were honest about the future of the NHS. There is no doubt that over the spending review period, the NHS will have its spending power reduced. It is time for the Government to be honest with the public about the decisions they have made.
It is good to be here this afternoon under your chairmanship, Mr Gale.
First, let me congratulate my hon. Friend the Member for Easington (Grahame M. Morris) on having the foresight to table this subject for debate. The Minister and the rest of those present will be pleased to know that I shall not be quoting from the King’s Fund during this debate—yes, I see that he is quite pleased about that. Instead, I have a brief from the Nuffield Trust about the likely effect of the comprehensive spending review on health, on top of what we have just been discussing. My hon. Friend talked about a 0.5% increase over four years, or something like that, but the Nuffield Trust argues at one level that there might be a bit more to it. Let me go into the brief it published last month, although it is not related to this particular debate:
“The 2010 Spending Review announced that the NHS will receive 0.4 per cent… growth over the next four years—0.1 per cent a year. This compares to an average real-terms increase of 5.7 per cent per year from 1997/98 to 2009/10. This is the lowest four years’ increase for the NHS since 1951-56. The Spending Review also allocates £1 billion a year from NHS funding to social care. The real-terms change in NHS funding, net of the social care support, is therefore a reduction of 0.5 per cent over the next four years.”
[Interruption.] The Minister says that that is rubbish. Perhaps he can stand up and tell us whether he disagrees with it. I want to continue with this brief and ask him about something that is directly related to this. The next paragraph states:
“The Spending Review also announced important changes to the treatment of past underspends.”
Many of us will know from talking to the NHS locally over the past few years that, because of the generous funding over the past decade, there are such things as underspends. The brief continues:
“Health has accumulated underspends of £5.5 billion, of which £3.7 billion is classified as ‘resource’ (ongoing expenditure on staff, medicines, equipment and the like) and £1.8 billion as capital. There is also a planned underspend for 2010/11 of £1 billion. According to the Spending Review, these accumulated stocks—known as end-year flexibility (EYF)—have been abolished. This means that any previous underspend that is honoured by the Department of Health will have to be made within the settlement outlined in the Spending Review.”
Will the Minister tell us whether the current underspends that our primary care trusts, or perhaps hospitals, hold at the moment—I hope they will be spent on expanding services, as they have been over the past decade—will be clawed out?
The other issue that I would like to raise relates to the changes in commissioning. I am in a peculiar position on this. Some Members will know that I chaired the Health Committee in the previous Parliament. In March, we brought out a report on commissioning. The Government responded some time in July. When the Secretary of State was on the Floor of the House making his statement on the White Paper, he talked about the Health Committee and said:
“Before the election, when it had a majority of Labour Members, the Select Committee on Health said that PCT commissioning was weak and that it was not delivering what was intended. He set up a programme called world class commissioning—it never worked.”
He was replying to the then shadow Secretary of State for Health. The Secretary of State went on:
“Central to delivering better commissioning in the health service is ensuring that those people who incur the expenditure—the general practitioners, on behalf of their patients—and who decide about the referral of patients are the same people who”
blah, blah, blah, blah. In reply to a comment from the current Chair of the Health Committee, the right hon. Member for Charnwood (Mr Dorrell), the Secretary of State said:
“In his capacity as Chair of the Select Committee on Health, we will be responding to him very shortly regarding the Select Committee’s report from before the election on commissioning... What he has just said is absolutely right; we have been able—this is a central task in commissioning—to bring together the responsibility for management of patient care with the responsibility for the commissioning of services.”—[Official Report, 12 July 2010; Vol. 513, c. 665-66.]
I have mentioned that because he has used my name on at least two occasions on the Floor of the House, basically to say that the report on commissioning that we published supports GP commissioning. I want to put it on record that, in my view—it was obviously my draft report and it was not challenged at the time—it does not support GP commissioning in the way that the Government are bringing forward the changes in commissioning.
We looked at four areas in that report, in relation to commissioning: whether to abolish PCTs and reintroduce health authorities; retain PCTs but introduce more integrated care; retain PCTs but introduce local clinical partnerships, under which GPs would directly control commissioning; and retain PCTs but commission services from hospitals. There was also the option to retain and strengthen PCTs. We did not come to a hard conclusion on any of that. I will not bore this gathering with the conclusions we did come to, but it is a gross misrepresentation to say that we were arguing for GP commissioning.
Maybe the nearest scenario that we looked at was the one in relation to local clinical partnerships. The Nuffield Trust informed us:
“There are key changes to the policy environment that are required if commissioning is to stand a chance of becoming effective.”
That was one option, but local clinical partnerships, as we quoted in the report, look very much like the system of GP fund-holding, which had failed to improve commissioning, in our view and that of many other people. We also said that it might be expected to have the advantages and disadvantages of that system.
My right hon. Friend is talking about the GP’s role. Does he agree that GPs are not trained for many of the roles asked of them, and not qualified to play those roles? There are no extra resources made available in order to gain the skills.
That is absolutely true. There are fewer resources, because more is being taken out of administration than was planned before the spending review came along.
I am intrigued by the idea of giving clinicians power or giving GPs power. The British Medical Association is not saying no to the idea of GP commissioning. That is good—I have some quotations from it in front of me—but it would want to look at having a real local clinical partnership that included clinicians who worked in the local provider—the local hospitals. It believes that if we are going to do this, that ought to be looked at. I am interested to see whether the Minister agrees. One reason I say that is because, when we took evidence from his favourite organisation, the King’s Fund, the Royal College of Physicians and others thought that PCTs should be retained, but that hospital clinicians and GPs should work more closely together. Professor Ham, who is obviously one of the Minister’s favourite authors in these matters, said:
“There should be progressive migration towards clinically integrated systems, building on the most promising aspects of current reforms and drawing on evidence that shows the benefits of integration and the challenges of making a commissioner/provider split system function effectively.”
He was arguing for real integrated care, but my understanding is that that is not what the White Paper is proposing. It is proposing that only GPs will have the power to spend 70 or 80% of the NHS budget, not other local clinicians as well. I would like the Minister to reply on that specific point.
I thank my right hon. Friend for giving way on the point about GP commissioning. That is an issue that the Minister might address. If streamlining in commissioning bodies saves money—I think the previous Labour Government demonstrated that by reducing the number of PCTs from 350 to 150, which was acknowledged by Sir David Nicholson—how can it save money to be creating a plethora of GP consortiums that will be responsible for commissioning? Creating such a plethora of bodies must add to administrative costs.
I am grateful to my hon. Friend for his intervention. I have to say to the Minister that at no time when members of the Health Committee in the previous Parliament were looking at commissioning did we ever think that the Government would hand it over to GPs in the way being proposed in the White Paper. It has huge implications, not just for the NHS, but for GPs themselves. The only evidence we saw was that GP fund-holding has struggled for nearly 20 years to be a good, proper and efficient way to commission services. Frankly, nobody submitted any evidence to my knowledge for the leap into the dark of handing commissioning to GPs in such a quick period of time. Nobody gave that evidence whatever. There were some arguments about keeping the PCT and adding GPs to it, so that they could get the experience. Frankly, there should be more medical leadership in our national health service; I have no doubts about that. This leap in the dark with GP commissioning is something that, I fear, is unlikely to work. The professionals who work in the health service appear to have that same fear.
The coalition agreement states quite clearly:
“We will stop the top-down re-organisations of the NHS that have got in the way of patient care. We are committed to reducing duplication and the resources spent on administration, and diverting these resources back to front-line care.”
Now we are seeing the largest ever reorganisation in the NHS. We are seeing the PCTs abolished and GP consortiums looking to take their place, which will inevitably create duplication and require more finance and more resources to be spent on administration. What does my right hon. Friend think about that?
Order. As hon. Members know, I am the most tolerant of Chairmen, but I cannot help noticing that we are having a significant number of scripted interventions that are rather long. I am not entirely certain that they are in order, but what I am certain of is that the subject of the debate is the impact of the comprehensive spending review on the Department of Health. We appear to be embarking on a debate around the structuring of the health service. I think that, somewhere along the line, hon. Members might like to refer to the comprehensive spending review.
I had nothing to do with the interventions, Mr Gale, apart from giving way. There is no plan or plot. I thought I would seize the opportunity to talk about the commissioning report, because the current Health Committee is looking again at commissioning and the House has not had the opportunity to debate the report and the Government’s response, which came in July.
In relation to the latest intervention, at the last Health Question Time the Minister attempted to reply to what I said about major reorganisations in the health service. It is well known now that they take years to embed, are normally very expensive and usually have a negative effect on performance while they happen. That has happened under every major NHS reorganisation in the last 20 or 30 years. That is the truth of the matter. If the estimate of the increase in costs arising from the reorganisation is right, the CSR will have a significant impact on the NHS in the future.
Beside the financial impact of reorganisation, even more important is the fact that large numbers of clinicians and others working in the NHS are distracted from their day job of looking after patients to go to innumerable meetings and discussions. In some cases, they even have to reapply for their current jobs. That is all to do with the reorganisation, so it wastes staff time, as well as wasting money.
I think that there is some evidence in relation to that. Having said that, the evidence that we should be concerned about is the evidence that has come out in surveys recently about what GPs think about the proposed reorganisation.
I have in front of me a press release from what is probably the strongest trade union that we have in the United Kingdom, which is the BMA. The BMA does not like to be called a trade union, but, indeed, that is what it is. Along with the Minister’s favourite organisation, the King’s Fund, the BMA conducted a survey of doctors. I will quote from the results of that survey:
“Asked if the reforms would improve patient care, 38 per cent of doctors who responded either said they did not know, or said they neither agreed nor disagreed. Less than a quarter believed patient care would be improved.”
