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Mr. Milburn: It is true that the previous Secretary of State allocated extra cash for the winter months last year, but I must remind the hon. Gentleman that, although his right hon. Friend did that on two occasions, he allocated a total of only £25 million. Of course that money was most welcome in many constituencies, and proved a real
bonus for the NHS--but I must point out that it is somewhat dwarfed by the £300 million invested this year by the present Government.
Mr. Burns: Would the Minister be kind enough to check that figure and write to me after the debate?
Mr. Milburn: I will gladly check the figure--it was two tranches, one of £20 million and another of £5 million. I am happy to write to the hon. Gentleman if that is helpful.
The money that has been made available--the extra £300 million--is not just to deal with the immediate pressures of the winter, which we recognise. It will help to raise the foundations for long-term developments that will deal with some of the issues raised tonight--the problems which bedevil the delivery of services between the health and social care systems. My right hon. Friend the Secretary of State describes this as a "Berlin wall" and we are determined to break down that wall.
The people who suffer when the interface fails to deliver are the most vulnerable patients--people with mental health problems, disabled people and the elderly. We are determined to improve that situation.
My right hon. Friend the Chancellor of the Exchequer's Budget allocated an extra £1,200 million to the NHS next year, and we brought forward the allocation to the end of last month, to allow health authorities to plan over an 18-month period.
Finally on the subject of money, the hon. Member for North Essex (Mr. Jenkin) talked about the problems which have bedevilled the private finance initiative. There have been problems with the PFI, but they are problems of the past. This Government have taken decisive action to unlock the gridlock in the PFI. As a consequence, we were able to announce a few months ago an additional capital investment for the NHS, through the PFI, of £1,300 million for 14 new hospitals. Since then, we have been able to announce a new hospital to be funded through the PFI, which will be built at Greenwich.
Mr. Jenkin:
My hon. Friends refrained from wandering down the path of party political comparisons, because we wanted to discuss a particular issue, and I hope that the Minister will not use all his time making comparisons. We could all join in that game, but that is not the point of this debate.
Mr. Milburn:
The hon. Gentleman will be aware that I am coming to the issues in Essex, but it is important to place in context the issues that Opposition Members have raised. Many of the issues raised tonight have been questions of funding.
Since the election on 1 May, the Government have invested an extra £1,500 million in the NHS for revenue purposes, and more than £1,300 million for capital purposes. Those and other policies which we will produce in due course will enable health authorities throughout the country--including those which serve the constituencies of Opposition Members--to provide better care for everyone.
I listened with great interest to the comments of the hon. Member for West Chelmsford about the level of funding and the changes to the funding formula for next year and beyond. I listened also to his historical discourse
about the problems which he imagines have been endured by his part of the world. As he knows from his time at the Department, the funding formula is a fiendishly complex issue, and I thought it might be useful to him and to others if I explained briefly the three main changes to the formula we have made for the next financial year, beginning on 1 April.
First, we have extended the needs adjustment from 86 per cent. to 100 per cent. of expenditure, in line with advice that the Government received from the expert committee which served under the previous Government. Secondly, we have improved the market forces factor by reducing the number of pay zones from 61 to 51. Thirdly, we have introduced a geographical cost adjustment for the emergency ambulance service, partly in recognition of the need of shire areas. Under that element of the changes, North Essex is a gainer, and I am sure that Opposition Members will welcome that.
We are making the changes as part of our commitment to making the distribution of resources fairer, in support of our objective of reducing both inequities in access to health services and inequalities in health. The changes will not be the end of the matter.
I can give an undertaking that the Government will consider further changes to the formula. Indeed, we have established a new advisory committee on resource allocation to do specifically that. Its programme for next year will include a special focus on the market forces factor, which, as the hon. Member for West Chelmsford knows, has been the subject of much controversy in the national health service. I shall also ask the committee to consider whether the existing method of counting the population in health authority areas is accurate, as there have been some concerns about under-counting of particular groups in the population.
