Health Funding (Telford and Wrekin)

Tuesday 7th January 2014 Westminster Hall

11:00

[David Wright (Telford) (Lab)]

Mr Dobbin, it is a pleasure to see you in the Chair this morning and to have the opportunity to talk about health funding in Telford and Wrekin.

The objective of all of us, across the political divide and in the health community, is to strengthen the links between the formal national health service and local authorities and care providers in the community. That is the general consensus and I think everybody agrees with that as an overarching policy. However, I am concerned about the amount of resource available to tackle issues to do with continuing health care in the community in Telford and Wrekin, and about how that health funding integrates with the work that the local authority is doing.

It is pretty much acknowledged, across the political divide, that Telford and Wrekin council is a good unitary authority. It performs well and is working hard to ensure that it protects local residents as we move through a period of budget restraint and cuts to services. That is difficult and tough for the local authority and it has a major impact on our community. The way we integrate health services with the ongoing provision of front-line social care services is important.

The council is undertaking a consultation on its budget. Real pressure is emanating from Telford and Wrekin clinical commissioning group’s stance on funding continuing health care cases in the town. Some 50% of the council’s revenue budget—the money it spends on day-to-day services, such as caring for the elderly, looking after children and taking care of the environment—comes from the Government, and in the last three years it has been cut by almost £29 million.

By the end of 2015-16, the cut in the council’s funding from the Government will have reached nearly £50 million. These are cuts to cash grants that the Government provide to the council. Clearly, if inflation is taken into account, the real-terms cuts are much greater. At the same time, the council is facing major challenges from the growing cost of caring for increasing numbers of vulnerable people in our community. The CCG has added to the financial pressure by shunting around £8.5 million of costs that it would previously have covered in respect of CHC cases to the local authority. That is being done by the CCG’s taking a much harder line in the assessment of CHC cases. That is impacting seriously on the council and its budget.

Today is about exploring what more we can do to integrate health funding with the work that the local authority is doing in its social care environment. To set this out fairly starkly, in 2009-10 the primary care trust spent some £13.9 million on CHC cases. In 2012-13, the equivalent body in Telford and Wrekin spent just £2.3 million directly on care packages for CHC. I acknowledge that the CCG has topped that money up this year, with an additional £2.4 million, but that is a one-off payment. There is concern that such an enormous reduction in funding for CHC cases is putting enormous pressure on the health service and on front-line integrated health and social care services.

The other important issue to consider is how the funding formula has been calculated in respect of the number of people receiving continuing health care funding in our community, in comparison with surrounding locations. As at 30 June last year, there were 19.4 people per 50,000 population in Telford and Wrekin receiving CHC funding; in Shropshire, the figure was 82.2 per 50,000 population. Considerably fewer people, proportionately, are receiving CHC funding in Telford and Wrekin, but I cannot for the life of me determine why. Some have said that it is because Shropshire has an older population and because its structure is different, but it might be imagined that, given the provision of community hospitals in other parts of Shropshire, the figure would be different and that Telford and Wrekin would be doing far better.

If Telford and Wrekin is compared with similar local authorities—what might be called its Chartered Institute of Public Finance and Accountancy neighbours—we see that we are struggling to match the numbers of people per 50,000 weighted population who are receiving continuing health care funding. For example, in Warrington the figure is 54.6, in Darlington it is 65.1 and in Stoke-on-Trent it is 48.4 of weighted population per eligible 50,000 people. I reiterate that the figure is 19.4 in Telford and Wrekin and I cannot understand why, in that context, so few people are receiving continuing health care funding. This places enormous pressure on the local authority. As people move out of hospital or into care, whether at home or in other settings, the council is having to step in and try to provide care and support that ought to be provided, in my view, by the health service.

Although I accept that the primary care trust, at one time, was generous in its CHC funding compared with national averages—I mentioned the historical figures—the position now seems to have reversed. As I said, the ratio of CHC cases per 50,000 population in Shropshire is almost four times higher than in Telford and Wrekin. The council has calculated that, if the CCG spent at the national average, it would need to spend in the region of £7.65 million. That is significantly different from our current funding profile. I am concerned that the formula is not working effectively for Telford and Wrekin—either that, or the assessment procedure is not being undertaken in the same way as in other areas of the country.