Obviously surveys are surveys—we do not know what question was asked. In addition, I think that the number of doctors who responded to that survey was quite low. I would not lay great store in it, and the Minister probably has the figures from the survey in front of him. However, I want to point out what Dr Hamish Meldrum of the BMA said about the White Paper. He said that it had “many positive aspects” but added:
“Giving more power to clinicians has the potential to improve the quality and cost-effectiveness of patient care, but as this survey reflects, doctors believe that many of the proposals in the white paper would make joint working much harder.”
“GP-led commissioning will only be successful if there is effective integration between different parts of the NHS, but some of the proposals in the white paper will accelerate competition and fragmentation.”
That comment takes me back to the question that I posed to the Minister about whether those local GP consortiums can include other people who work in the NHS, such as consultants, other people from the local hospital or providers of primary care services. Can such people sit on those consortiums or is it exclusively GPs who will do the commissioning?
I will not go into much detail, but I want to refer briefly to the comment that the coalition said that these proposed changes are not “top down”. I appreciate that this debate might not be the right forum in which to debate that issue much further, Mr Gale, but what is the national commissioning board going to do if not act in a “top-down” manner?
There is good evidence—I do not think it has been denied by the Department of Health—that if a local GP consortium were to fail, the national commissioning board would intervene. I want to know what is the difference in concept between the national commissioning board and Richmond house. We have had about 40 years of battles between the NHS at local level and central Government, over central Government trying to give direction to the NHS at local level. How will that change?
Before I sit down I have a nice easy question for the Minister. I have here a press release that went out on 21 October, and the heading reads:
“New support for GPs will cut the costs of commissioning”.
The press release continues:
“A new series of resources to support GP Consortia to design and commission services for patients was announced today by Health Secretary Andrew Lansley”.
It says that those resources
“will provide… a set of tools and templates to use when designing and buying services for their patients. The first of these support packs published today is for cardiac rehabilitation services”.
We are apparently saving money with GP commissioning, so I want the Minister to tell us what evidence he has that this new system will save money and cut the costs of commissioning? I ask that question because such evidence—evidence of how commissioning had cut costs—was one of the holy grails that the Health Committee could never find. It has been said in the debate, and it is well evidenced, that the changes in commissioning that we have had during the past few decades have done anything but cut costs. In fact, they have increased them.
I will finish by saying that the Health Committee’s report on commissioning that was published in March said that we need to look wholesale at the past 20 years of payment by results, because payment by results is not working no matter what shape it comes in. We said that quite clearly in the report.
I do not necessarily want to make radical changes to commissioning, but I do want things to be better for patients and the public, and I am not convinced that the outcome of the White Paper will be better treatment for patients and the public, nor am I convinced about the evidence that the CSR’s effect on health will be a better outcome for patients and the public. As I said, organisations such as the Nuffield Trust, which have great experience of our national health care system, are talking about a reduction of 0.5% in NHS spending. I fear that that will happen, and it is not what was in people’s manifestos before the general election. I want the Minister to tell us what he thinks about that.
I am very grateful for the opportunity to speak in this debate and I congratulate my right hon. Friend the Member for Rother Valley (Mr Barron) and my hon. Friend the Member for Easington (Grahame M. Morris) on their very illuminating speeches.
I will not follow the lines that my right hon. and hon. Friends have taken. However, I note that the comprehensive spending review has been described as generous by some. If we want to see a generous settlement in next year’s spending, it is the settlement that has been given to the landowners and farmers of the country, especially when one recalls that the price of wheat has gone up by 47% and the price of lamb has gone up even more. Not only will the £3 billion that was given out in handouts to the farming industry be protected but it will probably be increased by 3%. Now, there is generosity from a Government.
When one considers what is behind this CSR, one is filled with a sense of despair; we have a new Government with new myths and new jargon, and we will have new errors too. An example of a piece of new jargon is that the National Institute for Health and Clinical Excellence is about to be emasculated and replaced by something called “value-based pricing”. It sounds attractive, but we know that it will not work because the pharmaceutical industry supports it and the pharmaceutical industry has a long record over the years of demonstrating that the only thing that it supports is increased prices and an increased share of the cake for itself. That is what has gone on.
At least with NICE, we had a modicum of control over the increases in the price of pharmaceutical products and the increasing share that the pharmaceutical industry had of the NHS; a share that the industry took away for itself, consequently depriving other parts of the NHS.
We know of examples of that practice by the pharmaceutical industry, mostly involving anti-cancer drugs. One drug was promoted as an answer to pancreatic cancer. One of my constituents was very much involved in this field, and I did some research myself to find out exactly what that drug offered. As far as The Sun, the Daily Mail and all the other tabloids were concerned, this was a miracle drug that had to be obtained for patients and it was only the “mean” Government who were not allowing patients to obtain it. Having gone into the details of what this drug achieved, I found that it cost £16,000 a year and that it increased life expectancy by 12 days, but it caused side effects in 10% of the patients who used it, including death. The other side effects were so dreadful and destroyed patients’ dignity to such an extent that their 12 days of extra life were of no value and would possibly even have been an increased burden to themselves and their loved ones. As is the case with many other drugs now, however, that drug was being pushed by the pharmaceutical company and its agents.
If we take away the power of NICE to make objective, scientific judgments, we will have the power of the tabloids and the lobbyists replacing it, and the patients associations will all join in behind them. We will have campaigns to persuade us; we will have patients on the television making appeals, patients who will be good-looking and who will arouse our sympathy. The pressure will then be on to alter the priorities of the health service to accord with the demands of the pharmaceutical industry. This is a surrender from a reliance on objective, science-based judgments to a reliance on the prejudice-rich decisions of the tabloid press and “big pharma”. Will the Minister guarantee that the price of drugs will go down?
Does my hon. Friend accept that the 150 drugs that are most commonly prescribed in this country are half the price that they are in the United States, where the pharmaceutical industry, roughly speaking, determines the price of drugs? We can guarantee that prices will start to go up under the new system.
Order. There is a very interesting debate to be had on those issues, but the hon. Member for Newport West (Paul Flynn) has been in the House a long time, and the right hon. Member for Holborn and St Pancras (Frank Dobson), who has just intervened, has been Secretary of State for Health and both are aware that, while the subject may be interesting, it is not to do with the comprehensive spending review, which is the title of the debate.
I want to address my remarks to the budget of the health service, and how it matches our priorities.
Perhaps I may move to a different subject. I should like to pursue what my right hon. Friend said. He is absolutely right that the lobbyists determine health policy in America, and will have an increasing effect on the comprehensive review, and on the demands on and priorities of the health service. However, I shall deal with another matter, which is not political in any way, because it involves decisions made by one Government, which were then approved by the pantomime horse of a Government we have now. It is about pandemics past and future. We have had a series of those, which have been costly for the health service. They go back to severe acute respiratory syndrome—a very severe and nasty illness, which killed more than half the people who caught it—through the threatened avian flu, which never lived up to its billing, to swine flu last year.
Swine flu in Britain cost the health service £1.2 billion on antivirals and vaccines. It also had other damaging effects, in that it scared the country greatly. People were frightened by the possibility of flu on the scale of the 1918 flu that killed between 25 million and 40 million people. It distorted all the priorities of the health service for a year. The health service gave attention to that rather than to the other things that it should have given attention to. It also involved the use of a vaccine that had not been trialled. The people who say it was not fully trialled are those who made it—GlaxoSmithKline and the other producers. That was a major event, and we might consider, knowing what we know now, how we got into that situation.
We were told by Liam Donaldson that it was likely that there would be between 3,000 and 750,000 deaths. He gave an average figure. We in the United Kingdom could expect 65,000 deaths, many of which would be among children. Rightly, that terrified the country and the media took it up. What was the source or basis for those figures, and the result? The result was that the number of people who died with swine flu was about 450. The number of people who died of swine flu was about 150. That compares with the 2,000 to 12,000 people—in one year it was 20,000—who die every year of seasonal flu. The swine flu outbreak was thus by any standards a minor event in Britain. Worldwide we were told to expect between 4 million and 7.5 million deaths. The total recorded was 18,000—a minute fraction of what had been expected.
In the context of the spending review, how do we prepare for another pandemic? What if we are given word by the World Health Organisation to prepare for another pandemic? Why did the WHO act as it did? It was for one reason—the definition of a pandemic changed between May and June last year. Scale 6 is the top pandemic; there is no six and a half, and no scale 7. The WHO told the press that there was a scale 6 pandemic; the press immediately went into hysteria mode and said that it was the same as the flu of 1918, and told us to prepare for tens of thousands of deaths. Until May 2009, the definition of a scale 6 pandemic was one that involved a tremendous number of deaths or serious illnesses. In June 2009 the definition was changed to take out that measure of severity and the point was made that it could involve mild flu. A pandemic would be a scale 6 pandemic depending on the geographical area in which the flu was detected. The alarming message came from Madame Chan, who was very much involved in the SARS outbreak in Hong Kong, and who expected something like SARS again. The world was expecting a flu epidemic, because we had one in 1957; there was a world flu epidemic in 1968, and another one in 1977. There was an expectation of a major flu epidemic, but we know the results now.
I want now to consider Tamiflu.
As to the likely spending this year, if there is another threatened pandemic, how are we to fit it into the spending review, and future spending, since we are at present tied? Do we draw the lessons of what happened last year? If another epidemic comes along, will we react in the same panic-stricken way, or act as another country did? Perhaps we should consider the present spending review in the Polish Parliament. Ewa Kopacz, who has responsibility for health, was interviewed by GlaxoSmithKline, who told her, “We are not going to guarantee this vaccine, because we haven’t trialled it properly, and if there are any adverse reactions you, the Polish Government, will be responsible.” Ewa Kopacz said, “Well, if you don’t trust it, I don’t trust it.”
