Junior Doctors: Industrial Action

David Mowat Excerpts

Thursday 24th March 2016 Commons Chamber

[David Mowat (Warrington South) (Con)]

Seven-day working was a clear manifesto commitment, and the BMA’s position is highly regrettable, but to implement it we will clearly need more junior doctors to backfill rosters, rotas and all that goes with it. For the avoidance of doubt, will the Minister confirm to the House that he has enough junior doctors to do that?

[Ben Gummer]

We are increasing the number of junior doctors and the number of other doctors, consultants and nurses over the next five year years in order to meet the increasing challenges facing our national health service.

Cancer Drugs

David Mowat Excerpts

Tuesday 19th January 2016 Westminster Hall

[Pauline Latham]

I will come on to that later. If my hon. Friend does not mind waiting a few moments, he will hear what I have to say.

Delisted drugs are still potentially available on an individual basis via an individual funding request. Is the Minister able to say how many of those requests have been successful as a proportion of all requests, and for which drugs? I know he is working extremely hard on this matter, about which he cares passionately, and I thank him for that.

Although there has been recent progress, the UK still lags behind most other developed nations on use of and access to cancer drugs. In fact, we do not do as well on outcomes for cancer as many other nations. Nationally, cancer is still the largest killer, accounting for 29% of all registered deaths in 2014, the last year for which Office for National Statistics figures are available. Tracking the history of the Cancer Drugs Fund, a fund for which I have repeatedly supported investment, we can see that it has been on a rocky road to get to where we are now. Drugs have been removed, and the general consensus is that the fund has become unsustainable.

For the first three years, the fund underspent its budget—the opposite problem from the one we have now. In fact, between October 2010 and March 2013, the 10 strategic health authorities that administered the fund underspent by £128 million, or 28% of the fund’s total budget. That is a lot of money that could have been spent treating cancer patients. There was significant geographic disparity in the use of the fund. In the east midlands, which covers my Mid Derbyshire constituency, the number of patients supported by the fund per 1,000 new cancer cases in 2012-13 was just 27. That was the lowest figure in the country and represented a failure of the East Midlands strategic health authority, which was then in control of administering the fund, to promote its use to clinicians and patients. Several of my constituents died prematurely because they were refused funds for the drugs they needed when the fund was always underspent, despite pleading from me on behalf of people who were spending their own money on those drugs.

Since NHS England and Public Health England took control of the fund, the change has been dramatic. Having one central authority administering the fund removes the geographic differences whereby treatment authorities were promoting the fund and treatments at different levels. The effect is such that patient numbers skyrocketed. As last year’s high quality National Audit Office report on the Cancer Drugs Fund notes, the number of patients approved for funding increased by about 30% each year from 2011 to 2015, which should be viewed as a success for patients. Thanks to the fund, 84,000 patients have been able to access treatments that they would otherwise have been denied. The success is such that, in 2014-15, almost one in five patients started a new cancer drug through the Cancer Drugs Fund. What was meant to be a temporary measure is now a mainstay of cancer treatment in England.

Obviously, such growth comes with a price; the cost of funding the scheme spiralled out of control. Following the Government’s decision to extend the fund to March 2016, NHS England increased the annual budget from £200 million to £280 million for 2014-15 and 2015-16. In January 2015, it increased the budget for 2015-16 again, to £340 million, meaning that the fund now has an expected lifetime budget of £1.27 billion.

Was taking drugs off the list a solution to the fund’s problems? It was certainly the easiest way to regain control of costs, but it hit patients hardest rather than solving the problems with NICE’s approval processes, which was the underlying reason for the fund’s creation. The rapid response to regain control of the budget also means that no new treatments were added to the Cancer Drugs Fund from January 2015. The decision to keep drugs on the fund’s list or remove them was based on their clinical effectiveness and cost, but from the start the fund did not keep records of treatment outcomes. Surely it is hard to obtain a full understanding of drugs’ full efficacy if a full analysis is not available by which to judge them. The failure to collect data on patient outcomes until July 2015 is truly disgraceful and undermines any proper evaluation of the fund’s success.

I am particularly attracted to the question asked by the right hon. Member for Don Valley (Caroline Flint) during a Public Accounts Committee oral evidence session on the Cancer Drugs Fund last year. She asked why the Department of Health did not

“knock the heads of the SHAs together to ensure that there was some sort of common collection of data”,

instead of just recommending it. Fortunately, NHS England and Public Health England have resolved the problem—today, every new Cancer Drugs Fund patient is automatically identified on the systemic anti-cancer therapy database—but five years to fix a problem is far too long, and a failing of the fund.

Although data outcomes are now mandated, the rate of return has been far from perfect. In 2014-15, many records lacked important data. Most shockingly, 93% of patient records submitted did not have an outcome summary. Will the Minister inform us whether there will be penalties for trusts that consistently fail to produce the required data on cancer treatments?

The lack of data collection also undermines efforts to establish whether the price paid for drugs is equal to their outcomes. As the chief executive of the NHS admitted himself, the NHS has not been good enough at negotiating a price for drugs. Many drugs have been delisted because they were deemed too expensive. The drug Imnovid, which would benefit my constituent Graham, costs the NHS £115,000 a year, compared with £90,000 in Spain.

The failure to negotiate the best price was demonstrated by the fact that when threatened with removal from the list, some manufacturers were able to offer a lower price for their drugs. I understand that Imnovid was already offered at a discounted price, but I cannot blame drug manufacturers for not immediately offering the lowest price that they can afford. They need profits to use on research and development and to show value for their investments. Will the lack of positive outcomes from the price negotiations be addressed in the new CDF proposals? Also, can the Minister provide information on the number of negotiations between NHS England and drug manufacturers that have been positively resolved, and which drugs they relate to?

The new Cancer Drugs Fund proposals aim to distribute more evenly the financial risk of placing a drug in the fund, but the Rarer Cancers Foundation strongly suggests that the NHS has not been flexible in negotiating with pharmaceutical companies on value propositions for treatments in the fund. Can the Minister confirm whether NHS England rejected multi-treatment cost reductions from drug companies because they would have fallen outside NHS England’s standard operating procedure? Likewise, from evidence given to the Public Accounts Committee, it is clear that some companies have offered financial schemes stating that if the medicine does not work as expected, its cost will be returned to the NHS, but have been turned down in favour of straight discount schemes. Together, such schemes would offer a win for the taxpayer and would have allowed more drugs to be made available for the fund.

My final comments concern the proposed reforms of the appraisal process for drugs on the fund, which under current plans will be put solely in the hands of NICE. The proposal is that the CDF should become a managed access fund for new cancer drugs, as my hon. Friend the Member for Solihull (Julian Knight) mentioned, with clear entry and exit criteria. It would be used to enable access to drugs that appear promising but for which NICE indicates that there is insufficient evidence to support a recommendation for routine commissioning. At the end of the period, the drug would go through a short NICE appraisal, using the additional evidence.

For those looking for treatment for rarer cancers, such as myeloma, there are a number of questions about the new proposals that need to be addressed to ensure access to new treatments. As I understand it, under the new proposals, only a limited number of patients will have treatment funded through the CDF, and the industry is expected to fund additional patients. The consultation sets out NHS England’s proposal to limit funding for each drug on the CDF to the number of patients required to be treated in order to gain further evidence for use in NICE appraisal. The consultation is not clear what data NICE might require to be gathered during the CDF funding phase or the indicative size of patient populations. It is therefore difficult to assess whether the proposals would result in more or fewer patients getting access to treatment than the current arrangements.

What consideration is there of drugs for rarer cancers, which will have smaller patient pools creating only a small amount of data? Does the appraisal process have flexibility for such drugs? It is not clear whether pharmaceutical companies will be willing to fund patients for the 24 months required to allow data to mature if they think the likelihood of NICE approval at the end remains small. That could result in patients losing out once again on innovative treatments, or a situation in which drugs are put on the fund list and taken off in 24-month cycles, leading to uncertainty for patients about which drugs they have access to, just like the uncertainty caused by the current delisting.

I would like reassurances from the Minister that patients seeking treatment after the number of patients required to be treated in order to gain further evidence has been reached will not be denied treatment given to others in their situation. Does he believe that the changes to the NICE process outlined in the consultation are sufficient to ensure that more cancer treatments will receive positive NICE recommendations? Patients should be at the centre of any new decisions about the fund. Finally, I ask the Minister how the views of patients will be given greater weight in the new CDF arrangements.

