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Mr. Deputy Speaker (Mr. Michael Lord): Order.
Dyfed Powys Health Authority
1 pm
Mr. Denzil Davies (Llanelli): Dyfed Powys health authority may seem an esoteric subject, but it does not to my constituents. It is a matter of keen concern to them, to others in the Dyfed Powys area and to me.
Health authorities buy medical services from hospitals--in the case of Llanelli, from the Prince Philip hospital and one or two smaller ones. If Dyfed Powys health authority goes bankrupt or runs out of money, the hospital services provided for my constituents will deteriorate. I thank my hon. Friend the Member for Bridgend (Mr. Griffiths) for meeting a delegation of hon. Members from the old Dyfed area some time ago. This debate should not be taken as a criticism of that meeting, which was very helpful. However, time has moved on and the situation is changing.
Dyfed Powys health authority resulted from a merger, under the previous Government, of Dyfed health authority and Powys health authority. The area covered by the Dyfed health authority had three acute hospitals and a small number of community hospitals, as they are described. The Powys area had no acute hospitals and a large number of community hospitals. To a city banker experienced in merger negotiations, that situation would have been ideal. One complemented the other: Dyfed provided the acute hospitals of which Powys had none, and Powys provided the community hospitals of which Dyfed had only a few. Real life is not like that, certainly not in the health service.
The new authority inherited many problems, most of them, I am sorry to say, from Powys. It has tried to resolve them. It made various suggestions some time ago to resolve them by closing many community hospitals--
Mr. Richard Livsey (Brecon and Radnorshire):
Will the right hon. Gentleman give way?
Mr. Davies:
Not at the moment.
The authority also proposed the reduction of services. Those proposals met with universal condemnation and were thrown out. Poor Dyfed Powys health authority is again trying to resolve the matter. In the autumn, it will no doubt advance other proposals. As far I can see, its proposals will aim to improve the financial situation. They will not be for the purpose of improving the health service. The corollary or obverse of improving the health authority's financial situation will be a deterioration of the health services provided for Llanelli and the other constituencies affected. There is not much use in looking at the matter from the point of view of trying to resolve the financial problems in that way.
I do not want to criticise anyone. I do not want to criticise Dyfed Powys health authority because it inherited difficult problems. I am not criticising my hon. Friend the Minister, who has also inherited a horrible situation, but I have several questions. I shall understand if he cannot answer them now. This is an Adjournment debate and, if he is not in a position to answer them, he will no doubt write to clarify matters.
I understand that health authorities make up accounts, although I am not sure in what form, or whether they are audited by outside, independent accountants. Has my
hon. Friend the Minister received the 1996-97 accounts, if they exist, of the Dyfed Powys health authority? Are they properly audited? Who drew them up? Do they set out what one would normally expect to find in accounts--borrowings, assets, loans, liabilities, expenditures, and everything else that people would wish and need to know? When they appear--if they have appeared, fine--could he please place them in the Library for us to try to fathom? I know that it is a long way from mid-Wales or Llanelli, but at least the accounts should be open for inspection so that we can then ask questions about them. Are the accounts in a form that an accountant would not feel disgraced to sign?
My second question relates to debts. I do not understand the structure of health authorities. I tabled a question to my hon. Friend the Minister, which he properly answered quickly. Again, I make no criticism. Perhaps I was naive, but I asked what were the borrowings of the Dyfed Powys health authority from the Welsh Office. The answer that I got was approximately £2.5 million. That surprised me a little because various figures have been bandied around: deficits of £6 million and £7 million. I wondered whether I had missed something. Was it a very carefully drafted answer? I am sure that the £2.5 million figure is correct, but can my hon. Friend say whether there are other borrowings, loans, brokerages or whatever other words can be used to dress up debt? Has Dyfed Powys health authority borrowed secretly from somewhere such as the Drover's bank in Llangammarch Wells? Who knows whether there are liabilities to building societies in small mid-Wales villages? May we be told how much the health authority really owes? I am told that it has money somewhere that should be going to GP fundholders and that it borrows a bit, then pays it back again.
