NHS Funding

Stephen Dorrell Excerpts

Wednesday 12th December 2012 Commons Chamber

[Andy Burnham]

Mr Dilnot may be watching; the Minister needs to be careful what she says.

That promise was carried into the coalition agreement, which said:

“We will guarantee”—

guarantee, mind—

“that health spending increases in real terms in each year of the Parliament”.

The Secretary of State has stopped nodding; he was nodding earlier. [Interruption.] I will be interested to hear how the Conservatives make those claims stack up, because week after week, Ministers from the Prime Minister downwards have stood at the Dispatch Box and claimed that that is exactly what they have delivered.

Until recently, this appeared prominently on the Conservative party website:

“We have increased the NHS budget in real terms in each of the last two years”.

Then, on 23 October, the Secretary of State said to the House:

“Real-terms spending on the NHS has increased across the country.”—[Official Report, 23 October 2012; Vol. 551, c. 815.]

[Interruption.] “It has”, he says again today. Okay, but this is where the story changes, because last week, he received a letter from the chair of the UK Statistics Authority, Andrew Dilnot CBE. Let me quote the key sentence, which puts Mr Dilnot and the Secretary of State at odds, if I heard the Secretary of State correctly a moment ago:

“On the basis of these figures, we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”

[Interruption.] I am coming on to it all. In other words, NHS spending is lower, in real terms, after the first two years of the coalition, than when Labour left office.

[Mr Stephen Dorrell (Charnwood) (Con)]

Can the right hon. Gentleman confirm that the next sentence says:

“Given the small size of the changes and the uncertainties associated with them, it might also be fair to say that real terms expenditure had changed little over this period”?

[Andy Burnham]

Let me say to the Chair of the Health Committee that today I am challenging the veracity of ministerial statements made at the Dispatch Box. I am sure that as a former Secretary of State with many years’ experience of the House, he will know that when Ministers are at the Dispatch Box, they have to be accurate; they have to say the truth. A moment ago, the Secretary of State for Health said that he and the Conservative party were right to say that NHS spending had increased in real terms. That directly contradicts the letter that the Secretary of State had just been sent. Is it any wonder that the public are losing trust in the Government if that is the kind of arrogant spin that comes from those on the Government Benches, week after week?

[Mr Dorrell]

rose—

[Andy Burnham]

I give way to the right hon. Gentleman once more, but then I will make some progress.

[Mr Dorrell]

Is it fair to characterise the letter as saying that

“real terms expenditure had changed little over this period”?

[Andy Burnham]

That is what the letter says, but it is a cut; that is what the letter says. The right hon. Gentleman might say that, in the context of the NHS budget, £1.9 billion is not very much, but it is still a change, and it is a cut. He stood for election on a manifesto promising a real-terms increase. He has just acknowledged that there has been a real-terms cut. Does he acknowledge that there has been a real-terms cut? I think he will have to. I am amazed; the Conservatives come here today to try to con the public, yet again, into thinking that they are fulfilling their promise.

--- Later in debate ---

[Mr Stephen Dorrell (Charnwood) (Con)]

You challenged us earlier, Mr Deputy Speaker, to introduce a little Christmas good will to the debate, and I want to try to do that in two ways. First, I want to respond to the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock), who spoke from the perspective of the local constituency and community interest in Lewisham. The challenges that she described repeat themselves many times over in the health care system, and it is those challenges that I want to address.

Secondly, I want to surprise the shadow Health Secretary, the right hon. Member for Leigh (Andy Burnham), by welcoming the fact that his motion, although I do not endorse it, refocuses the health debate on the core challenge facing the health service, and the health and care system more broadly, as it thinks about how we meet demand—in truth, there is bipartisan agreement on this—in the more challenging resource environment in which we now live.

Although we were not able to detect it in the right hon. Gentleman’s speech, the fact is that he, as Secretary of State, introduced the changed resource outlook within which the health and care system now operates. It was in May 2009—not on election day in May 2010—that Sir David Nicholson issued his annual report on the challenges facing the national health service. He made it clear that the system has to meet demand against the background of a resource outlook that is not only unrecognisably different from that during the generous funding of the Labour years between 1997 and 2010, but that has fundamentally changed from the one that the NHS has experienced throughout its whole history since 1948.

[Andy Burnham]

I agree with the right hon. Gentleman that I had to give the NHS that reality check and set the Nicholson challenge. With that in mind, does he agree that the Nicholson challenge should have been the only show in town after 2010, and that it was catastrophic to combine it with the biggest ever reorganisation that the NHS has ever seen?

