NHS: Deficit

Lord O'Shaughnessy Excerpts

Wednesday 22nd November 2017 Lords Chamber

[Lord Harris of Haringey]

To ask Her Majesty’s Government, in the light of the quarterly performance report published by NHS Improvement on 16 November, what is their current projection for the aggregate deficit of NHS provider organisations at the end of this financial year.

[The Parliamentary Under-Secretary of State, Department of Health (Lord O’Shaughnessy) (Con)]

Prior to today’s Budget settlement, recent figures from the NHS suggested that trusts will end the year with a combined deficit of £600 million. The vast majority of trusts are on plan to balance their budgets or better, and for those trusts in financial special measures, significant support is available to return them to good financial health.

[Lord Harris of Haringey (Lab)]

My Lords, I am grateful to the Minister for that Answer. He glided over the fact that the level of deficit in trusts seems to be rising rather more rapidly than the Government can cope with. Two weeks ago, the Nuffield Trust, the Health Foundation and the King’s Fund produced a joint report that said that the levels of funding then planned for the NHS were,

“far below what is needed to maintain standards of care”.

They said that £25 billion would be needed by the end of the Parliament and £4 billion was needed urgently next year. The Government have given £1.6 billion in today’s Budget for next year. This is at a time of rising numbers of mixed-sex wards, and of trusts delaying payments to small business suppliers and having to take out bank loans to pay their staff. Is this a case of the Government not caring about the NHS and wanting to see it wither on the vine?

[Lord O’Shaughnessy]

That is a completely unfair accusation and unjustified, both by the funding settlement that the NHS had and by the improved settlement today. First, deficits have been falling year on year for the past couple of years in terms of both outturn and forecast, and that is before today’s announcement on additional funding. The Chancellor today announced over £2.5 billion-worth of extra revenue funding over the next two years. That means that the actual value of the spending review settlement will end up being £11.5 billion compared with £8 billion, so I reject the idea that this Government are not funding the NHS properly.

[Baroness Jolly (LD)]

My Lords, the NHS is very nearly 70. There was some continued investment in today’s Budget, which we welcome, but we consider that it is only a sticking plaster unless we look at social care and the NHS together. If we want the NHS to continue for another 70 years, we really need to see a change. A cross-party group of MPs visited the Prime Minister and put that to her, suggesting that there needs to be an all-party conversation about this—an all-party commission. Will the Minister tell the House whether the Government are minded to pursue that and, if not, why not?

[Lord O’Shaughnessy]

As the noble Baroness pointed out, additional spending is going in. I should point out that the proportion of public spending on health has increased under this Government, so even while fiscal retrenchment has taken place, more money has been spent on health. On the idea of a cross-party convention, we talk about building a cross-party consensus on social care with the Green Paper that will come out in due course. We need to focus on action. The danger with conventions and commissions is that they just prolong the process of making decisions, whereas moving ahead with decisions on both integration in the NHS and getting consensus behind reforming social care is the way forward.

[Baroness Manzoor (Con)]

My Lords, does my noble friend agree that there is nothing to prevent NHS organisations, acute services and social care working together? There are no barriers and that can be done currently. Therefore, having a commission that will prolong things is not necessary. We must exclude any barriers that exist now.

[Lord O’Shaughnessy]

My noble friend is absolutely right: there are no barriers. Indeed, the five-year forward view, in which the NHS sets out its own future, talks about integration and moving towards accountable care systems. Some capital programmes have been announced today under what will amount to a £10 billion capital programme over five years. These are precisely to deliver the transformation which is needed by making the kind of investment to provide that level of integration.

[Lord Patel (CB)]

My Lords, the Minister has said previously that he read the cross-party House of Lords report on the long-term sustainability of the NHS and adult social care with enthusiasm. No doubt he will have noticed several recommendations in it that would go a long way towards making the NHS financially stable and sustainable over the long term. Does he agree that what is now enthusiastically required from him and from the Government is to accept those recommendations? A short answer made up of a three-letter word will suffice.

[Lord O’Shaughnessy]

The noble Lord waits patiently. I pay tribute to the quality of the report and we have already accepted some of the ideas set out in it. Now that the Budget is over and the Treasury can turn its mind to additional things, we will be responding to the report very soon.

[Lord Clark of Windermere (Lab)]

My Lords, in his Budget Statement today, the Chancellor referred to the fact that he was establishing a working party of the department and the unions to look at salaries in the NHS, but he was a bit vague when it came to the funding of the outcome. Can the Minister give an assurance that the Government will fund whatever is agreed by the department?

[Lord O’Shaughnessy]

The Chancellor has confirmed that he will fund an Agenda for Change, as it is known, pay deal on the condition that the pay award enables improved NHS productivity and is justified on recruitment and retention grounds.

[Baroness Wheeler (Lab)]

My Lords, is the Minister aware that the number of GPs has fallen sharply over the past year, despite the government pledge to increase the supply of family doctors by 5,000 by 2020? How many more targets are likely to be missed by the Government? When did the NHS last achieve the A&E 95% target or the 92% 18-week treatment target? What will the actual impact of today’s funding announcements be on the Government’s performance on these key targets and their ability to ensure that planned improvements in priority areas of care such as cancer and mental health will not be stopped, as Simon Stevens has warned?

[Lord O’Shaughnessy]

The noble Baroness has pointed out the disappointing numbers as regards GPs. I should point out that there has been an increase in training places for future years. It is critical that we deliver those places and bring more staff into the service. I am glad that she drew attention to where the additional funding will go. There will be £340 million to help the NHS through this winter, £1.6 billion of additional revenue in 2018-19 and £900 million in 2019-20. That is precisely, as the Budget pointed out, to improve A&E waits, turn waiting list growth around and improve performance against the RTT targets.