The Polish Government spent about 7 zlotys on the vaccine, compared with our £1.2 billion. The result was that they had half the number of deaths per million of population that we had. I want to point out that huge financial decisions were made in the swine flu pandemic, and we should have drawn the lesson from them, but we have not. We had a review, by one Department, which was a whitewash and was approved by the Government, and which said that the reaction was proportional. It was not proportional if we compare UK spending with the spending in Poland—which was virtually nothing—given the result that they had.
Tamiflu was approved by the Food and Drug Administration in America on the basis of its being a mass placebo medicine. In December 2009 the BMJ published an article alluding, in a reference along the lines of “Somebody stole my Tamiflu research paper” to the traditional excuse that students give for not doing homework. The authors had tried to find the research that said Tamiflu was some good, but it was not there. The BMJ could not find it. The FDA in America approved Tamiflu not because it found it was useful but because it had gone into the research and found that the drug was no better than a couple of aspirins. It had no perceived proved value; but the FDA approved it because it wanted to be able to prescribe something in the event of an epidemic. They wanted to show a man in a white coat, giving a pill. It would have an advantage as a placebo—but there is no advantage.
In spite of that, in this year’s spending review we shall almost certainly spend more money on Tamiflu and the vaccines that have not been properly trialled. I am not against vaccines, which are a huge and miraculous improvement in world health, and have saved thousands of millions of lives, but there are serious doubts about the fact that we spent our money last year, and might spend more next year, on a vaccine the side-effects of which are now becoming apparent in various countries—Japan, Finland and India.
I sense that you are going to call me to order, again, Mr Gale. My point is essentially how we order our finances in the spending review. With the changes in NICE, there will certainly be another increase in drug prices. The drug bill constantly increases, in real terms and as a proportion of the health budget. That has been going on for the past 20 years. It will happen again if we hand over power to the lobbyists and big pharmaceutical companies. We are seeing it now. It has been said that instead of a postcode lottery, we have a one-way escalator to higher prices. If we surrender further to hysteria about another world pandemic or to pressure from lobbyists to buy certain drugs to the detriment of other health services, the spending review will be inadequate. The Department will spend more money on drugs—some required, some totally unnecessary—and further impoverish the NHS, creating a decline in important life-saving services.
Thank you for allowing me to contribute to this debate under your chairmanship, Mr Gale. I am a passionate advocate for the national health service. For more than 30 years, I have been directly involved in it. Through the health authority, I was chair of Liverpool Women’s hospital for 10 years; just before I became an MP, we took the hospital to foundation status. I am also currently a member of the Select Committee on Health.
I explain my background because I want the Minister to understand that I have witnessed at first hand the roller coaster that the NHS has been on—reorganisations, crises, investment, disinvestment and improvements—as it has sought to deal with a dramatically changing world and shifting demands and expectations. However, today the NHS faces perhaps its most far-reaching and fundamental challenge since its inception. I will lay out some of the challenges for the future of the NHS that will be driven directly by the Department of Health settlement in the comprehensive spending review.
The Chancellor’s announcement in the CSR that health would receive a real-terms increase of 0.1% revealed the tension and struggle that will define the future of the health service. It is not exaggerating to say that decisions in the CSR and subsequently in the Department of Health are life-and-death decisions. We cannot afford to play Russian roulette with the future of the people’s health services.
We must disregard the rhetoric and myth-making of the Conservatives as they seek to demonstrate that they have changed when it comes to the NHS. Sadly for the health service, I am not convinced that they have changed at all. Before the general election, the now Prime Minister pledged clearly to end the merry-go-round of organisational change and to protect NHS funding. Those two clear and definitive statements would have suggested to voters a period of stability and continuity for the NHS, even in these difficult and challenging economic times.
There was certainly no indication at that point of what the Secretary of State was about to unleash. We are only now starting to get to grips with the implications of the proposed changes. As a member of the Select Committee who has addressed Department of Health officials and the Secretary of State, I am not sure that the Department of Health is really in control of what is happening. As far as I can see, the current policy in the Department of Health is “Don’t ask for the detail; we haven’t made it up yet.” All the changes are being led by the Secretary of State.
Statements change from one minute to the next. We are told that primary care trusts and strategic health authorities will remain until 2013 to underpin the changes; then, today, Sir David Nicholson, chief executive of the national health service, warned the Secretary of State that his proposal to abolish all PCTs by 2013 could affect quality and safety. The whole thing is becoming a circus. The plans were described by one journalist as an accident waiting to happen, and by a doctor as a politically motivated reorganisation of the NHS. That is hardly critical acclaim.
The Secretary of State for Health said to the Conservative party conference that the Government had made
“An historic commitment to increase NHS resources in real terms each year”.
That is over-egging the pudding somewhat, given the 0.1% increase. The Government could not have done any less without failing to keep their commitment. It is the lowest settlement since the 1950s. That promise must be seen in context: in-year efficiency savings of £20 billion; £1 billion taken out of the NHS to make up half the £2 billion allocated to local authorities for social care, which is not ring-fenced; an increase of £200 million to £300 million in VAT costs after the coalition increases the VAT rate; a possible £800 million to £900 million in redundancy payments over the next two years; an anticipated budget shortfall of about £6 billion by 2015; a 17% cut in capital expenditure; a two-year freeze for those earning £21,000 or more, with the expectation of a catch-up in salaries post-2013. Hospitals face financial pressures because the Department of Health has frozen the tariff. Those are the downward pressures on the financial strength of the NHS, without even taking into account the long-term strategic pressures that will shape the nature of health services and increase the strain on the NHS. They will inevitably require a more substantial budgetary provision than 0.1% year on year.
The Minister knows that the NHS faces increasing demand for services, an ageing population, an increasing number of people with complex long-term illnesses, rising treatment costs and more and more expensive medical technology. On top of that comes the far-reaching organisational restructuring of the entire health service. Sir David Nicholson told the Health Committee that the productivity challenge was huge and had never been done on the same scale in the NHS or anywhere in the world, and it is expected to happen during the transition into the new world of NHS commissioning.
With your permission, Mr Gale, I will quote Nigel Edwards, chief executive of the NHS Confederation. I asked him:
“I just wonder whether you could address this in a few sentences: do you think that we can release these productivity gains, face the furore of the populace, who will not be happy with the comments you have made about hospitals closing, and GPs in consortia trying to manage this system and, in the interim of trying to get there, a lot of the PCTs and strategic health authorities––the good people––are jumping ship? So you are now facing a huge, dangerous area where you may not have the personnel to keep what we have got going. How are we going to get the consortia—the GPs who are commissioning services—facing the wrath of their people, when some of the services they are well used to are closing down? At the same time we are busy saving all this money, do you actually think we can do it?”
“I was going to say I think you have encapsulated the problem extremely well…my personal view is there is a very, very significant risk associated with the project that you have just described.”
On top of that, we have heard warm words from the Secretary of State. In various speeches, he has said that the guiding principle will be:
“‘No decision about me, without me’”,
yet when we examine the detail—very little of which is available—the truth appears different.
My hon. Friend is right to deal with such global matters. Does she think that it is possible for the Secretary of State or the Minister to reconcile all that benign guff about the money being there with the Government’s proposal to take £16 million away from Great Ormond Street hospital for sick children in my constituency? It is the most famous of its kind in Britain, with world-renowned staff, and it now faces major cuts.
I share my right hon. Friend’s view. Alder Hey, which is adjacent to my constituency and serves my constituents, will be similarly affected. We are taking a worrying direction.
On “No decision about me, without me”, the Secretary of State said to the Select Committee that
“the conclusion that we reached was that we could achieve democratic accountability more effectively by creating a stronger strategic relationship between the general practice-led consortia and the local authority.”
Many people might imagine that that would mean patients being at the heart of decision making and that consortia would operate with councillors, the public and non-executives on the board with a vote. However, that will not be the case. The scrutiny will come from well-being boards. The fact that they will not be at the table and will not have a vote means—as with the current local authority overview and scrutiny arrangements—they might as well not be there. In the Health Committee, I said that such a situation was like throwing snowballs at a moving truck—in other words, the decisions and views of the well-being boards would make little or no difference.
In reality, the Government are giving the NHS budget to GPs, many of whom just want to practise medicine, rather than get involved in this giant policy experiment. There will be no testing; it will just be a big bang. The Government will use the consortiums as a shield to deflect criticism, rather like the way they are currently using the Liberal Democrats. There are rumours that the Prime Minister is getting worried about all of this. I can only hope that that is true.
The warning signs of what this means for the national health service are already apparent. There was an 80% increase in bed blocking in hospitals between May and September. I expect that that situation will only get worse, especially when the cuts to local government budgets really start to bite. Hospitals are once again increasingly becoming the safety net when the funding for social care has been used up. If a local authority cannot afford to provide the necessary care, people will end up in hospital.
Questions were asked at the Health Committee about reserves held by NHS organisations and how they would be treated. Primary care trusts are beginning to refuse to provide certain treatments. We have also had announcements on the future role of the National Institute for Health and Clinical Excellence, which will no longer advise on drug treatment and is moving towards value-based pricing. Will the Secretary of State control the drug companies pricing policies or, as most people think, will the drug companies shortly be back in control? We will soon be back to postcode prescribing and, more worryingly, we are making the availability of drugs a political rather than a clinical decision.
