NHS Funding

John Pugh Excerpts

Wednesday 12th December 2012 Commons Chamber

[John Pugh (Southport) (LD)]

While you were not in the Chair, Mr Speaker, you missed a lively and interesting but predictably arid debate. We have reached a kind of stalemate. Those who understand the dark art of political messaging tell me that it is important to say the same things again and again, and psychologists tell me that those who do that are more likely to be believed. Prior to the election, the Tories were unique in having as an important part of their messaging the wish to ring-fence and preserve NHS spending.

That message was then embodied in the coalition agreement and has influenced subsequent spending decisions. We all recognise that there are good reasons for that—the NHS is a demand-led service. It is therefore perfectly sensible, in the Westminster bubble, for the Opposition to make an issue of it. Members have come to the debate with predictable information from the Whips-SpAd axis about the private finance initiative, the misdemeanours of Wales, evidence of unexpected service rationing, reconfiguration trouble, positive and negative variations in waiting lists and ambiguous data on productivity. We have all been given that stuff, and we can use it as we wish.

Meanwhile, the public have clocked that we have a real problem. The demands on and expectations of the NHS will continue to rise, resources are tight and there will potentially be a huge problem. They know that politicians cannot be seen to reduce the NHS offer—they simply would not tolerate that. They do not know quite how all the sums will ultimately stack up, and nor do we. That is the big question.

[Andy Sawford]

Will the hon. Gentleman accept, though, in the interests of being transparent with the public, last week’s letter from Andrew Dilnot, the chair of the UK Statistics Authority?

[Andy Sawford]

The letter stated unequivocally that

“we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”

Until both Government parties acknowledge that truth, which independent experts have told us about, they will not have any credibility in health debates.

[John Pugh]

I think I will take the advice of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and move on.

I think we all agree that the only acceptable answer to the problem is to spend public money wisely. Currently, the NHS is holding up—sort of—by making economies and savings, largely off the back of a wage freeze, which is not sustainable. However, I am starting to be alarmed by the disagreement about what else we can do and what strategies we should follow. I will run briefly through the suggested options.

It has been suggested that we should keep people out of hospital, but we already have fewer hospital beds than almost anywhere else in Europe, and according to the NHS Confederation there is no clear evidence that treating people outside hospital would necessarily be cheaper.

Some people recommend personalisation and personal budgets, but it can be argued that that would not lead to better use of scarce resources, despite the fact that it would be more popular than some current service configurations. Telehealth has also been suggested, and I am a great enthusiast for it—it is my personal favourite suggestion, and I am chair of the all-party telehealth group. However, although there are cost-effective pilots, the Nuffield Trust has expressed some criticism of telehealth, saying that it may not save us anything like the money that we believe it will. The industry itself is concerned that if the roll-out is not efficient and effective enough, telehealth simply will not take off.

[Mr Dorrell]

I am listening carefully to my hon. Friend, and I have some sympathy with him, but will he acknowledge that the arguments for those options are partly about health economics but partly related to the need to deliver better quality to those who rely on community-based services? We do not want acute cases if they are avoidable.

[John Pugh]

I agree; none the less, we both agree that there is still a huge economic problem.

Even reducing the number of managers has mixed impacts, because asking doctors to manage services or buy in management service from elsewhere has cost implications. It uses up medical time, which needs to be replaced. Then there is the blighted history of IT and the uncertain role of technology and innovation, which can increase demand but also reduce cost. Even if we see public health as the answer, it is still not a complete answer by itself, because if we do not solve the huge problem of dementia, there is no saying that prolonging life and keeping people fit will necessarily reduce overall costs in the long run. If we look at things such as rewarding doctors through the quality and outcomes framework, and so on, we find some pretty expensive deployment of public money, albeit not always to massive effect. The point I am trying to make is that there is a whole medicine chest of remedies available, but no complete agreement on precisely how or where best to use them. None of them seems to be a cure-all, and many have undesired side effects.

As we choose to use those remedies, they need to be employed with skill, judgment and the benefits of experience, because we are dealing with an almost insurmountable problem. We have to approach the problem—almost like good medicine—using the right remedy, at the right time, in the right way and with skill, judgment and experience. However, that will not result simply from using market forces or creating some sort of ersatz market—that is just another tool we might choose to use. What we want—I am sure the Minister agrees—is integrated services, which would avoid expensive duplication, cost-shunting and piecemeal provision. It would be really nice if we could exploit better economies of scale in procurement, for example, or make better use of the NHS estate. It would be nice if we could discover good practice and roll it out across the piece quickly. It would be really nice if the NHS was a well oiled and efficient machine—a truly integrated system with proper clinical networks that were properly protected. It would be nice if we got what the Minister describes as integration, which is a kind of holy grail at the moment.

However, I have a problem—I am sure the Minister has a response to it—in that we have just abolished what I think would be the best agency for integration. The strategic health authority, unloved as it was—a bit obese, misunderstood, and so on—was a vehicle that could perform that role, applying the right remedies in the right place. I must own up: we decided in the Lib Dem manifesto that we wanted to get rid of the SHA. However, perhaps over the fullness of time the NHS Commissioning Board will create something like that—quietly, privately—because to some extent, I think we all agree, it is needed. Meanwhile, there are key things we need to get on with. We can certainly improve procurement without any difficulty. We can try to release ourselves from the pointless grip of the EU working time directive, which adds appreciably to salary costs. We can also work hard to move data around the system better. There is an enormous amount to do and it is not obvious who is going to do it.