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East Hertfordshire Health Authority

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Patnick.]

10.13 pm

Mr. David Evans (Welwyn Hatfield) : I thank-- [Interruption.]

Mr. Speaker : Order. Will the hon. Member wait a moment please? Will hon. Members who are not remaining for the Adjournment debate please leave quietly?

Mr. Evans : Thank you, Mr. Speaker, for granting me this Adjournment debate. I welcome the opportunity to raise in full the funding of East Hertfordshire health authority. My hon. Friend the Under-Secretary is only too well aware of the strong feelings on this subject held by myself and my hon. Friends whose constituencies have the misfortune to fall within the ambit of North West Thames regional health authority. We have run out of patience and we want to see some action that will put an end to the cycle of incompetence, mismanagement of public funds and generally deceitful behaviour of the regional health authority, which has dogged patient care in our area for so long. Promises made by the region no longer have any credibility, and that has undermined staff morale.

To appreciate the specific problems faced by East Hertfordshire health authority, it is necessary first to see them within the wider context of the general position of the six shire authorities in the North West Thames region. In particular, it is necessary to examine the methods and formulae used by the regional health authority to allocate funds to the 13 district health authorities in the region. For many years, the shire authorities have argued--rightly--for a formula that would result in a more equitable distribution of funds and for one that would take into account the distance from target and over target. Instead, the regional health authority has persisted with its practice of distributing funds on a pro rata to cash limits basis. In other words, the message that it has been sending out to its Left-wing friends in the inner London health authorities is clear--"The more you spend, the more we'll give you"--and that is precisely what it has done. The result is a regional health authority in which the inner London authorities can go grossly over budget without fear and where many of the shire authorities are forced to make cuts to help pay for that extravagant spending.

Perhaps not surprisingly, therefore, an inspection of the underlying position in 1989-90 of the 14 regional health authorities in England on the basis of income to expenditure reveals that only three are in deficit and one, of course, is the North West Thames regional health authority with a deficit of approximately £13 million, which is the largest and more than twice the size of the other two deficits put together.

The shocking practice of punishing well-managed and prudent authorities for the irresponsible and spendthrift policies of their neighbours is a problem that the Government have addressed in relation to local authorities. It is time that regional health authorities had to succumb to greater financial discipline--otherwise the incompetence of authorities such as North West Thames will continue to prevail.

That financial incompetence has manifested itself most recently in the expenditure on the Westminster and

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Chelsea hospital scheme. During the nine months between July 1988 and March 1989, the cost of the scheme rose from an estimated £78 million to a staggering £173 million. My hon. Friends who represent shire seats in the region agreed to support the scheme on the basis of the original estimate and on the understanding that it would not have a detrimental effect on capital projects in the shire authorities. It is difficult to see how it can do anything but, given the vast increase in spending that is involved.

More recently, we have learnt that the authority has had to go back on a promise that it made to fund a CT scanner, which would have cost £100,000 in revenue to support. That promise has been broken not once, but twice.

Luton and Dunstable hospital needs £12 million for capital needs, which is a mere 15 per cent. of the overspend at Riverside. I repeat to my hon. Friend the Minister that we are not asking for more money, we are pointing out the consistent misuse of public funds, which results in some people in the region having as much as 25 per cent. more spent on their health than is spent on others.

Putting it another way, why should a person living in Welwyn Hatfield have 75p spent on him when for someone living in Brent the amount increases to £1? Where is the fairness in that? Why do shire authorities receive only 31 per cent. of the region's funding when, on the basis of population, they should rightfully receive 43 per cent.? Perhaps the Minister can enlighten us on that and not give the standard answer that next year we shall get 33 per cent., and the year after 35 per cent. I am afraid that we do not believe him any more. Only if the chairman and his administrators are changed, and only if the funds are reallocated, will we believe the promises that have been made over the years.

Frustration, bordering on contempt, for North West Thames regional health authority is not confined to my hon. Friends whose constituencies are within the region. Last month South Bedfordshire community health council passed unanimously a motion of no confidence in the ability of the regional health authority to manage the financial and planning affairs of the National Health Service in North West Thames region. The motion was supported by the chairmen of the other five shire community health councils in the region. It is worth reminding the House that those are independent bodies that represent local opinion on Health Service matters.

