Health and Social Care Bill

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Mr. Denham: Overall, when primary care groups examined services and their cost-effectiveness, they found a levelling up of services across the country as a whole. I cannot say that there were no areas in which colleagues felt that local services were not cost-effective, but we have seen a levelling-up. The greatly increased resources allocated to the NHS under this Administration have helped to advance that process.

I have tried to outline the way in which the funding formula will work. The clause must be considered alongside the proposals to abolish the Medical Practices Committee and to enable health authorities to declare GP vacancies. Clause 1 will provide a health authority with the means to manage all the health care resources for its population, whether in primary or secondary care. We intend the health authority to discharge that key strategic responsibility with the local primary care trust, other members of the local health economy and local government partners. In the areas which are currently under-doctored in relation to their populations, the additional growth moneys that they will receive will enable them, for example, to disband PMS pilots, introduce further GMS local development schemes or support their existing primary care services through the provision of extended services in primary care.

Mr. Hammond: Perhaps the Minister can clarify one point. Is the cost of PMS services included in the general part II expenditure or excluded from it? How does that impact on the way in which the Secretary of State will want to take into account general part II expenditure when looking at a particular health authority?

Mr. Denham: As the hon. Gentleman will know, when a PMS pilot is established, funds that would have been within the global budget for GMS become part of the unified budget within a local area. There is some transfer from one pot to another. The Bill addresses the part of the non-cash-limited budget that is currently in GMS. The two sums of money—whatever is within the unified budget, whether it is spent on PMS or other services, and the GMS non-cash-limited budget—are looked at together, as one budget. Allocations are then made against that and the new fair share target.

Health authorities can also attract new doctors by declaring vacancies for GMS GPs. There is no question of taking away resources, cash-limited or non-cash-limited, from health authorities with more doctors than are expected for their population needs. However, it is likely that those authorities will receive a smaller increase in their unified budget than would otherwise be the case.

I am sure that we will touch on several other issues during debate on other amendments and clauses. I hope that I have set the scene and reassured hon. Members about the way in which the clause has been drafted, our intentions, and the practical constraints that will prevent the Secretary of State from using the legislation in a way that is not rational or fair.

Mr. Hammond: I am grateful to the Minister for putting the terminology into the historical context of legislation in respect of cash-limited expenditure. I hope that, when I read his words in Hansard, I will find a reassurance that the Secretary of State will act in a formulaic, transparent and objective way that is not subject to manipulation or variations on a case-by-case basis that could not be properly and effectively predicted by someone who was privy to the formula and the data available to the Secretary of State. We seek simply to ensure that the allocation of money to health authorities is done by means of impartial funding formulae, rather than introducing yet another element of discretion.

In view of what the Minister has said, I shall not press the amendment to a Division. We may need to raise a couple of other issues, but they will naturally fall within the scope of the debate on amendments Nos. 9 and 10. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Sir George Young (North-West Hampshire): I beg to move amendment No. 2, in page 1, line 15, leave out

    `(in whatever way he thinks appropriate)'.

It is good to see you in the Chair, Mr. Maxton. Any propensity to misbehave disappeared the moment that I knew that you would be chairing the Committee.

Amendment No. 2 is a probing amendment; this debate should follow on well from the previous debate. The amendment would remove from the Secretary of State the discretion in allocating substantial sums of money. It is interesting to compare the discretion that the Secretary of State has under this Bill with that of the 1977 Act, which we are amending. Section 97 of the 1977 Act states:

    It is the Secretary of State's duty to pay...such the Secretary of State approves in the prescribed manner.

That wording is tighter than that in the Bill, which states:

    In determining the amount to be allotted...the Secretary of State may take into account (in whatever way he thinks appropriate)—

taking us back towards Henry VIII rather than onwards to whoever the next monarch might be.

If, as the Minister said, the new system will be formula driven, fair and objective, despite the way in which the Bill is worded, I am not sure that he needs the discretion that my amendment would delete.

I shall try to put the issue in perspective. The NHS budget this year is about £44.5 billion, a very substantial sum of money, most of which is distributed to our constituencies. The revenue support grant is £21.5 billion, less than half that. Yet we monitor the distribution of the revenue support grant much more strictly than we monitor the distribution of the NHS budget.

