Cambridgeshire and Peterborough CCG: Funding Pressures

Tuesday 11th June 2019 Westminster Hall

[Mr Philip Hollobone in the Chair]

15:59

[Heidi Allen (South Cambridgeshire) (Ind)]

I beg to move,

That this House has considered Cambridgeshire and Peterborough CCG funding pressures.

I start by thanking the Backbench Business Committee for granting me this short debate and you, Mr Hollobone, for chairing it. I also thank the Minister for his time.

I represent South Cambridgeshire, which is a largely rural constituency, although it also contains part of Cambridge, which is the fastest growing city in the UK: it grew on average by 7% every single year from 2010 to 2015, and since then has continued growing beyond the national average. There is no doubt that the economy, which is spun out of Cambridge University, is world class. It is equally no surprise, therefore, that the Government are keen to connect us with Oxford, another world-leading, rapidly growing city. Beyond the exceptional levels of growth that we are already experiencing, the Oxford-to-Cambridge expressway and rail line will create a further 1 million homes, so how can it be that the health funding allocated to our clinical commissioning group is based on an assumption that we are growing more slowly than the rest of the UK?

The NHS funding formula has determined that our population is growing at 0.1% below the England average, when in reality growth across the whole county has been 0.6% above the England average over the past four years. That difference matters. In population terms, the Office for National Statistics, from which the NHS draws its calculations, predicts that our population will be 988,000 by 2021, while our known and planned housing growth means our population will in fact be 1,022,000. That is known housing growth, before we even consider the additional housing that will come from the Cambridge to Oxford project.

I must tell the Minister that that is not all. The money we receive per head of population is also significantly lower than it should be. In fact, all our neighbouring CCGs are better funded than we are. In Cambridgeshire and Peterborough, we receive £1,125 per capita, as compared with £1,244 in Bedfordshire, £1,288 in West Suffolk and a staggering £1,497 in Norfolk. How does the Minister consider that to be fair, when we have one of the greatest and fastest growing ageing populations and severe areas of deprivation in Fenland and some of the Cambridge city wards? Those issues of unfair per capita funding and incorrect growth forecasting have the compound effect of making us the third-lowest funded CCG in the country.

On top of that, we have been given a £55 million savings target for this year alone, which amounts to 4.5% of our entire budget. We have an allocation uplift of 5.67%, or £66.7 million, but we are already committed to nationally mandated costs of £70 million, so the numbers just do not add up. In simple terms, despite our growth, we have less money to fund health services for the people of Cambridgeshire and Peterborough in 2019-20 than we did in 2018-19, and that is set to get worse.

[Daniel Zeichner (Cambridge) (Lab)]

The hon. Lady is making a very important speech. I would like to underline that final fact. It feels very much like the situation with our schools, where the Government tell us that we have more money, but teachers and headteachers tell us that we do not. I would like to underline her crucial point: we have less money to fund health services in 2019-20 than in 2018-19. I hope the Minister will be able to explain why.

[Heidi Allen]

The hon. Gentleman, who is my neighbour, is absolutely right. Everyone knows that Cambridge and the surrounding region are growing, yet somehow we are expected to manage on less and less money every year.

Let us bring some colour and real life to the situation. The provision of in vitro fertilisation, of any number of cycles, is totally under question. Hearing aids for those with moderate hearing loss, and community diagnostics, such as ultrasound services, might go, as might vasectomies. The CCG has to reduce its spend on services outside of hospitals by £33 million this year. That means, speaking plainly, significant cuts to community care—everything we are trying to do to stop people from being admitted into hospital, which we know is the most expensive form of care. Every single one of our major out-of-hospital care services is under review.

The Minister will be familiar with a CCG’s “distance from target”, which is how far away a CCG is from what the NHS would consider the fair funding position to be. I can tell him that that will deteriorate yet further to 3.71% by 2019-20 from an already unacceptable gap of 3.5% in 2018-19. That position is simply unsustainable. The goalposts are being moved further and further away. In monetary terms, it means that we are underfunded by £43 million this year. If nothing changes, over the next five years we will be underfunded by £200 million. Our CCG has just agreed the 2019-20 financial plan with NHS England. That agreed plan will show a deficit of £192 million. That just cannot continue. I cannot believe for one minute that the Minister would be content with such a depleted health service.

What are the Minister’s views on what he can do specifically to correct the flawed growth forecasting? How will he address our significantly lower funding per capita? Will he tell me why the problems have not been addressed in the five-year funding allocation? I would appreciate a commitment to an early review of the funding allocation and extra intermediate emergency funding. At this rate, we are going to be cutting just about everything. If that funding is not available, I sincerely ask the Minister to explain exactly how my CCG and its providers are expected to close that deficit gap. Without cutting more health services for my constituents in South Cambridgeshire and for people across the whole Cambridgeshire and Peterborough area, I do not see how the CCG can make ends meet.

16:06

[The Minister for Health (Stephen Hammond)]

It is a pleasure, as ever, to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for South Cambridgeshire (Heidi Allen) for bringing forward this debate. I know there are not many Members in the Chamber, but that should not in any way undermine or take away from the importance of this debate, which is clearly of great interest to her. She spoke powerfully about the problems that the CCG has had.

