National Health Service and Social Care (Commission)

Norman Lamb Excerpts

Wednesday 6th January 2016 Commons Chamber

[Norman Lamb (North Norfolk) (LD)]

I beg to move,

That leave be given to bring in a Bill to establish an independent commission to examine the future of the National Health Service and the social care system; to take evidence; to report its conclusions to Parliament; and for connected purposes.

Two former Secretaries of State for Health—one Labour, one Conservative—and other Members on both sides of the House have joined me in calling for the Government to establish a commission of this kind. We have also been joined by an organisation called NHS Survival, a group of progressive junior doctors, patients and others which now has 8,000 members, and by Care England, which represents social care providers. The purpose of the commission would be to engage with the public, staff in the NHS, care services and civic society to tackle the massive challenge faced by the NHS and care services, with the objective of establishing a long-term new settlement for the NHS and care.

Why is this needed? The NHS and social care face an existential crisis. In the post-war period, demand has risen by about 4% every year. We all understand the reasons for that. We are all living longer. The number of people surviving cancer has increased dramatically. According to Cancer Research UK, half those diagnosed with cancer now survive their disease for 10 years or more, compared with only a quarter 40 years ago. The number of people living with three or more chronic conditions is expected to have risen by more than 50% during the 10-year period up to 2019. New medicines are invented that enable the underlying cause of some genetic diseases to be tackled for the first time, and we are seeing remarkable advances in surgical procedures. All that is a triumph of modern medicine and of our NHS, and it is something that we should celebrate.

For the last five years, the coalition Government ensured that spending on the NHS was protected, but real-terms increases have been marginal. With demand continuing to rise, this has been the toughest financial settlement in the history of the NHS. Meanwhile, social care has been cut in real terms, despite significant increases in demand. A widely accepted assessment is that there will be a gap of £30 billion in the NHS by 2020. The Government have committed to finding £10 billion, including the increase in this financial year, but few experts in the NHS believe that that will be enough. The Health Foundation has estimated a gap of £2 billion in 2020 on top of the £10 billion commitment and many others believe that the gap will be much larger.

A reflection of the rapidly deteriorating financial position is shown in the accounts of NHS and foundation trusts. They are facing a projected £2.2 billion deficit by the end of this financial year. Pension changes announced by the Chancellor of the Exchequer are likely to add another £1 billion to costs. Pressures across the system are very evident. Today’s news that at least 100 GP surgeries applied to stop accepting patients because of shortages of doctors is the latest example.

The position in social care is perhaps more serious. The respected Health Foundation has estimated that there will be a £6 billion funding gap by 2020, without taking into account the increase in the minimum wage; the Local Government Association has estimated that that alone will add £1 billion to costs by 2020. It also does not take into account the planned introduction of the cap on care costs, which the Government have said they are committed to introducing in 2020.

The spending review provision for councils to increase council tax by 2% will narrow that gap by an estimated £1.7 billion by 2020 according to the LGA, but only if every council takes advantage of the new power. The plan for an increase in the better care fund will add £1.5 billion, but only in 2019-20. So a substantial shortfall remains. That means that further cuts to social care are inevitable.

Simon Stevens, the head of NHS England, has made it clear that, if we cut social care, it will have an impact on the NHS and, in effect, create a larger funding gap in the NHS by 2020 than the projected £30 billion. So the situation based on planned spending over this Parliament looks unsustainable and, beyond 2020, it just keeps on getting more challenging.

It is worth looking at how we compare with other European countries. In 2000, the then Prime Minister, Tony Blair, set the objective of the UK hitting average EU spending on health by 2006. We now risk drifting further away from the EU average. An analysis shows that of the 21 OECD countries in the EU in 2013 only Slovakia, Hungary, the Czech Republic, Poland and Estonia spent a lower proportion of GDP on health than the UK.

Looking ahead, the picture is just as disturbing. Projected health spending in England as a proportion of UK GDP up to 2020-21 shows a declining share of GDP spent on the NHS. According to the Office for Budget Responsibility, based on the Government’s spending review, funding for the Department of Health declines as a percentage of GDP from 6.1% in 2015-16 to just 5.4% by 2020-21. The position for social care is more dramatic. Given what we know about the inexorable rise in demand, can it make any sense at all to commit a reducing share of GDP to health and care? I fear that the consequences of failing to address that funding situation could be very serious.

The Government argue that substantial further efficiency savings can be achieved. Yet, however much we hope that the necessary “efficiency savings” will be achieved through smart re-engineering of the system to deliver better value and better care, the reality is that around the country anecdotal evidence suggests that too often preventive services are cut as clinical commissioning groups indulge in crisis management.

The financial incentives in the system do not help. We have payment for activity for acute hospital care but block contracts for community care and mental health. That ensures that rational allocation of resources is distorted. Acute hospitals continue to see increases in income, but demand for their services also increases, in part because of a failure to invest in preventive care, so their financial position becomes more perilous despite that increase in income. It is a vicious circle that has to be broken.

In social care, the anticipated shortfall, with rising demand, up to 2020, will result in more people losing support, or support packages becoming more inadequate. We are currently witnessing reductions in care packages in my own county of Norfolk, and I suspect that that is widespread. There are also serious concerns of significant numbers of providers of social care leaving the market. There is a sense of the system living on borrowed time. The unattractive effect of all this will be that those with money will be able to get good care. Those relying on the state will increasingly get nothing at all or substandard care. None of us can tolerate that, and none of this addresses the fact that mental health desperately needs more investment, despite the help given in the spending review.

The Government face a choice—either the system will drift into a state of crisis or we confront the existential challenge now. This transcends narrow party politics. We have to decide as a country how much we want to spend on our NHS and care system. What can we do differently to make better use of the resources available? Should we consider, as I have proposed, a dedicated NHS and care tax, and give local areas the ability to vary it? Should we end the artificial divide between the NHS and social care? We fund health and social care through three different routes—through the NHS, local authorities and the benefits system. Does that make sense?

The NHS commands an extraordinary level of support in our country. It is an amazing demonstration of social solidarity and decency. It is also the best system in the world, according to the Commonwealth Fund in 2014. Yet we cannot take the survival of the NHS and social care services for granted. William Beveridge proposed the national health service. It is now time for a new Beveridge commission for the 21st century.

Question put and agreed to.

Ordered,

That Norman Lamb, Tim Farron, Tom Brake, Mr Nick Clegg, Mr Alistair Carmichael, Mr Graham Allen, Mark Durkan, Dr Andrew Murrison, Jim Shannon, Dr Phillip Lee, Mr Ivan Lewis and Caroline Lucas present the Bill.

Norman Lamb accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 11 March and to be printed (Bill 115).