[David Mowat (Warrington South) (Con)]

I have been listening carefully to my hon. Friend. Does she agree that the crux of the matter is that the NICE evaluation criteria for those sorts of drug have not been adequate? The whole genesis of the Cancer Drugs Fund is in a failure of NICE. We need to get the NICE criteria right; then we would not need a drugs fund in the current format.

[Pauline Latham]

My hon. Friend is absolutely right. NICE has not done what it should have done. I hope that the Minister will be able to rectify that failure in the system.

Resolving data collection issues, negotiating value for the taxpayer and making the NICE assessment process flexible for innovative new drugs and drugs designed to treat only a small number of patients are vital for the fund to work successfully when it re-launches in April. Will the Minister please look again at the delisted drugs and give hope to people such as Graham that they can spend longer with their loved ones? Failing to do so will not help those whom the fund is designed to help most: cancer patients and their families.

--- Later in debate ---

[George Freeman]

The hon. Gentleman makes an interesting point about the balance of responsibilities between NICE and NHS England. The system was set up so that NHS England is statutorily bound by NICE’s recommendations. Part of the problem in recent years has been that even treatments approved by NICE can take up to two, three and in some cases five years to be rolled out across NHS England. Much as we all love the NHS, we accept—even the NHS accepts—that there is a problem with patchy roll-out. That is also to do with data, which various colleagues have touched on.

[David Mowat]

The Minister used the words “world class” in respect of NICE, but said that its scoring system was such that drugs did not get authorised, and that many that the drugs fund includes were not authorised by NICE. Those two things do not seem to be consistent. Should we not look carefully at what NICE’s criteria are, as they have done in Scotland, and make them more appropriate?

[George Freeman]

The answer is yes. That is why I have set up the accelerated access review, which is doing precisely that. NICE is heavily involved in contributing to setting up the reforms, giving it new flexibilities and changing the way we adopt, assess and reimburse new medicines. I meant that NICE is recognised internationally. Indeed, other countries follow its health technology assessments, and its methodology and protocols. The challenge now is to update them for a world of genomics and informatics, with a much more targeted and precision medicine landscape. I accept that in that context we are not yet world class—we have more to do—but NICE is a world class organisation. Given the chance to update its systems, I believe it will lead the world in that field.

In the autumn statement we fully funded the NHS’s five-year forward view, including its cancer strategy, with a commitment to £10 billion extra per year by 2020. We frontloaded that with £6 billion, as was asked for, to allow it to make the investments necessary to modernise. That is a half-trillion pound commitment to spending on the NHS over this Parliament, so I gently point out to the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), that to describe that as a cut is testing the admirable elasticity of the English language.

On the importance of NICE and independent, clinically led decision making, much as at times like this I yearn to reach for a big lever, pull it, make a decision and send hon. Members out dancing and cheering and send patients home happy, I think we all understand that it is right that such decisions are not taken by MPs or Ministers; they must be taken by clinicians, based on the very best evidence from the very best independent advice. That is how this system works: NICE makes an independent judgment using the very best systems available to it. I take the point made by my hon. Friend the Member for Warrington South (David Mowat) that that needs to be, and it is being, updated to give NICE more flexibility to reflect the challenges of precision medicine—treatments that have a very definable, predictable response in a very small number of patients. NICE’s advice goes to NHS England, which makes the clinical judgment about treatment protocols. It is right that the Cancer Drugs Fund is based on that clinical decision making.

Nevertheless, there is an anomaly. Although we expect NHS England to be guided by NICE, in one therapeutic area, with the best of intentions, we have created a fund that sits at the end of the process, so that NHS England has a fund to buy drugs that NICE has said no to. That is an anomaly in the system. The point of the review is to take the CDF commitment to fund earlier, so that NICE can use it as an assessment fund to enable it to look earlier in the process at new drugs that are coming on stream and then give NHS England advice. That is in keeping with our general policy of opening up a space between research and medical practice in which we use data from the front-line treatment of patients and from the system to inform our procurement and reimbursement system.

Rather than “finger in the air” theoretical models of health-economic benefits, we are within touching distance of a system that is able to use real data in realtime from real patients with real diseases to drive real models of cost-benefit and health economics, and we are trying to wire the system in order to deliver that exciting prize. Members will understand that, where funding is finite—£1.3 billion is a big commitment, but it is finite—the system must re-prioritise which drugs it purchases. That is difficult for those who are in the process of getting a diagnosis and expecting a treatment that is then withdrawn, but I stress that no patient who is in receipt of a treatment that is withdrawn has that treatment withdrawn from them specifically. If they are getting a drug, they continue to get it.

My hon. Friend the Member for Mid Derbyshire mentioned pomalidomide, a drug used to treat relapsed myeloma. The CDF clinical panel looked at it, reviewed it, and, based on its independent, best-in-class assessment, the score was too low so the panel recommended that it not be approved. As I understand it, NICE is currently looking at other treatments for multiple myeloma, including panobinostat. I checked with NICE before the debate, and can say that final guidance on that treatment for that condition is imminent.

I remind Members that any patients receiving drugs continue to be treated, and that no drug will be removed if it is the only proven therapy available on the NHS. Sometimes in debates such as this we give the impression that we are taking away a drug, patients will stop getting it, and patients who have no other treatment will be left without treatment. That is not what happens. We should remember that there is an individual funding request mechanism—the IFR—for patients with exceptional conditions that are not met by other drugs. That is there specifically so that if any constituents have a unique claim on clinical exceptionality, their clinicians can make that case.

I should highlight the fact that two new drugs were approved in the previous CDF round. We sometimes forget that new drugs are being approved. We do not get requests for debates in Westminster Hall to congratulate the system on their approval, but it is worth mentioning them. The system approved panitumumab for bowel cancer and ibrutinib for cell lymphoma. Those approvals have been widely welcomed by patients and charities in the relevant sectors. I am delighted that, through the early access to medicine scheme that we introduced last year, which, with patient consent and their clinician’s approval, enables unlicensed drugs to be fast-tracked, we have now got pembrolizumab through, tested, into patients and purchased by NHS England several years earlier than would have been the case. That is a precursor of what we want to do much more widely through the accelerated access review.

It is no coincidence that one reason for the delay that was referred to earlier is that I am very keen for the CDF review to be done at the same time as the accelerated access review. Had we not done that, colleagues would have been saying to me, “How ridiculous, Minister, that you have reviewed the Cancer Drugs Fund and closed it before you have received the recommendations of the accelerated access review this spring.” I wanted to ensure that we are building a landscape that is logical and fit.

Sight Tests in Special Schools

David Mowat Excerpts

Tuesday 3rd November 2015 Westminster Hall

[The Minister for Community and Social Care (Alistair Burt)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) not only for securing this debate but for the usual thorough and highly competent way in which she has presented her case, which was full of facts, information and understanding, and informed in particular by her visits. It will be slightly easier to respond to one or two of her requests than to others, but I will come to that in my remarks.

Before anything else, I acknowledge what everyone recognises, which is that, although all our senses are precious, sight is probably the one that we value most. Sight is the key way in which children learn about the world. Ultimately, as the hon. Lady said, undetected sight problems can lead to a reduced quality of life and unnecessary damage to the eyes, which we all wish to prevent. The risk is that the vision of children with learning disabilities can be overlooked and assumed to be just part of their overall condition and behaviour. There is no doubt about the background to the campaign she mentioned.

We all share the desire that all children should be able to access sight tests, especially that group of children for whom we know that visual impairment is much more possible. There are more than 100,000 pupils in special schools in England. New arrangements have been introduced for children and young people with special educational needs or disabilities to develop more integrated approaches to meeting need. There is rather more variability than the hon. Lady suggests, and that variability is necessary to cope with the different conditions we are talking about.

A new framework was introduced in September 2014 that will see commissioners and local authorities working together to agree arrangements for meeting the needs of children with special educational needs. That includes publishing a local offer of services and ensuring that health and education professionals undertake a co-ordinated assessment of a child or young person’s needs that will inform an education, health and care plan. The plan has to consider the aims and aspirations of the young person and focus on the outcomes that will have the biggest impact. It has to include the needs of a child or young person with a visual impairment. That approach has tremendous potential for stimulating much more joined-up approaches in local care settings; meeting children’s needs; and helping health commissioners and local authorities to understand jointly how population needs can be supported by more flexible delivery methods.