The changes are not the end of the matter, but they are a start. We want resources to be more fairly distributed across both primary and secondary care. For 1998-99, beginning on 1 April, every health authority in the country will receive a real-terms increase in its allocation for the delivery of local health services. There will be a minimum growth in allocation of 1.35 per cent. in real terms.
North Essex does rather better than that, receiving 2.2 per cent. in real terms. That makes it the 26th biggest gainer out of 100 health authorities. We have changed the formula, and that results in changes to health authorities' target shares. I can give an undertaking that we will move health authorities, including North Essex, to those targets over time.
There was a fundamental misunderstanding at the heart of the comments of the hon. Member for West Chelmsford, about the implications of the changes in the formula. As he knows, the matter is fiendishly complex and difficult, but it is simply not the case that North Essex has lost out, for the straightforward reason that we apportion growth according to the distance from target of health authorities as a whole. We cannot view North Essex or any other health authority in isolation. We consider the composite picture.
Certainly, if there had been a different formula, there would have been different distances from target. As a consequence, there would have been a different apportionment of growth. The hon. Member for North Essex--I think that it was him--queried my answer about hypothetical situations, but it really is impossible to
compare like with like in the straightforward way that he wants. Perhaps we shall have to confront that problem, but that is the nature of the formula that we have inherited from the previous Administration.
We have changed the formula and made it fairer, and North Essex is a net gainer this year, especially in comparison with other health authorities.
Mr. Whittingdale:
I understand what the Minister is saying, but our point is that, under the previous formula, North Essex and South Essex were the two authorities furthest from target, and were, as a result, the first and second biggest gainers in allocation of funds. Because the target has been changed and North Essex is no longer the furthest away, it is now, as the Minister said, only the 26th biggest gainer, rather than the first or second.
Mr. Milburn:
North Essex got a 2.2 per cent. real-terms increase, compared with the English average of 1.9 per cent., and I can give the hon. Gentleman the historical context.
Our allocations for next year, giving a cash increase of 5 per cent., as opposed to the 2.2 per cent. in real terms, are higher than the average for the previous five years. So, the argument that Opposition Members are advancing that somehow--[Interruption.] If the hon. Member for North Essex will calm down and resist the temptation to make the statistics squeal until they confess and look at the figures objectively, he will see that the increase of 5 per cent. for next year is bigger than the average for the previous five years. I should hope that Opposition Members would have welcomed that. It is a real benefit to his constituents and to those of other Opposition Members.
Mr. Burns:
Of course the Minister is right, but let us look at the figure. He said "five years", and he did so for a reason, because the first year was the last year of RAWP, when the percentage cash increase was 2.7 per cent. In the remaining four years, until this year, it was between 4.5 per cent. and 6.4 per cent., and that is why the average is so high. Using the first year has brought the average down. If the Minister had given the average over the past four years, it would have been higher. Our point was that that was done to catch up because of what had happened under RAWP until 1992-93.
Mr. Milburn:
I understand the hon. Gentleman's point--it is pretty straightforward--but, however we look at the statistics, North Essex is doing extremely well. Its growth for next year is greater than that allocated for this financial year by his Government when he was a Minister in the Department of Health. I do not want to make a party political point about that. I merely want to make it clear that the Government are committed to the fair distribution of resources, which includes looking after the needs of residents in North Essex on a fair basis, and ensuring that they have the health services they deserve.
I am aware that there has been a problem in North Essex because of the financial position of the health authority and a number of the trusts, about which several hon. Members have raised concerns. An overspend of about £6.9 million was incurred by the health authority in 1996-97. As a result, it commissioned an investigation by an external agency into its financial planning and
management systems. The report identified certain shortcomings, and made recommendations to remedy them.
I understand that the health authority has implemented all the recommendations in the report, and that that has added a robustness to the authority's financial position. However, I recognise, as do other hon. Members, that the authority is facing a complex set of interdependent issues.
As hon. Members know, it is simply not possible to extract one hospital or one bit of the health authority area from another. Nowadays, the national health service works increasingly as one. Indeed, my hon. Friend the Member for Braintree (Mr. Hurst) made some of those points about the flow of patients and the fact that care is delivered on a more holistic basis than it has been.
