The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I shall now repeat a Statement made earlier this afternoon by my right honourable friend the Secretary of State for Health about the NHS. The Statement is as follows.
“I wish today to make a Statement about the future of our NHS, one that I hope everyone in this House will welcome. In October, NHS England and its partner organisations published an ambitious Five Year Forward View that was welcomed across the political divide. Today, I will announce how the Government plan to implement that vision.
Our response has four pillars. The first pillar is to ensure that we have an economy that can pay for the growing costs of our NHS and social care system: a strong NHS needs a strong economy. Some have suggested that the way to fund extra cost pressures is through new taxes, including on people’s homes. However, through prudent economic policies, the Government can today announce additional NHS funding in the Autumn Statement without the need for a tax on homes. The funding includes £1.7 billion to support and modernise the delivery of front-line care, and £1 billion of funding over four years for investment in new primary care infrastructure. That is all possible because under this Government we have become the fastest growing economy in the G7.
The NHS itself can contribute to that strong economy in a number of ways. It is helping people with mental health conditions to get back to work by offering talking therapies to 100,000 more people every year than four years ago. But the NHS can also attract jobs to the UK by playing a pivotal role in our life sciences industry. We have already attracted £3.5 billion of investment and 11,000 jobs in the past three years, as well as announcing plans to be the first country in the world to decode 100,000 research-ready whole genomes. Today, I want to go further by announcing that we are establishing the Genomics England Clinical Interpretation Partnership to bring together external researchers with NHS clinical teams to interpret genomic information so that we go further and faster in developing diagnostics, treatments and therapies for rarer diseases and cancers. Too often, people with such diseases have suffered horribly because it is not economic to invest in finding treatments. We want the UK to lead the world in using genetic sequencing to unlock cures that have previously been beyond our reach.
The second pillar of our plan is to change the models of care to be more suited for an ageing population, where growing numbers of vulnerable older people need support to live better at home with long-term conditions like dementia, diabetes and arthritis. To do that, we need to focus on prevention as much as cure, helping people to stay healthy without allowing illnesses to deteriorate to the point where they need expensive hospital treatment. Some have argued that to do that we need to make clinical commissioning groups part of local government and force GPs to work for hospital groups. Because this would amount to a top-down reorganisation, we reject this approach. We have listened to people in the NHS who say that more than anything the NHS wants structural stability going forward, and, even if others do not, we will heed that message.
We have already made good progress in improving out-of-hospital care. This year, all those aged 75 and over have been given a named GP responsible for their care, something that was abolished by the previous Government. From next year, not just over-75s but everyone will get named GPs. Some 3.5 million people already benefit from our introduction of evening and weekend GP appointments, which will progressively become available to the whole population by 2020. The better care fund is merging the health and social care systems to provide joined-up care for our most vulnerable patients. Alongside that, the Government have legislated, for the first time ever, on parity of esteem between physical and mental health. To deliver world class community care, we will need much better physical infrastructure. Today, I can announce a £1 billion investment fund in primary and community care facilities over the next four years. This will pay for new surgeries and community care facilities in the places where people most want them: near their own homes and families. These new primary care facilities will also be encouraged to join up closely with local jobcentres, social services and other community services.
Additionally, from the £1.7 billion revenue funding we are also announcing, we will make £200 million available to pilot the new models of care set out in the Five Year Forward View. To deliver these new models, we will need to support the new clinical commissioning groups in taking responsibility, with partners, for the entire health and care needs of their local populations. So as well as commissioning secondary care, from next year they will be given the opportunity to co-commission primary care, specialist care, social care, through the better care fund and, for the first time, if local areas want to do it, public health. The NHS will therefore take the first steps towards true population health commissioning, with care provided by accountable care organisations.
A strong economy and a focus on prevention are the first two pillars of our plan. The third pillar is to be much better at embracing innovation and eliminating waste. We are making good progress in our ambition for the NHS to be paperless by 2018, and last month the number of A&E departments able to access summary GP records exceeded a third for the first time, while from next spring, everyone will be able to access their own GP record online. However, today, I want to go further: £1.5 billion of the extra £1.7 billion revenue funding will go on additional front-line activity. To access this funding, we will ask hospitals to provide assured plans showing how they will be more efficient and sustainable in the year ahead and deliver their commitment to a paperless NHS by 2018.
We also have to face the reality that the NHS has often been too slow to adopt and spread innovation. Sometimes this is because the people buying healthcare have not had the information to see how much smart purchasing can help contain costs, so from next year CCGs will be asked to collect improved financial information, including per-patient costings.
