Health Funding (Telford and Wrekin)

Dan Poulter Excerpts

Tuesday 7th January 2014 Westminster Hall

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

It is a pleasure to serve under your chairmanship for the third time, Mr Dobbin.

I congratulate the hon. Member for Telford (David Wright) on securing today’s Westminster Hall debate, on his strong advocacy for the needs of his constituents and on his highlighting of the importance of political consensus on these issues. He is absolutely right to do so.

We know that the single biggest challenge facing our health services is how better to look after older people and people with long-term disabilities and how to provide dignity in the care of people as they grow older. The key to delivering better health services for that group—and for all patients, including those in the early years of life—is an increased focus on integration and more joined-up health care services. That is very much at the heart of the hon. Gentleman’s contribution, and I hope my remarks will reassure him that it is very much the focus of the Government’s stewardship of the health care system.

The hon. Gentleman will be aware that a £3.8 billion integration fund has been set up that will, in the longer term, drive and improve joined-up services between local authorities and the NHS. For far too long, there has been too much silo working. Silo budgets have sometimes reinforced the silo working, and it is often patients who have fallen through the gaps and paid the price. That is why the Government are determined to fix the situation and ensure that, not just through the changes we are introducing in the Care Bill but through the integration fund, there will be greater synergy of joint commissioning and pooled budgets between local authorities and the NHS, where that is to the benefit of patients.

It was a pleasure for me to visit the Princess Royal hospital in November 2013 to see the birthing centre and the development of the new women and children’s centre. As the hon. Gentleman will be aware, the trust has benefited from some £35 million of external capital money to support its capital investment programme, including the development of the women and children’s centre, which is due to open in autumn 2014.

Before we proceed, there are two issues. First, there is the key issue of how the national funding formula is set. I reaffirm that throughout the NHS, including in Telford and Wrekin, there have been real-terms increases in NHS funding under this Government. Secondly, the local CCG has discretion on how it allocates its budget, so there is some local discretion, which probably goes to the heart of some of the hon. Gentleman’s concerns.

Until recently, the funding allocation was set by the Department of Health, but under the new arrangements politics has been taken outside the setting of health care funding; NHS England now has direct responsibility for funding allocations. The NHS, through NHS England, relies on the Advisory Committee on Resource Allocation, or ACRA, and its assessment of the expected need for health services to help set allocations for each area.

We were all pleased that, for the 2013-14 allocations, NHS England decided that following the ACRA recommendations exactly would lead to higher growth for areas with better health outcomes and possibly reduced budgets for areas with less good health outcomes. Given that, like NHS England, we are all concerned about reducing health inequalities, the important decision was made to maintain the substantial weighting in the formula for areas of deprivation and health care inequalities. The ACRA formula was not directly followed, an issue on which we have touched in previous Westminster Hall debates. NHS England’s thinking, in outline, was that the recommendations were inconsistent with the responsibility to reduce health inequalities. NHS England conducted a fundamental review that has informed the allocations.

On 17 December 2013, NHS England’s board met and agreed CCG planning guidance and allocations for 2014-15, which will help commissioners to commission services for the benefit of local populations. The Government have protected the overall health budget, and NHS England has ensured that every CCG in England will continue to benefit from at least stable real-terms funding for the next two years.

The Government’s mandate for NHS England makes it clear that we expect it to place equal access for equal need at the heart of its approach to allocations; to consider health inequalities; to ensure a transparent process; and to ensure that changes to allocations do not destabilise local health care economies. A rapid change to or endorsement of the ACRA recommendations would have led to mass destabilisation of local health care economies. NHS England was mindful of that, and of the need to prioritise funding for areas of deprivation, in its allocations.

The 2014-15 allocation for Telford and Wrekin CCG will be almost £187.8 million—the per capita allocation is £1,058 a head, about the same as my constituents receive in Suffolk. That is a cash increase of 2.14% on the funding that the CCG received this year. The CCG will also receive a 1.7% increase on its allocation for 2015-16, which means that its funding will go up to almost £191 million. Additionally, NHS England has announced that the Shropshire and Staffordshire area team will receive a 2.38% rise in primary care funding in 2014-15 to almost £342 million and a further 1.8% increase in 2015-16 to more than £348 million. Those increases are higher than average, which reflects the historical underfunding in those areas against the primary care funding formula adopted by NHS England. I hope that is some reassurance to the hon. Gentleman that, in a general sense, increased funding is coming to his part of the country.

The hon. Gentleman will be aware that the Government have also provided £221 million in additional funding to the NHS to help cope with winter pressures this year so that patients get the treatment they deserve. Winter is a challenging time for all health care services, and it is right that we have put in place additional money for the NHS. The local health economy has received £4 million in additional funding, of which £1.2 million will be directly invested in Shrewsbury and Telford Hospital NHS Trust to staff all escalation areas.

The trust has also outsourced a proportion of day surgery to the Nuffield hospital to protect elective activity, should that be necessary at times of high demand during the winter. The remaining £2.8 million is being used to improve unscheduled care capacity and flow outside the hospital. An additional 69 beds have been sourced outside the trust, including intermediate care, care home and specialist dementia beds.

As the hon. Gentleman will be aware, the winter pressures money is being used to fund intermediate care beds and the focus on rapid discharge, not only in Telford and Wrekin, but nationally to some extent. That benefits not only the NHS, but local authorities, and it is part of the drive to achieve more integrated and joined-up health and social care.