The ultimate goal is to ensure that sustainable, high-quality clinical and cost-effective services are provided in modern facilities in all parts of the country. Although the consultation to which I will refer shortly will take time, those processes should ensure that whatever solution emerges is based on informed debate among the public and professionals.
A further financial problem was presented by three of the trusts in North Essex, which got into trouble recently and reported significant financial deficits. Those were carried forward into the current year, but, following work carried out by the trusts, the health authority and local general practitioner representatives, they have been considerably reduced, and are expected to be eliminated completely within the next two years.
However, I have asked the NHS executive's north Thames regional office to continue to monitor the situation closely. The last thing I want is for the national health service to enter the next financial year in the parlous state in which it entered this year, with record levels of debt.
My hon. Friend the Member for Braintree and the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) referred to the consultation on the subject of changes to acute and community services in north Essex. I have listened to their concerns and the case they outline, and I am aware of the strong local feelings on the proposals. It is vital that plans for service development are determined in a democratic manner and implemented sensitively and appropriately.
However, as that consultation is still in progress, it would be inappropriate for me at present to express an opinion either on whether or not consultation has been undertaken properly, or on the substantive issues it raises. The hon. Member for West Chelmsford will be aware that, if there is an objection from one of the local community health councils, the issue will end up on Ministers' desks, and it will be for Ministers to decide. I must and will keep an open mind until then, but I have listened carefully to what has been said this evening.
I will say that it is especially important to have local accountability, which my hon. Friend the Member for Braintree mentioned. The way services are run and the way they develop must be properly in tune with local
needs and views, and it is extremely important that all those involved in running the NHS should remember that it is a public service. The NHS does not belong to them any more than it belongs to me; it belongs to the local community.
All those engaged in the processes of consultation and service development should take that as their yardstick. That is what the Government expect, and we will judge proposals accordingly. I can assure hon. Members that there is no fait accompli. We have a statutory responsibility to consult publicly, and we shall weigh the results both fairly and carefully.
A major challenge faced by the NHS in north Essex at present is that of managing the pressures that are always present in the health service during the winter. Those are being exacerbated in Essex by the large number of people who are waiting in hospital, despite being medically fit to be discharged--a point raised by the hon. Member for West Chelmsford. That backlog of people waiting for discharge constitutes a severe pressure on acute services.
As I said, the Government have allocated an additional £300 million to the NHS to help the services to manage winter pressures. North Essex health authority has proposals, jointly drawn up with Essex county council and the local trusts. As a consequence, I have agreed that £2.8 million will be given to North Essex health authority this winter. More than 60 per cent. of that money will be spent on social care initiatives, which should considerably alleviate the delayed discharge problems by enabling people to be discharged from hospital into more appropriate care.
I have listened extremely carefully to the concerns expressed by the hon. Member for West Chelmsford and other hon. Members this evening. This and other debates will inform the Government of the changes we will need to make to restore the NHS to a proper condition.
I give the House the assurance that those changes will be properly thought through and introduced sensitively; but changes there have to be, to ensure that local hospitals are able to provide a proper health care service in tune with our founding principles of the NHS. It is particularly important that we restore local accountability. The way services are run and the way they develop must be properly in tune with local needs and local views.
I recognise that the NHS in north Essex, like the service everywhere, is facing challenging times. The Government have recognised the problems, and have moved to help the local NHS by allocating the extra £7.8 million for the next year and the additional £2.8 million this winter. That should enable the NHS in North Essex to rise to the challenges it faces.
I share the determination of the hon. Member for West Chelmsford that high-quality treatment and care are available to the people of his area. I am sure that the trusts in North Essex and the North Essex health authority share those commitments. Whether the proposals before the public will assist that process is a matter on which I shall certainly keep an open mind. I will consider the results with great care.
Question put and agreed to.
Adjourned accordingly at six minutes to Ten o'clock.
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