The best way to encourage investment in innovation is a stable financial environment, so I can today announce that the Government, in collaboration with NHS England, will give local authorities and clinical commissioning groups indicative multiyear budgets as soon as possible after the next spending review. We expect that NHS England and Monitor will follow this by modernising the tariff to set multiyear prices and make the development of year-of-care funding packages easier.
The NHS also needs to be better at controlling costs in areas such as procurement, agency staff, the collection of fees from international visitors and reducing litigation and other costs associated with poor care. I have announced plans in all these areas and we will agree the precise level of savings to be achieved through consultation with NHS partner organisations over the next six months. That will lead to a compact signed up to by the department, its arm’s-length bodies and local NHS organisations, with agreed plans to eliminate waste and allow more resources to be directed to patient care.
The final pillar of our plan is the most important and difficult of all. We can find the money, we can support new models of care, and we can embrace innovation, but if we get the culture wrong, if we fail to nurture dignity, respect and compassionate care for every single NHS patient, we are betraying the values that underpin the work done every day by doctors and nurses throughout the NHS. We have made good progress since the Francis report, with a new CQC inspection regime, six hospitals being turned round after being put into special measures, 5,000 more nurses on our wards, the My NHS website and 4.2 million NHS patients being asked for the first time if they would recommend to others the care they received.
In the next few months, however, we will go further, announcing new measures to improve training in safety for new doctors and nurses, launching a national campaign to reduce sepsis and responding to recommendations made in the follow-up Francis report, tackling issues around whistleblowing and the ability to speak out easily about poor care.
Under this Government, the NHS has, according to the independent Commonwealth Fund, become the top-ranked healthcare system in the world. In 2010, we were seventh for patient-centred care, and we have now moved to top. Under this Government, we have also become the safest healthcare system in the world. But with an ageing population, we face huge challenges.
How we prepare the NHS and social care system to meet those challenges will be the litmus test of this Government’s ambition to make Britain the best country in the world to grow old in. We are determined to pass that test and today’s four-pillar plan will help us to do just that. Our plan will need proper funding, backed by a strong economy, so I welcome yesterday’s comment by Simon Stevens that when it comes to money,
‘the Government has played its part’.
However, we also need ambitious reforms to the way we deliver care, focusing on prevention, innovation and a patient-centred culture that treats every single person with dignity and respect—proper reforms not as a substitute for proper funding but as a condition of it, with a long-term plan for the economy and a long-term plan for the NHS. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Earl Howe
My Lords, I normally thank the Opposition spokesmen for their comments, but that was an absurdly negative response, if I may say so. It does the noble Baroness no credit to do that amount of shroud-waving. She knows perfectly well that the case that she has put is grossly overegged. Yes, of course, the NHS is under pressure; we all know that. There is rising demand on a scale that we have never seen, but it ill befits the party opposite, which agrees that more money is needed for the NHS, to take issue with the money that we are announcing today. I would have hoped that she would have welcomed that, but she has not.
I shall answer the noble Baroness’s questions about where the money has come from. We never pretended that the whole £1.95 billion was new money. Some £550 million comes from reprioritised programme work that we have reallocated from the department; £150 comes, similarly from work that NHS England has reprioritised. So the Treasury is providing an additional £1 billion of funding; the department, as I say, is doing its bit; and the Treasury is also providing additional funding of £1 billion over the next four years, to support investment in out-of-hospital infrastructure and facilities. The £700 million that the Treasury is not providing as new money is made up of savings from a number of programmes which come to a natural end in 2014-15. There are back-office savings and there is contingency funding which is no longer needed. These savings have been found without impacting on existing front-line services, so this funding provides a genuinely additional boost to the NHS.
As for the Treasury’s new money, £1 billion from the forex fines will fund the £1 billion fund over four years to invest in out-of-hospital infrastructure, but the Government’s tight financial management has seen departments continue to exceed savings targets. Historical underspends have been quite considerable. The largest were generated by the Ministry of Defence, the Department for Education and the Department for International Development. These underspends demonstrate the Government’s firm grip of the public finances and continued improvements in spending control and financial management. They allow us to be confident in reallocating spending within the overall totals for 2015-16 to priorities in the health service.