The hon. Lady spoke about a postcode lottery, which is the term commonly used when anything that is provided in one area is not provided in another. I am slightly hesitant about using that term, because it suggests that nothing can be done and implies that it is an accident of fate, when in fact it is not. The difference in provision in different areas often depends on the ability of the leadership and management in an area to recognise a problem and the local determination to make a change. We get change around the country when somebody takes a lead and does things differently, often because they have been stimulated by changes at a national level and have taken the opportunity to do something differently. I recognise that, at its worst, the term “postcode lottery” implies that people get less of a service in one place than another. However, we lever up standards by pointing to what is done best. If we did not allow for some variation, we would not be able to learn. I take the hon. Lady’s point, but SeeAbility’s work in London demonstrates what can be done and shows others the way forward.

[David Mowat (Warrington South) (Con)]

The Minister is right that the term “postcode lottery” can be pejorative. We need centres of excellence that can be spread out more widely. Warrington hospital is well-funded in that regard, and it considers itself a centre of excellence, at least in Cheshire. For that spreading out to happen more quickly, we need a national programme or some kind of national impetus, which is where the Minister might come in.

[Alistair Burt]

I am delighted to recognise the centre of excellence about which my hon. Friend speaks so powerfully. I will talk about the national side when I get to the conclusion of my remarks. I will illustrate how we are moving forward and what we are doing, which will address some of the concerns raised by the hon. Member for Mitcham and Morden and my hon. Friend.

Let me turn to the issue of children with learning disabilities and problems with vision. It is widely recognised that children with learning disabilities have a greater risk of a wide range of eye problems, including refractive errors that require correction with glasses, squints, cataracts and glaucoma. All children under 16 and those between 16 and 18 in full-time education, including children with learning disabilities, are entitled to free NHS-funded sight tests. Sight tests are an extremely valuable heath check of the eye that can pick up a need for glasses and early signs of eye conditions, many of which can be treated if they are found early enough.

As the hon. Lady said, NHS England is responsible for commissioning the NHS sight testing service. I will come on to the work that NHS England is doing with SeeAbility in a moment. The hon. Lady said that she is concerned that an optical practice is not necessarily the best environment for undertaking a sight test on a child with learning disabilities. I agree, which is why we want greater use to be made of different ways of providing sight tests for children with learning disabilities. The NHS can contract with providers for mobile, funded sight tests for children, which can take place at special schools. We appreciate that that provides a familiar environment for the test, as the hon. Lady said, which best serves the child. Any provider can apply for a contract with NHS England to provide those services, provided they meet the conditions for holding a general ophthalmic services contract. I will come on to the point about payments in a moment.

However, I am aware that, even with current provision, the concern remains that children with learning disabilities may find it more difficult than other children to access services. SeeAbility has been doing valuable work in that area to develop evidence and promote awareness of the specific needs of children with learning disabilities. I am pleased to accept the invitation to meet SeeAbility and visit one of the schools in which such work has been going on. It will not be my first visit. I visited it when it was the Royal School for the Blind when I was Minister with responsibility for disabled people 20 years ago, and it will be nice to renew the acquaintance.

I am also aware of SeeAbility’s “Children in Focus” campaign, which seeks a nationally commissioned service to provide sight tests and glasses for that important group of people in special schools. In addition, I understand that SeeAbility has recently been awarded a contract by NHS England to provide eye care services at a number of special schools in London.

Reducing health inequalities is a key part of the five-year forward view and NHS England’s 2015-16 business plan. In that context, I know that NHS England recognises a growing body of evidence that suggests that access to sight tests and glasses is an issue for some children and that regular eye tests and the wearing of appropriate glasses make a vital contribution to those children’s health, educational progress and general quality of life.

As the hon. Lady said, NHS England has been in dialogue with SeeAbility about sight test provision for those pupils, and it has met Dr David Geddes, the head of primary care commissioning. I welcome the engagement between the NHS and patient groups. As I said, SeeAbility has recently been awarded a contract by NHS England to provide eye care services at a number of special schools in London. NHS England is keen to see how that work is going, so that it can consider what can be built on it and see whether the model of care that is right for that cohort of parents can be rolled out elsewhere. Some good early work has been done, but it is early days. It is appropriate that NHS England carries out some longer term work with SeeAbility to assess how that contract is working and see what can be done. Although we would all like to see rapid progress, it is early in the contractual relationship, and NHS England needs to develop the evidence base further.

The hon. Lady rightly spoke about fees. SeeAbility has pointed to a structure that is considerably higher than the current fee of £21.31 per test. We all recognise that the current financial stresses in the NHS mean that a robust case has to be built before further funding is committed. NHS England is happy to work with SeeAbility to understand better what financial model best contributes to those patients’ needs. Its view is that SeeAbility has done some very good early work, but it is only two months into the contractual relationship. We therefore need to take a little longer to find out what is actually happening and what more can be done. NHS England expects to have concluded that work by next spring, and it will be in a position to consider the need for changing the current arrangements and possible service developments.

I hope that gives the hon. Lady a sense of where this is going. First, we all recognise the scale of the problem. Secondly, because there is now more variability in the NHS’s ability to meet this need, some things are being tried out to see how they work—particularly through the contract with SeeAbility. I am keen to see how it works in practice, which is why I am happy to accept the invitation to see some of the work it is doing in schools. I will work with NHS England on how it is assessing the work and on the next steps.

In closing, I reiterate that I recognise the importance of properly considering the needs of children with learning disabilities in service planning. If children are to be given the best chance in life, it is important that any vision problems that could affect or impair their development are identified and addressed. I am pleased that NHS England is closely looking at this issue and is already in discussion with SeeAbility. I look forward to hearing about the outcomes of NHS England’s work in this area and its proposed way forward.

The early day motion that the hon. Lady mentioned states that, as a start, it

“encourages the Government and the NHS to work together to create a comprehensive national programme and a properly-funded system to make sight tests available in all special schools in England”.

In the spirit of encouraging the Government and NHS England to work together to see what can be done, the hon. Lady can be sure that that is indeed happening.

I look forward to meeting SeeAbility and NHS England to pursue this matter further. I am sure the House will have a further opportunity to discuss it in the future. Once again, I thank the hon. Lady for securing the debate and conducting it in her normal thorough and effective manner.

Question put and agreed to.

Green Investment Bank

David Mowat Excerpts

Thursday 29th October 2015 Westminster Hall

[Graham Stuart]

I will come to that point on the continuing role of Government in a minute or two. It is not enough to say that something will be privatised. It could be privatised 100%, or it could be privatised 100% with strings attached, whose value we would have to try to estimate in advance—if something is sold 100%, the strings are not normally worth a great deal. Then there is the issue of whether a minority stake is retained and, if so, how it will be used. I will come to that point later, but the hon. Gentleman is right to say that such questions, not least those of the Scottish Government, persist.

[David Mowat (Warrington South) (Con)]

I am listening very carefully to my hon. Friend. Surely the principal factor protecting how the bank will operate is the fact that the green purpose is still in the 2013 Act and the articles of the company. It therefore cannot do anything outside the green purpose. That is set out in the five points that my hon. Friend mentioned, or did I misunderstand his point?

[Graham Stuart]

My hon. Friend is quite right. What happened—given the late tabling of amendments in the House of Lords this week, I think it came as something of a shock to the Government—is that the Office for National Statistics decided that if this place continues to determine the purpose of a supposedly privatised institution, such as this bank, that institution continues to be controlled not by its shareholders but by this place, and it is thus linked to the Government. Therefore, the ONS said that those ties have to be cut.

The nub of the matter is that those statutory guarantees and safeguards are being removed, albeit at the last minute—that was announced recently and will be coming to the House of Lords this week. We are asking how much the remaining wish-fulfilment requests will be worth in the real world of private finance, where people seek the maximum return for their money and often have a fiduciary duty to do so.

The senior directors of E3G—an environmental non-governmental organisation that works in these areas across the world—who were involved in the conception and creation of the bank, have heard worrying views from financiers that the bank may lean towards investing in safe, established technologies. Worse still, it could be attracted to purchases purely because of the virtue of the assets and cash flow that will come forward in due course, rather than because they are going concerns in their current form. It is possible, therefore, that it would be a zombie investment vehicle, rather than a genuine project-developing bank.

Those views were echoed by Bob Wigley, the former chief executive of the Green Investment Bank commission at the recent summit held by the Aldersgate Group. He warned of an “inherent tension” between the GIB’s continuing to invest in novel, more complex projects that are profitable in the long term, and shareholder pressure to maximise short-term returns on high-value investments, given their focus on quarterly performance. Such an outcome would defeat the objectives of the bank. It was and is intended to capitalise new green technologies and to invest in projects that other market operators shy away from. In doing so, it makes strides in environmental protection while simultaneously stimulating economic growth.

