NHS Funding (York and North Yorkshire)

Dan Poulter Excerpts

Tuesday 18th June 2013 Westminster Hall

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

It is a pleasure to serve under your chairmanship, I believe for the first time, Mr Streeter.

I pay tribute to the hon. Member for York Central (Hugh Bayley) for introducing the debate and raising the important issue of health care funding. He, like all Yorkshire Members in the Chamber, is a great advocate for his constituents. It is important to debate such issues and, in particular, to look at perhaps the greatest determinant of need in the NHS, which is that many older people have very expensive multiple care needs—dementia, diabetes, heart disease—and to look at the very big human need, which is how better to provide dignity in elderly care. That is exactly why my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) adjusted the formula, slightly changing the weighting for deprivation, to reflect such demographic challenges.

My hon. Friends and the hon. Member for York Central will be aware that the responsibility for health care funding now falls to NHS England. I have committed NHS England to reviewing the funding formula, and I am sure that it will listen carefully to today’s debate on north Yorkshire and elsewhere.

It is important to highlight how funding flows work in the NHS, and it may be helpful to say a few words about how the new arrangements have changed the way in which funding is allocated. As Members have pointed out, the NHS is paid for by taxpayers, and the money is allocated to the Department of Health by the Treasury. For 2013-14, the Department has set key priorities for NHS England through the mandate. I will outline the priorities that will help NHS England to prioritise funding within the NHS, and aid in the interpretation and use of the independent data given to it by the Advisory Committee on Resource Allocation.

The first priority in the mandate is the focus on preventing people from dying prematurely by improving mortality rates for the big killer diseases to be the best in Europe, through improving prevention, diagnosis and treatment. There is a clear priority to improve the standard of care throughout the system, so that the quality of care is considered as important as the quality of treatment or the clinical outcome. That will be done through greater accountability, better training, tougher inspections and paying more attention to what patients say, so that we have a truly patient-centred NHS, which is as important as providing care and dignity of care for older people.

There is a clear priority to improve treatment and care of people with dementia, and to focus on the important role played by technology—particularly in rural areas, through telehealth and telemedicine—in delivering better care in the community for older people. A key focus is on improving productivity and ensuring value for money to make sure that our health care system stimulates and supports the local economy in relation to not only the obvious importance of keeping local populations well and at work, but the benefits that can be gained from synergies with the life sciences and the supportive and stimulating research from such important places as Cambridge.

The Department of Health has set the mandate and a clear sense of direction for the NHS, with the priorities that are clearly there. The Department then makes allocations to several health bodies, including Public Health England, Health Education England, the NHS Trust Development Authority and NHS England. For 2013-14, NHS England received £95.6 billion, and some of that money will then, in turn, be allocated to clinical commissioning groups, but allocations to individual CCGs and the formula used to decide them are now the responsibility of NHS England, which has the key role.

In making those allocations, NHS England relies on advice from the Advisory Committee on Resource Allocation, as Members have said. ACRA provides detailed advice on the share of available resources available to each CCG to support equal access for equal need, as specified in the priorities set out in the mandate.

NHS England does not, therefore set income on an equal cost per head basis across the whole country; allocations instead follow an assessment of the expected need for health services in an area, and funds are distributed in line with that, which means that areas with a high health need receive more money per head. Under the formula, the 10% most deprived areas received more than 30% more per capita compared with the 10% least deprived, as the hon. Member for York Central outlined in his comments about Barnsley.

The calculation is based on several factors. In particular, it is increasingly based on the age of the population, the relative morbidity and unavoidable variations in cost. The objective is to ensure a consistent supply of health services across the country: the greater the health need, the more money that will be received. I am sure that we all support that.

The shift from a PCT funding formula to a CCG funding formula resulted in changes to the allocation for each particular area in 2013-14, as the hon. Gentleman commented. Funding now often takes place at a more local level—at the CCG rather than the PCT level—which we hope will ensure better prioritisation for local health care funding, with the funding formula being more sensitive to local health care needs.

The CCG model covers only non-specialised hospital and community care, as well as primary care prescribing, but the older PCT model also covered the whole of primary care, specialised services and public health, the costs of which were transferred to NHS England. There is, therefore, no direct comparability between the old PCT funding formula and the new CCG formula, for the reasons that I have outlined.

[Nigel Adams]

Whenever there are historical funding problems, such as those we experienced in north Yorkshire, there are inevitably leaks or stories about potential rationing and cuts to services. In my constituency in north Yorkshire, there has been lots of media speculation that a hospital opened by the Duke of Gloucester less than two years ago might close or lose its minor injuries unit. I have an awful lot of respect for the Minister, because he has done the job professionally, but I urge him to press NHS England to consider the funding case for north Yorkshire and other rural areas, and to consider the special circumstances that we have to deal with.

[Dr Poulter]

I will of course continue to press NHS England and raise concerns, as we have with representatives from the area, about the funding challenges being faced in north Yorkshire. It is also important to be aware that, because of how the new system works, with a mandate that sets clear priorities, NHS England recognises the need for a review of the funding formula for not only north Yorkshire, but nationally.

I agree with the remarks of my hon. Friend the Member for York Outer (Julian Sturdy) and the hon. Member for York Central about ensuring that funding goes to areas of greatest health care need. NHS England will obviously want to take account of rurality, age, the needs of older people and the complexity of care when it reviews the funding formula.

[Hugh Bayley]

The Minister says that Barnsley gets more money than north Yorkshire because of its higher level of deprivation, which I acknowledge, but why has the new formula given York less money than leafy Richmondshire and Hambleton, when York has higher levels of teenage pregnancy, drug addiction and deaths from asbestos-related diseases among people who had a career in industry. We have higher levels of deprivation than other parts of north Yorkshire, and yet we get less money. That cannot be right.

[Dr Poulter]

The hon. Gentleman makes a good case on his constituents’ behalf, but he should recognise that the Vale of York CCG—it serves not only his constituency, but others in the surrounding area—has received £357,891,000 which is the highest allocation in the area. He is right that its allocation is relatively lower per head than, say, that of Scarborough and Ryedale CCG, but I have outlined the factors that inform the capitation formula for funding, including density of population, and the obvious advantages of delivering health care in an urban environment.

I would be very happy to talk through such issues with the hon. Gentleman and my hon. Friends who are here today, and I am sure that we can arrange a meeting to do so in more detail than this debate allows. I also point out that NHS England will fundamentally review the funding formula to take account of demographics, age and rurality, which I am sure we all welcome. I look forward to meeting hon. Members in due course for further discussions and to see how I can assist them with the matters that they have raised.

Question put and agreed to.