When I hear Government statements about their commitment to the quality of health care and delivering outcomes, my thoughts return to the fight between myth and reality. The idea that front-line services will not be affected seems somewhat delusional. During questions at the meeting of the Health Committee on 26 October, it became apparent from a witness giving evidence that hospital closures would be necessary to release moneys back into the wider health service. We were told that that was part of “managing demand” and “redesigning care pathways.” I have heard those two phrases throughout my health service attachment and they are very much back in vogue at present.
The failure adequately to address the true budget requirements of the NHS will not deliver and continue the quality of care that patients expect and need. These are short-term measures that have long-term consequences. They are ill thought out and will have major ramifications for the people who rely on access to vital health services. For those people, such services are a lifeline. Nobody is pretending that nothing can be improved in the health service. However, does it have to be subject to untested reorganisation while we are trying to manage increasing demand in the current financial climate?
The Labour Government were rightly proud that they reduced waiting lists from 18 months to 18 weeks. It took 13 years of proper investment to turn the NHS around, and it is a service that we should rightly be proud of. My fear is that Conservative policies could destroy all that hard work within a matter of 13 months. I agree with the comments of my right hon. Friend the Member for Wentworth and Dearne (John Healey) about the “broken promises” of the coalition. My fear is that those broken promises will lead us headlong into a broken NHS—or is that the intention?
I congratulate my hon. Friend the Member for Easington (Grahame M. Morris) on securing this Back-Bench debate today. I shall take the opportunity to talk about the effects of the spending review on health care locally. In concentrating on my constituency of Tottenham and on the London borough of Haringey, I hope to illustrate some of the real concerns of what would traditionally be classed as deprived and disadvantaged areas.
When one looks across the canvas of political issues, it must be the sincere hope of all hon. Members that health care should not be treated like a political football. People’s lives literally depend on health services. In the run-up to the general election, I was therefore pleased by the Conservative party’s undertakings on health care spend. Frankly, I was pleased at the absence of detailed policy on health in the Conservative manifesto. It felt to me as if we had perhaps arrived at a place in which health care could be a quiet zone for a few years. That is absolutely and clearly not the case. The coalition Government and the rapid plans they have brought forward will bring about the biggest change to health care in this country that we have seen since the war.
I am absolutely certain that such changes will have a detrimental effect on my constituents in Tottenham. It is important to remember that Tottenham is a constituency with the highest level of unemployment in London. It is a constituency that we like to say is the most diverse in not just London but the UK and possibly Europe. Mortality rates among many of the members and subsections—different groups—of the community are high. If someone caught, for example, the W3 bus at Northumberland park—just up by the Spurs stadium—and travelled across the constituency to the other side of Haringey, they would experience a life expectancy rise of about 10 years. That is the reality in this part of north London.
We have heard about the conclusions reached by the King’s Fund and by the Nuffield Trust. Those organisations have been in the business for many years; they are independent and they are clear that there will be a cut in funding to the NHS over this next period. However, the truth is that the Minister knows that when we talk about health care, it is absolutely the one policy area that does not sit on its own in some kind of silo; it is dependent on what is going on around it.
Much has been said about multidisciplinary working and agencies working together, but what is happening at the coal face in an area such as mine is that the local authority is calculating how to afford 28% cuts in local community services. What is actually happening is that the borough commander is calculating cuts to his front-line services and that, in an area that has experienced high levels of knife crime, youth services will be cut over this next period. Right across the board, the things that people rely on will be cut. Where will those challenges end up? They will end up in the local hospitals and in the GP surgeries at a time when the Government are proposing a fundamental restructuring of how we afford health care locally and are handing power down to GPs.
Not all the country is like a leafy part of Surrey. There are GPs—sometimes single-handed GPs—in communities such as mine who are struggling. We have GPs, as has been said, who simply do not have the practical skills needed to engage in GP commissioning on the scale proposed and over the time frame proposed. What will that mean for health care? I would like the Minister to say something on what will happen in communities such as mine, and in London more generally. We still do not know the size of the areas proposed, so I would like to hear something on that today.
I remind the Minister of a recent debate on housing benefit that focused on the health implications of the proposed changes. In the London borough of Haringey, we have already seen other local authorities begin to place people in our borough in reaction to those proposals. I have been advised by the lead member for children on the council that 27 additional children who are on the child protection register have been placed in the borough in the past two months. In remind the Minister that it is in my constituency that baby P lost his life. Those were profound challenges that found the health care system wanting in that borough and involved one of our greatest hospitals, Great Ormond Street, which, as we have heard, now faces a £16 million budget cut. This is a serious debate and we need some serious answers.
The biggest problem facing health care in my constituency is that Haringey PCT is forecasting a year-end deficit of £35 million, largely because of some of the problems I have outlined. If one includes the deficits faced by Enfield and Barnet, that amounts to a £110 million deficit in that part of north London. Which GPs does the Minister think will take on a £110 million deficit, and what does his Department propose to do about PCTs that have deficits of that level? Is he asking them to make in-year cuts to deal with it, or is he saying that the Department will pick up the deficit? It does not take a rocket scientist to work out that few GP commissioners will rush to take on a deficit on that scale in a constituency with the needs that I have outlined. I ask him to read his notes quickly, because we want an answer. What are his proposals for PCTs with such deficits?
What are the Minister’s plans for mental health? We have heard very little about mental health services and the relationships that they will be expected to have in the new arrangements, in the context of cuts beyond the borders of mental health in the local authority and in relation to social care.
The Minister might recall that my first ministerial job was in the Department of Health. I remember working with my colleague, John Hutton, the former Member for Barrow and Furness, as he negotiated the GP contract. Many Members will have their views on our former colleague, who has most recently been employed by the Minister’s party. They will also have their views on the contract and the success of those negotiations, which I was not privy to, because they were being led by the Minister at the time, who has now taken his seat in another place.
Historically, the arrangement we have in this country is that GPs are the for-profit element of the NHS; they run small businesses and have done since the war. We are obviously grateful for the oath they take and the undertaking to serve people in their local communities, but does it not seem bizarre to hand power to the element within the NHS that has historically always been its for-profit element? How will that save costs in practice? Will it not make things even harder than they are?
I started my time in the Department in 2001, just as PCTs were beginning to bed down and find their feet. For a community such as mine, the great benefit of having the chair, the non-executive directors and sometimes councillors come forward to be on the boards was that local people were in the driving seat. I do not claim that that ever got to where we would have liked it to be, but for the first time in London we began to see the leadership of PCTs reflecting the communities they served.
I also remember the situation we inherited at the Whittington hospital, the other hospital that serves the local community, with beds lined up in the corridors—a problem that we successfully dealt with over time. The Minister has previously made a commitment that the Whittington is safe under the new arrangements, but will he reiterate that for the record? Will he state for the record that North Middlesex University hospital, which has just seen a huge rebuild, is also safe and commit to the health strategy for Barnet, Enfield and Haringey, which sees that hospital really servicing the needs of that poor part of London?
This is a hugely important time for health care in London. It is a time when I want to be able to talk to people. I want to be able to find people to discuss the deficit and the existing health needs, but guess what? I cannot find them. I cannot find them because they are beginning to leave and because there are now proposals to amalgamate so that there is a pan-London relationship on all those issues. That is not local at all. It is disastrous, frankly, for people in my constituency, which has seen profound health care challenges over the last period that have got on to the national agenda as a result. I am looking forward to what the Minister has to say.
Before my right hon. Friend leaves the subject of the Whittington hospital, in which he was born, does he remember attending one of the rallies to save the A and E department? The current Secretary of State, then the shadow Secretary of State, promised at the time that the unit would not be closed. Is he confident that that still applies, because there are all sorts of rumours that its closure is once again being contemplated?
My right hon. Friend is right. I am grateful to him for that question and for his great expertise in health care matters. We are lucky that he is one of the MPs representing north London. I was at that rally, as was he, along with all the MPs from the wider north London area, because it was a cross-party issue. It was absolutely clear that the then shadow Secretary of State had promised a future for the Whittington hospital and had said that the A and E would remain.I hope that that is still the case because, if it were to go, the effect on health care outcomes for the people of north London and certainly my constituents would be profound. The Royal Free hospital in Hampstead is too far away to expect them to drive there in the event of an emergency.
I conclude on that basis. I am grateful to have been able to put on the record some of the health care issues in Tottenham and Haringey.
Thank you for your indulgence, Mr Gale, in allowing me to speak this afternoon. I apologise; I was in the main Chamber earlier for the debate on policy for growth. I also thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing the debate. To look at us, one would not believe that we are often mistaken for each other. I do not see how that comes about, but I understand that it does—it is something to do with the accent, I believe.
Despite pledges that the NHS would be ring-fenced from Government cuts, according to press reports, dozens of accident and emergency and maternity units have been earmarked for closure or merger. Let me highlight a few: Newark hospital in Nottinghamshire will have its A and E services downgraded, and emergency admissions will stop being taken from April 2011. At the Queen Elizabeth II hospital in Welwyn Garden City, A and E services will be downgraded and the consultant-led maternity unit could be closed. There will also be a downgrading of A and E services at Rochdale infirmary. The Conservative’s election manifesto promised a moratorium on the forced closure of A and E units and maternity wards, so what happened to that pledge?
The situation proves that the settlement provided for health by the comprehensive spending review is not sufficient to meet the pledges made by the coalition parties. As my hon. Friend said earlier, the Prime Minister’s promise in January, and the coalition agreement pledge to
“guarantee that health spending increases in real terms in each year of the Parliament”,
will not be met.
The settlement agreed by the coalition will leave the NHS unable to meet growing cost pressures, and that will reduce its purchasing power each and every year. The Government seem to be in denial—that has just been shown by the Minister’s sedentary comment.
