Department of Health: Budget

Earl Howe Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, in asking the Question standing in my name on the Order Paper, I remind the House of my health interests.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the department underspent against its budget by 1.7% in 2010-11 and by 1.3% in 2011-12, or by 1.5% combined across the two years.

[Lord Hunt of Kings Heath]

My Lords, I think that is about £3 billion; perhaps the noble Earl will confirm that. This Government promised to protect the NHS and to cut the deficit. In fact, they are cutting the NHS and the deficit is rising. How can the department justify handing back so much money to the Treasury when large parts of the NHS are under great financial pressure at the moment?

[Earl Howe]

My Lords, the deficit is not rising. The Government are putting £12.5 billion extra into the NHS over the course of the spending review. The noble Lord, Lord Hunt, will know from his ministerial experience that government departments have an absolute requirement to manage expenditure within the financial controls that are set by Her Majesty’s Treasury and voted on by Parliament. For the Department of Health that means that the net expenditure outturn, which incidentally stems from around 400 organisations, all of whose accounts have to be consolidated, must be contained within the revenue and capital expenditure limits. Given those circumstances, it is sensible to plan for a modest underspend to mitigate against unexpected cost pressures.

[Lord Mawhinney]

My Lords, why does my noble friend believe that he will be able to tell your Lordships’ House that all the PFI hospital projects undertaken under the previous Administration, some of which are in a serious financial mess, will be deemed to be financially sustainable? How many of them are likely to require extra expenditure from his budget to achieve that desired end?

[Earl Howe]

My noble friend raises a very important issue. The analysis that we have done on hospitals financed by private finance initiative has indicated that there are seven trusts that are basically unsustainable as a result of their PFI commitments. The Department of Health has therefore undertaken to support those trusts to enable them to make up the shortfall which is beyond their control. It would be wrong to suggest that PFI was a solution that did not deliver benefits. Clearly it did, but I am afraid that some of the sums that were done initially were sadly wanting.

[Lord Warner]

My Lords, what consideration was given by the Government before they repatriated, as my noble friend said, £3 billion to the Treasury? What consideration was given to using some of that money to buttress social care, which makes great demands on the NHS and which has suffered on average a 7% cut in each of the past two years?

--- Later in debate ---

[Earl Howe]

My Lords, we did, as the noble Lord would expect, look at the anticipated surplus this time last year and we channelled an extra £150 million into social care then in the near-certain knowledge that the department would generate a surplus during the year. However, as he will know, it is an inexact science to predict in December what the outturn will be in April, and one has to be prudent at that stage.

[Lord Alderdice]

My Lords, my noble friend gave a reassuring Answer a week or two ago about the balancing of expenditure and resources between mental health services and physical health services within the NHS. Is it possible for my noble friend’s department to look to the possibility of any surpluses in the future being used to achieve greater parity between mental health services and the rest of the NHS, given the decisions made in your Lordships’ House regarding the Health and Social Care Act 2012 and the mandate for the NHS Commissioning Board that has flown from it?

[Earl Howe]

My noble friend makes an extremely important point. He will know that the Government have made it clear that mental health problems should be treated as seriously as physical health problems. That commitment has now been made explicit in the Health and Social Care Act 2012. As he mentioned, the Government’s mandate to the NHS Commissioning Board explicitly recognises the importance of putting mental health on a par with physical health. It tasks the NHS Commissioning Board with developing a collaborative programme of action to achieve that and it will be held to account accordingly.

[Lord Laming]

My Lords, does the Department of Health and its Ministers monitor the number of people who today are in hospital and whose treatment is being completed, but who are there because alternative arrangements have not been made for them?

[Earl Howe]

Yes, my Lords. As the noble Lord will know, the problem of delayed transfers of care is not new. We have seen a drop in delayed transfers in terms of the number of days but there has been a levelling off in recent years. However, it is up to the NHS and social care services to collaborate to ensure that proper and appropriate community services are available to patients when they are discharged from hospital. That planning process begins the moment the patient enters hospital.

[Baroness Farrington of Ribbleton]

My Lords, the Minister very unusually failed to answer my noble friend Lord Warner’s question as to why the money that has gone back to the Treasury could not have been used to meet the needs of the patients to whom the noble Lord, Lord Laming, referred.

[Earl Howe]

My Lords, I apologise. I addressed part of the noble Lord’s question in relation to the issue around social care. The important point to make about the surplus is that none of the underspend is lost to the NHS. Under Treasury rules, the NHS is allowed to carry forward all underspends to the next year. It is not a case of the NHS having to give up any money and thereby depriving patients of treatment.

[Lord Flight]

My Lords, will the Minister say how much NHS spending has risen in the past 20 years in cash and real terms? I believe that in cash terms it is of the order of about £11 billion to well over £100 billion.

[Earl Howe]

My Lords, I would be happy to write to my noble friend. I do not have the figures for the past 20 years in front of me but I can tell him that, unlike the party opposite which promised to cut NHS expenditure had it been re-elected last time, we are protecting the NHS budget. It is now well over £100 billion. As I said earlier, it will be increased by £12.5 billion over the course of this Parliament.