If an old person can be promptly discharged home with the right care package, it is important that that happens; that is better for the person and the care they receive, but also better for the NHS’s financial settlement. To put it crudely, stuffing beds with patients does not make good financial sense, and it is not good for patients, who would much rather be at home in their communities. I am pleased that the money is going towards making that possible in the hon. Gentleman’s area.

[David Wright]

I absolutely agree with everything the Minister says—it is basic common sense. Although I am glad to hear him say it, and it is really positive, it would be helpful if he could address one concern, although I am not necessarily suggesting he will have an answer today.

I accept that we want to get people out of hospital and into their homes if possible to ensure they are cared for effectively. However, he must admit that the figures I highlighted, as well as the local authority’s concerns, suggest there has been a fairly significant reduction in the CHC pot. Given the scale of the local authority’s budget, compared with the health service’s budget, that reduction has an enormous knock-on effect on the local authority. I hope the Minister will take some time to look at that.

[Dr Poulter]

The hon. Gentleman is absolutely right to highlight the issue. The point I was coming on to is that although the region’s funding allocation from the Government through NHS England is going up, the CCG obviously has some local discretion over how that allocation is spent, and that goes to the heart of the matter.

As has been highlighted, continuing health care funding is the crux of this matter, and it is relevant to mention NHS continuing health care, which is a package of ongoing care arranged and funded solely by the NHS where the individual is found to have a primary health need. The NHS provides that throughout the country, and it is vital that it does.

There is sometimes quite a blurred line between where NHS funding and care end and where local authority responsibility starts. The issue is not whose budget is involved or which budget the money comes from, and that is part of the reason why the Government set up the £3.8 billion integrated care fund. This is about joining up budgets. The hon. Gentleman and I, the doctors and nurses on the ground, and the local authority are interested in the person, rather than who pays for treatment. The fund is a recognition of that, and we are setting it up to drive forward joined-up working.

However, we have to look at where we are now and why we have come to the place the hon. Gentleman highlighted. He will be aware that audits were carried out in 2009-10 and 2010-11 of the then PCT’s accounts. It was decided that the continuing health care funding was not being allocated properly, appropriately or even, potentially, legally.

At that point, the PCT was putting a lot of additional money into continuing health care, but a similar approach was not being taken elsewhere in the country. The auditors therefore rightly took the view that funding had to be allocated in accordance with the correct public rules for spending money, including NHS money, and that if money was, potentially, being allocated in an illegal way, that needed to be addressed under the rules at that time.

[David Wright]

rose—

[Dr Poulter]

I absolutely accept—the hon. Gentleman may wish to elaborate on this in his intervention—that, fundamentally, this is not about rules, but about making sure we have a better service for people. That is what we need to focus on.

[David Wright]

Yes, indeed, I do believe that. My concern is that the figures I highlighted suggest that, in comparison with similar and surrounding authorities, we are doing very badly per head of population in terms of the assessment process for qualification for continuing health care. That suggests to me that the pendulum has swung too far in the other direction and that the assessment procedure is being used to ensure that the figures are kept down.

I am concerned that some people with care needs in the community will lose out—as the Minister rightly said, this is not about structures and silos in the health service, but about individuals and their families in the community who are trying to cope.

[Dr Poulter]

The hon. Gentleman is right. In terms of the per capita spend in CCG allocations, Suffolk similarly has large towns with very rural surrounding areas, and the CCG in the hon. Gentleman’s area has a fairly similar allocation to the one I represent.

There is also an issue about how the money given to CCGs is spent. In a knee-jerk reaction, perhaps, to the auditors’ findings and the fact that the spend was not allocated appropriately, Telford and Wrekin went from being almost one of the highest spenders on continuing health care to being one of the lowest, and that is the crux of the problem. That is down to decisions by the CCG, or the PCT as it was, about how to allocate the budget given to it.

If, in 2009, 2010 and 2011, the PCT was picking up funding responsibilities that should perhaps have been the local authority’s, but then, in response to the audit, changed the amount it allocated to continuing health care, that could clearly have a destabilising effect on the local authority. However, the PCT and then the CCG have done everything they can to mitigate that, and they have given the local authority discretionary funding.

In particular, just over £3 million has gone to the local authority thanks to the fund set up by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) to facilitate exactly that kind of activity. At its own discretion, the CCG has also given the council £2.4 million on top of that, over and above what the council expected to receive. The CCG has therefore acknowledged and accepted that, in reacting to the auditors, there was perhaps an over-reaction, and it has now righted that by giving the local authority some discretionary additional funding.

That does not detract from the overriding point that, generally throughout the country, and particularly in Telford and Wrekin, we need to see increased emphasis on integration and joined-up care. It is in no one’s interests to have such discussions about funding, which waste a lot of time and effort on the part of the local authority and the CCG. If we can drive more joined-up working, more joint commissioning and more pooled budgets, where appropriate, as the Government will be doing through the Care Bill and the integration fund, the number of these turf wars will be reduced, because the emphasis will be on the patient, rather than the budgetary silo. That must be the right way forward.

I am sorry that, in this instance, the hon. Gentleman’s constituents and local authority have perhaps been caught up in errors made by the former PCT, although I am pleased the CCG is doing all it can to redress the balance by giving the local authority discretionary additional funding. I hope working relationships will improve and that, as we move forward, with further emphasis centrally on integrated health care and joined-up budgets, we will see greater improvements to the local health care economy and, more importantly, continuing improvements to patient care locally. If the hon. Gentleman wants to discuss the matter further or to meet me, I will be happy to do so.