3.30 pm

Next week, the House will debate and vote on the distribution of the revenue support grant and we will have the opportunity to say on behalf of our constituents that the distribution is unfair and to complain about the formula. It is also quite easy to get briefing from one's local authority about the way in which the RSG formula penalises one's own constituency. Any director of finance worth his salt can produce powerful evidence that shows that the formula is unfair to one's constituency. Having been a local government Minister, I can pay tribute to the ingenuity of hon. Members and local government officers in finding ways round the formula.

The budget and the means of allocation that we are now considering are not subject to similar scrutiny although the sums are far higher. Local health authorities, which are agents of the Minister, are understandably reluctant to brief Members of Parliament about the way in which formula is unfair on any particular constituency. It is the job of every Member of Parliament to fight for the fairest share possible for his or her constituents. We are talking about a very substantial sum of money.

I have no difficulty with the principle of resource equalisation. I believe in the concept of equity in health care. I read the White Paper ``Our Healthier Nation'' that says that any sensible public health strategy must take into account resource allocation and the differential distribution of need. That goes far wider than just the NHS. It applies to housing and all the other budgets. I take the view that everyone, wherever they live, should have the right to good access to a high-quality service. It follows from that that the allocation and application of NHS resources should be related to need. There can surely be no disagreement with what I have said so far.

After the election, I arrived at my new constituency—North-West Hampshire, which was very different from the inner-city seat that I had previously represented— and I found that for every £100 of NHS resources allocated nationally, my constituents received £80. We were deemed to be 20 per cent. healthier than the rest of the country. Being a conscientious local Member of Parliament, I thought that I would run that round the course to see whether it was substantiated. It is not the case that all deprived people live in deprived areas. More than half of the most deprived individuals in the country live outside the most deprived 20 per cent. of wards. So any resource allocation that just targets the most deprived wards will miss more than half of the most deprived people in the country.

What really interested me were two documents that supported my suspicion that, sadly, my constituents were not 20 per cent. healthier than the national average. One document, ``Meeting the Challenges'', was the report of a scrutiny panel set up by the Parliamentary Under-Secretary of State for Health, the hon. Member for Birmingham, Edgbaston (Ms Stuart). The panel was appointed in April last year to examine proposals that were aimed at achieving savings of £13.5 million. It may come as a surprise to Committee members that, at a time of more resources being allocated to the NHS, the Government are looking to make savings of £13.5 million in my constituency. The panel, in its report, said it wished to emphasise its independence of Government, the health authority, trusts, primary care groups and community health councils. It said that

    we are our own men and women and unanimously recorded, at our first meeting, that we would not ``rubber stamp'' any proposals.

Mr. Hammond: My right hon. Friend expresses some surprise at the fact that, given all the additional money that the Government are putting into the health service, it is necessary for his health authority to make such savings. He might be interested to know that my health authority also has to make savings of £8 million, and he might notice that his health authority and mine have something in common: they both occupy areas represented by Conservative Members of Parliament. Does he think that that is entirely coincidental?

Sir George Young: Very hard-working and conscientious Members of Parliament at that. I want to develop my theme and, I hope, give the Minister the opportunity to dispel the suspicion that my hon. Friend and I may share.

The report went on to state that

    The National Funding Formula for Health Authorities is at the heart of the problem. This is a challenge for central Government...North and Mid Hampshire Health Authority receives 80 per cent. of the national needs assessment. Panel members felt strongly that this was too low.

I find the next remark especially interesting. The document continues:

    We heard no evidence to support such a large reduction in the national needs ``norm''. What is more, we were told of both urban and rural ``pockets of deprivation'' within the Authority, where an 80 per cent. allocation was arguably inadequate...This challenge lies at the door of Government but the authority should fight for it, too.

That is one of my concerns. An independent panel appointed by a Minister found the formula unfair, and we are discussing extending that formula to the part of the health service that is not cash-limited at the moment.

``Coronary Heart Disease—an equity profile for north and mid Hampshire'', the other document that supported my view that the present formula was unfair, landed on my desk yesterday. Extracts from it show that it would be misleading to assume that because one lives in north and mid-Hampshire one is healthier than the national average. It states that

    Basingstoke and Deane residents have strikingly higher death rates from coronary heart disease, not explained by deprivation,

and that

    Prescribing of statins in Mid Hampshire PCG is lower than expected on the basis of need.

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