I went to the Conference of the Parties in Montreal in 2005, and from there I got involved in an organisation called Globe International, a global legislators’ organisation for a balanced environment. I am chairman of that group. I have been involved in the issue of climate change over the years; when I first came to this place, I was a member of the Environmental Audit Committee. It seems to me that the central challenge in tackling climate change, despite all the complexities, is to drive down the cost curve of clean and green approaches as quickly as possible.

For all the jobs that are created and for all the economic benefits, we cannot do that for free. One of the big challenges is to speed up the reduction in cost and ensure we have the institutions and frameworks to incentivise that. I say that because, for all the complexities around climate change and all the conferences I have been to over the years, I have always thought that we have to get the cost down as quickly as possible.

We have subsidised renewable technologies to try to make up for market failure, and successive Governments have struggled to create a dynamic regime that controls the level of public subsidy while encouraging investment. In that landscape, in which it is so hard to create dynamic frameworks that maximise value for money for the public purse but accept the need to pump-prime and drive the implementation of new technologies and lower costs, the bank is an important component.

On the bank’s next deal, it will have brought in a total of £10 billion into the UK green mix alone, of which less than a quarter has been from the state. To those outside who think the Green Investment Bank is rather arcane or marginal, I say that it is pretty fundamental to meeting the requirements of our industrial strategy and our desire for people to have affordable bills. We have got to ensure that we get it right. I urge the Government to consider how we can guarantee that the balance that I mentioned will be maintained under private ownership. For precisely that reason, I would be grateful if the Minister explained how the transfer will affect the shareholder relationship framework document that sets out the bank’s operating principles and strategic objectives.

Alongside primary legislation, the shareholder relationship framework document is an important safeguard to define the GIB’s role in the green marketplace. Article 3.1 states that the bank shall

“seek to align its activities with HM Government’s green policy objectives”

and

“seek to overcome market failures and improve market effectiveness”.

Article 4 lists the priority policy sectors and is clearly intended to be updated on a rolling basis in line with changing needs. It is hard to see how the SRFD could survive the sale of the Government’s shares. The Department for Business, Innovation and Skills is described in the SRFD as the bank’s “sole shareholder”, and the document as a whole appears designed for precisely that arrangement. It is likely that the SRFD would fall away if BIS ceased to be the sole shareholder. If the SRFD does survive a share disposal, the Government would not be able to protect it if their shareholding dropped below 25% and if the other shareholders or shareholder decided otherwise. If the Government retain a sufficient minority to resist any change to the SRFD, they would still lack the power to update the priority policy sectors that the bank invests in and supports.

How do the Government intend to safeguard the shareholder relationship framework document following a sale—or at least preserve its effect? Do they intend to maintain a significant minority holding in the bank? What assessment have they made of the implications of different sizes of shareholding that they may have going forward? Has any consideration been given to any form of arrangement, contractual or otherwise, to prevent the bank’s core purposes from being distorted or discarded after sale?

Before closing, I want to raise some related issues on which clarity would be helpful. The European fund for strategic investment is a pot of €21 billion of off-balance-sheet capital. That sounds a bit dodgy, but it basically means that it does not go on to national accounts for debt when used, which is quite important given the fiscal retrenchment that this country is going through and the commitments to eliminating debt and moving to surplus and so on.

The capital can be used by EU member states to finance energy and infrastructure projects. While the UK has committed an additional €8.5 billion to the fund, there is currently no effective intermediary within the UK to help British projects access the funds. Would a privatised Green Investment Bank be able to access the EFSI? If the privatised bank is an unsuitable vehicle to access it, will the Minister say what would be and how the UK’s green economy would be able to benefit? It would be a significant missed opportunity if there were no plan in place to ensure that we can leverage off-balance-sheet funds to which the UK is a key contributor. Indeed, if the UK were unable to access the funds, that might alter the whole calculus as to whether we stand to gain or lose by the privatisation of the bank.

While discussing alternative sources of finance, I also want to touch on the potential for the GIB to explore citizen investment. As I explained earlier, the bank has deliberately sought to make itself sustainable by operating a higher risk, higher return model, but one of the bank’s key aims since its inception has also been to accelerate delivery of the UK’s low-carbon future at the lowest possible cost—quite right, too. With that in mind, relatively cheap capital could be available from citizen investors investing via Green Investment Bank bonds. In Germany, such citizen investors are willing to accept lower returns on equity than traditional investment—more like 4% to 6% than 7% to 9%—because their motivations are not solely financial. Given the capital-intensive nature of most low-carbon investments, scaled-up citizen finance has the potential—only the potential—to make the delivery of large-scale infrastructure more affordable.

To get a sense of how important that is, a 2012 study by the Crown Estate showed that every 1% increase in the cost of capital leads to a 6% increase in the lifetime cost of an offshore wind farm. Similar analysis exists for the solar sector. The nature of both is that up-front investment is huge with relatively low costs thereafter to get a return. A huge premium must be paid when funding becomes more expensive for projects that require so much capital up front and there is therefore a huge incentive to secure the lowest possible financing costs for the GIB. Has the Minister considered the idea of encouraging citizen investment in the GIB? Might the Government pursue such a concept?

To conclude, we are at a crossroads when it comes to the development of the Green Investment Bank, with both new opportunities and old dangers presenting themselves. Failure to provide reassurance about the bank’s future role would send negative signals to low-carbon investors, who might feel that they have received a lot of negative signals already. That has the potential to threaten inward investment flows and undermine the low-carbon sector’s contribution to our ongoing economic recovery.

It is essential to get the privatisation process right and to remember that many investors and Governments will be watching how we decide to proceed with the GIB. As we head towards the UN climate summit in Paris this December, we have a responsibility to ensure that the Green Investment Bank remains a world leader in its field and a driver of investment and innovation in cutting-edge, low-carbon technologies.

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[George Kerevan (East Lothian) (SNP)]

Thank you, Mr Crausby, for giving me the novel opportunity of winding up from the Front Bench. I will try to add a little to the debate briefly.

The hon. Member for Beverley and Holderness (Graham Stuart) is to be thanked for securing this debate and for providing such a rounded and nuanced case—one that all of us here can agree with—that we might as well have stopped there and asked him to go and talk to the Cabinet. The substance of the debate, both today and in the Environmental Audit Committee the other day, is that everyone is convinced that the Green Investment Bank works. No one has come up with even a modest complaint about what it has done. Hon. Members on both sides of the House agree that it works and it has been there for only three years, so, in the standard form, if it ain’t broke, why try to fix it? If we move to a quick privatisation, I worry that we will in fact destabilise the existing operation, which is in its infancy. It will divert management time—time that is scarce—and expertise to selling the company, reorganising its culture and dealing with new owners, who are likely to be institutions rather than a widespread number of investors, at precisely the wrong moment.

The hon. Gentleman put well the point that the chances of the bank’s being able to borrow substantial amounts of money—possibly in the billions—to provide for further investment are very limited at this stage. I agree. It will be some years before the bank will be in the position to lever in the kind of money that the Treasury and the Government have been talking about. Selling it now is therefore premature even on the basis of what the Government think the bank will be able to achieve once privatised. The privatisation makes no sense unless the Government have an alternative agenda. I think they do. It is clear that the Government are trying to sell off as much of what remains of the household silver as possible to find capital to pay down the overall level of debt.

[David Mowat]

The hon. Gentleman makes two very good points: that if it ain’t broke, we should not fix it, and that the privatisation could cost management time. However, the bank’s management requires and has asked for more capital; that is presumably why both the chief executive and the chairman, who I guess must be part of the success of the past three years, seem quite keen to bring more capital in through this route.

[George Kerevan]

Having spoken to the chief executive I totally concur. The bank wants the facility to borrow more money. After all, for it to be a bank rather than a fund it will need to be able to think strategically and have funds in place; as we all know, it takes a long while to broker and deliver infrastructure projects. The projects delivered to date have been small scale, so if it wants to step up a quantum it will need large amounts of money in the pipeline. But that is covered in the existing legislation, under which it is allowed to borrow.

The worry on the Treasury’s part, one that I am happy to accommodate, is that if the bank borrows more money, that money will be counted by the various statistical agencies as part of overall debt. But that possibility is absolutely notional. The City is not worried—it supported the creation of the Green Investment Bank and has been backing it; indeed, it would not lend money in the medium term unless it was convinced that the GIB was a sound proposition as a bank. The impact of any loan on public debt will therefore be notional.