The noble Baroness mentioned mental health. We remain committed to investing in mental health services. The Deputy Prime Minister will be making a full announcement soon, outlining how we will invest an additional £45 million on mental health services. As for the current year, to which she also referred, we have already made significant additional funding available for the NHS this year to support winter and system-resilience planning and to tackle long waits for operations. Robust plans are in place to maintain and improve NHS performance through the rest of this year and we are confident that the NHS will live within its budget this year.
The noble Baroness also mentioned social care and the pressures on those services. Through the better care fund we are moving to a position where we see health and social care no longer as separate budgets and services, but rather as the same thing—a position the patient and carer have been in for a number of years. Any investment in the NHS will provide benefit to social care and, as the Five Year Forward View sets out, the NHS will take decisive steps to break down the barriers in how care is provided between health and social care. This funding will help kick-start that.
As for the noble Baroness’s final barb about the Government’s reforms, I put it to her that the NHS is now set fair to work with the system that we have established. In other words, we have established a system that has health and well-being boards looking at the health priorities of a whole area, with clinicians embedded in that prioritisation process, commissioning for the health needs of an area, and public health centred on local authorities, which many regard as its natural home. We have clinical leadership in those clinical commissioning groups, something we did not have before these reforms, and we have saved a packet of money. The noble Baroness referred to the £3 billion cost of the reforms. That figure is fiction, as I am sure she knows because I have said it many times. The gross cost of the reforms was roughly £1.5 billion. During this Parliament, we will be saving, net, £4.9 billion as a result of the reforms, with £1.5 billion recurring year after year. This is a massive boost to front-line capacity in the NHS and nobody should forget that. This was a set of reforms designed to benefit patients and, by that measure, I put it to the House that it has succeeded in spades.
Lord Willis of Knaresborough (LD)
I thank my noble friend for repeating the Statement. I echo the point that, while many of us on all sides of the House may have disagreed with some of the structural changes in the Health and Social Care Act, the last thing the health service wants is another structural reorganisation. The plan by the party opposite to scrap the Health and Social Care Act is a real worry to many professionals. I say to my noble friend that no matter how much money the Chancellor promised today, it will not be enough to meet the demands of a changing healthcare system, where we are seeing, year on year, because of the success of the NHS, people living longer and with lots of different comorbidities.
I have a concern about the Statement. I actually think that Simon Stevens’s report is an excellent report and one that should have united this House rather than dividing us. After all, his pedigree comes from working with the Labour Party on the early reforms in the last Parliament. What really worries me is that neither in Simon Stevens’s report, nor in the Statement, is there a mention of the other crucial element, which is the workforce. The workforce and, indeed, the work of Health Education England, is not even worth a mention in the Statement—yet it is the 500,000 nurses and the 1.4 million care workers who bind the health and care system together and who will deliver the integrated health and social care which all of us in this House want to see.
Will my noble friend make it clear today that no savings will be made by reducing Health Education England’s budget? Will he state clearly that there will be investment in the skills of our staff in order that Simon Stevens’s plan actually works and that we can make it a realisation rather than a hope?
Earl Howe
My noble friend is absolutely right. One of the critical elements of the Five Year Forward View is to ensure that we have the right number of staff with the right qualifications in the right places. While Health Education England is the body charged with ensuring that that happens, it is up to us in government to ensure that there is adequate funding to enable it to do that. I can assure my noble friend that Ministers are very clear that Health Education England should be fully supported to deliver the programme that it has mapped out for itself. That programme is an exciting one. It involves more doctors and nurses in training over the next few years. Our ambition is to see by 2020 an extra 10,000 people working in primary care, for example—and that is only one detail.
As a result of the Government’s reforms to the health service, we have been able to afford a large number of extra posts in front-line care, including doctors and nurses in both primary and secondary care. We have done that by reducing the number of administrators in the system—20,000 fewer than there were in 2010. My noble friend is right to draw attention to this issue; it is one that is very much in our focus.
Lord Liddle (Lab)
My Lords, pursuing the point about the integration of health and social care—I declare an interest as a member of Cumbria County Council—we in Cumbria face a situation where already our budget has gone down by over £100 million, we face another £80-odd million of cuts in the next four years, and this does not take account of the cost of the tax reductions that the Conservative Party is promising. The numbers of staff will have declined by 2,500 from 2010 to 2017, out of a staff of about 8,000. In this situation, it is impossible to protect social care. It is interesting that the Government are promising a longer-term perspective on health funding. Does this perspective apply to social care funding as well? What guarantees are the Government able to give that they will continue to fund local councils adequately in order to meet the rapidly growing demands of social care?