Kieran Walshe, professor of health policy and management at Manchester business school, who has already been cited in the debate, puts the figure for reorganisation at up to £3 billion, but there is nothing to say that it will not cost significantly more. We do not yet see where the money will come from.
One of the last reorganisations under the Labour Government involved reducing the number of primary care trusts from 303 to 150. In oral evidence to the Health Committee, Sir David Nicholson, the chief executive of the NHS, stated that it generated
“significant management cost savings and gains at that time. If you look at productivity in the NHS in 2006-07, by 2007-08 you see productivity improved.”
If streamlining and reducing commissioning bodies has saved significant amounts in the past and created efficiencies, why does it appear that the Government now want to create more commissioning bodies? Some say that up to 500 general practice consortiums would be required, but it could be more than that.
The GP involvement in the process is questionable. My local experience in Gateshead as deputy leader of the council with the adult social care portfolio was that it was often difficult to engage GPs in the process of partnership working—they are very busy people. In addition, it takes time for any organisation to become an effective negotiator in commissioning relationships with acute care providers, and to develop health provision plans and purchasing capacity. Why is the coalition placing those additional pressures on the NHS at a time when it is cutting its spending power?
Press reports—the Minister refers to these as rubbish—give fairly extensive lists of hospitals facing A and E closures, maternity closures and cutbacks. Let me quote an example:
“Despite pledges that the NHS would be ring-fenced from government cuts, dozens of A&E and maternity units have been earmarked for closure or mergers.”
Those are the words of not some revolutionary incitement periodical, but The Sunday Telegraph. I do not think that many of the people on yesterday’s demonstration about the proposed hikes to tuition fees were hawking The Sunday Telegraph as some kind of revolutionary organ with which they could incite the crowd to further action.
The Sunday Telegraph refers to:
“More than 30 maternity and casualty units facing the axe”,
and provides us with a significant list of examples from all over the country. It also tells us that, as a result of the spending review, the NHS faces a bed-blocking crisis. It states that the permanent closures and downgrading of services agreed since May affect many hospitals.
There is a long list. However, according to The Sunday Telegraph:
“Maternity units in Tiverton, Okehampton and Honiton, Devon: plan to downgrade services so they will not offer any midwife care overnight. Solihull Hospital: maternity unit was shut as a temporary measure just before the election. It re-opened in July as a midwife-led unit. Proposals to make the closure permanent due to be published within weeks”—
I could go on. For Hartlepool, in my region, we are told that there is a “proposal to close A&E” and that that will be
“replaced with minor injuries unit, and direct admissions for emergency medical cases.”
Of course, that comes on the back of the announcement a couple of months ago of the cancellation of the replacement North Tees hospital.
This is a very recent Sunday Telegraph report. I am glad to hear what the Minister says, but it is not the real issue for the area—that is the replacement North Tees hospital. As the Minister told us in a previous debate in this very Chamber, a brand new hospital worth £450 million, with brand spanking new service facilities, will be sacrificed for the grand sum of £11 million a year over the life of the hospital.
The Sunday Telegraph goes on to state:
“Hexham, North Tyneside and Wansbeck hospitals in Northumberland: Casualty units would no longer take ambulance cases if a new hospital is built near Cramlington.”
The Hexham hospital provides A and E services for people in a large constituency. I would not like to be dragged backwards by my hair between that constituency and Cramlington, because it is an awfully long way. There is a great deal more in the article.
The health service in my constituency is unrecognisably better than the one that we inherited in 1997. I would like to place on record my personal thanks to the staff of the neurosurgery unit at Newcastle General hospital, without whose efforts I would not be standing here today, because I had neurosurgery on my spine about 22 months ago. The Queen Elizabeth hospital in my constituency is now a very well regarded resource for the region and has a regional surgical support unit. Our other primary care facilities include the successful Gateshead smoking cessation service, which has reduced the prevalence of smoking—[Interruption.] I am not having a go at the Minister; I really mean that. However, the service is important to my constituents. We have reduced smoking rates in my constituency with its help from some 35% just over 10 years ago to about 21%. That is vital to the life expectancy of many thousands of my constituents. There is great concern, worry and uncertainty about what the future holds for such services as a result of the Government’s decisions.
The spending review will force deep cuts in patient care as the Government focus on a wholesale NHS reorganisation that will negate many, if not all, of the efficiency savings. I have real concern about commissioning, in that we will see GP practices coming together and then outsourcing to some fairly significant global players. Those players will take over the services on a local basis—they are out there, ready and waiting. It is not in the interests of patient care for money to go out of the public sector as profit for those companies.
I thank my hon. Friend the Member for Easington (Grahame M. Morris) for securing this very interesting debate and his excellent speech. Such debates are important to our more detailed examination of Government policy. This is the first opportunity I have had to welcome the Minister to his obviously well-deserved promotion. He is a stalwart supporter of the coalition Government and I am sure that his efforts had a lot to do with the coalition coming together. I look forward to hearing his speech.
It is interesting that not a single member of the coalition has stood behind the Minister to support his policy. That might indicate that the Secretary of State and his Department are somewhat isolated because there is a great deal of worry about what is happening. All the speeches have been very important. Of course, they have all been Labour speeches.
No, not all old Labour at all. There has been a mix of Labour: young, old, new—some a bit younger than others. My hon. Friend the Member for Easington made some very important points about this being the worst settlement since the 1950s, and he raised the point about rising to the challenge of the financial settlements and the impact on social care. We heard many important points from my right hon. Friend the Member for Rother Valley (Mr Barron) who, along with my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), is probably the most experienced person in the Chamber, given his knowledge of the health service and his involvement in it over the years. One of those points was what the Nuffield Trust said about this being a real-terms cut, once the £1 billion that is being transferred from the NHS is taken out—I shall come back to that later. My right hon. Friend also made an important point about how the Government have used a Health Committee report to support their policies. His point was very clear, and he also raised the important issue of commissioning for GPs.
My hon. Friend the Member for Newport West (Paul Flynn) made a very important point about NICE and drugs companies with reference to funding and influence. My hon. Friend the Member for West Lancashire (Rosie Cooper) has great experience in the health service. She is a near neighbour, and our areas successfully share the excellent women’s hospital in Liverpool. She made a number of powerful and important points about the reorganisation and cost pressures, and their effects on patient care. She also talked about Ministers not listening—[Interruption.] I know that the Minister has listened to what has been said in the Chamber, but Ministers’ listening will also be an important aspect of the reorganisation.
My right hon. Friend the Member for Tottenham (Mr Lammy) made a powerful speech. I think he said that because he had believed what was in the Conservative and Liberal Democrat manifestos, he was somewhat disappointed—[Interruption.] Perhaps I got that wrong, but he made the point that what was said before the election and in the manifestos is not now being delivered.
I always carry a copy of the coalition’s programme for government—it is a fascinating read and, I must say, comforting at times.
My right hon. Friend the Member for Tottenham made some important points about mortality, the different life expectancy rates in his constituency, and the impact of the 28% cut on local government services, to which I shall return later in my speech.
I advise the shadow Minister to take the analysis of the right hon. Member for Tottenham (Mr Lammy) of the impact of the so-called figures that he used with a pinch of salt, because he also said that when he was as a Health Minister in 2001, he remembered the PCTs beginning to bed down. That was rather confusing, because of course the PCTs were not established until 2002.
The hon. Gentleman should have listened much more carefully to what my right hon. Friend the Member for Tottenham said. He made a lot of good points, including one about GPs being put under pressure by the reorganisation due to the fact that some of them do not have the skills that it will require. That was a very powerful point, because many GPs are either opposed to or very uncertain about the Government’s proposed reorganisation.
My hon. Friend the Member for Gateshead (Ian Mearns) made a very impassioned speech about his own experience, his local health service, of which he has great knowledge, and the consequences of the Government’s actions for A and E and maternity units. He also made an important point about the great uncertainty in the health service as a result of the reorganisation—not just financially, but in all aspects of the service.
It is worth reiterating that we have had some successes in the health service, although many of them were achieved in recent years by the Labour Government rather than during the Conservatives’ 18 years in government. Back in 1997, I was regularly contacted by constituents who had to wait between 18 months and two years to have an operation. We have now got that time down to 18 weeks or fewer, and two to three weeks for cataracts. I set out that information because the Government will be measured on such things, although I am not sure whether they will be “outcomes”, “horizons” or “milestones”. A million more operations have been carried out each year since 1997, and there is now rapid access to chest complaint clinics. A large part of the NHS estate dates from before 1948, but we now have more than 100 new hospital building schemes and more than 90 NHS walk-in centres.
We have not achieved those gains for patients without sustained, deliberate and targeted investment. The combination of reform and investment that Labour undertook when in it was power has brought about tangible results for patients: heart disease deaths are down by more than a quarter; cancer mortality rates are down by more than a tenth; and breast cancer and male lung cancer death rates have been cut faster than anywhere else in the world. Under the cancer target, patients now see a cancer specialist within two weeks, which saves many lives. We made real investment and real change, and real people’s lives were made better. Let us see how the coalition intends to honour some of Labour’s guarantees. It has scrapped the right to cancer test results within one week of referral.
As I said, that was one of our guarantees, and the Government have not taken forward those guarantees. They have gone against what we said, which was welcomed by many patients and organisations. Free prescriptions for vulnerable patients with long-term conditions have been scrapped and, in this Parliament, some 8,000 new psychological therapists have been scrapped.
The shadow Minister is a reasonable and intelligent individual, so he knows that we did not scrap that target because it was never in place. All that happened was that the previous Prime Minister, at his party conference just over a year ago, made public an aspiration that was totally unfunded and totally untried against any clinical guarantee for quality.