The Government—in particular the Treasury, which is driving this agenda—are trying to sell off available assets. Others, such as Channel 4, are in the pipeline. They are doing so to find capital to prove that they can begin to reduce the overall level of debt, which they have not managed to do so far. One accepts that that is the Government’s agenda, but in this case it would mean sacrificing something that the Government themselves have worked to bring about and that is successful. It would be a cheap sacrifice for a minimal impact on the overall debt.

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[Kevin Brennan]

I have known the hon. Gentleman for a long time. All I will say is that he has let himself down slightly by injecting a slight note of partisanship into our proceedings; I knew it would inevitably come. Given the sort of person I am, of course, I would never respond to anything of that kind.

[David Mowat]

Without wanting to take this too much further, I should say that I do not think it was Luxembourg and Malta; I think it was Cyprus and Malta. Perhaps we could clarify that.

[Mr David Crausby (in the Chair)]

You were doing so well.

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[Kevin Brennan]

That is right. We have all read the reports about the confusion of the international community ahead of the Paris conference as to what the position of the UK is now, having been at the forefront, for more than a decade—under both the coalition Government and the previous Labour Government—of pressing forward on renewables.

[David Mowat]

On that point, will the hon. Gentleman give way?

[Kevin Brennan]

I will.

[Graham Stuart]

It’s all my fault.

[David Mowat]

It is indeed the fault of my hon. Friend; we can all agree on that at least.

We have the Climate Change Act—no other country in the world has come up with an Act that has also required an 80% reduction. It is also true that the level of carbon emissions in this country is lower than the EU average and one third lower than in Germany. We should be pleased about where we have made progress.

[Kevin Brennan]

If it was the fault of the hon. Member for Beverley and Holderness that we descended into partisanship, credit should go to the hon. Member for Warrington South for raising the tone once again, bringing us back on topic and pointing out that it is important that the UK shows leadership in this area. Perhaps we can all agree on that, even if we do not agree on the extent to which that is currently being displayed by the Conservative Government.

As I said, this has essentially been a very successful innovation. One problem—we have had differences of opinion about this during the debate—has been the restrictions placed on the Green Investment Bank in relation to borrowing. Obviously, the Treasury does not want that to appear on the books, because of the targets that it has set in relation to deficit reduction. However, we have come to a strange pass when even something that we could all agree would be a good thing, even good borrowing, is bad if it is on the Government books, simply because it is on the Government books. Hon. Members touched on this during their contributions. Sometimes in this country we seem to be the prisoners of public accountancy convention, rather than common sense, in relation to when borrowing is a good and effective thing to do—when it is to invest to grow our economy in the future in a sustainable way.

Oral Answers to Questions

David Mowat Excerpts

Tuesday 13th October 2015 Commons Chamber

[Ben Gummer]

The thrust of the right hon. Lady’s question is correct. That is why we have near-record numbers of nurses in training and a record number of nurses in practice, and we will continue to see growth over the next five years.

[David Mowat (Warrington South) (Con)]

Last year the NHS paid £300 million to claimants’ lawyers. Indeed, for small and medium claims, the lawyers made two to three times as much as the claimants themselves. Is there more we can do to stop this abusive behaviour?

[Mr Jeremy Hunt]

There certainly is. We spend £1.3 billion every year on litigation claims—money that could be used to look after patients on the front line. The way to avoid spending that money is to have safer care, and that is why it is so important that we have a seven-day service.

NHS Reform

David Mowat Excerpts

Thursday 16th July 2015 Commons Chamber

[Mr Hunt]

I am really grateful to the hon. Lady for making that point. NHS managers have one of the most difficult challenges in the country. Not only do they have to balance revenue and expenditure; they have patients’ lives at risk and public accountability. It is really difficult to run a hospital or a clinical commissioning group. These are some of the most difficult jobs one can imagine. We need to support them. I hope they will agree and welcome a move away from targets as the main way of driving change in the NHS to intelligent transparency and peer review. This is not a confrontation with doctors. Doctors overwhelmingly support a seven-day service. It is, I am afraid, a battle with the BMA, with which we have been trying to negotiate on the matter for nearly three years. It has refused to move. It needs to get in touch with what its members want and what the public want, and then I hope we can make much faster progress.

[David Mowat (Warrington South) (Con)]

A characteristic of the health system in our country is that we have something like 20% to 25% fewer doctors per head of population than comparable countries such as France, Germany and Spain. Is it part of the Secretary of State’s vision to correct this over time, and will that make reforms such as these easier to push through?

[Mr Hunt]

We do need more doctors and more nurses. We saw an increase of about 8,000 nurses and 10,000 doctors in the previous Parliament. We will need more for the simple reason that we will have 1 million more over-70s by the end of this Parliament. That said, the NHS is admired in the other countries my hon. Friend talks about for our models of care, which are sometimes less hospital-centric and therefore inherently more efficient than what happens in some other systems. The learning should go both ways.

NHS Funding (Ageing)

David Mowat Excerpts

Tuesday 25th March 2014 Westminster Hall

[Dr Coffey]

I respect what the hon. Gentleman is saying. There is no doubt that allowing doctors to lose the responsibility for effectively caring for their patients 24 hours a day has caused significant change. An ageing population means that that is increasing and will continue to be a pressure on alternative sources of health treatment. A lot of work is going on and I am pleased that the landmark Health and Social Care Act 2012 will start to tackle some of the issues, but I want to give credit to GPs, who are doing so much more for patients in our local surgeries now than 20 or 30 years ago, mainly because of technology changes, but also through a recognition that we can prevent people from going to hospital by doing more in primary care. That is an admirable change, so I want to praise GPs, while agreeing with the hon. Member for Upper Bann (David Simpson) that rescinding that 24-hour care responsibility was a backwards step for patients. The lack of out-of-hours care was one of the big doorstep issues before the 2010 general election.

Turning to the different formulas, one big change in the 2012 Act was splitting funding for the NHS, with public health going to authorities, recognising the deprivation inherent in different parts of the population. That was the right thing to do. Surrey ended up with £20 a head for public health and places such as Hackney had £115. Westminster, for example, has an even higher allocation, recognising that parts of the borough have significant deprivation, but it was the right thing to do. Local authorities not only got the staff from NHS trusts who focused on public health campaigns, but were also given responsibility for tackling the long-term factors that contribute to health inequalities, be they quality of housing or local employment. Frankly, the NHS was not in a position dramatically to change the levers affecting such inequalities in local communities, so it is right that councils took on that leadership. I hope and pray that they continue to take the initiative, rather than just focusing on public health programmes. It is a real step change in the responsibility of and the opportunity for our local councillors to make a difference.

Meanwhile, the opportunity was there to examine the formula for the rest of the NHS budget. I refer to section 23(1) of the 2012 Act, which inserted a new chapter into the National Health Service Act 2006. Section 13G, “Duty as to reducing inequalities”, of that new chapter states:

“The Board must, in the exercise of its functions, have regard to the need to—

(a) reduce inequalities between patients with respect to their ability to access health services, and

(b) reduce inequalities between patients with respect to the outcomes achieved for them by the provision of health services.”

The effect is twofold, but the latest funding formula has not taken account of the

“ability to access health services”,

and inequalities have been strengthened.

[David Mowat (Warrington South) (Con)]

I thank my hon. Friend for giving way and congratulate her on securing the debate. The problem is not with the formula that was developed by the Advisory Committee on Resource Allocation, but that the board of NHS England inexplicably decided not to implement it. That is what we are now living with.

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[Dr Coffey]

My hon. Friend makes an interesting point. I have not gone into that level of detail and do not have that level of understanding, but she makes an important contribution to the debate. Local clinical commissioning group and NHS trusts must contend with that challenge and should make that point to the board of NHS England.

I come back to the formula. I said in response to my hon. Friend the Member for Warrington South (David Mowat) that the focus on age may have slightly increased, but that it did not go far enough. The correlation between age and per capita funding increased only marginally between the old formula and the partially adopted current formula. South Sefton receives 40% more per capita than Ipswich and east Suffolk, but it has 50,000 fewer pensioners and a lower proportion of pensioners. Life expectancy in my part of Suffolk is considerably higher than in others, which is good, but that does not necessarily mean that people, in particular the elderly, do not have complex health needs that need addressing. At the moment, the formula continues to discriminate against the elderly and even further against people in rural areas.

[David Mowat]

This is a really important point on which we need clarity. The issue here is not the formula. Indeed, it does not really matter what the formula comes up with, because NHS England will not implement a formula that does not give everybody an inflation-based pay rise. That is what happened. With all due respect, the formula could be anything we liked, but if it will not be implemented, it just does not matter.