Earl Howe
My Lords, the noble Lord makes a very good point. It is for precisely that reason that we have looked at the mechanism that we have called the Better Care Fund to bring together budgets for health and social care. It will amount in practice to a transfer of funding into social care from the NHS. We are clear that that is the best way in which we can realise the vision that we have set, which is a preventive one for people—in other words, to forestall admissions to hospital.
Local government is feeling the strain—I do not seek to deny that—but so are many other areas of our national life. Up to now, the Better Care Fund aside, we have found an extra £1.1 billion from the NHS budget to bolster local authority budgets, and we are maintaining public health allocations at the same figure as before, so no cuts there. I realise that the strains are considerable and that local authorities are having to find ingenious ways of moving forward, but I am encouraged by the Better Care Fund plans that are coming forward; they look credible and exciting in terms of the quality of care that local authorities are now looking at.
Lord Walton of Detchant (CB)
My Lords, it may be thought inappropriate that someone of my age should comment upon what is called a forward view but which is in fact a five-year plan. Having said that, I have listened carefully to the Statement repeated by the Minister with his characteristic lucidity and authority, and although I have heard many five-year plans discussed by Governments of all parties over the past 66 years since the NHS began, I think that there are features of this one that are quite important, not least the crucial importance of integration between medical and social care. Will the additional funding that the Minister announced be capable of introducing and maintaining a seven-day week in the NHS, in the community and in the hospitals, which has been long awaited? That is a very important point.
I welcome what the Minister said about developments in the training of healthcare professionals; that is a crucial point at this stage in NHS development. I also welcome what he said about developments in biomedicine. In what way are the Government going to be able to handle the many new orphan and ultra-orphan drugs that are now coming on stream for the treatment of rare diseases, as a result of research in the NHS, which are going to be extremely costly? Is this going to be handled by NICE or do the Government have any specific plans regarding that problem?
Earl Howe
My Lords, I thank the noble Lord, Lord Walton, for his welcome of the Statement and indeed of the Five Year Forward View, which I think commanded a great deal of support from many quarters. He asked about the seven-day working plans for the NHS. Part of the Better Care Fund plans involves local areas committing, in one form or another, to seven-day working. Unless we have seven-day working in hospitals, we cannot hope to achieve the smooth and timely discharge of patients. That means a change in approach by a number of professionals. It does not mean that every professional will need to work seven days a week—no one has ever suggested that—but it means a shift in approach by social services, and by consultants in hospitals, in a way that in some areas we have not seen. In other areas this is already happening, and we can build on those models.
On the noble Lord’s question on biomedicine and orphan drugs, he is of course as well informed as he always is on these matters. Orphan drugs, as and when they come forward, can indeed be expensive, particularly if they are termed a stratified medicine applicable to only a narrow cohort of patients. In those instances we will expect NICE to make an assessment of these high-cost, low-volume treatments under its new methodology for those drugs. NICE is already engaged in a number of work streams in those areas. It is right that we take that approach. We have to have some methodology that commands confidence, to ensure that the NHS receives treatments that are not only clinically effective but provide value for money.
Lord Cormack (Con)
My Lords, I thank the Minister and congratulate him on what he has said. However, does he not accept that at the end of five years, welcome though this new injection of money is, there will be even greater demands and greater needs? Will he reflect on the debate introduced last year by the noble Lord, Lord Patel, where almost every speaker from all sides of this House indicated that there is a need for a plurality of funding if our National Health Service is to avoid further problems and disasters? Will he therefore reflect on the wisdom of establishing, with all-party support, a royal commission on the funding of the NHS that can look at everything and rule nothing out? If we are to have a world-class service through this century, we cannot resort to sticking plasters from time to time; we must have a new model of funding.
Earl Howe
My Lords, my noble friend, as ever, has rightly identified the likelihood of greater and greater demands on our health service over the coming years. Certainly, building a non-partisan consensus is something to be desired regarding the way that we fund our health service. Having said that, I can tell my noble friend that there has been no thinking whatever on the part of Ministers to depart from the current model of funding for the NHS. We believe passionately that the NHS should be free at the point of use, regardless of ability to pay. That is one of the core principles on which the NHS has been founded since 1948 and it is paid for out of general taxation. While I take on board my noble friend’s desire to look afresh at this area, I think that we have some way to go before cross-party talks need to take place. We are clear that we can proceed on the current basis.
