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The Parliamentary Under-Secretary of State for Health (Dr. Stephen Ladyman): I congratulate my hon. Friend the Member for Barnsley, Central (Mr. Illsley) on securing the debate and on his continuing interest in the health service in his constituency. He and my hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis), who I see in his place, have raised before in the House their concerns about health service funding in Barnsley and have also discussed the matter with the Secretary of State for Health, so tonight is by no means an exceptional demonstration of their commitment to the NHS in Barnsley.

I am also aware that a meeting tomorrow evening has been organised by the coalfield communities campaign, which, I believe, is based in Barnsley, to discuss the specific issue of health service funding in coalfield areas. I do not know whether my hon. Friends will be at the meeting, but I hope that it goes well. As Thanet and Dover, the two councils that represent my own constituency, are members of the campaign, I have a personal interest in their success.

I do not disagree with what my hon. Friend the Member for Barnsley, Central said. He set out the case fairly and accurately but perhaps not quite in its full context. I start by putting it in context. The national health service in England is benefiting from record investment. Over the years 2003–04 to 2007–08, expenditure on the NHS in England is increasing on average by 7.2 per cent. a year over and above inflation, a total increase over the period of 42 per cent. in real terms. That will take the total spent on the NHS in England from £69 billion in 2004–05 to £92 billion in 2007–08.

Along with other areas, Barnsley is benefiting from this record level of investment and, I am pleased to say—my hon. Friend put this fairly in his contribution —has been making effective use of the resources it has received. Barnsley primary care trust is receiving £247.7 million in the current financial year, increasing to
 
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£270.7 million in 2005–06. In total, over the period 2003–04 to 2005–06, the increase in funding available to Barnsley PCT is more than £64 million, or 31 per cent.

That is a real and significant level of investment in health services in Barnsley, and it has produced real benefits for local people. For example, all the residents of Barnsley are able to make an appointment to see a GP within two working days and no one in the Barnsley area now waits more than 13 weeks for a first out-patient appointment or more than nine months for in-patient treatment. Barnsley district general hospital provides excellent services for local people: 98 per cent. of people with suspected cancer see a specialist within 48 hours, and 97 per cent. of patients are in and out of accident and emergency within four hours.

New building and facilities are also coming on line. Later this month, three new primary care centres developed as part of the first wave of the local improvement finance trust will open in Goldthorpe, Thurnscoe and Worsborough, while at the district general hospital new imaging and breast cancer services are being developed. None of these major improvements would have happened if we had not elected a Labour Government in 1997, as my hon. Friend would be the first to acknowledge, and none of them would have been made without the dedication and hard work of people on the ground, and I join him in commending the staff working in the local NHS for their dedication in bringing about real improvements to health services in Barnsley.

A few moments ago, I mentioned the allocation of money to my hon. Friend's PCT, so let me explain how the Department of Health decides what funds primary care trusts should receive. Clearly, different parts of the country have different health needs. The national resource allocation formula, which is used to inform revenue allocations for PCTs, recognises that fact. The formula is based on the age distribution of the population, additional need over and above that accounted for by age, and the unavoidable geographical variations in the cost of providing services.

The formula was criticised in the past for failing to get health services to the areas of greatest health need. Getting resources to people with greatest need and ensuring equity of treatment are fundamental principles of faith for this Government, so we carried out a wide-ranging review of the formula, under the auspices of the Advisory Committee on Resource Allocations, aimed at producing a fairer means of allocating resources.

The review was completed in autumn 2002, in advance of the current allocations to PCTs. The allocations were announced in December 2002 and were based on the new formula. The allocations, of £148 billion—a cash increase of more than 30 per cent.—were then made directly to local PCTs. In 2001, we proudly proclaimed in the NHS plan:

"by 2003, following the review of the existing weighted capitation formula used to distribute NHS funding, reducing inequalities will be a key criterion for allocating resources to different parts of the country."

I am equally proud to say we have delivered on that promise.

The pattern of use of health services, and the relationship with socio-demographic factors, have changed in the past 10 years, so the element of the
 
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formula that reflects need has been updated to include better measures of deprivation. For the first time, the formula takes account of "unmet need" in relation to certain groups within the population—for example ethnic minorities and socio-economically deprived groups.

The new formula also deals with the variation in labour market pressures across the country. We need to able to get funds into areas where recruitment and retention difficulties are greatest—and I am aware that there is a shortage of GPs in Barnsley.