The Minister should realise that he cannot meet what we proposed. I notice that he intervenes on that point, but not to congratulate us on the many improvements that we made in the NHS over the years. I look forward to hearing what he says about those improvements in his speech.
Returning to mental health, the Department of Health website says:
“Policy around mental health is developing…Mental health policy cannot be devised and implemented by any single government department or the NHS alone – it requires collaboration across central government, local government and the independent sector.”
We knew that already, did we not? However, the coalition has cut those 8,000 therapists. Of course the financial climate is difficult, and whomever was in government would have difficult choices and decisions to make, but the Prime Minister and the coalition have, again, broken their promises on health, which I want to explore, particularly with reference to the CSR.
For all the coalition’s boasts of ring-fencing the total NHS budget, the negligible 0.1% increase in NHS spending over the CSR period is low by historical standards, as we have heard. The King’s Fund has been cited, but let me give another quote from it:
“the NHS has averaged real terms increases of 4% a year since it was established and 7% since the turn of the century. The only similar period of near-zero real terms growth was in the early 1950s”—
I think that the Minister agrees. Spending in the NHS has increased from 6.6% of gross domestic product in 1996-97 to 8.7% in 2009-10.
The Minister might be interested to hear that the Royal College of Midwives has said:
“there are fears that a funding increase of 0.1% a year could be swallowed up by a rise in drugs, an ageing population, the cost of reorganisations and inflation.”
While we are on the subject of midwives, will the coalition deliver on the pre-election pledge to increase substantially the number of midwives, or will that be another broken promise?
Perhaps the Minister will want to respond to my next point. The CSR also announced that £1 billion will be transferred from the NHS budget to local councils for spending on social care. He will argue that that is designed to improve working relationships between the NHS and local social services departments, to improve health and to reduce costs on the NHS, such as by helping older people to stay healthy and independent in their homes. Of course, that is a good thing. However, the Government cannot have it both ways and double count. This is a real-terms change in NHS funding over the next four years. When we consider the net funding for social care support, there is a reduction of 0.5%, which is a real-terms cut.
I want to respond to the point that the shadow Minister made about the Nuffield Trust. He said that we were giving £1 billion to local authorities for social care, but we are not giving—[Interruption] I think that he did say that, but if he did not, we will wait for my speech.
I will be careful because of the context in which the shadow Minister is trying to put the matter. We have made no secret of what we have done. Because of the lack of funding for social care and the demand for it, which we inherited, we have decided that we will use £1 billion out of the capital budget on social care and, at the same time, local authorities, through the revenue support grant, will provide another £1 billion. There will be £2 billion of extra money: £1 billion from the health service, which the health service will spend, and £1 billion through the RSG.
I will carry on and we will take this up later during the Minister’s speech.
Will the Minister make clear whether the money has been ring-fenced? What what will be the impact on local services of the 28% cut in councils’ budgets over the next four years, which was announced as part of the CSR? We must not forget the increase in VAT to 20% from January, which several of my colleagues mentioned, which will do little to enhance the NHS’s spending power. It is little wonder that the King’s Fund feels it necessary to warn:
“slashing budgets and cutting services should not be the answer to the financial challenge facing the NHS.”
I cannot allow the Government to get away with another disastrous decision for the NHS and it will be interesting to see what the Minister has to say about this.
The NHS has accumulated £1.8 billion of capital and £3.7 billion of revenue underspend. It would normally be allowed to keep that money to reinvest in patient care or to help deal with future overspends, but the CSR has abolished end-of-year flexibility. Perhaps the Minister would like to deny that or tell me that we have got it wrong.
What estimate has the Minister made of the number of job losses and redundancies in the NHS that will occur as a result of the CSR? What will be the impact on waiting times in the spending review period? What is his estimate of the number of nurses who will be employed in the NHS at the end of the spending period? What measures has he implemented to deal with winter pressures? How many specialist nursing posts will be left vacant at the end of this financial year? I have many other questions. We do not have time to go into them now, but I shall be tabling a lot of written questions for the Minister to answer.
We now move on to another broken promise in the context of the CSR, which has been the subject of a fair bit of comment. An ideologically inspired, top-down reorganisation of the NHS has been proposed. It has been put forward in defiance of the coalition agreement. The approach is untested and threatens the viability of the NHS. I remind hon. and right hon. Members that the coalition agreement says:
“we will stop top-down reorganisations of the NHS”—
another broken promise. Here is a straight question for the Minister: why, as many believe, did his party hide their plans for such a massive reorganisation from the public? Why did it make no mention of the scale of the proposed changes in its manifesto or election campaign? This is the biggest reorganisation in NHS history. The King’s Fund estimates the actual cost at some £3 billion, and that is at a time when the NHS can ill afford it. The British Medical Association has stated:
“these proposals risk undermining the stability and long-term future of the NHS”.
What is the Minister’s latest estimate of the financial cost of the reorganisation, and will he publish the rationale underpinning the assumption for those costs?
The coalition talks about reducing waste, but the 45% cuts in strategic health authorities and primary care trust management will save just £850 million of the £15 billion to £20 billion of efficiencies that are required. I could not agree more with the words of my right hon. Friend the Member for Wentworth and Dearne (John Healey):
“This reorganisation is untested and unnecessary. It is high cost and high risk. At this time when finances are tight, all efforts should be bent to making sound efficiencies and improve patient care. We are in favour of giving clinicians greater responsibility and patients a greater say in their healthcare. NHS experts, professional bodies and patient groups say ‘slow down’, because this big reorganisation is a big risk for the NHS.”
Trade unions such as Unison, the RCN and Unite, who represent many who work in the NHS, have raised genuine concerns, but we do not believe that the Secretary of State is listening to what is being said.
As part of these changes, there is danger of fragmentation, of more of a postcode lottery and of doctors’ time being diverted from their main role of looking after their patients. We need to know the extent and nature of future private sector involvement in running the health service. How and to whom will organisations be accountable? How can we deal with current overspends in organisations, which my right hon. Friend the Member for Tottenham mentioned?
Will the Secretary of State and the Chancellor listen to the appeal of patient groups, Royal Colleges practitioners and other health staff, or is he bent on setting his face against the view from the coal face—from the same professionals whom his party’s manifesto says we should trust to deliver services?
I want to mention another important issue: the proposed stealth cuts to the funding of specialist children’s hospitals, which will affect the hospitals that treat some of the most severely ill children in the country. The Prime Minister promised that the health budget would be “protected”. In an interview with Andrew Marr on 2 May 2010, he said that he
“would not accept cuts to the NHS”.
It is unarguable that specialist children’s services are the front line, so even that is not being protected. This is another promise broken by the Prime Minister.
The Secretary of State is not being straight on this matter. During oral questions on 2 November, he told my right hon. Friend the Member for Holborn and St Pancras that the hospital that my right hon. Friend asked about would face a 2% cut under the proposed tariff changes. That is bad enough, but it is contradicted by the trust’s own assessment of those changes, which suggests that they will bring about much larger cuts. Will the Minister set out—I ask him this carefully—what the situation is and how much funding the hospitals will lose?
I will give a couple of examples of the figures that we have received from the hospitals involved. Great Ormond Street hospital, which is in the constituency of my right hon. Friend the Member for Holborn and St Pancras, will face a cut of £16.3 million. In Birmingham, the cut will be £12.8 million, and at Alder Hey hospital, on the doorstep of my constituency, it will be £12.9 million. Will the Minister confirm what the funding cuts will be and how much those hospitals will lose? What figures have the hospitals provided to the Department in their assessments of the cuts? Will he make public any assessment that has been sent to his officials about the impact of the tariff changes?
I do not feel that Liberal Democrat or Conservative Members have realised the true extent of what the coalition Government are doing to the health service and the impact that it will have on their constituencies. Perhaps they are not in the Chamber because they find the measures difficult to support. As the impact of the health cuts becomes clearer, I believe that hon. Members will become more worried and will seek answers to the broken promises of the Prime Minister and the Secretary of State.
There have been broken promises on NHS funding to protect front-line services, and broken promises about structural change. Hon. Members might ask why the Secretary of State is forcing the NHS into a major reorganisation that costs valuable time and resources at a time that the King’s Fund and the NHS Confederation have called the biggest financial challenge of its life. I assure the Minister and the Secretary of State that we will hold the coalition Government to account for what they have said and what they will do.
I begin by thanking the Backbench Business Committee for and congratulating the hon. Member for Easington (Grahame M. Morris) on this interesting debate. In passing, let me say what a difference six months makes. Six and a half months ago, all the Labour Members who are sitting on the opposite side of the Chamber were in government. Some of the examples of reconfigurations and decisions taken on the health service happened under the last Labour Government, although some hon. Members seemed oblivious to that as they criticised what is happening.
One moment; let me make a start. We have taken difficult decisions and, as I will explain, we have honoured our election pledge on a real-terms increase, albeit a modest one, as a number of hon. Members, including the hon. Member for West Lancashire (Rosie Cooper), pointed out. However, no hon. Member tried to explain why that increase had to be so modest, which amazed me. The reason was, quite simply, our inheritance of the most horrendous debt and deficit problems, left to us by the previous Government. That would have tied the hands of any party, including those of the Labour party had it won the election. Rest assured, if the previous Government had been re-elected, they would have been making serious cuts.
Having listened to a number of speeches, it is slightly ironic that some hon. Members present seem to be oblivious to the fact that one of the Labour leadership candidates during the recent campaign, the former Secretary of State for Health, the right hon. Member for Leigh (Andy Burnham), criticised us for honouring our pledge of a real-terms increase in NHS funding. He said that it was a disgrace that we were keeping to that pledge and that, in the overall spending programme, we should not be honouring our pledge of a real-terms increase in health spending. I find that a bizarre proposition from a former Labour Secretary of State for Health, but that was his view and his decision. Judging by the faces of some Labour Members, they seem oblivious to the fact that the right hon. Gentleman criticised us about that. That somewhat undercuts the arguments that I have heard today from those who say that we have broken our promise and not kept to a real-terms increase. They will have to make their mind up one way or another.