The South Bedfordshire motion encapsulated neatly the problems encountered in North West Thames. It was passed in view of the health authority's failure to take the necessary financial and planning measures to achieve the substantial strategic redeployment of resources from London to shire districts ; to prevent the development of chronic overspending in the major strategically losing districts during the 1980s ; to exercise the necessary measures to monitor, control and re-evaluate the cost escalation of capital projects, particularly in central London, one of which has risen by 220 per cent. of its June 1988 cost ; and to recognise and fund the desperate and immediate capital needs of the district. That is a damaging indictment, but one that is entirely justified.

The problems for East Hertfordshire, however, have their origin as far back as 1974. There is not time to dwell on the background to the whole sorry affair. Suffice it to say that East Hertfordshire has traditionally suffered from under-funding and has been consistently under pressure to make economies of scale. There is a feeling of desperation

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because we want to give service to the people, but starvation of money eventually weakens one's resolve. Yet money could easily have been found.

Let us take, for example, the staffing ratios of East Hertfordshire compared with the Riverside authority, an authority with a similar population but located in central London. Why has that authority funds for 120 occupational therapists compared to East

Hertfordshire's measly 19, 119 physiotherapists compared to 18, and 179 district nurses compared to 17? So it goes on, with health visitors, speech therapists, psychiatric nurses and chiropodists. If measures had been taken to reduce the overstaffing in Riverside, money could have been diverted to assist the under-funded shire health authorities that are struggling to produce a basic service. The real scandal involves nurses' regrading. The Prime Minister herself stood at the Dispatch Box and told the House that the Government would refund in full the cost of clinical regrading. However, the process of regrading has left us in East Hertfordshire with a shortfall estimated to be £400,000, excluding the cost of appeals. Despite earlier statements to the contrary, the regional health authority claims that it is not now in a position to fund the shortfall. Yet it is responsible. The money was there. It was its formula for distributing the money which led to a shortfall in East Bedfordshire and also in South West Hertfordshire.

The chairman of East Hertfordshire health authority is convinced, as I am, that had the exercise been conducted on the basis of actual cost there would have been enough resources to go round. The irony is that East Hertfordshire undertook the task more effectively than virtually anyone else, completing the exercise back in May last year, several months ahead of other authorities, some of which are still hearing appeals today.

The success and efficiency of the regrading process in East Hertfordshire has been recognised and acknowledged by the chairman of the regional health authority, yet it is his actions that have helped to bring about this shortfall, a shortfall that could have disastrous implications for an already overstretched authority such as East Hertfordshire. The effect of years of incompetence and mismanagement is being felt every day in East Hertfordshire.

Mr. Robert B. Jones (Hertfordshire, West) : I am grateful to my hon. Friend and I apologise for interrupting his catalogue of the iniquities of North West Thames region, but it is true not only of East Hertfordshire but of the other shire districts. In North West Hertfordshire, such projects as the Marnham ward as part of the waiting list initiative are having to be cut back because the inefficiency of the region in distributing money to the districts. I hope that my hon. Friend will press this home to the Minister and make sure that action is taken soon.

Mr. Evans : I thank my hon. Friend for his intervention--it only underlines what I am saying about East Hertfordshire.

We have a loss of new out-patient appointments, fewer operations, a reduction in the number of respite beds, the suspension of some sessions and a freeze on many current vacancies throughout the district. How long will this go on? I repeat : it is not more money that is sought, but rather a more equitable distribution of available funds based on capitation. Why should £1 in Brent be worth only 75p in

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Hatfield, Watford, Hemel Hempstead, St. Albans, Stevenage, Broxbourne, Hertford, South West Hertfordshire, or East Bedfordshire? The list is endless.

The Health Service in East Hertfordshire can no longer survive. What is needed is a solution. One was proposed by the National Health Service management board to North West Thames in July 1988, when the situation in East Hertfordshire was analysed. I hope that the Minister will be able to tell us whether these recommendations were pursued by the management board and whether they have been acted upon by North West Thames, because we see precious little evidence of it in East Hertfordshire.

The South Bedfordshire community health council concluded its motion of no confidence by calling upon the Secretary of State "to review the activities of the North West Thames regional health authority and to take the measures necessary to remedy the situation".