[Dr Coffey]

I can understand why the board of NHS England made a decision not to cut per patient funding in different parts of the country. We could get into the politics of the different aspects of what happened under previous Governments when overall funding went up, but parts of the country, such as the one that I represent, did not receive the same increases and seemed to suffer as a consequence, despite overall funding going up.

I am not into playing party politics with NHS or public funding, so I recognise exactly what my hon. Friend says. I guess that is what led to the outcry in the autumn about the “Tory-run NHS cutting funds to northern Labour seats,” which was disgraceful, because it was down to the ACRA’s independent assessment. I recognise, however, that that must be managed. Nevertheless, the board of NHS England bottled it by not being prepared to be a little braver in deciding on the allocations. It also ignored the formula and, as a consequence, effectively decreased the recommendation on the proportion that should go to elderly patients, which was wrong in principle, but I recognise what my hon. Friend says.

Various proposals were suggested—I say this as a constituency MP and not as a Conservative party representative—that could have seen an improvement in the pace of change towards getting a fairer funding formula while still not cutting funds to patients in different parts of the country. I regret the final decision of the board of NHS England. Of the two options proposed, I would have hoped that it would have gone for the first, recognising that it was a unique opportunity to tackle the unfairness, but the board bottled it.

I want to discuss why the issue matters. There are four community hospitals in my constituency: Felixstowe, Aldeburgh, Southwold and the Patrick Stead, in Halesworth. The first three have been highly commended by the Care Quality Commission and they are well recognised and loved in the community. The Patrick Stead also does an excellent job. The CQC made some slight criticism, but, true to form, the hospital addressed that straight away and is back to doing good things. After I was elected to the House, it was understandable that my constituency neighbour, who is now the Minister, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), should be the local expert on health, as he is a distinguished doctor. However, in my own case work, the experiences of older patients in particular, who had not got the care or treatment they needed, kept coming up. That is what got me going on the entire issue.

We have in the past debated the East Of England Ambulance Service NHS Trust. That was a classic example. At the top line things were running fine. The trust was hitting its targets and financially it was very good. It was trying to get foundation trust status, and the chief executive was awarded the Queen’s ambulance service medal. However, at the heart of things, the NHS relied on the meeting of targets, and forgot about patients. As a consequence, elderly people with broken hips waited for hours for an ambulance to arrive, because their condition was not life-threatening. I am pleased about the big shift that has happened only in the past few months: finally we have got rid of the entire board of the ambulance trust. I am sure that they were all good people who wanted to do the best to help guide the trust. Nevertheless, they seemed to be satisfied with hitting targets, and patients were forgotten. The arrival of Anthony Marsh will be particularly useful.

I supported most of the service reconfigurations, as the Minister knows, but there was one I did not support. A proposal to reconfigure stroke services would effectively have removed them from Suffolk. One need not know a lot about medicine to know of the excellent FAST campaign, which I recommend all MPs share with their constituents. That recognises the need to act quickly and get good treatment after someone has a stroke. Ambulances in the east of England were not reaching people quickly enough to help them with the first steps in care. If stroke services had been removed from the county, it would have taken well over an hour to get access to the sort of care that is necessary to enable a stroke sufferer to have a good life. In the case of cardiac services, when people were treated en route and taken to the regional specialist centre in Cambridge, they got higher-quality care, and I support that, but I was concerned about the stroke proposals. That is why I was pleased when the local clinical commissioning groups came together and said, “No. We are going to keep stroke services in the county.”

However, I must admit that our significantly lower funding per head means that that decision has potential consequences in the local NHS. The fact that our funding level is so different is one of my concerns. Despite a small above-inflation increase, which I am pleased about, I contend that we should be doing considerably more to help NHS CCGs to meet the needs of a significantly higher proportion of the relevant population. The constituencies with the highest proportion of people over 85 include places such as Worthing West, Christchurch, North Norfolk and Newton Abbot—largely rural and often coastal areas. By definition, those are often the places away from regional centres of excellence. I am concerned that the funding formula did not address the needs of patients living on the coast.

I have discussed at length my concerns about what the NHS board has not done, but opportunities are coming through, to do with local innovation. The King’s Fund report, “Making our health and care systems fit for an ageing population”, was an important contribution. One of the examples of local innovation to which it referred was at Gnosall GP surgery in Staffordshire, which provides patients over 75 with an annual health review and uses experienced “elder care facilitators” to support patients, helping them to navigate the system and draw up care plans. That is a good example of local innovation. I tabled a parliamentary question on 20 January at column 76W asking about bringing health visitors in for people over 75. I recognise that health visitors’ primary focus is, rightly, young children. However, there may be something that we can do, and perhaps the board of NHS England could think about rolling out the practice I suggest, particularly in parts of the country with a high proportion of elderly patients.

I could speak for the entire hour and a half on this subject, but I will not, the House will be pleased do know. It is regularly talked about. The board of NHS England had a golden opportunity, with the Health and Social Care Act 2012, to step away from the political pressures and do what was right for patients. As I said, I think it bottled it, and I am sad about that. I hope that it will reconsider its decision and think again about the needs of the elderly. Those people have served the country with distinction. We say that we do not want to discriminate by age, but the postcode lottery seems to determine whether elderly patients get the treatment they deserve. The debate will not be settled today. Unusually, perhaps, the Government cannot wave a magic wand and change the formula. It is for the board of NHS England to do that. I hope it will reconsider and truly look after the patients in question. In a few years we will be the ones in their position, and we need to do our bit to address the challenge.

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[David Mowat (Warrington South) (Con)]

I congratulate my hon. Friend the Member for Suffolk Coastal (Dr Coffey) on securing this important debate. Although NHS funding has increased in real terms, what matters is the allocation that we get in our communities. We have learned a lot already from hon. Members’ remarks. Personally, one of the most important things I have learned is that my right hon. Friend the Member for Banbury (Sir Tony Baldry) reads the Daily Mirror. I will reflect on that fact.

The issue of ageing has been a known problem in the NHS for some while. It was a problem for the previous Government and there was an attempt to reflect it better in what was then the ACRA formula. Like the current Government, the previous Government did not implement that formula. The direction for travel adjustments that should have been made in the years before the general election were not made and the formula was essentially static.

As an MP for an underfunded area—Warrington is underfunded—I was optimistic that a new Government bristling with talent and enthusiasm for sorting out such issues would fix the problem. As has been mentioned, the Secretary of State asked the independent ACRA committee to make a clinically based decision on how money should best be allocated—of course, allocation can mean that there are winners and losers—based on ageing, deprivation, population and any other salient factors. The consequence was that a new formula was developed and submitted.

To be clear, nobody who wants the problem fixed is expecting a new formula to be implemented immediately. As hon. Members have pointed out, some areas are significantly under-allocated while others are over-allocated. There therefore has to be a process by which we move towards the correct number over a period of years—that is, the direction of travel adjustment—so that big, unmanageable changes do not happen. That would be perfectly acceptable.

Is that what happened, however, when we went to the board of NHS England with the new, clinically developed formula designed by an independent group? The answer is no. The board of NHS England said, “If we implement the formula, there will be winners and losers. Our view”—perhaps this was because of political pressure—“is that the losers complain more than the winners celebrate. We are going to give everybody an inflation increase. With the bit left over, we will give a little more to those furthest away from target.”

One of those areas was Warrington. We are grateful that we got extra money, but it was not enough. I suspect that the situation was similar in Suffolk and Oxfordshire: some extra money was allocated, but not as much as would have been allocated had the formula been implemented.

What does that mean for public health? We are stuck with a static formula, developed around 2002 or 2003. The previous Government made no direction of travel adjustments to it other than for inflation and we are apparently reluctant to make those adjustments as well. That is a pity. A static formula may be politically expedient but it is not right. That is why we have ACRA—to go into the issues and come up with the right answer. The situation, for me, raises the question of why someone would be on the board of ACRA, given what happens to its recommendations.

There are consequences. I have seen the numbers: 34 CCGs are more than 5% underfunded—that 5% is a lot of money in health allocation—and 38 CCGs are more than 5% overfunded. What to me is even more significant is that 84% of CCGs that will have a deficit are underfunded. That is an issue because if we are trying to make people accountable for managing an efficient operation, but start that process by saying that we are not going to implement a formula that would give a fairer allocation, it is reasonable for them to come back and say, “Yes, and therefore we have a deficit.” It hits the whole process.

