Health Funding

Iain Wright Excerpts

Tuesday 22nd June 2010 Westminster Hall

[Andrew George]

I am grateful to my hon. Friend. She rightly highlights that many factors, including life expectancy, rurality and age profile, need to be taken into account, and we must get the balance right. The history of the changes to the allocation formula—not something I would recommend as bedtime reading—shows that all the factors have been conjured with and balanced over time. It is difficult to arrive at a formula satisfactory to all people.

I want to emphasise the fact that we need to identify and make the allocation formula clear. We need to be able to show that it takes into account the health inequalities across the country and, above all, does not further impoverish the most deprived areas. I represent the poorest region in the UK, yet its poverty was used as a reason not to give it additional funds. Its poverty acted against its best interests, which would have been additional funds, as I explained in my description of how the market-forces factor operated and the impact that it had in some areas.

It is difficult to assess what impact the Budget will have on the future of the PCT allocation formula so soon after the statement, which was made in the Commons today. The NHS Confederation recently estimated that the announcements made by the coalition Government indicate a real-terms reduction of between £8 billion and £10 billon in funding to the NHS in the three years from 2011. According to the King’s Fund, a rise in VAT will lead to an additional cost of £100 million per annum to the NHS budget overall.

My hon. Friend the Minister will no doubt ask where we will find the money to provide additional resources for deserving areas such as Cornwall and the Isles of Scilly, Bassetlaw, and South Staffordshire, and the other places that receive allocations that are further below their target than those anywhere else.

[Mr Iain Wright (Hartlepool) (Lab)]

Will the hon. Gentleman give way?

[Andrew George]

I will happily give way, because I asked myself a difficult question and I had better sit down.

[Mr Wright]

I am grateful to the hon. Gentleman for securing the debate and for giving way. He has been an extremely tenacious campaigner on health inequalities and housing, a subject on which I used to speak for the Government in a previous life. What are the hon. Gentleman’s views on the relationship between resource allocation and capital spend? It is an important subject to bear in mind when trying to iron out health inequalities. He mentioned the Chancellor of the Exchequer’s Budget statement, which said: “Well judged capital spending by Government can help provide the new infrastructure our economy needs to compete in the modern world.” If we put that in the context of reducing health inequalities, is it not important to have good capital spend in health? Does the hon. Gentleman share my disappointment at the £463-million cancellation of a new hospital for North Tees and Hartlepool?

[Andrew George]

I thought that the hon. Gentleman would use a local matter as a sting in the tail in his intervention. Let me commend his work on housing, which deserves a great deal of credit. With regard to capital spend, I was never terribly enamoured of the previous Government’s enthusiasm for the private finance initiative projects that were put in place across the country; they did not represent value for money. Having said that, I acknowledge that some difficult decisions need to be taken. I am sure that the hon. Gentleman’s point about his hospital will be heard by Ministers, and that he will be as tenacious in mounting a campaign to ensure that the right decision is taken as I have been on the issue of health funding, and on other issues.

As far as the health allocation formula is concerned, Hartlepool’s funding was 4.3% below its target, so the hon. Gentleman may wish to join the campaign to ensure that the areas furthest from their target achieve their target as quickly as possible. The PCT and the health community in that area may well be able to address their need for capital investment by ensuring that their revenue and allocations are increased by means of our campaign.

The difficult question that the Minister will be asking himself is where will the additional resources be found if areas such as Lambeth, Richmond, Westminster and Kensington and Chelsea are not to have the rug pulled from under them. Part of the answer lies in looking at how the last Government spent their money. There was an obsession with centralised, top-down and quite expensive projects, such as the alternative providers of medical services—or polyclinics, as some people have called them—and the independent treatment centres built across the country, which have never given value for money. A lot of money has also been committed to the NHS information technology programme. I urge the Minister to look at that, and at other such areas, to find the funding, and to give that funding to the PCTs. The PCTs can then decide how best to use their resources, rather than having decisions made for them in Richmond House.

Many issues in Cornwall need a great deal of further investment and support, including ambulance response times. Of course, given our geography, we do not expect to have the quickest ambulance response times in the country, but we would like resources to be put in place to ensure that the ambulance service can at least begin to address some of the deficiencies in the service at present. The NHS dentistry service in Cornwall is one of the most threadbare in the country. Given how difficult it is to see an NHS dentist in most of my constituency, and in many other parts of Cornwall, there would be massive benefits to improving the service there. Other such areas include: cancer screening and prevention; better support for the rehabilitation of stroke patients; improving the functionality of mental health services by ensuring greater availability of therapists and a greater ability to meet demands for treatment; improvements in psychological therapy support for armed forces veterans—provision is clearly insufficient in Cornwall, as in other areas—greater support for dementia; expanding physiotherapy; and improving and investing in the midwifery services in Cornwall, which are overstretched.