The new formula provides a better measure of health need in all areas. In order to get resources in the right place, we need to get the balance right between areas of high health need and those with high labour costs. For all these reasons, I am confident that the allocations to PCTs announced in 2002 set us on the right path.

Jeff Ennis (Barnsley, East and Mexborough) (Lab): I congratulate my hon. Friend the Member for Barnsley, Central (Mr. Illsley) on his excellent speech, and associate myself with most, if not all, of what he said. I accept that the Minister sincerely wants to redress the current imbalance in Barnsley. However, in 2001—before South Yorkshire secured objective 1 funding —my constituency had a lower gross domestic product per capita than any other United Kingdom constituency. It still has one of the lowest levels of GDP per capita, and it also still has the highest level of disability: one in three households contains at least one disabled person. That is obviously a legacy of the former mining industry.

My constituency is divided between Barnsley and Doncaster health authorities. Two thirds of my constituents live in Barnsley; the other third live in Doncaster. Doncaster enjoys funding up to the national average, while Barnsley's funding is 3 per cent. less than the national average. I am finding it increasingly difficult to explain to my constituents in Barnsley that my constituents in Doncaster enjoy much more generous health funding under the present Government. My hon. Friend says that the gap will not be closed until 2015. Will the Minister try to give me a better explanation, which I can convey to my Barnsley constituents, of the current funding inadequacies?

Dr. Ladyman: Certainly. If my hon. Friend will bear with me, he will find that my later remarks explain the position.

The new formula provides a better measure of health need in all areas. It is right to move from the old formula and distribute health funding to a new one, which will benefit Barnsley considerably in the long term. I hope that my hon. Friend agrees, however, that it would not be sensible to swing violently from one formula to another overnight, with all the negative consequences that that would bring for some areas. This is very relevant to the point raised by my hon. Friend the Member for Barnsley, East and Mexborough. We clearly need to phase in the change to allow PCTs to manage the consequences sensibly.

That said, I assure my hon. Friends that we are committed to bringing PCTs to their target allocations as soon as is practicable. The pace-of-change policy is decided for each allocations round and the policy varies
 
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from round to round to take account of a number of factors, including the overall level of resources available and the priorities for their use. By next year—2005–06—no PCT will be more than 6 per cent under target, and PCTs will be constrained to a maximum reduction in distance from target each year of 2 per cent for any one year.

The progress made to date in Barnsley is considerable, but has taken place in the context of a tight financial position. I do not dispute any of the points that my hon. Friends have made about the financial allocation to Barnsley PCT, but they should also be clear about the impact of our funding policy on Barnsley. The new formula's emphasis on directing funding towards areas with higher rates of deprivation, and our policy of moving all PCTs, mean that Barnsley PCT has received a greater increase in funding over the current three-year period than would otherwise have been the case. It amounts to a total increase of £64 million, equivalent to 31 per cent.

I know that both my hon. Friends would like me to make a commitment here and now to future levels of funding for Barnsley PCT, and to increasing the pace of progress towards target allocation; but, as I am sure they will appreciate, I am not able to do so at this stage. We have received advice and recommendations from the advisory committee for the forthcoming allocations round, but my hon. Friends will have to wait until the
 
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new year for the precise details of funding for Barnsley. What I can say is that we are committed to increasing funding for health services throughout England and to moving all PCTs towards target, and that includes Barnsley. I can also say that, despite the tight financial position, health services in Barnsley are on track to deliver all the key targets set by the Department.

The NHS improvement plan sets new key targets to build on the progress that has already been made in Barnsley and across England, not least the target that by 2008 patients will receive treatment within 18 weeks of referral by a GP. It is my job as a Minister to ensure that all PCTs are adequately funded to enable them to meet the next set of challenges. I hope that when PCT allocations for 2005–06 to 2007–08 are announced, they will bring welcome news for my hon. Friends and provide a platform for health services in Barnsley to build on their success.

If I cannot give my hon. Friends any guarantee of funding tonight, I can give them another guarantee. All the Department's targets—on accident and emergency waiting times, on overall treatment times, on choice and equity and on quality of service—will be delivered everywhere, and that includes Barnsley. The NHS in the constituency of my hon. Friend the Member for Barnsley, Central will receive the resources and support necessary for the achievement of these challenging goals.

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