What is the impact in our constituencies? We have heard about Harrow, Oxfordshire and Suffolk. Warrington is also underfunded. The issue is not necessarily that older folk get worse services, but that marginal or discretionary activities are not carried out in underfunded CCGs. For example, in Warrington we are unable to provide IVF in the way that the National Institution for Health and Clinical Excellence would like because funding is not available. GPs decide how to allocate what funding they have and consequently the people who lose are not always the ones who would be imagined to have lost in the formula. Overfunded CCGs can undertake more discretionary activity than others, and someone should look at which parts of our NHS are spending large amounts of money on alternative therapies such as homeopathy. That is likely to be the result of overfunding, and that is not acceptable.

There was an element of politics. Everyone agrees that ageing is a good proxy of health need, but there is an issue about the weighting that we should give to deprivation. That was in the letter from the shadow Secretary of State for Health that was read out, and it may have been part of his concern. That does not allow for the fact that ACRA was an independent committee and either we accept what it said or we do not. I have some questions for the Minister on that because it goes to the heart of whether the NHS is manageable. If such important decisions are, in the end, made for reasons of political expediency, why do we have an NHS board and senior NHS managers who are supposed to provide the right answers? We would not need any of that; we could just link the issue to inflation or inflation plus a little bit.

[Dr Thérèse Coffey]

My hon. Friend is making a key point. One point about the Health and Social Care Act 2012 was to remove that party political element of manipulating or managing the formula or putting in extra factors. That is where a key opportunity has been missed.

[David Mowat]

I agree with my hon. Friend, but as I said, the issue is not the formula, although it may also be the formula—my hon. Friend and I may not agree on that. I accept the formula, and I would have liked it to have been implemented. I have difficulty in accepting that, for political reasons, it was not implemented.

People in my constituency and elsewhere who are not affluent and do not understand this stuff lose out because the previous Government did not do the distance from target adjustments under the old formula and NHS England has refused to implement the right thing under the new formula. It is hard to justify that. Why have ACRA if we are not going to do what it says, and why have an NHS board if it cannot manage change and do the right thing? That is why big organisations have senior managers who are paid lots of money.

Are there symptoms of waste in the 38 CCGs that are overfunded by 5% or more? Is the incidence of alternative therapies and all that goes with that higher there because they have the money, so why not spend it? Does the Minister really believe that he can hold CCGs accountable for budgets given that how those budgets are allocated is apparently so political and not based on clinical judgements by independent people such as those on ACRA?

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[Mr Reed]

I thank the hon. Lady for her intervention. I am not sure that I agree with her. Not for the first time today—I am not laying this singularly at her feet; she knows that I have great respect for her—we have heard the argument that I hear frequently from Government Members about there somehow being an enemy within. That does not deserve significant air time in this Chamber or on any other platform in this House.

It is a mark of how important these issues are that so many hon. Members attend these debates—not just today, but every time I have responded to a debate such as this in Westminster Hall. As we have heard again today, hon. Members passionately represent their constituents, often with moving testimony of constituents’ experiences. Today, we are discussing an issue that will affect many more people in the future.

The NHS is now more than 65 years old and to ensure that it is still here in 65 years’ time, it needs to adapt to the challenges of this new century. In 1948, the health challenges facing the UK were clearly very different from those we now face. As consistent improvements in medical knowledge have enabled more people to live better for longer, we are now tasked with providing a system to cope with an ageing society. Surely we all agree on that. One of the core principles of Labour’s plans for the NHS is that there should be a system fit for the 21st century. My right hon. Friend the Member for Leigh (Andy Burnham) will speak about that and the impact of an ageing society later today.

The hon. Member for Suffolk Coastal has raised on the Floor of the House and in recent Health questions the issue of the NHS funding formula and its impact on the elderly, and in my view the Government’s response has been poor. Late last year, NHS England consulted on a new funding formula based on recommendations from ACRA and we have covered such issues widely this morning. ACRA said:

“The objective of the formula is to provide equal opportunity of access for equal need. The basic building block of the formula is the size of the population of each CCG, and then adjustments or weights per head for differential need for health care across the country. The weights per head are based on need due to age (the more elderly the population, the higher the need per head, all else being equal) and additional need over and above that due to age (this includes measures of health status and a number of proxies for health status). There is also an adjustment or weight for the higher costs of delivering health care due to location alone, known as the Market Forces Factor…This reflects that staff, land and building costs are higher in”

for example,

“London than the rest of the country.”

I can point to life expectancy gaps in Cumbria exceeding 20 years. Healthy life expectancy ages in some areas of the country are well below 60 years and the local population, by default, will be younger than in areas where healthy life expectancy is much higher. Health funding in areas with low life expectancy will be disproportionately affected.

It is right that NHS England listened to the concerns not just of the Opposition, but of medical professionals and others about the funding formula, and it is right that deprivation will be taken into account as part of the formula, but that has not changed the overall direction of travel. Over time, money will still be taken from areas with the poorest health and given to those where healthy life expectancy is longer. I would be grateful if the Minister explained how that is justifiable. It is the very antithesis of the founding principles of the NHS that funding should be allocated disproportionately to more wealthy areas.

The pattern is also demonstrated across the public health spending formula. Areas such as Westminster and Kensington and Chelsea receive in excess of £100 per head more than my own county, Cumbria, despite Cumbria’s having some of the greatest health inequalities in the country.

[David Mowat]

Just to get clarity, is the hon. Gentleman’s position that ACRA’s formula was wrong and therefore should not have been implemented, or would he have liked to have seen it implemented over time?

[Mr Reed]

I will come on to that question. The funding formula on its own is a blunt tool that will struggle to address intricacies within a health economy as varied as the one in England and, therefore, more needs to be done at the interface between medic and patient to improve care for older people.

Funding is crucial, but financial pressures mean that we have to use existing funding more efficiently. Day after day, we are getting repeated warnings about the sustainability of the NHS and the £3.5 billion reorganisation that nobody wanted and nobody voted for has left NHS finances on a knife-edge. As such, more has to be done with less and that requires more than small changes at the system’s periphery. Last year, more than half a million pensioners had an emergency admission to hospital that could have been avoided if they had received better care outside hospital.

A study undertaken by researchers at Imperial college London found that nearly a third of hospital beds are used for patients who might not have needed them if their care had been better managed, which shows that we should focus on improving community care services to allow older people to remain in their own homes. The CQC has also found a general acceleration in the rate of avoidable hospital admissions.

Pensioners tend to have at least one long-term condition and those over 75 tend to have two or more. As society ages and the number of comorbidities increases, we need a system set up to care for the whole person, rather than the individual ailments that have no regard for the person behind them. The system needs greater integration and better co-operation between services to improve care for older people and ensure that they can be cared for in their own homes, rather than being forced into hospital just because the services in the community are not good enough or, in some cases, are not there at all.

The Government, however, have legislated for competition and fragmentation—and, as a result, for service isolation. Cuts to council budgets have meant that community services have suffered and patients are paying the price. I see that every day in my constituency. To improve health and well-being for the elderly in our society does not require penalising deprived areas with an obtuse funding formula; it requires improvement in collaboration between primary and secondary care and improvements in community care services to ensure that people can get the treatment they need, but also live independently in their own homes.

Thus far, the Government have provided no real solution to the challenges posed by changing health needs. We need to introduce a system of whole-person care and to respond to the changing health needs of our society: for young and old, and for the poor and those not in poverty. To do that—I end on a partisan note that reflects the tone of the debate so far—we need a Labour Government.

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

It is a pleasure to serve under your chairmanship, Sir Edward, for what I believe is the second time. I congratulate my hon. Friend the Member for Suffolk Coastal (Dr Coffey) on securing today’s debate. As I am also an MP who represents Suffolk, which is a predominantly rural county, I recognise and support her interest in the allocation of NHS funding in areas with a high proportion of older people. I understand that she is meeting with colleagues at NHS England, who lead on clinical commissioning group funding allocations, to discuss the matter later in the month.

It is worth outlining at the outset that the funding formula allocations for this year mean that Suffolk and every other CCG is a winner. They have all seen an increase in their NHS funding. It is important to make that clear.

Before I go any further, I will pick up on some of the points made. I will not detain the Chamber by talking further on the issues raised by the hon. Member for Harrow West (Mr Thomas). His was a wide-ranging contribution, and I understand that he had to leave early, so I will write to him separately.

My right hon. Friend the Member for Banbury (Sir Tony Baldry) made an eloquent case, as he always does, for Oxfordshire and the issues faced in that county. He outlined in particular the challenges presented in rural areas by an ageing population.