In closing, I want to ask the Minister a few questions that hit the bull’s eye of the issue. Bearing in mind that the NHS budget will be protected, how soon will the Government ensure that the funding shortfall in the most underfunded areas of the country is removed? I mentioned the 13 PCTs that are 6.2% below their target; do the Government see those targets as genuine targets to hit, or just as something for the Department to take note of? What is the Government’s policy on the pace of change in the most underfunded areas, and what will be the pace of change in future?

I know that a number of other hon. Members wish to contribute to this debate, so I will resume my seat now. I look forward to the Minister’s response.

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[Mr Iain Wright (Hartlepool) (Lab)]

I want to reiterate what I said earlier in an intervention and congratulate the hon. Member for St Ives (Andrew George) on securing what I think is a very important debate; it is important not only in the south-west but across the country.

I also want to congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on what I think might be her maiden speech, although I am not entirely certain that it was. [Laughter.] I imagine that she will be as tenacious as the hon. Member for St Ives, her close parliamentary neighbour, in ensuring that she stands up for the interests of her constituents.

I want to make two or three key points about health funding issues that are affecting my constituents. The first point relates to something that the hon. Member for St Ives said; he has obviously done his homework and knows his brief incredibly well in this area. As he said, despite great improvements in recent years Hartlepool primary care trust is still some distance from its funding target. It is about 4.3% below its funding target, which is about £7.7 million. In the last two years, 5.5% more funding was provided year on year, but we still have some considerable way to go. I just want to press the Minister on the question asked by the hon. Gentleman—how far and how fast can we move to get to the funding target for deprived areas such as Hartlepool?

The second issue that I want to mention is access to health care and funding for health-care-related transport. The hon. Member for Truro and Falmouth made a telling point about how important it is that people should have access to transport in rural areas, to enable them to access health services. I certainly have that situation, to some extent, in my constituency. Hartlepool is a very urbanised constituency—one of the most urbanised in the country. However, we have outlying villages, such as Dalton Piercy, Elwick and Greatham, which I am thinking about in particular. In the last 12 months or so, Greatham’s nurse-led clinic has been closed, largely on clinical grounds rather than because of cost-cutting exercises. Nevertheless, I think that finance has still had a role to play. I have tabled a number of parliamentary questions about the provision of nurse-led clinics in rural areas and the Government, in their written responses, have said that they are very much committed to those clinics. But I want to know from the Minister what extra assistance will be given to residents of Greatham and other rural areas, which can really help communities to have access to health care—both preventive health care and care related to reactive clinical outcomes.

The third issue that I want to mention is the appalling health inequalities that we still have in Hartlepool, despite the improvements that we have made in recent years. A person is more likely to die earlier if they live in Hartlepool than if they live anywhere else in the country, with the possible exception of Easington, which is next door to Hartlepool. In certain parts of my constituency, particularly Stranton ward, the difference between the local life expectancy for men and the national life expectancy for men is 11 years; a man living in one of those parts of my constituency will die more than a decade earlier than if he lived in other parts of the country. That issue needs to be addressed, not only through funding but through reconfiguration of services so that they are really patient-led.

That brings me to my final point, which is my most relevant point at the moment. It is about the announcement made by the Chief Secretary to the Treasury on the Floor of the House last Thursday about the cancellation of the £464 million new hospital for North Tees and Hartlepool. That hospital was something like a decade in planning; it was not thought up in the last two months before a general election campaign. There has been an awful lot of pain with regard to reconfiguration of health services in Hartlepool. The issue dominated the by-election that I won to come to this House. It has been extremely painful for the community to get to this position, but with one swift swish of a pen we are back to square one, with no real vision about where we go to for hospital services north of the Tees in my area. With the co-operation of neighbouring primary care trusts, we are embarking on what is known as the momentum programme, whereby we are pushing services closer to the community. That has an impact on health funding allocation. What reassurance can the Minister give that we will receive additional services and additional resources, so that the momentum programme can go further and faster in pushing health care into the community?

Also, with regard to the cancellation of that hospital and with regard to the idea that we do not have a plan B—there is nothing in place—can the Minister provide me with a degree of reassurance that support will be able to maintain the existing North Tees and Hartlepool hospitals? Is that the way that his Department is suggesting that we are going? If so, that would be at odds with the clinical recommendations from the independent reconfiguration planning of a number of years ago. It was recommended that we should have a new world-class hospital, which could serve the communities of Hartlepool, Easington, Stockton and Sedgefield.

I hope that the Minister will agree to meet me and my neighbouring MPs, so that we can discuss these issues and ensure that the health inequalities and the uncertainty that has been created by the announcement last Thursday can be addressed; so that the concerns of my constituents and those of people in neighbouring constituencies can be addressed; and so that we can really begin to address health inequalities in the north-east.

--- Later in debate ---

[The Minister of State, Department of Health (Mr Simon Burns)]

I congratulate my colleague, the hon. Member for St Ives (Andrew George), on securing this debate on NHS funding allocations. I also congratulate the shadow Minister, the hon. Member for Kingston upon Hull North (Diana R. Johnson), on her appointment to the Health Front Bench. In Government she was a Minister with other responsibilities, and a Whip, and I assure her that she will find serving as a shadow Health Minister tremendously rewarding, because of the important role of such matters in our lives and those of our constituents. I also congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on her almost but not quite maiden speech.

