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1.44 pm

Mr. Brian Sedgemore (Hackney, South and Shoreditch): I congratulate my hon. Friend the Member for Newham, South (Mr. Spearing) on raising this vital subject. As the finances of East London and the City health authority have been spinning out of control, a kind of madness has set in. Hospital closures are still proposed in the medium term. Recently, the chief executive of ELCHA, Peter Coe, said publicly on the radio that no decisions on the closures could be taken before the general election. Thank God for that.

The absurd people who run the most despised bureaucracy in the national health service have at last realised that there are limits to their bizarre betrayal of local people. I am told privately that their thinking is as follows. The Royal London hospital cannot be closed--I certainly do not want it to close--because the Government are committed to spending £300 million on a new hospital there, even if that distorts local finances for decades to come.

In the medium term, the authority wants to close either Homerton or Newham hospital, but not both. It is a satanic choice: Newham people can die, or Hackney people can die--take your pick. Demographically, the authority would prefer to save Newham hospital, with a functioning accident and emergency unit, but Newham has many problems--so I am told--and Homerton is still new and being built, so its closure would be political dynamite.

That is not the end of the savage irrationality. East London and the City health authority has published a list of cuts in community and hospital care. From Hoxton Health to Lorne house, from counselling for Asian women on health to help for Turkish and Kurdish communities, from City and Hackney MIND to the Hackney bereavement service, from Age Concern Hackney to the Jewish care services for frail older people, cuts are being made.

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General practitioners are up in arms. Consultants are blinking in disbelief, voluntary organisations are angry, and the rest of us are stunned. We wait with interest to see whether the Minister is more than complacent today.

1.45 pm

Mr. Stephen Timms (Newham, North-East): I also congratulate my hon. Friend the Member for Newham, South (Mr. Spearing) on securing this important debate.

East London health services have the most overstretched staff, who work in the shabbiest conditions and deal with the highest levels of ill health in the country. It is scandalous that they struggle in the 1990s in decrepit conditions that were obsolete in the 1970s. Whatever measurement we use, Hackney, Tower Hamlets and Newham have the highest concentration of health and social problems in the country.

At a time when the Government tell us that they are substantially increasing the resources for the health service, how is it that in east London we are facing the appalling cuts that my hon. Friends described? A couple of years ago, the Government removed the needs weighting for the 24 per cent. of funds in the capitation formula that relate to community health services. At first sight, that may appear to be an obscure technical adjustment, but its consequences for east London have been catastrophic, and have culminated in this crisis.

In the summer of last year, an article in the Health Service Journal presented the top 10 losers from that adjustment to the formula developed at York university and introduced by the Department of Health. East London suffered the largest cash loss to its target--£13.2 million. The other biggest losers were Manchester, Liverpool, Sunderland, Barnsley, North Durham, St. Helen's and Knowsley, South of Tyne, Tees and Newcastle.

In whose interest did the Government decide that they needed to make the adjustment? Which areas have such a pressing case for help that it was necessary to cut the amount for east London, Sunderland, Middlesbrough and Knowsley? The article spelled it out. The biggest gainer of all, with more than a 5 per cent. increase, was mid-Surrey. The second biggest gainer in the entire country was north-west Surrey. The third biggest was south-west Surrey, and the fourth was east Surrey. Who was the Secretary of State for Health while all that chicanery was going on? It was none other than the right hon. Member for South-West Surrey (Mrs. Bottomley).

The Government have cynically siphoned funds away from areas where they are most needed, to spend them in areas where they think that they can buy the most votes. The health needs of Britain have lost out to the vote needs of the Tory party. The Tory party has concluded that it can get away with gerrymandering the health funding formula. That is why we are now facing this crisis. The figures for next year provide us with no comfort at all.

I take no pleasure in recounting those facts, but I make no apology for being angry about the crisis. As I left home in East Ham this morning, my next-door neighbour told me of the problems that she was having getting the treatment that she needs at our local hospital. She said, "I do not blame the doctors," and nor do I. I do not even blame the administrators appointed by the Government to run the service: in this instance, I think that they are doing their best. The fault lies fairly and squarely with the

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Conservative party, and the Government's record on health in the hardest-pressed parts of the country is a disgrace.