I recognise right at the outset that Cambridgeshire and Peterborough CCG has faced a number of difficult, interlocking and historical factors. The historically low funding settlement is obviously taking time to rise to target—there is a commitment to rise to target over time, which I will come on to in greater depth in a moment—and that has combined, as she rightly points out, with the fast rate of population growth across the area, which has put additional demands on the CCG.

I and the Government recognise that the CCG receives less per person than its neighbouring CCGs. As the hon. Lady rightly pointed out, it gets £119 per person less than its neighbouring CCG in Bedfordshire. Although it is moving towards target—as she rightly points out, it is 3.7% below target this year—that figure reflects some of the historical funding patterns. It does not reflect the allocation formula change that the NHS is working to resolve.

The hon. Lady and the hon. Member for Cambridge (Daniel Zeichner) pointed out the growth levels. She is right that Cambridge and Peterborough have seen substantial population growth in recent years, and that growth has been 0.6% above the England average over the past four years. Inevitably, that growth—plus the potential growth from the Oxford-to-Cambridge expressway, which will put more housing along the corridor—will clearly cause additional pressures.

The hon. Lady asked for a commitment from me. I can say that NHS England is committed to bringing all CCGs up to target as soon as possible, while also ensuring that all CCGs receive some additional funding this year. As a result, the CCG has received an additional 2.5% per capita growth in 2018-19, and will receive a further 5% per capita growth in 2019-20. That will bring the CCG funding up to £1.1 billion for 2019, which is below target but moving up. As I think the hon. Lady said, it was previously some 5% away from the target; it is now 3.7% away from the target. Our commitment is to bring all CCGs up to the target as soon as possible.

The hon. Lady will not be surprised to hear me say that it is, of course, a matter for NHS England to allocate funding to CCGs, and that process has been evolving. It might be helpful if I briefly set out how that happens. NHS England must ensure that funding is equitable and fair, taking into account the three main drivers of healthcare demand: population growth, deprivation and an ageing population. As a point of principle, CCG allocations are based on equal access for equal need and reducing health inequalities.

As the hon. Lady pointed out, a complex national formula supports the allocation of resources, and historically that has caused some distortions. That formula is developed by the Advisory Committee on Resource Allocation, known as ACRA, which is an independent body of experts, supported by the population projections of the Office for National Statistics.

The hon. Lady cited some population predictions, which I think come from the Cambridge Research Group as opposed to the Office for National Statistics. She will therefore understand that, although I accept that those numbers are shared locally, Ministers and the NHS have to rely on the independent and academically rigorous body. Otherwise, it could easily be perceived that we were using a local think-tank’s population growth estimates to privilege one group over another.

[Heidi Allen]

Am I allowed to intervene?

[Mr Philip Hollobone (in the Chair)]

Order. You are allowed to rise at any moment, but the Minister does not have to accept your intervention.

[Heidi Allen]

Thank you, Mr Hollobone. Forgive me—I have not led a Westminster Hall debate before. I accept all that the Minister has said, and it is a difficult matter, but the statistics are flawed. The Minister said that he accepts that the growth is 0.6% above the England average; the Office for National Statistics is working on its being 0.1% below. Something is therefore going a little astray.

[Stephen Hammond]

I am sorry—either I did not make myself clear, or the hon. Lady misheard me. I said that the population growth was 0.6% above the England average over the last four years. The number that she cited of the growth being below the average is from ONS predictions for the next two or three years.

[Heidi Allen]

Forgive me if I am mistaken, but I thought I heard the Minister agree that the growth was in fact 0.6% above the England average. If it is, why on earth are we working on the ONS figures that it is 0.1% below the England average?

[Stephen Hammond]

This is prejudging the tennis season, in that we can go backwards and forwards, but let me say for the record that if I misled the hon. Lady I apologise wholeheartedly. I agreed that the population growth of the Cambridge and Peterborough CCG area has been 0.6% above the England average over the last four years; I did not intend to suggest that it is expected to be 0.6% above the England average for the next one, two or three years. I think the ONS number that she cited is one that we recognise; however, as I said, the numbers that she produced from the Cambridge Research Group are different from those of the ONS.

This year, ACRA has recommended a wide-ranging set of changes to the formula, to ensure fairness across the country. In the case of Cambridgeshire and Peterborough CCG, that has led to an increase in NHS England’s estimate of what the fair share of resources should be. That is mainly due to the mental health and learning disability service estimate and the market forces factor.

Changes have also been made to the way population data is used. ACRA now uses the annual average registered list for the most recent year, rather than the size of the list at the time of allocations, to allocate resources on a per capita basis. That change will inevitably benefit Cambridgeshire and Peterborough CCG because it will reflect more recent population growth. The change is obviously also intended better to reflect cyclical patterns in areas with large numbers of seasonal workers or large student populations.

ACRA also now uses specific data regarding age and gender population projections produced by the ONS, so that if population growth in an area is disproportionately in a younger or older population, which will obviously affect the relative need, that will now be reflected in the new way that NHS England calculates the allocations. As I said earlier, the formula changes will more accurately reflect population growth, deprivation and the structure of the population over the next few years.