I pay tribute to the NHS in Cornwall, which provides an excellent level of care to the constituents of my hon. Friend and those of my honourable colleague; he has long campaigned on how best to distribute resources and has argued that PCTs should be moved to their target allocations. Before I respond in detail to his points, perhaps I might set out the general principles of the system of funding allocation; that may help the hon. Member for Kingston upon Hull North.

The Government believe in an NHS that is free to all, irrespective of need or ability to pay; in which professionals are freed from the shackles of centralised targets and empowered to take responsibility for their patients; where better access to services is matched by improved quality and greater efficiency; and which provides value for money and health outcomes that are second to none. That is our vision for the national health service, and the coalition’s programme for government sets out how we will achieve it.

First, the Government will increase spending on the NHS in real terms for each year of this Parliament, as the shadow Minister acknowledged. It is a commitment that reflects a deeper belief: that the NHS must be protected and properly resourced to continue its vital work. We must focus our resources where they are needed most. That means stopping the flow of resources from the front line to the back office, giving front-line staff the responsibility and resources to improve outcomes for patients, and entrusting local professionals—and local people—with the means to improve local health. By committing to cut the costs of health bureaucracy by a third, we will release resources that can be reinvested in front-line services; by giving GPs the power to commission services based on need, we will push decisions about health care provision close to patients; and by giving local communities more responsibility for public health, we will create a more flexible national health system—one that is responsive to local demand for health services, and is able to react to changing health needs and to direct funds towards emerging priorities.

Secondly, we will establish an independent NHS board to allocate resources and provide commissioning guidelines. The board will ensure access to health services that are designed around the needs of the patient, not the needs of the bureaucracy. It will set standards based on clinical evidence, not political micro-management. The aim is to achieve the best outcomes for patients, instead of simply ticking boxes and meeting targets.

[Mr Iain Wright]

I congratulate the Minister on securing his post. I know that he is passionate about health, and I wish him all the best as a Minister in the Department of Health. He mentioned the establishment of an independent NHS board whose focus will be on clinical standards as opposed to political micro-management. Bearing in mind health services north of the Tees, a clinically led, independent reconfiguration panel recommended that a new hospital should be built. Is that not something that the Government should be doing?

[Mr Burns]

I have to congratulate the hon. Gentleman. I remember that as a Minister he was extremely helpful, within the confines and straitjacket of his remit. He was tenacious both in that job and this afternoon, and is using his skills to try to tease out an answer beyond the one that was given to him in my letter to him last Thursday explaining why that capital project was cancelled as part of the public spending review. However, to be helpful, and if he would like it, I will repeat basically what the letter said. Facts are facts, and I am afraid that the situation has not changed since I wrote to him.

When this Government came into power in May, we were faced with the largest deficit and debt that any Government had ever inherited from an outgoing Government. The debt is a financial problem that must be addressed urgently. Therefore, the incoming Government announced a review of spending commitments that were made by the previous Government after 1 January 2010—that is, in the run-up to the general election. As a result of the review, which has been carried out over the past seven weeks or so, an announcement was made on 17 June in which the coalition Government announced the go-ahead of four major hospital programmes, ranging from the Pennines to Liverpool and to St Helier in south-west London. Unfortunately, the North Tees and Hartlepool project did not get permission to go ahead. I am afraid that that is the answer. It is because of the economic situation and debt in which we find ourselves.

[Mr Wright]

The Minister is gracious in giving way a second time. On that basis, and given what the Prime Minister said about NHS funding increasing in real terms despite the financial problems that we find ourselves in, capital spends will be provided elsewhere in the country, but seemingly not in my constituency. Are my constituents’ health outcomes not to be thought of because of financial considerations?

[Mr Burns]

The hon. Gentleman knows the answer to that question. That is not why the hospital was not given the go-ahead last week. I can appreciate his frustration. As a constituency MP myself, I too would be frustrated, but the hon. Gentleman, who is a generous man, must not try to reinterpret the decision for other reasons. Sadly, the decision was taken simply because of the urgent need of this Government to take decisions to start curbing the ballooning debt problem, which needs to be addressed. That is the reason, I am afraid. It has nothing to do with our commitment to reducing health inequalities and spending more money on providing health care and services for people throughout the country.

I hope that the hon. Gentleman is satisfied with that. If he is not, and if it would be of any help to him, I would be more than happy to meet with him and, if he wants to bring them along, his colleagues from the Hartlepool area and the surrounding constituencies. They can discuss the matter with me—my door is always open. I would be more than happy to do that, if we can arrange a meeting, and if he thinks that it would be helpful.

Let me return to Cornwall and the general position on health funding allocations. I was saying, before discussing Hartlepool again, that we will establish an independent NHS board.