Annex
Statement on Health Expenditure
The Government's top priorities are to renew
and modernise our country's health and education systems. And
so on Tuesday the Chancellor of the Exchequer was able to announce
that as a result of our comprehensive spending review an extra
£21 billion pounds will be invested in the National Health
Service in the United Kingdom over the next three years—£18
billion in England. This is an average annual real terms increase
of 4.7 per cent over the three years—starting off with 5.7
per cent next year. It will kick start the Government's 10 year
programme of modernisation for our National Health Service.
This is the biggest cash increase ever announced
for the NHS. This step change in funding will be matched by the
biggest programme of renewal and modernisation since the NHS was
founded. Investment for reform. £21 billion is a large sum
of money. It has been welcomed by the representatives of all the
people working in the NHS and described by the National Health
Service Confederation as "beyond their wildest dreams."
However when set against the run down in the state of the NHS
which we inherited. When set against the improvements which the
staff and the public are seeking. When set against the scale of
our ambitions even £21 billion is a settlement that will
have to be tightly managed and properly targeted. Not all the
problems that we inherited in the NHS are going to be solved over
the next three years. They are too deeply entrenched for that.
Not all the improvements we seek can be delivered in that time.
But what both staff and public will see is demonstrable year on
year improvements in all parts of the health and social care system.
Staff and patients alike want to see a modern
and dependable health service. A modern health service requires
high and stable levels of funding. In all its long history the
NHS has never before had a three year settlement. The NHS has
never been able to plan beyond the short term. Modern organisations
have to plan for the long term. The NHS can now do that for the
very first time.
A modern health service requires enough staff,
well trained and highly motivated. With the extra money we are
making available the NHS will be able to take on more doctors
and more nurses. Up to 7,000 more doctors and 15,000 more nurses
over the next three years. And earmarked funds will be provided
to allow staff to update their skills to keep up with rapidly
changing technology. I can tell the House today that over the
next three years there will be an extra 6,000 nurse training places.
And I will shortly be announcing a large increase in the number
of places in medical schools. With these extra staff NHS hospitals
will treat an extra three million patients.
Expanding staff numbers, in particular to deal
with some of the shortages we know exist, depends upon pay rises
being fair and affordable. Fair, to allow us to recruit and retain
motivated staff. Affordable, to allow us to make the modernisations
patients demand. Fair pay and modernisation must go hand in hand.
That is why for the first time we are asking the Pay Review Bodies
formally to take into account the service improvements we want
to achieve, the resources available to the NHS and the Government's
inflation target, as well as recruitment and retention,
A three year settlement allows the NHS to take
a longer term view. Now that funds are guaranteed for three years
for example, there should be no more systematic use of short term
contracts of employment for nurses and other staff.
A modern health service requires modern buildings
and modern equipment. Over recent years the NHS has been starved
of capital. We are putting that right. That is why as part of
the modernisation programme £8 billion will be invested in
new hospitals, clinics and GP premises. 30 new hospitals are already
planned. Work is already under way at Dartford and Gravesham,
Norfolk and Norwich, Carlisle, High Wycombe, Durham, Sheffield,
Amersham and Greenwich. There will be more to come. But new and
better buildings won't be confined to the places getting new hospitals.
We will be increasing public sector capital by 50 per cent.
Hospitals in every part of the country will
benefit. Hundreds of wards, A&E Departments and operating
theatres will be refurbished. And every year outdated equipment
will be replaced with the newest and best medical science can
offer.
And we are investing in primary care. Over 1000
GP surgeries will be improved or rebuilt over the next three years.
A modern health service requires earmarked cash
to make change happen. I can announce today that the £18
billion settlement for England includes a £5 billion plus
modernisation fund. This money will be strictly targeted on helping
NHS staff to transform the NHS into the kind of service both they
and we want to see. A service that is fast and convenient. A service
has uniformly high standards. A service that is moulded to the
needs of patients.
The modernisation fund will fund the IT revolution.
It will go towards making sure that we meet the reductions in
waiting lists to which we are committed. We will also use money
from the modernisation fund to make a start this year on introducing
booked admissions so that when a patient is told by their GP that
they need to attend outpatients they will be able there and then
to book an appointment which suits them. Similarly, if they have
to have surgery as a day patient or an in-patient they will be
able to book an admission date which suits their needs and family
and work responsibilities.