The Minister has just destroyed my reputation. My point is about the cost of the reorganisation at what is a difficult time for the economy. Why embark on an expensive major restructuring of the health service? It does not make any sense. Previous reorganisations were expensive and time consuming. Surely, if we learn anything from evidence, it is that now is not the time to do this. Another top-down reorganisation is the last thing we need.
I am grateful to the hon. Gentleman for that intervention, and I am sure that his reputation will survive my praise of him. I shall, in my own way, come to the point that he raises.
Before I begin to explain why we have not broken our election pledge, let me congratulate the hon. Member for Halton (Derek Twigg). He is a dedicated and decent man who was always an exemplary Minister when he was in government. I am delighted to see him back on his party’s Front Bench, albeit in a shadow ministerial post, and I wish him well in his endeavours. I trust that he will be doing the job for many years to come and that the same fate will not befall him as sadly befell him when he left the previous Government: ironically—I grieve as much as he does about this—his place was taken by someone who was ostensibly a Tory, who was, for some bizarre reason, embraced with both arms by previous Prime Minister. It is great to see the hon. Gentleman back, and I look forward to many debates over the coming years as our careers continue.
This debate goes to the heart of two of the coalition Government’s main priorities: bringing the public finances back on to a sustainable footing and ensuring the future health of the nation. Our manifesto commitment, reiterated in the coalition agreement, was to increase spending on the NHS in real terms for every year of this Parliament. Notwithstanding the comments of some hon. Members, I am tremendously proud of the fact that we have kept the faith and honoured that pledge. Before anybody jumps up to try to intervene, let me remind them that I am proud of keeping that pledge.
The right hon. Member for Leigh, the former Secretary of State in the outgoing Labour Government, has criticised my party for keeping that pledge because he thought it was wrong. It would be difficult for any Labour Member to claim that we have broken the pledge, because, by definition, if we have broken the pledge, the right hon. Gentleman is factually incorrect in his criticism of us. It is a bit of a dilemma for Labour Members.
We will come to that point. Whenever there is a parliamentary briefing or statement for a debate that fits the prejudices that Labour Members want to project—their straitjacket—that is fine, but anything that does not conform to their prejudices or prejudged views, or to the facts, such as the comments from the King’s Fund on which I kept pressing the hon. Member for Easington, which confirmed its view that we had honoured our pledge and made a real-terms increase, they dismiss as fiction. I am afraid that I do not share the support offered by the right hon. Member for Rother Valley (Mr Barron) for the views in the Nuffield Trust document.
I will come on to social care spending, because I know that the shadow Minister, the hon. Member for Halton, made quite a lot of that. I will try, in a longer period than I would have in an intervention, to show that he is wrong and the Government are right.
I will briefly answer that now; I was going to come to it later. The figure that has been bandied around by shadow Ministers, Labour Back Benchers and so on is £3 billion. The Department does not recognise that figure. We recognise the figure that the previous Secretary of State for Health, the right hon. Member for Leigh, put in this year’s Budget, which is 1.7%. He put that in specifically for reorganisational purposes under a Labour Government. That is the only figure—[Interruption.] That is the only figure that we recognise.
The Minister is using a figure that was in the Budget for reorganisation. I assume that that reorganisation is not the reorganisation that his Government are proposing, so have he, the Department and his officials made any assessment of the cost of their reorganisation? That cannot in any way be linked to a figure that was laid down by the previous Government; it is bizarre if it is. If they have made such an assessment, what is the rationale for it and will he publish it?
I am saying that the previous Secretary of State had built in to this year’s Budget a £1.7 billion figure for reorganisational purposes and we recognise that amount of money as money that can or could be used for reorganisational purposes. On the question of the full figures, we will publish in due course our response to the consultation process on the White Paper and the documents that flowed from that White Paper. Also, we will respond on any decisions that we have taken emanating from that consultation process. We will also publish the Bill, which will flesh out more of the details where details need fleshing out.
As a number of hon. Members mentioned, there are parts of the Bill where we are not prescriptive and we are not dictating, down to the last dotting of an i and crossing of a t, what has to happen. That will be down to local decisions. That will then put us in a position—
I am not scared of anything. The purpose of my speech is to outline the Government’s view on the subject, rather than simply, as in an Adjournment debate, answering every single point from hon. Members who have contributed. I will not fall into the trap of being sidetracked into answering, as in an Adjournment debate, all the points that have been raised. I will certainly deal with those that I can deal with in the time available, but I shall primarily give the Government’s view on the topic before us, so I beg some indulgence from hon. Members as they listen and learn why we have kept our pledge.
I shall start again. This year, before we spend a single penny on health, education, defence or anything else, we shall have to pay £43 billion simply to service the interest on our debts. That is £120 million a day and more than £83,000 a minute. Those who are mathematicians will realise that during this three-hour debate that will have cost us £15 million. The colossal debt racked up by the previous Government is crippling the country. That is why, through my right hon. Friend the Chancellor, we have had to act decisively to lay the foundations for setting the economy back on track. The country simply could not continue to sustain such debt and payment of debt interest.
When the Chancellor stood at the Dispatch Box last month to deliver the spending review, he set a course for sustainable finances. He set out our plans to turn the country round, so that by the end of this Parliament our national debt will be falling, instead of rising, as a proportion of national income. To achieve that, over the next four years we need to reduce public spending by £81 billion. Difficult decisions have had to be taken, and more lie ahead, but the result will be a strong economy, more jobs and sustainable public services. As I have said, just as important as reducing the deficit is protecting and improving the nation’s health.
The hon. Member for Newport West (Paul Flynn) probably is not aware, because this is a new form of debate following the setting up of the Backbench Business Committee, that I am not winding up the debate, even if I am speaking last. I am making a speech on the Government’s position on the subject that we are debating, and I will certainly—on occasions, where appropriate—refer to and answer hon. Members’ questions, although I have to say to the hon. Gentleman that I probably will not answer any of his questions because he was not taking part in the same debate that is on shown on the annunciator. He was having a general roam-about on NICE and pharmaceuticals, rather than speaking on the spending review and health.
No, it is not. It is a fact, and the hon. Gentleman knows it.
As I said before the intervention and the point of order, just as important as reducing the deficit is protecting and improving the nation’s health. That is why I am proud that we have kept our pledge to protect the NHS budget. More than that, it will receive an increase of 0.4% over the next four years. In this difficult financial climate, that demonstrates the Government’s determination to provide the best care and the best outcomes for patients.
This year, the NHS budget is £103.8 billion. That will rise to £114.4 billion by 2014-15. No matter how anyone looks at that, it is obvious that it is a real-terms increase. A number of people who have sent in briefings for this debate and who have commented on the spending review have echoed the view that I have just outlined. It is a self-evident fact that it is a real-terms increase, however much Opposition Members prefer to say that it is not. The facts do not bear out that criticism.
The shadow Minister must be patient; I will come to social care.
The Department’s capital budget will be sufficient to ensure that key schemes that have already been agreed are continued and that the NHS estate is properly maintained. The NHS capital budget will pay for, among other things, publicly funded projects at North Cumbria University Hospitals NHS Trust, Pennine Acute Hospitals NHS Trust, and Epsom and St Helier University Hospitals NHS Trust.
Notwithstanding the real-terms increase in funding, we always knew that the NHS was facing challenging times. That is self-evident and we have never sought to hide behind it; everyone recognises it. As a number of hon. Members said, that challenge is due to an ageing population, expensive treatments, and health care and social care costs rising substantially every year. That is why the NHS and social care need to do more with their resources and make every penny count. In health, we are asking the NHS to secure, as a number of hon. Members said, up to £20 billion of efficiency savings over the next four years through the QIPP—quality, innovation, productivity and prevention—programme.
In addition, every penny of those savings will be reinvested in front-line services, enabling us to meet the costs of increased demand for care. The savings will come from cutting administration costs across the system by a third, as well as from other efficiencies throughout the NHS. Frequently, better care can save money. It is cheaper, as well as better for people, to get the right care first time, rather than the inappropriate or insufficiently relevant care that is involved when people have to go back to be provided with extra care—an expensive way to provide care and not an experience that patients should have.
I appreciate what the Minister is saying, but does he not agree that radical change to or redesign of a system often requires investment to get those costs out at the end? We are hearing about lots of cost cutting, but there are no obvious signs of a process or pathway where investment is taking place to get those gains out.
In the overall run of things, the hon. Lady makes a genuine point, but most of the cost cutting that I heard about during the speeches involved accusations of services being cut without the reasons for the status of what are, in many cases, reconfigurations being gone into. Also, until conclusions have been reached, there is no guarantee that those reconfigurations will happen. They might do so, but there is no automatic guarantee that, just because there is to be a reconfiguration, the end product will be what was first proposed.
Furthermore, I heard very little comment—indeed, I do not think that anyone passed comment, although I apologise if someone did—on the QIPP programme, which is so important and vital for raising standards, using innovation to improve quality of care and delivery. In that, we have examples across the country of the NHS finding changes that can make a big difference.
For example, Southend Hospital NHS Trust is saving £160,000 a year by mapping postcodes—patients who live near each other can be picked up together for their dialysis appointments. Oxford Radcliffe Hospitals NHS Trust is saving £1 million a year by implementing an electronic blood transfusion system, which cuts the staff time taken to deliver blood and reduces transfusion errors, thereby improving services for patients. Ten NHS trusts have been piloting a new pathway to improve care for patients, mainly elderly people who have suffered a fractured neck of femur. If that were rolled out across the country, it could save £75 million a year.
