NHS Funding (Ageing)

Tony Baldry Excerpts

Tuesday 25th March 2014 Westminster Hall

[Sir Tony Baldry (Banbury) (Con)]

It is always good to submit to the chairmanship of a brother knight, Sir Edward. I congratulate my hon. Friend the Member for Suffolk Coastal (Dr Coffey) on her excellent speech, analysis and introduction, and on providing the House with an opportunity to consider this important subject.

However large the budget is for the national health service, money has to be allocated to local clinical commissioning groups through a formula. The easiest formula, of course, would be to allocate a certain amount of money per person so that for each clinical commissioning group we simply took the size of the population of both adults and children—a straightforward and transparent calculation. I suspect that since the start of the NHS, however, there has been a belief that the health needs of some people and groups within the community are greater than those of others, and that the NHS allocation formula should be adjusted to recognise those needs. I think it is clear to everyone that one of the most significant factors affecting demand and spending in the NHS is an ageing population.

Last Saturday’s Daily Mirror summarised the situation thus:

“More than half a million Britons are now aged over 90—an increase of a third in just 10 years.

Average life expectancy is now up to 78 for men and 82 for women, according to the Office for National Statistics.

Its figures showed there were 513,000 people over 90 in 2012. Of those, there were 372,290 women… And 141,160 men... The number of centenarians has also increased by 73% to a record high in the past decade. In 2012 there were 13,350 people over 100 in the UK.”

That is a lot of telegrams from the Queen. The Daily Mirror continued:

“It comes amid concerns over how the NHS will cope with an ageing population… A newborn boy can expect to live 78.7 years and a newborn girl 82.6.”

In Oxfordshire, according to the Office for National Statistics, on average, men aged 65 can expect to live a further 10-and-a-half to 13 years and women an extra 11 to 14 years. The Oxfordshire clinical commissioning group has calculated that the impact of demographic change in Oxfordshire will lead to an increase in costs of £54 million over five years. In Oxfordshire, the population of over-65s is expected to grow by 2.5% a year, so the proportion of the population aged 65 will grow from 15.8% to 18.2% by 2017 and to 25.2% by 2035. By 2035, more than a quarter of everyone living in Oxfordshire will be over 65. The proportion aged over 85 will grow from 2.3% to 3.4% by 2017 and to 5.6% by 2035.

I am not suggesting that the increase in Oxfordshire’s elderly population is necessarily significantly greater than in other parts of the country. What I am saying, however, is that an ageing population is a significant cost to the NHS and therefore the amount of funding for Oxfordshire should be much nearer to the average for NHS spending. The size of the difference between the clinical commissioning groups that are receiving the most money per head and Oxfordshire is too great and is unsustainable.

For a long time, I have been arguing that the NHS allocation formula does not give sufficient weight to the fact that we have a significant and growing ageing population. It is of course good news that people are living longer, but there is no doubt that older people on average have greater need for NHS support. We have been arguing that the formula for NHS allocations needs to be reformed to reflect more reasonably and fairly the number of elderly people in an area.

The facts and the needs speak for themselves. One would have thought that on an issue as self-evident as this, there would be a degree of cross-party consensus. Whether the significant number of elderly people is in Oxfordshire, Blackpool or any part of the country, they have similar needs. An average 80-year-old in Oxfordshire does not have significantly fewer needs than an 80-year-old in Bradford, Birmingham or Bermondsey.

Understandably, in making any change to the funding formula, NHS England might wish for some cross-party consensus; sadly, it has clearly not been possible to find it. The shadow Secretary of State for Health has campaigned vigorously against any changes to the allocation formula that would better recognise the needs of those aged over 65. My hon. Friend the Member for Suffolk Coastal has done the House a service in securing from the chair of NHS England, Professor Sir Malcolm Grant, a copy of the letter sent to Sir Malcolm last December by the Labour shadow Secretary of State, who started his letter by saying:

“I wish to register the strongest possible concerns about proposed changes to NHS resource allocations being considered by your board on Tuesday, 17 December”.

The shadow Secretary of State sought to defend his resistance to allowing NHS funding to reflect more fairly the needs of the elderly in the community with a rather convoluted argument: that

“health care utilisation is not the same as healthcare need and resources should not be allocated based on demand levels rather than the level of need”.

Lewis Carroll and Alice in “Through the Looking Glass” would find it difficult to dissect what that sentence is meant to mean. I suspect that it is meant to mean all things to all people.

The Labour party has made it clear that it does not want any change to the existing allocation formula—a formula that in no way adequately reflects the local needs of an ageing population. I think it is fair to draw the conclusion that at the NHS England board meeting last December, faced with such hostility by the Labour party to any changes in the formula—I agree entirely with my hon. Friend who introduced the debate—NHS England simply bottled it. It made some changes, but it bottled introducing the original new formula proposed by—let us remember this—an independent committee, which had recommended much greater weighting for age. NHS England simply added an adjustment for what it described as “unmet need”, which it said was a particular issue in deprived areas, in effect negating any improvement in the formula to take account of the number of elderly people in a local area.

The consequence of not making reasonable provision for the number of elderly in a clinical commissioning area is that, under this year’s funding allocations, the CCG allocation for the NHS in Oxfordshire for 2014-16 will be the lowest amount of money of any clinical commissioning group in the country—£856 per head, at present. That compares with a national average—I stress, average—of £1,115 per head. By definition, many parts of the country will be above average. Oxfordshire is the third most underfunded CCG in the country, at nearly 11% below target. If, however, NHS allocations took proper account of the number of elderly, Oxfordshire’s NHS funding allocation would increase by an extra £57 per person.

Any NHS funding formula, of course, has to have appropriate regard to indices of deprivation, and I understand Labour’s wanting to stick with a formula that largely directs funds to parliamentary constituencies held by Labour MPs. It is absolutely no good, however, everyone’s acknowledging that one of the greatest pressures, if not the greatest, on the NHS into the future is the fact of an ageing population if that fact is not then fairly reflected in the funding formula. It is little wonder that the Oxfordshire CCG and the Oxford University Hospitals NHS Trust are both running at a deficit; Oxfordshire receives the lowest amount of money per head for the NHS of anywhere in the country, but, that notwithstanding, it has a significant and growing elderly population.