Besides contributing to the refurbishment of
hospitals and the building of new GP premises, the fund will help
buy new equipment. It will support the promotion of good health.
It will pay for better training of NHS staff. It will provide
modern and effective mental health services. The modernisation
fund will be allocated to finance well worked out plans and proven
mechanisms for improving services. It is investment for reform.
A modern health service requires modern ways
of working. By getting rid of the wasteful and divisive competitive
internal market we are taking money out of the Tory bureaucracy
and into patient care. Primary care groups involving doctors,
nurses and social services will replace the maze of commissioning
and fundholding organisations. NHS Trusts managements are being
amalgamated. Competition between hospitals is being ended. They
are working together again. They will continue to do so. The NHS
is already the most cost effective healthcare system in the world.
But there are unacceptable variations in performance. Management
effort will be targeted on hospitals where costs are above the
national average. A new Performance Framework will help measure
progress. Our value for money improvements should release a further
£1 billion a year for patient care. So there will be a tough
drive on genuine efficiency. That means more money for patients
and better value for taxpayers.
A modern health service requires a new relationship
with social services. We have made a start on breaking down the
Berlin Walls between the NHS and social services.
To back that up, over the next three years we
are providing an extra £3 billion for social services so
that they can match, complement and augment what the NHS is doing.
An increase of 3.1 per cent in real terms, year on year on year.
So for the first time they will be able to produce joint local
long term plans with the NHS. And, for the first time we will
be setting tough efficiency targets for all social services authorities
to help them deliver the goods for vulnerable people. It will
mean better help for the elderly and for carers. There will be
new measures to allow tens of thousands of old people to live
an independent life, where at present they end up trapped in nursing
homes or in hospitals. And it will mean more help for people with
mental health problems to match the extra NHS commitment to mental
health.
Arrangements for looking after children in care
have far too frequently been deplorable with children being molested,
with low levels of school attendance and educational attainment.
Many of them have been turned out of care to fend for themselves
when they are little more than children. We are determined to
give them a new deal and the extra PSS money will provide the
money necessary to improve the quality of care received by children
living away from home. And not before time.
All this effort, all this investment is intended
to deal properly with people when they need treatment and care.
But this Government is not satisfied with a health policy just
for treating the sick. We want to stop people getting ill in the
first place and stop people dying prematurely. And we want to
tackle the growing inequalities in health.
That is a job for the whole Government. This
CSR settlement isn't just a good settlement for our health service,
it's a good settlement for our people's health. £540 million
for the Sure Start children's fund, almost £4 billion to
invest in decent housing and improved insulation, £3 billion
for deprived communities, £1.7 billion for transport. And
this is on top of our earlier commitment to the £3.5 billion
New Deal for jobs and our introduction of a national minimum wage.
What all this amounts to is the biggest health crusade the country
has seen since the NHS was born 50 years ago. A modern, Government-wide
crusade.
The NHS was founded on a simple principle. Care
should be provided on the basis of need. That principle has served
the NHS well for 50 years.
While we were considering the CSR we were urged
to abandon this principle. By some of the Hon Members opposite.
By the Social Market Foundation. By the Adam Smith Institute.
By many of our newspapers. By various pointy-headed professors.
They wanted us to charge people for going to the doctors. Charging
to see a GP. Charging for outpatients appointments. Charging people
for going into hospital. We have looked at all of this very carefully.
We have looked at all the pros and cons. We have spent a year
doing it. We utterly reject these ideas. We have rejected them
because they wouldn't work and they would harm the worst off.
Charges would be expensive to collect. Charges would glean little
overall revenue. Most important, charges would deny treatment
to those who need it most. So I can announce today there will
be no new NHS patient charges in the lifetime of this Parliament.
And we haven't stopped there. From next April
the NHS will provide free eye tests for pensioners. This will
be good for their purses and pockets, good for their sight and
good for their general health.
MADAM
SPEAKER
This is a historic settlement. It will enable
the hardworking and dedicated staff of the National Health Service
and social services to provide the treatment and care that people
need and to provide it to a higher standard than ever in every
part of the country. It will modernise and renew the NHS. The
extra money will be matched by enormous changes and improvements.
Over the last few weeks we have been celebrating
the 50th anniversary of the NHS. That was right and proper. But
now we must do as the founders of the NHS did. We must look forward,
find the resources and make the changes that are necessary to
relaunch the NHS so that it serves our country well for the next
50 years. Nothing less will do.
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