[Mr Dorrell]

The right hon. Gentleman knows that I agree that the prime focus of health policy since 2010 should have been on how we can change the way that care is delivered in the health care system and the social care system to ensure that we can meet demand against the very different resource outlook that I have described. However, I say to the right hon. Gentleman, as I have done many times in this Chamber, that he shares some of the responsibility for the two-year trip down memory lane that we have had. It has been comfortable for the Labour party to say that the Tory party does not believe in the health service. We have been reminded numerous times that Tory MPs—all of whom are now dead and most of whom died before most of the current Members of the House of Commons were born—voted against the establishment of the national health service in 1946. We have had reminders from Government Members that the Labour party voted against the establishment of NHS trusts and then went ahead with the policy in office. The Labour party says that it is against choice and competition, but it was that party that established the choice and competition panel to ensure that those influences were brought to bear in health care policy.

We have had a two-year trip down memory lane, in which we have engaged in party political arguments that have avoided the issue that the right hon. Gentleman articulated as Secretary of State: how can we meet rising demand for health and care services against the background of a budget that, as the Select Committee has said repeatedly, is flatlining in real terms? That is why I was so keen earlier to read out the sentence from the Dilnot letter that states that it is

“fair to say that real terms expenditure had changed little over this period.”

The way that I prefer to put it is that if the decimal points are knocked out, real-terms expenditure is running at zero. The question is how to act against the background of a very small growth in resources, which is what the Government are committed to.

What the right hon. Gentleman did not cover in his speech is that the revenue expenditure of the NHS, which is what actually treats patients on a day-by-day basis, has grown modestly in real terms since his last year as Secretary of State. In my view, it will continue to grow modestly in real terms. He is frowning, but it is there in the arithmetic that there has been modest real-terms growth in the revenue expenditure, which is another definition of front-line services. That is the expenditure that funds the delivery of services to patients on a day-by-day basis and that is where the pressure is felt.

[Lucy Powell]

In addition to the point that the right hon. Gentleman is making, has he considered the chronic pressure that is being put on the NHS, which will get much worse from next April with the cuts to adult social care and the desperate cuts to local government? The conversation that we are having has to take into account what the money has to be spent on. The service will decline dramatically from next April.

[Mr Dorrell]

I have made the point more than once that we should look across the traditional divide between the national health service and the social care system towards a health and care system. The only way of responding to the efficiency challenge that the right hon. Member for Leigh was the first Secretary of State to set out—what the Select Committee has described as the Nicholson challenge—is to rethink the way in which services are delivered across the health and social care divide. The National Audit Office, another independent body, has stated that 30% of non-emergency hospital admissions are avoidable—not unnecessary, but avoidable. We need decent community-based services that meet the demand early in the development of the condition to avoid the unnecessary development of acute cases that have to be treated though hospital admission.

[Andy Sawford]

The right hon. Gentleman has been a vocal advocate for a long-term solution to the issues relating to the integration of health and social care. I have enjoyed engaging with him on those issues in the past. Does he agree that it is incredibly disappointing that we are not making the progress that we should be making in finding consensus on the future of social care funding and, in the short term, on diverting more funding, particularly from NHS underspends, to prevention?

[Mr Dorrell]

I agree completely with the hon. Gentleman’s characterisation of the challenge. I was looking forward to him congratulating the Government on taking a step in the right direction, although it is not a total solution, by investing in prevention some of the resources in the health care. [Interruption.] The hon. Gentleman indicates that it is only a little and that it should be more.

We need to look across the statutory divide that reflects history, but not the demands of today’s generation of patients. The key thing that we must recognise in the debate about health and care is that we have inherited a system, which all of us have supported through most of its history, that is built on the assumption that the typical patient will be restored to good health. In Bevan’s day, that was true of the typical patient in the health and care system, but it is not true of the typical patient in today’s system. The majority of the resources in today’s health and care system go towards delivering care to people who will not be restored to full health. That, not surprisingly, requires a different set of institutions, shaped in a different way from the institutions that we have inherited from history.

The challenge that faces all of us in this House who care about the health and care system is not to protect the different bits of the system as though they were listed buildings, but to change the system so that it uses today’s technologies to meet the needs of today’s patients. That is the core challenge that faces my right hon. Friend the Secretary of State and his colleagues and, if I may say so, the right hon. Member for Leigh and his shadow ministerial colleagues.

[Mr Graham Stuart]

Will my right hon. Friend give way?

[Mr Dorrell]

If my hon. Friend will forgive me, I will not.

For the second half of this Parliament, we could have a reprise of the first half and we could trade party political slogans about a system that increasingly thinks that the political debate has nothing to do with it, or we could engage with the people who understand what real life feels like on the front line of the system, which has been described by one or two Opposition Members, and we could show that we in this House support the need for change in order to use taxpayers’ resources to meet taxpayers’ health and care needs. That is the real challenge that faces the House this evening.

--- Later in debate ---

[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.