I hope that my hon. Friend the Under-Secretary will tell me that that is exactly what he intends to do. If not, why not? I call on him to instruct the Audit Commission to investigate this serious matter. Does he not realise that the National Health Service in the North West Thames health authority area will never have enough money while financial incompetence prevails?

10.28 pm

Mr. Bowen Wells (Hertford and Stortford) : I am deeply grateful to my hon. Friend the Member for Welwyn Hatfield (Mr. Evans) and to my hon. Friend the Under-Secretary of State for allowing me just two minutes to speak on this very important issue. The Minister will realise how angry are the hon. Member for Welwyn Hatfield and I and other hon. Members representing constituencies in the region and here tonight.

This has been going on not just for the past three years ; we have been battling with the problem for the 10 years that I have been connected with it, and longer.

When Riverside was designed, it was said that, once it was built, money could be put into the districts. Instead, less money has come to them. East Hertfordshire has been closing beds, hospitals and family planning clinics for the past three or four months, while the North West Thames regional health authority indulges itself with another expensive scheme called Parkside. There, the number of nurses attending each patient will be four times, and the community nursing will be 10 times, that provided in East Hertfordshire--and that is just an estimate.

We are angry at the way that the Department of Health treats us. Ministers say, "Go back to the regional health authority and the district health authorities." When we complain to the regional health authority it says, "Go back to the Ministers." That leaves my hon. Friends and me in an impossible position in trying to get anything done.

Unless my hon. Friend the Minister can sort out the regional health authority in the way suggested by my hon. Friend the Member for Welwyn Hatfield, he must take out the whole of the shire county districts from the London regional health authorities. Let them be funded separately so that our areas can obtain a proper allocation to take care of patients in our hospitals, near their homes. That is the only solution unless my hon. Friend the Minister agrees to undertake a proper inquiry and to ensure that the chaos, inefficiency, stupidity and lack of care by the North

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West Thames regional health authority-- which, unfortunately, is supported by some of the most senior medical consultants in the London hospitals--is sorted out. I hope that he will make a robust reply.

10.31 pm

The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman) : My right hon. and learned Friend the Secretary of State and I are left in no doubt about the strong feelings of my hon. Friends the Members for Welwyn Hatfield (Mr. Evans), for Hertfordshire, West (Mr. Jones) and for Hertford and Stortford (Mr. Wells). They and their colleagues met my right hon and learned Friend and me on 16 and 17 January and expressed their strong feelings in forthright and trenchant terms. There is no doubt in Richmond house about the strength of feeling in the shire districts of North West Thames about the relative allocation of funds.

My right hon. and learned Friend and I have total confidence in the integrity and competence of the chairman and the regional general manager of the North West Thames regional health authority. They work extremely hard for the benefit of patients in the region. They, my right hon. and learned Friend and I recognise that there are very sharp differences of opinion on the issue, and in the 10 minutes available I shall try to deal with some of the points raised. I welcome the acceptance by my hon. Friend the Member for Welwyn Hatfield that the present level of funding in the National Health Service is adequate. Indeed, he recognised the substantial advances made in recent years in funding the NHS, and I am grateful to him for his remarks. The case is not often put so trenchantly and clearly. Health Service funding for the hospital and community health services stands at £15 billion, and substantial and real rates of growth have been enjoyed in recent years.

My hon. Friend is quarrelling not about the total funding, but about the basis of allocation. The record shows that there has been a shift from the London districts to the shire districts of North West Thames during the past few years. I accept that it is not enough for my hon. Friend. However, it is important to put on the record the fact that between 1982-83 and 1988 -89 the region enjoyed a cash increase in revenue resources of 48 per cent. ; the outer London districts enjoyed a cash increase of 44 per cent. ; the inner London districts had an increase of 42 per cent. ; and East Hertfordshire health authority had an increase of 60 per cent. I do not have the figures for the other districts.

Mr. Wells : What about population?