Lord Davies of Stamford (Lab)
The noble Earl has always taken a very serious attitude towards his ministerial responsibilities and he has just spoken about the desirability of moving to an all-party consensus on health matters. Does he not therefore rather regret, in retrospect, that the Government decided to spin this announcement, leaking it in advance of the Statement in the House of Commons and putting it about that there was £2 billion of new money for the NHS—the implication being that this was the result of more buoyant government revenues because of a higher growth rate? In fact, it is nothing of the kind as the noble Earl has now revealed to the House. It is roughly £1 billion being reallocated within the NHS budget and £1 billion being reallocated from other department budgets, including from defence where there has been underspend, which is very damaging to this country’s interest. Would it not have been better, and easier to develop a consensus in this country—to which the noble Earl quite rightly looks forward—if in fact the Government were slightly more straightforward and candid with the public over announcements of this kind?
Earl Howe
I do not think one can develop a consensus prior to a government Statement—that is probably wishing for the moon. The charge that the noble Lord levels against the Government is also, if I may say so, misplaced. We have never pretended that all the money being announced today is new money. I do not seek to suggest that, as I have already explained. As regards the timing, I think it is standard practice for key elements of the Autumn Statement to be trailed ahead of the formal announcement. However my right honourable friend the Chancellor will confirm everything we have said today in the Autumn Statement on Wednesday, and that is as it should be.
Baroness Masham of Ilton (CB)
My Lords, the Minister has not said anything about specialised units. I declare an interest as president of the Spinal Injuries Association. Spinal units are vitally important when patients need treatment, yet some spinal units have cut the services of physiotherapists and occupational therapists, who are vital for rehabilitation. The answer is always, “It is up to the trusts”. The trusts can be wrong and in this case they are. Can the Minister give an assurance that there will be enough trained doctors, nurses and therapists for the next five years in spinal units?
Earl Howe
My Lords, I will have to take advice about that question. What I can say is that we now have in place a system of workforce planning that is better than its predecessor. I do not think there can ever be such a thing as a perfect system of workforce planning. We now have a national body, Health Education England, that is responsible for making sure that we have adequate numbers of professionals with the right skills. However, we also have local education training boards whose members include representatives from the acute trusts. It is up to those boards to make clear what the requirements are for trained staff and feed those requirements up to Health Education England so that planning over the coming years can be done in a rational and sensible way. I would expect that spinal units should make their case in that fashion so that if there is a need for physiotherapists in spinal units, and those physios are—for any reason—not available, then they will come forward in adequate numbers in years to come.
Lord Patel (CB)
My Lords, the Minister started his Statement by saying that the Government recognise the importance of life sciences in both economic growth and in delivering mental health care. Of course, I would agree with that and I take it from the Statement that the Government therefore have no intention of cutting the budget of either clinical or medical research in the spending review to come. I welcome the suggestion that the Government will recruit more people to decode genetic information. Of course, we will need that if we are to develop better biomarkers or drugs for treatment, but the personalised medicine that would lead to is expensive and the budgets it will require will be far greater that what we have now.
I also welcome the idea that we integrate the care of patients and do not have a demarcation between primary care, community care and hospital care, but the model that he suggested might not quite do that. He might like to reassure us that the model he has in mind is of complete integration of care, otherwise we will not win the battle for better care for people suffering from long-term conditions.
The comment about future budgets requires a greater debate. I have read the review in detail and it is a bold statement to say we can conduct a five-year review of healthcare without any further restructuring. I, for one, do not mind some restructuring if it will lead to better delivery of healthcare.
Earl Howe
I think that the restructuring the Government believe is necessary is the restructuring of the delivery of care and the culture, as the Statement made clear. What we do not think necessary is a restructuring of the architecture of the National Health Service. That has been done and, as I have said, we are set fair for the future. As regards integration, will it be complete integration? “Integration” is a word that is bandied about and it will mean different things in different areas, depending on what is necessary. We are clear that the better care fund plans, for example, which focus on this idea of integration, should most definitely involve the acute sector and social care along with primary and community care, and in many cases other disciplines as well. Pharmacy, for example, has a major part to play in reducing unplanned hospital admissions and I could cite many other professional disciplines. It depends on what each area requires.
I cannot give an answer on the research budget in the next spending review because that spending review will be conducted by the next Government, whoever they will be. Meanwhile, we are clear that the research budget is an absolutely essential part of the NHS’s future ability to provide quality care for patients over the long term. As the noble Lord knows, we have protected that budget during this Parliament.