Mr. Livsey:
The right hon. Gentleman is making a powerful case about the finances of Dyfed Powys health authority. Does he agree that it is strange that, last October, it said that it would have a deficit of £9 million over the next five years; that in January it said that it would be £11 million over the next five years; and that, in meetings in my constituency in March, it said that, if compound interest were added, it would have a deficit of £38 million over the next five years?
Mr. Davies:
We should leave compound interest to the Chancellor of the Exchequer, but I agree. I am as baffled as the hon. Gentleman, and that is one reason for this debate. Again, I do not expect my hon. Friend the Minister to be able to answer fully, but I hope that we can get some figures for the so-called deficit.
What is a deficit? I suppose that a deficit means spending more than is being earned. I do not how to apply that concept to such an organisation. From where does the money come? Does it come out of the dreaded public sector borrowing requirement? That would be terrible. I take it that the £2.5 million comes out of the dreaded PSBR, but what about all the other deficits? Are they added to the wretched borrowing requirement? We should like to be told the answer so that we can assess the position.
I shall now refer to 1997-98, this financial year; we have already asked for the accounts for the last financial year. I do not know how the health authorities are funded. No doubt, a sum of money is provided for them by the
Welsh Office. I am told that there is some sort of formula for local authorities that is called the standard spending assessment. It used to be the rate support grant, but names get changed, although the reality does not.
How much money has the Dyfed Powys health authority received--or will it receive--from the Welsh Office for the next 12 months from this April to next April? We need to know how much it will be so that we know how much it is being paid. Is the figure plucked out of the air? At the meeting with my hon. Friend the Minister, he mentioned a long equation, which no doubt ends in nought--such equations for economists usually end in zero; I do not know why. Could my hon. Friend the Minister send me a letter explaining how the algebraic equation is arrived at? How is the figure arrived at? It is an important question because the spending figure is important. It tells us the amount that can be spent on buying services from the Prince Philip hospital in Llanelli and from other hospitals. I do not expect to be told the equation now, but we need to know it so that we can work out--or be told--exactly how much money is allocated for this year. What will the deficit be for this year? Apparently, there will be one. Is the deficit rolled on every year until the Welsh Office has to provide a loan?
The Llanelli-Dinefwr hospital trust operates the main hospital in my constituency, the Prince Philip hospital, and other hospitals, but there is still no negotiated contract. I raised that issue with my hon. Friend the Minister and he made some helpful comments. I am told that there is no negotiated contract between those hospitals and the health authority.
We have the extraordinary situation whereby a public body--the health authority--pays what it can. It is as though I went into Tesco in Llanelli, took a trolley full of food to the till and said that I could afford only £5 and the shop could possibly have the rest later. When will the contract be signed? If a contract is not signed on satisfactory terms, the Llanelli-Dinefwr hospital trust will run up debts. As the Minister knows, that trust runs a tight ship--it has never been in debt and it balances its books--but I am told that, if the situation continues, by the end of this financial year the trust could be in debt to the tune of at least £1.5 million.
In reply to another question, which is not relevant to this debate, my hon. Friend the Minister said that Morriston hospital was now in debt to the tune of £16.5 million. I do not want that to happen to my hospital trust. It would not be fair if it had to pile up debts that were not of its own making and then had to do something in future to try to reduce those debts. Could that contract be negotiated fast so that the trust does not run up a debt like the one that has been run up by Dyfed Powys health authority?
There is no solution to the problem to be found in measures to reduce the bureaucracy of the Dyfed Powys health authority. It is always possible to find savings in a bureaucracy, but that will not solve the problem. The difficulties should not be solved by cutting services. I am sure that my hon. Friend the Minister would agree that the problem should not be solved in that way. I am sure that he will also agree that we should not come up with a plan to solve financial problems by cutting services. We are not looking to improve hospital services in Llanelli, merely for them to be at least maintained. If the financial plans are put into operation, health services will deteriorate. People who voted for us and for my hon.
Friend the Minister at the last election did not vote for a deterioration in existing services--within realistic boundaries, they want improvements.
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