The Prime Minister made it clear in the Conservative manifesto for the last general election that health funding would be protected. I am concerned that costs are being shunted away out of the health service and on to local authorities. The real concern is that these hidden cuts within the health service are being fed through into the local authority sector, so that nobody notices. Well, I hope that after today people will notice. This dilemma will be faced by a range of local authorities that will increasingly have to pick up costs that would previously have been met by the health service.

The Minister is a good man with a good reputation for understanding how the health service works—understandably, given his background—and I am sure that he agrees with my opening remarks. We want to see better integration between the health service and social care, as provided by local authorities. That is what I am calling for today. I should like him to look at the formula for Telford and Wrekin overall, in terms of the work being done by the CCG, and at whether the assessment procedure operating in our area is correct and being applied effectively.

The council is making a lot of savings. It has delivered more than £50 million of ongoing annual revenue savings, and it is considering proposals to cut the remaining £23.7 million that has to be saved over the next two years. Colleagues from mid-Wales will have seen the coverage in the Shropshire Star over the past few days on how the council is working extremely hard to identify where some of the cuts can take place. We have already seen significant cuts in the council’s back-office staff, and large numbers of people have left the structure of the local authority—1,000 posts at the council have been deleted or become subject to voluntary redundancy in recent years—so there has been a lot of work to try to pare back costs.

In the next two years, the council will endeavour to meet the Government’s proposal to freeze council tax too, because we are conscious of the big cost-of-living issues for ordinary people. That means that some of the cuts to front-line social care services will fall on the most vulnerable people in our community. If the continuing health care budget is not correct, and if the health funding that passes through, in partnership with local authorities, to care for the most vulnerable people in our community is not correct, we will have an even greater challenge in the long term.

We are trying to develop proposals to make savings at local authority level, but the Government need to reconsider the issue of continuing health care. I would like the Minister to address direct support for trying to achieve a fairer apportionment of CHC costs between the CCG and the council in future years. The council’s managing director has written formally to the CCG. I understand that, fortuitously, a meeting is taking place today to discuss some of the issues.

I am not pitching for large pots of new money. We just want a fair deal on what we are entitled to, and I hope that the Minister can reassure us today that he is aware of the issues and how important they are for health funding within our community. I also hope that he is aware of the pressure on Telford and Wrekin council, which I think he will agree is a good council that tries to do a good job and is trying to deliver on the Government’s commitments while ensuring that we provide care and support for some of the most vulnerable people in our community.

11:12

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

It is a pleasure to serve under your chairmanship for the third time, Mr Dobbin.

I congratulate the hon. Member for Telford (David Wright) on securing today’s Westminster Hall debate, on his strong advocacy for the needs of his constituents and on his highlighting of the importance of political consensus on these issues. He is absolutely right to do so.

We know that the single biggest challenge facing our health services is how better to look after older people and people with long-term disabilities and how to provide dignity in the care of people as they grow older. The key to delivering better health services for that group—and for all patients, including those in the early years of life—is an increased focus on integration and more joined-up health care services. That is very much at the heart of the hon. Gentleman’s contribution, and I hope my remarks will reassure him that it is very much the focus of the Government’s stewardship of the health care system.

The hon. Gentleman will be aware that a £3.8 billion integration fund has been set up that will, in the longer term, drive and improve joined-up services between local authorities and the NHS. For far too long, there has been too much silo working. Silo budgets have sometimes reinforced the silo working, and it is often patients who have fallen through the gaps and paid the price. That is why the Government are determined to fix the situation and ensure that, not just through the changes we are introducing in the Care Bill but through the integration fund, there will be greater synergy of joint commissioning and pooled budgets between local authorities and the NHS, where that is to the benefit of patients.

It was a pleasure for me to visit the Princess Royal hospital in November 2013 to see the birthing centre and the development of the new women and children’s centre. As the hon. Gentleman will be aware, the trust has benefited from some £35 million of external capital money to support its capital investment programme, including the development of the women and children’s centre, which is due to open in autumn 2014.

Before we proceed, there are two issues. First, there is the key issue of how the national funding formula is set. I reaffirm that throughout the NHS, including in Telford and Wrekin, there have been real-terms increases in NHS funding under this Government. Secondly, the local CCG has discretion on how it allocates its budget, so there is some local discretion, which probably goes to the heart of some of the hon. Gentleman’s concerns.

Until recently, the funding allocation was set by the Department of Health, but under the new arrangements politics has been taken outside the setting of health care funding; NHS England now has direct responsibility for funding allocations. The NHS, through NHS England, relies on the Advisory Committee on Resource Allocation, or ACRA, and its assessment of the expected need for health services to help set allocations for each area.