Across east London, partnerships between local authorities, businesses and Government are bearing fruit and generating new optimism. In health, partnership has barely started, and we are still stuck with the problems of the 1970s. With these huge funding cuts, we are poised to take a huge leap backwards.

The London Docklands development corporation--itself as proud a creature of this Government as any--has at times been in despair at the impossibility of making progress in the health service in east London. What is the Government's response? Their response is to make £18 million-worth of cuts, which constitutes the axing of 5 per cent. of the total budget. I appeal to the Minister to take a close look at the problems in east London, and to see whether, even now, there is some way of averting the catastrophe that is looming.

1.50 pm

The Parliamentary Under-Secretary of State for Health (Mr. John Horam): I congratulate the hon. Member for Newham, South (Mr. Spearing) on his success in securing the debate, and am pleased to be able to respond. I acknowledge the hon. Gentleman's persistent and pertinent questioning of my hon. Friend the Minister for Health and me over the past few months on issues relating to the problems that we are discussing; I also acknowledge the interests of the hon. Members for Hackney, South and Shoreditch (Mr. Sedgemore) and for Newham, North-East (Mr. Timms), both of whom are obviously sincerely concerned about the issues.

East London and the City health authority, the local health authority of the hon. Member for Newham, South, is one of the largest health authorities in London, with a population of about 600,000. Like every health authority, it is responsible for studying the health needs of the local population, and ensuring the availability and provision of appropriate care and treatment for local residents.

Health authorities' allocations for 1997-98 were recently announced. East London and the City will receive an integrated allocation of £365.4 million--more money than ever before, and a real-terms increase of £8.7 million, or nearly 2.5 per cent., on its funding this year. That is the 11th highest percentage increase awarded to the 100 health authorities in England; I stress that in response to the points made by the hon. Member for Newham, North-East.

As a student of these matters, the hon. Member for Newham, South will know that what we mean by "integrated allocation" is the general allocation of £348 million, together with other allocations influenced by the weighted capitation formula. On top of all that, the authority will receive £25.6 million in non-formula-based moneys for services such as long-term care. After adjustments, that gives the authority a total cash budget of nearly £390 million for 1997-98. Furthermore, central funding is available for national priorities. The health authority is bidding for those funds, and therefore may well have more to spend next year. That means that East

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London and the City health authority will have at least £650 for each of its residents to spend on health care next year.

Ms Mildred Gordon (Bow and Poplar): If what the Minister is saying is correct, does he not agree that the money must be being misspent? Speech therapy will now be refused to 375 children between the ages of five and 11, and Moorfields hospital is turning away patients from east London who want eye operations and appointments, because of the reduced funding of the contract for east London and the City health authority. Where is all the extra money going?

Mr. Horam: The extra money is going into the provision of extra services in some areas. If the hon. Lady wishes to take up the question of precisely where there may be some underfunding, that is a matter for the health authority, and I am sure that she will take it up with the authority.

How the health authority uses the extra money is a matter for it to determine, having regard to all local needs, circumstances and views. I remind the hon. Member for Newham, South not only that more money is going to East London and the City and other health authorities this year than ever before, but that, with the merger of district health authorities and family health service authorities from the beginning of April, and with ever-increasing efficiency, more money on top of that is available for health services and direct patient care.

As the hon. Gentleman knows, East London and the City's population is ethnically diverse and characteristic of London's densely populated inner-city areas, and it makes much of that. In response to the point made so forcefully--but, in my view, mistakenly--by the hon. Member for Newham, North-East, let me say that our allocation policy is to target resources where the need for health care services is greatest. [Interruption.] The hon. Member for Newham, South must listen to what I am saying. Hospital and community health service funding is largely based on a national formula worked out on the basis of the size of the local population, weighted to take account of factors such as the number of very young or very old people and the degree of social deprivation that exists. It also takes account of market forces such as the higher costs of staff, buildings and land in the south-east.

Next year, for the first time, the formula includes a specific needs index for community health services--the hon. Gentleman referred to that--bringing 86 per cent. of the national allocation within the ambit of the formula. That will benefit the health authorities in inner-city areas such as east London.

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