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Mr. Eric Illsley (Barnsley, Central): I warmly welcome my right hon. Friend's statement, especially the increased funding and the review of the formula on which it is based. He will be aware that Barnsley health authority is the lowest funded in Trent and one of the lowest funded in the country, despite our levels of need. Does he know that Barnsley faces a £2.1 million shortfall in April next year? Will he reassure me that today's settlement will allow Barnsley health authority to deal with that shortfall and have the money for the new initiatives that it wants to introduce?

Mr. Milburn: Yes, I very much hope so. In fact, Barnsley will receive an increase of 10.05 per cent., which is the second largest in the Trent region. I know that there are funding pressures on the NHS; as my hon. Friend knows, there always are. I hope that the statement, the allocation and the guidance that we will issue to the NHS will give enough room for local flexibility so that decisions can be made locally on how best to spend the considerable resources for the benefit of the community that he represents.

Mr. Christopher Chope (Christchurch): Can the Secretary of State tell me why he has rejected and ignored the petition presented to the House by me on behalf of thousands of health workers in Christchurch, Bournemouth and Poole, which asks for the cost of living supplement to be extended to cover that part of south-east Dorset? Does he recognise that his announcement worsens

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the situation in which a nurse who lives in Christchurch, where housing costs are much higher than they are in Salisbury or Southampton, has a financial incentive to work in those cities rather than at the local hospital?

Mr. Milburn: I understand the concerns of the hon. Gentleman, his constituents and NHS staff who work in his area, but we have to proceed a stage at a time. This is the first year in which we have had cost of living supplements. We have not had them before, and certainly not under the Government of whom the hon. Gentleman was a member. We are extending them next year. They will continue to be evaluated and we will consider making further changes to them. The geographical coverage of the supplements and the professional groups who benefit from them will be extended if there is a good case for doing so.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): My right hon. Friend will know that south Cheshire, as an area that has been consistently underfunded for many years, will welcome the settlement. Will he ensure that if private health care facilities are used, and support for travel and other facilities is provided, the costs will be transparent, so that taxpayers know whether they are really getting good value for money or whether that money should have been spent in NHS facilities?

Mr. Milburn: Yes, there should be transparency. I am aware of the deficits and the problems that have been long apparent in south Cheshire. That is why this year we increased next year's funding by 9.86 per cent., which is a substantial increase in resources for my hon. Friend's health authority area. I am sure that that money will be used to good effect.

On the use of the private sector, we need to ensure that we get the best value for money, but it is also worth recognising, as I am sure that my hon. Friend does, that NHS hospitals often do not have the spare capacity. As a consequence, the patient and the Government face a dilemma: should we tell patients to wait longer or say that we will use the spare capacity for the benefit of NHS patients? I think that patients will conclude that the latter course of action is the right one to take.

Mr. David Heath (Somerton and Frome): I am increasingly worried by the number of letters and calls that I get from my constituents, especially those who live in the area served by the Royal United hospital of Bath, where the normal waiting time for orthopaedics is 18 months. Although the extra £400 million is extremely welcome, will the Secretary of State explain whether that is additional to the normal allocations and, if not, will it be targeted at specialisms and areas that place the greatest stress on the system? In providing the element of choice, which he suggested in his statement, how will he avoid the pitfall that occurred in the education system, with people being displaced from their local and regional hospitals in favour of people from elsewhere?

Mr. Milburn: On the amount of money that is available to tackle waiting lists and the expansion in capacity, the £400 million is embedded in health authority allocations. Each health authority will get a fair share of that and be able to make use of it. We can use that money

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to increase capacity in a number of ways: to create additional operating theatres or beds, to employ additional staff and to make operations and treatment available outside normal working hours. There is capacity in the NHS and outside it, and it is right that we use that to carry out more NHS operations and thereby reduce waiting times.

The hon. Gentleman made a good point about choice. It is right to offer patients greater choice because, as he acknowledged, some hospitals have long waiting lists and others have short ones. The problem for patients is that they cannot exercise choice and, in effect, the hospitals choose the patients rather than the other way round. That is precisely what we want to change, and we will do so gradually, in a way that tackles precisely some of the problems and challenges that he raised.

Dr. Howard Stoate (Dartford): May I tell my right hon. Friend that the so-called burgeoning wage bills mentioned by the hon. Member for Woodspring (Dr. Fox) are, in my constituents' opinion, much-needed pay rises to improve recruitment and retention of essential staff? How is my right hon. Friend progressing with his plans to set up fast-track elective surgery units throughout the country? Does he have any plans to build one in north-west Kent to service my area?

Mr. Milburn: I knew that there would be a sting in the tail. My hon. Friend is right—we cannot have it both ways. We cannot complain about some NHS resources going into pay packets. Few right hon. and hon. Members regard NHS staff as overpaid. Most NHS staff did not enter the service to make a mint; indeed, I know of no member of staff who entered the NHS with that aim. People enter the service for other reasons, and it is right that we reward them properly. We must have a fairer pay system to make sure that rewards go to the right staff.

Diagnostic and treatment centres are very important because, as my hon. Friend is aware, they will separate elective work from emergency work so that we can protect planned operations and, indeed, emergency work. Those centres are planned for different parts of the country. We will be inviting expressions of interest, not only from the NHS but from the private sector, so that we can locate those centres in parts of the country where we know that we need to do most to reduce waiting times for treatment.

Rev. Martin Smyth (Belfast, South): The Secretary of State will be aware that the statement deals particularly with England and Wales, but this is a national health service, and the principles set out in his latest publication will be applied throughout the kingdom.

I thank the Secretary of State for the extension of patient choice. Relatives have been able to travel to visit those who have had operations, and most patients who have had serious operations do not want many visitors but relaxation and rest. May I press him to consult the Chancellor and those dealing with the devolved regions about the fact that the amount of money going to health care is going down, as a percentage, under the Barnett formula?

Mr. Milburn: Those issues are properly the responsibility of the Assembly and of my right hon.

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Friend the Chancellor. I am grateful for the hon. Gentleman's support for the extension of choice. That is an important principle, and we will consult on it with patient and professional groups and the NHS to ensure that we get it right. That change will not happen immediately, but the policy will be gradually introduced from the middle of next year. It will make a fundamental difference to the relationship between patients and NHS services. The NHS is there to serve the patient, and for the first time patients will have the opportunity to choose the NHS service.

Dr. Stephen Ladyman (South Thanet): I should have thought that the statement would receive lavish praise from everyone in the House, but it should especially be praised by those of us with constituencies in east Kent. It recognises the additional costs in east Kent and even indirectly recognises the fact that many of my constituents can get to France more easily than they can get to London.

My only concern, which I would like my right hon. Friend to clarify, is that social services tell me that they do not get access to much of the funding going to health authorities, and yet it is their care for the elderly that could do most to unblock beds. Will he ensure that we strike the right balance between money going to social services and that going to the NHS?

Mr. Milburn: My hon. Friend makes an important point. He will know that resources for social services are to rise by 6.5 per cent. in cash terms for the next financial year, and that health services and social services now have the legal powers to pool their budgets or to form a single organisation. I would encourage more health services and local social services to do that—to pool their budgets, co-operate rather than compete with one another, and consider the possibility of forming local care trusts.

Like all of us, my hon. Friend recognises that our constituents do not care whether the funding comes from the health service or from social services. All they want is the package of care. Too often, health services and social services have been nudging resources and responsibilities backwards and forwards, when they should have been concentrating on the needs of the patient.

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