NHS: Debt

Lord O'Shaughnessy Excerpts

Monday 23rd January 2017 Lords Chamber

[Baroness McDonagh]

To ask Her Majesty’s Government why debt has increased in NHS trusts in 12 months from £894 million in 2014–15 to £2.45 billion in 2015–16.

[The Parliamentary Under-Secretary of State, Department of Health (Lord O'Shaughnessy) (Con)]

The NHS is facing pressure from the ageing population, increasing demand and changing expectations. In addition, there are the costs of new drugs, treatments and safer staffing requirements. All these factors have an impact on NHS trust budgets. To address this, the NHS leadership bodies have developed their own plan to deliver financial sustainability for the NHS. The Government are supporting that plan by investing a further £10 billion a year in the NHS by 2020-21.

[Baroness McDonagh (Lab)]

I must start by apologising to the Minister, but I do not recognise reality in that Answer. The Government have cut £1.8 billion from social care during this period, which has led to the escalation of the £2.5 billion in NHS debt. I do not know whether it is a case of incompetence or ideology, but the Government have set about providing us with the most expensive and worst system of care for the elderly in the western world. Will the Minister use all his powers of persuasion to do what the Chancellor wanted to do last year and persuade the Prime Minister to put more money into local authorities for social care? It will save lives and money.

--- Later in debate ---

[Lord O'Shaughnessy]

The noble Baroness’s Question is about debt in NHS trusts. I think that referred to deficits, and the facts I have given her are absolutely right. It did increase, not least because of important increases in staffing in response to the Francis inquiry, following events at Mid Staffordshire. Regarding the social care budget, there are a million more over-65 year-olds than there were in 2010 and social care is of course under a lot of pressure. That is why the Autumn Statement outlined additional money for social care. There is £900 million extra over the next couple of years, the precept is rising faster than previously and we have the Better Care Fund, so money is going in, but I accept that there is pressure on the system. That is something we are all working to address.

[Lord Maude of Horsham (Con)]

My Lords, will my noble friend reflect on the contribution that could be made to addressing the problem of overspending by NHS trusts, which has contributed to the growing deficit to which the Question refers, by reviving the programme of health service mutuals? Under the coalition Government, some tens of thousands of health service workers put themselves into not-for-profit social enterprises—staff-led and staff-owned—which showed a dramatic improvement in productivity and quality, and cut costs. A revival of this process, which has been slightly stifled, I suspect, by the attitude of the NHS establishment, could make a major contribution to improving productivity in the health service.

[Lord O'Shaughnessy]

I thank my noble friend for that point. I know he was a passionate advocate of mutuals when he was in government, not just in the health service but elsewhere. They can make a huge difference to productivity. Improving productivity in the health service is obviously one way in which we will meet our ambitious targets, as well as reducing demand on the most expensive bits of the system. I shall certainly look at the ideas he has suggested. Through the sustainability and transformation plans, the NHS has a number of routes to drive extra efficiency in the system, and I am sure that mutuals can play a part. I would be delighted to meet him to discuss that.

[Baroness Boothroyd (CB)]

My Lords—

[Baroness Boothroyd]

Order. That is a very good way to begin the week. My question is brief and very much to the point, and concerns the transportation of patients to and from hospitals. We are all aware that many patients often have to go to major hospitals—travelling 20 or 30 miles—on a daily, weekly, fortnightly or thrice-weekly basis. The cost must be horrendous; is this part of it? Can the Minister give any indication of the cost of transporting patients to and from hospitals?

[Lord O'Shaughnessy]

I will write to the noble Baroness with specific details of cost. It is certainly true that if you have to go to or be taken to a distant hospital for care, that is more expensive both in transport and setting terms. Part of the transformation that the NHS needs to make is that more care should be delivered in primary settings and in the community, which by definition will be closer to home.

[Lord Reid of Cardowan]

My Lords, first, I apologise to the noble Baroness; I thought it was the Liberal Benches. Has not the noble Lord missed the point of the Question? In the first sentence of his first answer, he said his first challenge was an ageing population. Is it not now obvious to even the most obstinate that cuts in social care have a knock-on effect on the ageing population in putting pressure on the NHS? It is not just that the deficits have trebled; 27 hospitals have now declared that they cannot provide comprehensive care, and more than 50 hospitals are asking for outside assistance every day of the week. The situation is getting worse every week. Will he not take the advice of my noble friend and urge his colleagues to reverse the cuts to social care in the Budget, which are not only affecting care provision but having a disastrous effect on provision through the National Health Service?

[Lord O'Shaughnessy]

It is certainly the case that one part of the system impacts on the other parts, whether that is primary, secondary or social care. There is no denying that and I do not seek to do so. On the picture the noble Lord paints of worsening deficits, in fact, the picture in 2016-17 is considerably better than it was in 2015-16. It has been helped not least by the sustainability and transformation plans. We are putting £1.8 billion into trusts, 95% of which have accepted control totals to get a hold of that financial sustainability. Extra funding is going in. There is a big increase this year for the NHS budget, which will help, as will the extra money for social care; but of course the challenges are there.

[Baroness Walmsley (LD)]

My Lords, is the Minister aware that 96% of hospitals say that they employ fewer registered nurses than they themselves have planned for safe staffing of the wards, and some of them employ more healthcare assistants than they had planned for? What does the Minister say to those who suspect that hospitals, in an attempt to deal with their deficits, are employing too few registered nurses for safe staffing of the wards and/or putting less qualified people on the wards?

[Lord O'Shaughnessy]

Clearly, trusts have a responsibility to make sure that they have the staffing right. There are more nursing places available and more coming through training, as we talked about in the House the other day. There has been a general uplift in staffing numbers because of the safety requirements post Francis, especially as we seek to leave the European Union, which will mean that that source of nurses and staff in general will change. We have to train more of our own staff, which is why we are increasing the number of doctor and nurse training places.