We were all pleased that, for the 2013-14 allocations, NHS England decided that following the ACRA recommendations exactly would lead to higher growth for areas with better health outcomes and possibly reduced budgets for areas with less good health outcomes. Given that, like NHS England, we are all concerned about reducing health inequalities, the important decision was made to maintain the substantial weighting in the formula for areas of deprivation and health care inequalities. The ACRA formula was not directly followed, an issue on which we have touched in previous Westminster Hall debates. NHS England’s thinking, in outline, was that the recommendations were inconsistent with the responsibility to reduce health inequalities. NHS England conducted a fundamental review that has informed the allocations.

On 17 December 2013, NHS England’s board met and agreed CCG planning guidance and allocations for 2014-15, which will help commissioners to commission services for the benefit of local populations. The Government have protected the overall health budget, and NHS England has ensured that every CCG in England will continue to benefit from at least stable real-terms funding for the next two years.

The Government’s mandate for NHS England makes it clear that we expect it to place equal access for equal need at the heart of its approach to allocations; to consider health inequalities; to ensure a transparent process; and to ensure that changes to allocations do not destabilise local health care economies. A rapid change to or endorsement of the ACRA recommendations would have led to mass destabilisation of local health care economies. NHS England was mindful of that, and of the need to prioritise funding for areas of deprivation, in its allocations.

The 2014-15 allocation for Telford and Wrekin CCG will be almost £187.8 million—the per capita allocation is £1,058 a head, about the same as my constituents receive in Suffolk. That is a cash increase of 2.14% on the funding that the CCG received this year. The CCG will also receive a 1.7% increase on its allocation for 2015-16, which means that its funding will go up to almost £191 million. Additionally, NHS England has announced that the Shropshire and Staffordshire area team will receive a 2.38% rise in primary care funding in 2014-15 to almost £342 million and a further 1.8% increase in 2015-16 to more than £348 million. Those increases are higher than average, which reflects the historical underfunding in those areas against the primary care funding formula adopted by NHS England. I hope that is some reassurance to the hon. Gentleman that, in a general sense, increased funding is coming to his part of the country.

The hon. Gentleman will be aware that the Government have also provided £221 million in additional funding to the NHS to help cope with winter pressures this year so that patients get the treatment they deserve. Winter is a challenging time for all health care services, and it is right that we have put in place additional money for the NHS. The local health economy has received £4 million in additional funding, of which £1.2 million will be directly invested in Shrewsbury and Telford Hospital NHS Trust to staff all escalation areas.

The trust has also outsourced a proportion of day surgery to the Nuffield hospital to protect elective activity, should that be necessary at times of high demand during the winter. The remaining £2.8 million is being used to improve unscheduled care capacity and flow outside the hospital. An additional 69 beds have been sourced outside the trust, including intermediate care, care home and specialist dementia beds.

As the hon. Gentleman will be aware, the winter pressures money is being used to fund intermediate care beds and the focus on rapid discharge, not only in Telford and Wrekin, but nationally to some extent. That benefits not only the NHS, but local authorities, and it is part of the drive to achieve more integrated and joined-up health and social care.

If an old person can be promptly discharged home with the right care package, it is important that that happens; that is better for the person and the care they receive, but also better for the NHS’s financial settlement. To put it crudely, stuffing beds with patients does not make good financial sense, and it is not good for patients, who would much rather be at home in their communities. I am pleased that the money is going towards making that possible in the hon. Gentleman’s area.

[David Wright]

I absolutely agree with everything the Minister says—it is basic common sense. Although I am glad to hear him say it, and it is really positive, it would be helpful if he could address one concern, although I am not necessarily suggesting he will have an answer today.

I accept that we want to get people out of hospital and into their homes if possible to ensure they are cared for effectively. However, he must admit that the figures I highlighted, as well as the local authority’s concerns, suggest there has been a fairly significant reduction in the CHC pot. Given the scale of the local authority’s budget, compared with the health service’s budget, that reduction has an enormous knock-on effect on the local authority. I hope the Minister will take some time to look at that.

[Dr Poulter]

The hon. Gentleman is absolutely right to highlight the issue. The point I was coming on to is that although the region’s funding allocation from the Government through NHS England is going up, the CCG obviously has some local discretion over how that allocation is spent, and that goes to the heart of the matter.