My hon. Friend the Member for Warrington South (David Mowat), as ever, made a compelling case for his constituents and for the importance of changes in the funding formula being gradual. I think he was saying that it is important not to destabilise local health care economies. The funding formula was a political formula set by the previous Government, while the current formula is not political but set independently with no political interference. It is important, however, as has been outlined in the debate, that we move towards a new set of arrangements in a staged and managed manner. Otherwise, local economies will be destabilised and that could lead to unintended consequences and potential effects on local hospital services, something none of us wants to see.

The hon. Member for Strangford (Jim Shannon), as always, made a useful contribution on behalf of his constituents. I understand that Northern Ireland has the fastest ageing population in the UK, with the number of over-65s due to increase by 10.7% in the next few years. The only sustainable long-term strategy is one that engages actively with the population through not just the health sector, but the community and elsewhere, to ensure that the focus is on whole-person care in Northern Ireland, with communities working together with the NHS to deliver better care and dignity in care for older people. That was, I believe, outlined in the Budget and it is to the Northern Ireland Assembly’s credit that they highlighted the significance of an ageing population. That issue is a funding priority for them, and rightly so.

It is also important to highlight the context in which this discussion is taking place. My hon. Friend the Member for Suffolk Coastal was right to highlight the Nicholson challenge and to say that, to meet it, we need to transform radically the way we deliver care, in particular in rural areas and communities. She was also right to highlight that the £3.8 billion integration fund that the Government are setting up to join together and better integrate the primary care, secondary care, care in the community and adult social care delivered by local authorities—in her constituency, by Suffolk county council—is the way to do that. The focus is no longer on seeing a patient or a person within the silo of where they are cared for, but on joined-up, holistic care and ensuring that people with long-term conditions such as asthma, diabetes, chronic obstructive pulmonary disease and dementia are cared for in the right way throughout their care. The primary focus for that must be to deliver more care in the community and in people’s own homes. That is something we can all sign up to.

I turn briefly to the points raised by the hon. Member for Copeland (Mr Reed). I cannot let him get away with some of the things he threw into the debate today. He talked about fragmentation of services. Service fragmentation is shown no better than through the decisions on the use of private sector providers made by the previous Government. Let us not forget that they paid those providers 11% more than the NHS to provide the same service and care—something a Labour Government should have been ashamed of. This Government were certainly ashamed of that, which is why we put that right and ensured that the tariff is now set so that the private sector cannot be advantaged over NHS providers. We have also ensured that the tariff is much more focused on integrated care, rather than fragmented care.

The previous Government—understandably, to some degree—focused on reducing waiting lists, but unfortunately that did lead to fragmented services. For example, when an older person went in to have a hip replaced, the focus was purely on the operation and not necessarily on the rehabilitation and recovery that is so important after such operations. That led to fragmentation. That is why this Government and NHS England are looking at tariffs across primary and secondary care and the community to ensure that there is a genuine focus on holistic care for those who have operations, rather than just seeing people as a widget in the context of an operation, as the previous Government’s tariff setting did. We need to see such people, whether young or old, in the round and ensure that, importantly, there is a more holistic focus on rehabilitation and care.

I notice that although the hon. Gentleman said that he would get on to whether he supports an independently-set formula, he failed to do so. I am sure that all hon. Members find that disappointing. Not committing himself either way on that question suggests that he prefers the political, set formula encouraged and supported by the previous Government, which disadvantaged areas with ageing populations. I hope that at some point in the next few months when we have these debates, the Labour party will clarify its position and we will understand whether it does support an independently set formula or whether it would like to return to the political, fixed formula of which the previous Government were so fond. It would be useful for us to understand that.

[David Mowat]

I think the Minister is not doing do justice to the Opposition spokesman, who did semi-answer the question. He made it clear that he did not accept the independent, clinically driven formula. I think he called it obtuse. It is extremely interesting for, among others, my constituents and health care professionals in towns such as Warrington, who would have gained from a fairer formula, that the Labour party will not accept an independent, clinically driven formula as a basis for allocation. That very important point was made today.

[Dr Poulter]

If that was the case—I may have missed it—my hon. Friend has made an important clarification. It is important that we have a formula that is as far as possible beyond reproach and set according to clinical need—the needs of patients. It is important that a number of factors be taken into account when that formula is put in place, as has been articulated clearly by NHS England in the discussions about how the formula is set. Deprivation is a factor. It is important to note that one of the primary drivers for setting the funding formula is now age and the needs of an ageing population. That is an important factor to highlight in this debate.

I shall now deal with some of the points made by my hon. Friend the Member for Suffolk Coastal. She may be aware NHS England has undertaken a fundamental review of its approach to allocations, drawing on the expert advice of ACRA and other external groups. The review’s findings have resulted in a new formula that provides a more accurate model of health care need. Last December, NHS England published the allocations for 2014-15 and 2015-16, based on the new formula. That gives CCGs two years of certainty about what their funding allocation is, which we can all welcome.

I know that my hon. Friend is very busy and may not have had the time or opportunity to review in detail during the past three months the information relating to the new formula, but I hope I can reassure her on the direction of travel. The formula is putting us much more on the trajectory she wants to see. It is independently set and therefore has a lot of clinical merit.

Oral Answers to Questions

David Mowat Excerpts

Tuesday 26th November 2013 Commons Chamber

[Mr Speaker]

I am deeply obliged to the Minister, but we must leave time for Mr Mowat.

[David Mowat (Warrington South) (Con)]

16. What recent consideration he has given to banning the use of NHS funds for provision of alternative therapies.

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

As my hon. Friend will know, the provision of alternative and complementary therapies is decided by clinical commissioning groups, which obviously must take into account local health needs and priorities.

[David Mowat]

I thank the Minister for that answer. Many parts of the NHS are under intense, relentless financial pressure, so how can it be right that we spend millions of pounds a year on remedies that have no scientific basis, other than through their placebo effect?

[Jane Ellison]

My hon. Friend is quite right to highlight that value for money is very important. It is for local commissioners, not the Department, to decide how funding is spent to meet the needs of the populations whom they serve, but crucially, clinical commissioning groups are responsible for achieving value for money as regards the services that they commission, as well as for delivering improvements in the quality of care, and better outcomes for patients.

Mid Staffordshire NHS Foundation Trust

David Mowat Excerpts

Tuesday 19th November 2013 Commons Chamber

[Mr Hunt]

The funding formula is decided independently, and no final decision has been made. The decision will be made by NHS England, which I know is looking at that at the moment. It has to decide equitably across the whole country, based on need, population, social deprivation and other factors. Like the hon. Lady, I am waiting to see what it decides.

[David Mowat (Warrington South) (Con)]

Some 14% of the entire NHS budget goes on complaints relating to injury compensation. Of that, a third or £4 billion per year goes to lawyers. That diversion of cash away from the front line to lawyers makes it much harder to get the staffing levels that Francis envisaged. Will the Secretary of State address that as part of the wider issue?

[Mr Hunt]

My hon. Friend is right that it is absolutely shocking that we spend more than £1 billion a year on litigation claims in the NHS. The only long-term way of reducing that bill is to improve the safety record of the NHS, so that we do not have the terrible incidents that lead to high claims. The only way to do that is through openness and transparency, which is why today’s measures will make a big difference.

Oral Answers to Questions

David Mowat Excerpts

Tuesday 26th February 2013 Commons Chamber

[Mr Speaker]

We will get to No. 13 in due course. Never mind.

[David Mowat (Warrington South) (Con)]

10. What assessment his Department has made of the effect of hospitals built under the private finance initiative on the work of neighbouring hospitals.

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

This Government recognise that no hospital operates in isolation. We are providing seven NHS trusts that are facing difficulties as a result of PFI agreements with access to a £1.5 billion support fund to pay for extra costs accrued as a result of those damaging PFI schemes.

[David Mowat]

I apologise for my voice—perhaps I shall soon be interacting more directly with the NHS.

The Warrington and Halton hospital has independent trust status. It is busy and getting busier. The previous Government built a huge PFI hospital about 10 miles away at Whiston, which does not have the patient volumes to sustain the demands of the botched PFI deal. It is heavily loss-making. Will the Minister provide assurance that there will be no forced merger and that my constituents will not pay for a bad decision made a decade ago?

[Dr Poulter]

I thank my hon. Friend for his question. He is right to highlight the very damaging PFI scheme signed by the previous Government for the St Helens and Knowsley NHS Trust. The percentage of annual turnover going on PFI payments at the moment is 14.2%. That is unsustainable, which is why this Government are trying to sort out the mess created by the previous Government’s signing up to too many PFI agreements.