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Clinical Commissioning Groups (Funding)

Volume 564: debated on Tuesday 11 June 2013

1. What plans the Government have to change the NHS formula for funding clinical commissioning groups; and if he will make a statement. (158866)

Allocations to CCGs are the responsibility of NHS England. However, I have been advised that NHS England will rely on advice from the Advisory Committee on Resource Allocation (ACRA) for changes in the CCG formula.

The failure of the Government to use the long-established funding formula for the NHS in dividing the budget between CCGs in north Yorkshire has left us with glaring anomalies, so that in York, the funding is £1,050 per head, but for Scarborough and Ryedale, which is served by the same NHS foundation trust, the funding is £1,234 per head. That is quite unsustainable and will lead to further postcode rationing. The same funding formula must be applied to all CCGs throughout the country. When will that happen?

I share the hon. Gentleman’s concerns about the way that NHS funding is allocated to different parts of the country. The allocation in my constituency is about the same as in his constituency, and I have long worried that things like age and rurality are not factored into the final amounts in the way that they need to be. However, in this case NHS England decided that if it was to follow precisely the ACRA recommendations, it would lead to higher growth for areas with better health outcomes and lower growth, or even cuts, for areas with less good outcomes, which it thought would be inconsistent with its responsibility to reduce health inequalities. That is why it is conducting a fundamental review, which it says it hopes will inform the next set of allocations for 2013-14.

The Secretary of State will be aware that in my area of north Somerset, in Weston-super-Mare, the actual allocations versus the intended amounts of cash which should arrive with us based on the existing formula, are well below what they should be; so even without changing the funding formula, we are still getting dramatically less cash than we should. I urge the Secretary of State to look at that swiftly and see what can be done, within the existing spending envelopes, to make the allocations fairer.

As I said, I share my hon. Friend’s concerns about the way funding works at the moment. We are in a very difficult situation because if we were to move closer to the formula proposed by ACRA—I am sure he would agree with me that it is right that it is done independently of Ministers, and in this case it is done under NHS England—it would mean cuts in real terms for the budgets in other areas. Given the pressures overall in the NHS, that was obviously a decision that NHS England was very reluctant to make.

The last Government matched health funding to health need and reduced the gap in male life expectancy and infant mortality, but this Government have reduced the weighting for health inequalities. The Secretary of State’s public health allocations mean that the areas he has identified today with the biggest health challenges do not get a fair share. The area with longest male life expectancy, Kensington and Chelsea, gets £133 per head, but Liverpool gets £89, Manchester £86, Luton £61, and Slough just £37. If he really wants to do something about health inequalities, should he not match his words with deeds and give more to the areas with the greatest challenges?

The right hon. Gentleman really cannot have it both ways. The budget for public health is also decided by an independent body, and we gave everyone a real-terms increase and then used any remaining money to even out the differences, to get everyone as close as possible to the independent formula. But if we are talking about spending, I think the right hon. Gentleman needs to say precisely whether he stands by his assertion that Governments should cut spending on the NHS by £600 million—[Interruption.] He says he has never said it before, but actually, up till now he has always said that it was irresponsible for the Government to increase spending in real terms. We have increased it; we have increased it by £600 million. He needs to come clean on whether he still wants to cut the NHS budget.

Given that age is the main driver for an individual’s health care needs, why has not age been given more weighting in the funding formula in the past? I urge the Secretary of State to request NHS England to give as much weighting as possible to age in any future funding formula.

I recognise that my hon. Friend has campaigned on that issue a great deal, and I have great sympathy, because areas with high age profiles do have much greater needs for the NHS. That obviously must be weighted against things like social deprivation, which also have an impact. It is right for these things to be decided independently, which they are. The question is how we get closest to those independent allocations, and I know that that is preoccupying NHS England at the moment.