Mr. Freeman : I shall deal with population in a moment. There has been a relative shift over that six-year period. We calculate that, at 1988 -89 prices, about £20 million has been moved out of London to the shire districts. I take the point that, although there has been a shift, my hon. Friends are not satisfied with its extent. I shall now deal with what my hon. Friend the Member for Welwyn Hatfield said in connection with my right hon. Friend the Prime Minister's statement on nurse regrading. We should be clear that the Prime Minister's statement related to full funding on what the estimated cost was said to be of the nurse regrading exercise. She made that statement before the exercise was launched. Her statement

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stands. No Prime Minister or Minister could give a blank cheque offering to pay the full cost of the nurse regrading exercise. That exercise is under way. She gave the undertaking that the full estimated cost based upon the estimates for the districts and regions would be paid.

There are two points in our White Paper about weighted capitation which I hope that my hon. Friend the Member for Welwyn Hatfield will welcome. We have started for the regions the process of allocating funds in a more equitable way, which is weighted capitation. We have started for 1990-91 and in the two subsequent years we shall fund all the regions on the basis of capitation. that means that the number of residents in each region will be weighted for demography and morbidity. In the Thames regions there is an addition to that to take account of the relatively higher cost of providing services. I now come to the vital point raised by my hon. Friend the Member for Welwyn Hatfield. We are saying to all 14 regions in England and Wales that they must make a positive start in 1991-92, the first year of our reforms, to allocate resources within each region on the basis of weighted capitation. That will take some years. I understand that the North West Thames region has started that process, albeit in a modest way. No doubt that is the result of pressure by my hon. Friends. I understand that, for 1990-91, some £3.5 million out of a total increase of resources to the region of £27 million is being allocated essentially on the basis of weighted capitation. I could quite understand my hon. Friends saying that that is only £3.5 million and what about the rest of the funds allocated, as my hon. Friend the Member for Welwyn Hatfield rightly said, on the basis of inflation. North West Thames has begun the process and, like all the other regions, it will have to continue the process next year. I am told that the East Hertfordshire region will enjoy an increase of 9.91 per cent. next year, compared with the figure for the regions of 7 per cent.

My second point about the White Paper is perhaps more significant in terms of 1991-92, the financial year that begins in about 12 months. We have said that all districts, including East Hertfordshire, will be funded on the number of residents in each district, and not upon historic activity. I do not think that many hon. Members have yet appreciated the significant basis of funding that will occur in that year. For the first time, the health authority of my hon. Friend the Member for Welwyn Hatfield will have under its control sums related to the residents in the district.

I suspect that my hon. Friend's district is an exporter of services, possibly to the London teaching hospitals and to

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surrounding hospitals. Through the process of negotiating and agreeing contracts between itself and other hospitals, the district health authority will be able to control the flow of resources to outside hospitals and districts. Candidly, we expect that, in the first year, the district health authority will broadly validate the existing flow of patients because we do not want a great disturbance in the pattern of patient care. However, it will, for the first time, be possible for the district health authority to control its own destiny and the flow of patients.

Mr. Robert B. Jones : My hon. Friend must not pretend that people go for treatment in London because that is what they choose. They go because the waiting lists are shorter there. They would much prefer to be treated in the hospitals in the shire district, and if we had our share of the money we could treat more patients there because it is cheaper to do so.

Mr. Freeman : My hon. Friend is right, and that is why we must all agree that our proposals for weighted capitation in the White Paper will benefit all shire districts. He must also accept that, with our concept of money following the patients, if we give the district health authority the funds, although the patients may be going to the London teaching hospitals, it will be able to decide whether those resources should be spent within the district. That will enable patients, perhaps for elective surgery, to get those services performed locally and as quickly. That is a major change in the basis of funding, and we believe that it will be welcomed by my hon. Friends.

My hon. Friend the Member for Welwyn Hatfield also mentioned the Riverside and Parkside district health authorities. I am disturbed by the figures of the increased costs of the new hospital that he quoted tonight. I shall look into that, and he is right to remind me of them. However, as a result of the Riverside reorganisation, we anticipate revenue savings of £15 million per annum by 1993-94. The Parkside proposals look like releasing some £7 million of revenue savings, and they will be available for reallocation.

I share the aim in whose direction my hon. Friends have pointed me. It is of a fairer, more equitable distribution of funds within the region. Our proposals in the White Paper, and our understanding of the strength of feeling of my hon. Friends, will ultimately lead to that goal.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o'clock.

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