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NHS Trusts (Financial Deficits)

Volume 569: debated on Tuesday 22 October 2013

4. What estimate he has made of the number of NHS Trusts forecasting a financial deficit at the end of 2013-14. (900586)

The Trust Development Authority and Monitor, for foundation trusts, indicate that there will be a financial surplus across the health care provider sector in 2013-14.

With so many NHS trusts in deficit and many missing their A and E targets, when will the Minister stop blaming everybody else and get a grip on the A and E crisis?

I am disappointed that the hon. Gentleman used a pre-prepared question and did not listen to my answer. Throughout the health care provider sector, over 80% of trusts and foundation trusts are in financial surplus, and the overall end-of-year forecast is pointing to a surplus of £109 million across the sector. To support hospitals through what can be very difficult winter periods, with flu and other seasonal problems, we have put in place measures including a £500 million fund for winter pressures. That will take the pressure off A and E—unlike in Wales, where the Welsh Administration are cutting the budget for the NHS. In Wales the NHS has failed to meet A and E waiting targets since 2009.

While I welcome the fact that the provider sector as a whole is in surplus, will my hon. Friend confirm that some trusts are indeed anticipating that they will be running deficits? Will he also confirm that the National Audit Office has estimated that up to 30% of acute hospital admissions would be avoidable if we had properly integrated services, and that that would allow us to deliver not only better financial management but, much more importantly, better quality care for patients?

My right hon. Friend is absolutely right to highlight the fact that a very small minority—20%—of trusts across the health care provider sector, including trusts and foundation trusts, are anticipating a deficit. Many of those trusts have a direct legacy of debt from the private finance initiative arrangements that the previous Government put in place. That is one of the direct legacies of the poor PFI deals that were arranged. He is absolutely right to highlight the importance of integrated and joined-up health care. That is exactly what the £500 million we are providing for winter pressures is designed to do by focusing on better preventive care to keep people out of hospital.

Trust balance sheets are bound to be affected by the resources allocated to the commissioning groups. On 12 June last year, I asked the then Minister for

“a clear assurance that he will not downgrade the importance of economic deprivation in his resource allocation formula”.

He told the House:

“Yes, I can give that assurance.”—[Official Report, 12 June 2012; Vol. 546, c. 167.]

Why is the Minister’s Department now consulting on doing precisely what the then Minister said he would not do and taking £230 million out of the budget for the north-east and Cumbria?

The right hon. Gentleman has perhaps misunderstood the information imparted on that occasion. It is very clear that the allocation formula is now independently set and NHS England has primary responsibility for it. There is legitimate concern. There is a 10% deprivation weighting for some of the poorest communities in-built into that formula. It is also important that we recognise that demographics and an ageing population are putting pressure on a lot of CCG budgets, but these are matters for NHS England.

As Morecambe Bay trust seeks to recover from its financial crisis, one of the options put forward by clinicians is for a new, acute hub hospital to be created south of Kendal to improve safety, access and financial efficiencies. It is bound to involve a capital cost to start off with. If the new hub hospital is the option chosen by clinicians, will my hon. Friend give it his backing politically and financially?

My hon. Friend will be aware that this is a matter for local commissioners to decide and it is not for Whitehall to impose solutions on them. There are issues and efficiencies that Morecambe Bay trust can drive by better managing its estate and reducing temporary staffing costs. The hospital and trust will, of course, want to look into those issues in improving their financial outlook and the quality of care they can provide for patients.

Whatever the Minister claims, the reality is that the Secretary of State has lost grip of NHS finances just as he has lost grip of the crisis in A and E. Earlier this month, we learned that half of all NHS hospital trusts are now predicting deficits—up from one in 12 last year. As a self-proclaimed champion of openness, will the Minister now commit to publishing those deficit figures monthly and guarantee that all NHS acute trusts will balance their books by the end of the year? It is a simple question—yes or no.

The hon. Lady is being economical with the figures. I indicated earlier that 70% of trusts and 89% of foundation trusts are predicted either to break even or end the year with a financial surplus. That is hardly a difficult position. Those trusts that have deficits are often a direct legacy of the PFI deals negotiated by the previous Government and the right hon. Member for Leigh (Andy Burnham) when he was Secretary of State. The sector as a whole is predicting £109 million of surplus. That is hardly a deficit. I know that the Labour party is not very good with figures and cannot add up, which is why this country is in such an economic mess, but the figures speak for themselves: £109 million of surplus is predicted for trusts and foundation trusts.