Those are just small examples of things that can be done where savings are made, the quality and appropriateness of care improve, and money can be ploughed back into front-line services, which is so important.
While we are talking about resources, I shall answer the important question asked by the right hon. Member for Holborn and St Pancras (Frank Dobson). He specifically mentioned Great Ormond Street hospital, but this applies across all the specialist children’s hospitals. The Department is having ongoing discussions with Great Ormond Street and the other relevant hospitals in England about potential—I emphasise “potential”—changes to the tariff for specialist children’s hospitals for 2011-12.
I can tell the right hon. Gentleman that no decisions have yet been taken and the discussions are continuing. On his specific question about how much less money is going to be given, there is no answer at the moment, because no decisions have been taken. The discussions will continue. I hope, for the time being, that he is reassured by that answer.
No, but I will confirm that discussions with the hospital are ongoing and, flowing from that, decisions will be reached in due course. At this point it would be inappropriate for me to interfere by giving any confirmation or denials of anything, because the situation does not arise in that context. Discussions are going on, and no decisions have been made. We will have to see once the discussions are concluded.
I honestly do not see what more I can say—my answer seems fairly conclusive, so I will make progress. If the right hon. Gentleman wants to have a quick word with me afterwards, I am more than happy to do so.
Moving on to social care, which a number of hon. Members and the shadow Minister have mentioned—
On the issue of social care, it is accepted by all parties that we need to be more efficient. There have been historic problems in the funding of social care and we found that, given the mounting pressures and the economic situation when we came to power, there was a serious problem that needed to be addressed so as to provide support in the forthcoming year and thereafter for some of the most frail and vulnerable members of society.
We believe, as I am sure the hon. Member for Halton does, that re-ablement services can restore someone’s independence. They have a crucial role to play, where appropriate. Around half of those who go through re-ablement require no immediate care package afterwards. The NHS is investing £70 million this year, £150 million in 2011-12 and £300 million a year for the rest of this Parliament in better re-ablement services. That will have a significant impact on improving the lives of many people.
Telecare, too, can help keep people safe and feeling more confident in their own homes, reducing their reliance on formal home care services. These are not isolated cases. There are similar remarkable stories across the country.
Re-ablement can make a real difference, provided that the authorities act seamlessly and quickly to ensure the equipment and anything else needed to assist someone to return home, avoiding a stay in a hospital, care home or any other non-domestic environment.
We will pursue the issue about specialist children’s hospitals, but I will now concentrate on the issue of the £1 billion that the NHS has set aside for, or put into, social care. No one argues that putting more money into social care is not a good thing, but we want to ensure that there is no double counting. The Minister confirms that £1 billion has been set aside, but will some of that money, or all of it, be used to fund the social care side of those services provided by local authorities?
If I may, I shall start on that point in my own way, as I want to give the setting for the whole social care thing. I know that the hon. Gentleman and the right hon. Member for Wentworth and Dearne (John Healey) have shown considerable interest in the matter.
The shadow Minister accepts that the NHS does not stand alone. It is only one part of this country’s care system; another essential service is social care, which helps hundreds of thousands of people to live as independently as possible. As I said earlier, when the Government were elected, we found a huge hole in funding for social care. That affects some of the most frail and vulnerable, and we believe that it is imperative to do something immediately to make up some of the shortfall. As the shadow Minister will know, the Department of Health has always funded social care—not all of it, but part of it—and local authorities have funded the other part. In some areas, there is a means test under the National Assistance Act 1948, so there are possibly three funding streams. I hope that I carry the shadow Minister with me.
To redress the funding gap in social care, the NHS will transfer up to £1 billion from the health capital budget to the health revenue budget by 2014-15. That will be spent by the health service on measures that support social care as well as health. That will include a specific allocation for re-ablement services to help people regain confidence and independence following discharge from hospital. We believe that this will help hundreds of thousands of people to live as independently as possible. To the person who uses both services, it makes no sense that health and care should be separate. I hope that I have given the shadow Minister sufficient explanation.
If I carry on for another minute, the hon. Gentleman may not need to intervene.
As well as the extra £1 billion that the Department of Health is making available for NHS social care, additional grant funding—again, rising to £1 billion by 2014-15—will be made available for social care through the revenue support grant. By 2014-15, the total additional funding for social care will amount to £2 billion, half from the NHS and half in grant funding. That will be allocated in addition to the Department’s existing social care grants, which will rise in line with inflation. In total, therefore, grant funding from the Department of Health for social care will reach £2.4 billion by 2014-15. I hope that that explains the situation for the shadow Minister.
The £1 billion will come from the NHS capital fund and be transferred to the NHS resources fund. It will then be spent by the NHS on re-ablement and other sorts of help and care for which the NHS is responsible. The NHS is responsible for the social care element of the assistance required by those in need. [Interruption.] So that the shadow Minister understands, on top of that, £1 billion will be coming from local government through the RSG.
It is an important point, and an issue that the Select Committee has considered. Evidence presented to the Committee shows that, over the lifetime of this Parliament and beyond, the gap between funding and demand will grow. There will be an ongoing problem of underfunding in social care. I would not like the Minister to give the impression that this demographic time bomb can be resolved by this single measure.
The hon. Gentleman is right. I do not claim that the demographic time bomb will be resolved by this measure. The trouble with personal social care is an historic one; Governments have always been playing catch-up. That is beyond dispute. I am saying that we recognised the growing pressures, and we believed that we had to act. That is why we have done so. It will reduce the problem, but the hon. Gentleman is right that it will not solve it, as more work has to be done. No doubt, it will be done, as we catch up with the past. I hope that I have reassured the hon. Gentleman. I now wish to make progress.
We believe that funding social care is important not only in its own right but for the sake of the hundreds of thousands of people who rely on it—and because the NHS cannot function without social care. Without it, people have to stay in hospital beds for longer, inappropriately blocking beds that other patients could use. It is important that we invest the money to ensure that there are no delayed discharges, and that we can provide an appropriate setting for those who are discharged.
I thank the Minister for giving way. I am trying to be helpful. My hon. Friend the Member for Easington (Grahame M. Morris) is right. The Select Committee suggested that there was a £3 billion or £3.5 billion gap. Evidence to the Committee clearly showed that local authorities believed that if they invested a pound, the saving and the benefit was likely to be seen in the health service through exactly what the Minister mentioned—beds not being blocked and so on. This might help my hon. Friend the Member for Halton (Derek Twigg), the shadow Minister; I suggested in Committee that the element of funding that lies currently with local authorities should be transferred to the NHS. We would not then have such a gap. The local authorities resisted, but the core of the problem that both Front Benches are outlining is that the £1 billion that the councils have is not ring-fenced and will be spent on whatever provisions are desperately needed. The money that the Minister says is for the NHS will be spent only on NHS re-ablement and other stuff that is absolutely within the NHS, but the local authorities do not believe that. They think that it will be dropped on their toes at any minute, and that they can spend it.
I fully understand the issue that the hon. Lady raised about whether we merge the NHS part of social care in local government into the NHS, or vice versa. That has been an ongoing debate for many years. The hon. Lady may find it difficult to believe, but 13 years ago I was the Minister with responsibility for social care. The argument was raging then. I have no doubt that it will continue to rage for some time to come. I, too, have heard the worries that the money that comes through the RSG will not be spent on social care. From the discussions that the NHS has had with local authorities, I have been led to believe that that will not be such a problem. Given that there is a problem with social care and a need to provide support, there will be a determination and a positive attitude to ensure that the money is appropriately spent on what it is designed for and that it will, with the money from the NHS, make a significant difference to a very serious and sensitive problem that we, as a society, have to address.
In conclusion, the spending review is the necessary consequence of this Government’s facing up to the financial responsibilities and problems that we inherited when we came to power. If we are to secure a future of growth, prosperity and jobs and if we are to fulfil our commitment to increase funding for the NHS in real terms for every year of this Parliament, then we must place our public finances on a stable, sustainable footing.
We will not ask the sick, the disabled or the elderly to pay the price of the previous Government’s economic mismanagement. We are increasing the health budget in real terms and reforming the service, not only to make the most of every penny but to put power in the hands of those who know best how to improve services. I am talking not about the Ministers and civil servants in Whitehall but about the NHS staff and patients on the ground.
Mr Morris has indicated that he wishes to make a few closing remarks with the consent of the Members present. I am perfectly prepared to facilitate that, but the hon. Gentleman must understand that these are closing remarks, and that he is not actually responding to the entire debate all over again.
With the leave of this Chamber, I thank you, Mr Gale, for your courtesy and stewardship of this debate. I thank my hon. Friend the Member for Halton (Derek Twigg) and the Minster for responding, and the Backbench Business Committee for giving us the opportunity to hold this debate and to scrutinise the impact of the comprehensive spending review on the Department of Health. Within the context of the CSR, Members present have highlighted concerns about the cost pressures on the NHS arising from the huge organisational change, hidden costs of VAT increases, drug inflation and cuts in local government and welfare budgets. Indeed, many questions have been raised that may be the subject of future debate in Westminster Hall or in the Chamber.
Members on the Labour Benches call on the coalition Government to honour their pre-election pledges to safeguard the NHS and enable it maintain a comprehensive service that is free at the point of need. I make this pledge. We on the Labour Benches will hold the Government and Ministers to account for their stewardship of the NHS.
Finally, I thank all of the Members who are here today. More than a dozen have participated, which is too many to mention by name.
Question put and agreed to.