As has been highlighted, continuing health care funding is the crux of this matter, and it is relevant to mention NHS continuing health care, which is a package of ongoing care arranged and funded solely by the NHS where the individual is found to have a primary health need. The NHS provides that throughout the country, and it is vital that it does.

There is sometimes quite a blurred line between where NHS funding and care end and where local authority responsibility starts. The issue is not whose budget is involved or which budget the money comes from, and that is part of the reason why the Government set up the £3.8 billion integrated care fund. This is about joining up budgets. The hon. Gentleman and I, the doctors and nurses on the ground, and the local authority are interested in the person, rather than who pays for treatment. The fund is a recognition of that, and we are setting it up to drive forward joined-up working.

However, we have to look at where we are now and why we have come to the place the hon. Gentleman highlighted. He will be aware that audits were carried out in 2009-10 and 2010-11 of the then PCT’s accounts. It was decided that the continuing health care funding was not being allocated properly, appropriately or even, potentially, legally.

At that point, the PCT was putting a lot of additional money into continuing health care, but a similar approach was not being taken elsewhere in the country. The auditors therefore rightly took the view that funding had to be allocated in accordance with the correct public rules for spending money, including NHS money, and that if money was, potentially, being allocated in an illegal way, that needed to be addressed under the rules at that time.

[David Wright]

rose—

[Dr Poulter]

I absolutely accept—the hon. Gentleman may wish to elaborate on this in his intervention—that, fundamentally, this is not about rules, but about making sure we have a better service for people. That is what we need to focus on.

[David Wright]

Yes, indeed, I do believe that. My concern is that the figures I highlighted suggest that, in comparison with similar and surrounding authorities, we are doing very badly per head of population in terms of the assessment process for qualification for continuing health care. That suggests to me that the pendulum has swung too far in the other direction and that the assessment procedure is being used to ensure that the figures are kept down.

I am concerned that some people with care needs in the community will lose out—as the Minister rightly said, this is not about structures and silos in the health service, but about individuals and their families in the community who are trying to cope.

[Dr Poulter]

The hon. Gentleman is right. In terms of the per capita spend in CCG allocations, Suffolk similarly has large towns with very rural surrounding areas, and the CCG in the hon. Gentleman’s area has a fairly similar allocation to the one I represent.

There is also an issue about how the money given to CCGs is spent. In a knee-jerk reaction, perhaps, to the auditors’ findings and the fact that the spend was not allocated appropriately, Telford and Wrekin went from being almost one of the highest spenders on continuing health care to being one of the lowest, and that is the crux of the problem. That is down to decisions by the CCG, or the PCT as it was, about how to allocate the budget given to it.

If, in 2009, 2010 and 2011, the PCT was picking up funding responsibilities that should perhaps have been the local authority’s, but then, in response to the audit, changed the amount it allocated to continuing health care, that could clearly have a destabilising effect on the local authority. However, the PCT and then the CCG have done everything they can to mitigate that, and they have given the local authority discretionary funding.

In particular, just over £3 million has gone to the local authority thanks to the fund set up by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) to facilitate exactly that kind of activity. At its own discretion, the CCG has also given the council £2.4 million on top of that, over and above what the council expected to receive. The CCG has therefore acknowledged and accepted that, in reacting to the auditors, there was perhaps an over-reaction, and it has now righted that by giving the local authority some discretionary additional funding.

That does not detract from the overriding point that, generally throughout the country, and particularly in Telford and Wrekin, we need to see increased emphasis on integration and joined-up care. It is in no one’s interests to have such discussions about funding, which waste a lot of time and effort on the part of the local authority and the CCG. If we can drive more joined-up working, more joint commissioning and more pooled budgets, where appropriate, as the Government will be doing through the Care Bill and the integration fund, the number of these turf wars will be reduced, because the emphasis will be on the patient, rather than the budgetary silo. That must be the right way forward.

I am sorry that, in this instance, the hon. Gentleman’s constituents and local authority have perhaps been caught up in errors made by the former PCT, although I am pleased the CCG is doing all it can to redress the balance by giving the local authority discretionary additional funding. I hope working relationships will improve and that, as we move forward, with further emphasis centrally on integrated health care and joined-up budgets, we will see greater improvements to the local health care economy and, more importantly, continuing improvements to patient care locally. If the hon. Gentleman wants to discuss the matter further or to meet me, I will be happy to do so.

11:30

Sitting suspended.