NHS Spending

Debate between Karin Smyth and Catherine West

Wednesday 6th July 2016 Commons Chamber

[Karin Smyth]

I agree with my hon. Friend. In fact, one of the reports I have with me is the one we published in December about the work of the Care Quality Commission and some of the concerns that have already been issued about the work it does to uncover issues such as the ones she has highlighted in her constituency.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that a worrying number of trusts are now in deficit, whereas 10 years ago they were simply bubbling along well—in fact, they were getting more money for their budgets? Even for North Middlesex hospital, which we have heard about extensively tonight, the situation is increasingly worrying, as it is now in deficit for the first time in 10 years.

[Karin Smyth]

I agree and I will talk about some of the issues with trusts.

Hon. Members have provided examples that highlight our concerns about how the Department is managing to do what Parliament intended with the funds voted to it. They highlight the importance of giving the Public Accounts Committee and Parliament the opportunity to review the departmental accounts properly.

The Department of Health annual accounts cover more than 20 arm’s-length bodies and delivery partners, not only NHS England, but the Care Quality Commission, NHS Improvement, the National Institute for Health and Care Excellence, the Human Tissue Authority, Health Education England, the NHS Litigation Authority and—one of my and, I am sure, many hon. Members’ favourite organisations—NHS Property Services Ltd.

Within NHS England, NHS trusts reported a record deficit of £2.45 billion in 2015-16—almost £500 million worse than planned, and triple the size of the 2014-15 deficit. As my hon. Friend the Member for Hornsey and Wood Green (Catherine West) said, a record 121 out of 138 acute trusts ended 2015-16 in deficit. Analysis by the King’s Fund and the Health Foundation has challenged the Secretary of State’s claim that, in the 2016-17 Budget, the NHS will receive the sixth biggest funding increase in its history. The chief economist at the King’s Fund concluded that this year’s total real spend increase of 1.6% is the 28th largest increase since 1975-76.

The Health Foundation noted:

“The health budget has been protected from cuts but spending growth is substantially below the growing pressures on the service…In exchange for this protection, the NHS has been asked to absorb these pressures through improved efficiency. There are opportunities to improve the efficiency and effectiveness of the NHS but realising these savings is proving to be a huge challenge—particularly against a backdrop of staffing shortage.”

Given the size of the trust deficit and the implications for the budget of NHS England, which takes up by far the greatest part of the Department’s budget, there are widespread concerns about how the Department might stay within its departmental expenditure limit. Failure to do so would be an exceptional breach of control. As my friend, the hon. Member for Aberdeen North (Kirsty Blackman) said, there are issues about the way in which capital has been transferred to revenue and so on.

The Public Accounts Committee understands that the accounts will be available before the recess—perhaps next week, which would be very welcome. We need to look at not only NHS England’s spend, but that of the other 20 or so bodies that make up the Department of Health. I know that you, Madam Deputy Speaker, and Parliament will take a dim view if the Department’s accounts are not subject to proper scrutiny when the Committee, which had some additional training this year to review the accounts, is ready to undertake such scrutiny.

In addition to my concerns about last year’s accounts and this year’s departmental budget, I believe that Brexit now poses huge risks. My major concerns are about staffing, procurement and medicines, but there are many others. In my NHS career as a non-executive director on a trust board and as a manager, I read and indeed compiled many a risk register. It is truly a joyful task. The Department requires all its bodies to identify, assess and mitigate risks. As anyone in any business knows, risk registers are an essential part of the planning process. Few if any risks to business could be greater than Brexit. I would expect the Department to have a robust Department-wide risk assessment process, and I would expect it to include Brexit.

Yesterday at Health questions, I asked what was being done across the Department, including the NHS, to assess and mitigate the risks to its current year budget of Brexit’s huge impact on staffing, procurement and medicines. I received a far from satisfactory reply—although he tried to be helpful—from the Under-Secretary of State for Life Sciences. I therefore pose three key questions to Ministers: what are the risks of Brexit that the Department must surely have already identified through its risk register or by other means? How are they to be mitigated? When will they be debated and discussed in Parliament?