NHS: Spending Formula

Earl Howe Excerpts

Tuesday 3rd July 2012 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government whether they intend to make changes to the formula governing levels of NHS spending in the different NHS regions in England.

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

My Lords, from 2013-14, the NHS Commissioning Board will allocate resources to clinical commissioning groups and the Department of Health will make a ring-fenced public health grant to local authorities. The Secretary of State has asked the independent Advisory Committee on Resource Allocation to develop formulae for both CCGs and local authorities. We published ACRA’s interim recommendations for local authorities on 14 June and its recommendations on CCG funding will be published in due course.

[Baroness Quin]

Is the Minister aware of the deep concern in the north-east and other parts of the north of England that if the Government, as has been rumoured, move away from using deprivation and health inequalities as an important criterion, and simply use an age criterion, areas of the north where life expectancy is lower will lose out, compared to more affluent areas in the south? This and other government-trailed proposals, such as regional public sector pay or regionalised benefits, as well as the daily reality of more job losses and more house repossessions in the north than in the south, are adding to concerns that there will be a dramatic worsening of the north-south divide. Will the Minister and his colleagues commit themselves to narrowing that divide, rather than widening it further?

[Earl Howe]

My Lords, yes. I am aware that this has been said, and it is based on a misapprehension, perhaps as a result of misunderstanding what my right honourable friend the Secretary of State said a few weeks ago. He was not suggesting that deprivation should not be a part of the future funding formula, but simply that age should continue to be the primary factor, as it currently is and should be, in the context of our intention to reduce inequalities of access to health services.

[Lord Walton of Detchant]

Is the Minister aware that a number of major surveys carried out by all-party groups into conditions such as muscular dystrophy and other neuromuscular diseases, Parkinson’s disease and, most recently, dementia have demonstrated gross inequalities in the standards of care, longevity and other important factors, in different parts of the country? The Neurological Alliance has pointed, in another major report, to serious discrepancies in relation to neurological and rehabilitation services in different parts of the UK. Will the proposals that the Minister has described do something to correct these serious inequities?

[Earl Howe]

My Lords, to a certain extent, we must say here that we are where we are. There is a lot of justice in what the noble Lord has said. We know that services in certain parts of the country are underfunded, compared to the level of clinical need and disability, and commensurately that some services are overfunded in other parts of the country. However, we cannot move suddenly to a position where we redress the balance. That would destabilise services. We certainly believe in equal access where there is commensurate need for the services, particularly those to which the noble Lord referred.

[Lord Brookman]

We are still the United Kingdom and the Question of the noble Baroness, Lady Quin, is very valid. I am originally from the valleys of south Wales. Life is pretty tough there. I hope that the National Health Service will provide equal service to the people in the valleys of south Wales as it does in the more prosperous areas of the country. Will the Minister confirm that that will be the case?

[Earl Howe]

My Lords, it is of course for the devolved Administration in Wales to decide on their own allocation of the health budget for Wales. That is not within my gift, as the noble Lord will understand. However, certainly within England we would expect the funding allocations to support the principle of securing equivalent access to NHS services, relative to the prospective burden of disease and disability. Because we have an independent NHS Commissioning Board, people can be assured that this will put beyond doubt that allocations are driven as far as possible by each population’s need for healthcare services and not by extraneous factors.

[Baroness Greengross]

My Lords, later this afternoon the All-Party Group on Dementia, which I am privileged to chair, will launch a report on the rates of diagnosis, the challenge of dementia and how it can be met. We know that more than half of all people with the disease have not been diagnosed. Diagnosis offers access to a memory clinic that can reduce the impact of the disease or postpone its worst effects. Is the Minister aware that the variations across the country are horrific and that people do not know where to go? Will the Government do something to ensure that everybody has access to the care and support that they need in an area that they can reach?

[Earl Howe]

My Lords, we come back to the issue of age in this context. I say again that we believe, as did the previous Government, that age is the primary driver of an individual’s need for health services. The very young and the elderly, whose populations are not evenly distributed throughout the country, tend to make more use of health services than the rest of the population—the noble Baroness gave a very graphic and important example of where that applies. This principle is reflected in the most recent PCT-weighted capitation formula. As I said earlier, there are imbalances that, over time, we will seek to correct.

[Baroness Tyler of Enfield]

My Lords, accepting that —as the Minister said—we are where we are, could he explain what evidence base is being used to determine the allocation of resources to CCGs?

[Earl Howe]

My Lords, the funding formula is made up of a number of components, including capitation, deprivation, age, the number of young people not staying in education and the number of people over 60 claiming pension credit. I have a long list in front of me. However, ACRA, the independent body that I mentioned, is composed of a group of independent-minded people who are keen to take into account every relevant factor that bears on this question. If my noble friend wishes, I will write to her with a more detailed list of the factors that historically have been in the formula.

[Lord Foster of Bishop Auckland]

My Lords, because the Minister has said that he will work very hard for more equality around the regions, we believe it—but that is not true of the Government as a whole. We are terribly worried, for example, that in the first round of local government negotiations the county of Durham lost £171 million, whereas the county of Surrey gained £60 million. If what we hear is true, the same kind of negotiation will go on in the next round. Will the Minister have words with his colleagues to say that people expect the same kind of equality in local government as he is trying to achieve in health?

[Earl Howe]

My Lords, I can go further than that. As the noble Lord knows, public health at a local level will become the responsibility of local authorities. Public health grants in 2013-14 will not fall below the 2012-13 estimates, other than in exceptional circumstances where responsibilities shift or where there has been a gross error in the calculation. ACRA proposes a public health formula driven mainly by a measure of mortality, which is strongly correlated with deprivation, and we are actively seeking views on these proposals.