[Heidi Allen]

I appreciate the sincerity, and my CCG knows that NHS England intends to improve the formula to make it more representative. However, a question remains, and it is the same question that the hon. Member for Cambridge (Daniel Zeichner) referred to regarding education: what happens in the meantime? Our CCG is talking about significantly cutting community services. That will affect elderly care in the community. That will stop vasectomies. It may take IVF treatment away altogether, as we are at just one round at the moment. Although I appreciate that NHS England is an enormous machine and improving the health formula will take some time, what do I say to my constituents whose health services are being cut while we wait?

[Stephen Hammond]

I will say two things to the hon. Lady. First, the reflection of the formula and the increase in the money is coming through this year and next year. We have spoken about the additional per capita funding that is coming through.

[Daniel Zeichner]

There is a complicated set of issues surrounding national health service funding, but the CCG is telling us that it will have less money to spend in 2019-20 than in 2018-19. I really just want confirmation from the Minister that that is his understanding too.

[Stephen Hammond]

All I have are the percentage increases in additional per capita funding for 2018-19 and 2019-20. I will seek inspiration to confirm the absolute totals, and if that inspiration reaches me while I am still on my feet, obviously I will relay it to the hon. Gentleman. If not, I am happy to confirm that I will write to him.

My point is that the NHS England allocation is based on the ACRA assessment and on the change in the funding formula. The hon. Member for South Cambridgeshire and the hon. Member for Cambridge rightly point out that, historically, the funding of their CCG has not been equivalent to that of local areas. That historical funding disparity is being improved, and is moving back towards the target of funding for CCGs over the next two or three years. I pointed out that last year there was a funding increase of 2.7%, and there will be one of more than 5% this year.

[Heidi Allen]

While the Minister’s inspiration is working diligently on the back row behind him, may I ask to be included in that? If we do not have time now, perhaps the Minister could come back to us. He is right that some additional funding has been provided to the CCG, but more than that amount is in mandated national programmes over which it has no control, so how much extra will the CCG receive for core services—not for something that has been put on it from a national point of view?

[Stephen Hammond]

The hon. Lady will know that some of those core mandated services are providing core services as well. I am happy for the hon. Member for Cambridge to correct me, but my understanding is that an additional £8.5 million will go into the CCG. If he wishes to write to me with his figures, I will happily source those numbers for him. However, I have just received inspiration from somewhere, for which I am very grateful, and I can confirm that that is the number.

[Daniel Zeichner]

We could probably swap numbers for the remaining 11 minutes of the debate, but I am told that the CCG has additional nationally mandated commitments that exceed the extra money that it is getting, which is the nub of the problem. The overall problem, however, is that the Prime Minister has been going around telling people that a huge amount of money is coming into the national health service, but locally it appears that we have less. That is obviously difficult for local people to understand.

[Stephen Hammond]

The Prime Minister has rightly been telling people that there is a huge commitment to put more money into the NHS. Throughout the debate, I have recognised that the moneys that the CCG historically received were below the target for CCGs. I have stated that more money is now coming into the CCG and that NHS England is committed to moving all CCGs to target. Although he may say that is a historical issue, I hope he would also recognise the fact that the Government are putting more money into the national health service and that that money is coming to his area.

That brings me to the point I wanted to make about wider funding. The Government are making a commitment and backing the NHS with an extra £20 billion a year by 2023, which will be reflected in the resources available to CCGs.

[Daniel Zeichner]

I note, however, that my reading of what is happening to the CCG is that it has already spent a lot of the money that is coming through, so it will mean not more money, but dealing with past debt. Again, could the Minister confirm that that is in fact the case?

[Stephen Hammond]

That will partially be a decision for the CCG. I do not recognise exactly what the hon. Gentleman has said; I have said that an additional amount of money is going in. I accept that there are nationally mandated core services that need to be provided by the CCG. I stress again, as I have throughout the debate, that I accept that the CCG has historically been underfunded against population growth and against other local CCGs, as he and the hon. Member for South Cambridgeshire have pointed out.

I have reflected in my remarks that the change in the formula will allow the population growth that has happened in the previous four years to be more accurately reflected. If the hon. Lady’s growth projections prove more accurate than those of the ONS, I have indicated how, through the formula change, that will come through more quickly in the funding that is received by the CCG. Those are the key points. I am happy to write to her and the hon. Member for Cambridge to confirm the financial position as I and the Department understand it, so we are clear. We could spend another joyous eight minutes swapping numbers, but perhaps we will not do that now.

Suffice it to say that the long-term plan also sets out how the NHS will use those resources more effectively. It is clear that there is a huge increase in the commitment to primary care and that the formula change will reflect that more accurately for CCGs. I have no doubt that, if the formula increase does not come through in the way that the hon. Gentleman and the hon. Member for South Cambridgeshire expect, or that I expect, they will continue to make the case to me and will bring me back for another debate. I thank the hon. Lady for securing the debate and I hope she agrees that we have discussed the funding formula.

Question put and agreed to.