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Mr. Henry Bellingham (North-West Norfolk) (Con): Is my hon. Friend aware that an increasing number of NHS trusts are reporting that they are moving heavily into debt? What is his explanation for that? Might the reason be that bureaucracy is stopping money from getting to the front line?

Mr. Lansley: My hon. Friend is right, and I shall come to that.

The extent to which hospitals have to comply with information requirements is a key consideration. A survey by the NHS Confederation identified that 50 per cent. of the data and information requests made to hospitals play no direct part in the performance management of those hospitals. We have to get rid of that and not only achieve a reduction in compliance costs for front-line services, but ensure that the resources get to the front line, as my hon. Friend said.

As always, the Secretary of State is all talk about cutting bureaucracy. He does it again today in a written statement, which says how he will cut the number of quangos and save money. Let us take one example. As a result of a public health White Paper five years ago, which the Government have conveniently ignored because they have made no progress on public health, they set up the Health Development Agency. They are now proposing to get rid of it by April 2005. The Government documents published today say that they will abolish it as one of their reductions in the number of quangos. What the documents do not tell us is that the public health White Paper published just a couple of weeks ago says that they will establish a new independent body to implement strategy on their behalf which will, in effect, have the same responsibilities as the HDA. Most of the quangos that the Government are getting rid of, they set up—and they are not really getting rid of them, but redeploying the staff and
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incorporating them into larger bodies, so there will be fewer quangos with wider responsibilities and more staff. At the same time, however, they are creating new bodies to take over the functions of existing bodies.

Just the other day, the chief executive of the NHS gave the game away when he said:

So the Gershon report, for all its vaunted reduction in the cost of bureaucracy across Whitehall, is not having much effect on the Department of Health. The implementation of the changes to taxpayer value that we are discussing with the James committee will affect the Department. As my right hon. Friend the shadow Chancellor of the Exchequer set out just 10 days ago, we now envisage more than £7 billion of savings from greater NHS efficiency, reductions in procurement costs, productivity improvements, reductions in the controls exercised by the central Department of Health, and a reduction in the number of quangos and the amount of bureaucracy in strategic health authorities and primary care trusts.

Mr. Nick Gibb (Bognor Regis and Littlehampton) (Con): I am listening carefully to my hon. Friend's interesting speech. Is he also aware of the Office for National Statistics survey, that shows that rising inefficiency consumes as much as 9 per cent. of the extra cash put into the NHS? That amounts to a staggering £6 billion a year in inefficiency and waste.

Mr. Lansley: My hon. Friend is right, and knows much about such matters. The latest ONS productivity data show that the NHS had an increase in inputs of 80 per cent. and an increase in outputs of just 28 per cent. When the figures are deflated not for gross domestic product but for an NHS inflation factor, they show an 8 per cent. reduction in productivity over the Government's lifetime—which is probably an underestimate, because internal Government documents suggest that there is more like a 15 to 20 per cent. reduction.

Mr. David Hinchliffe (Wakefield) (Lab): In the figures, what allowance is made for improvements in the quality of care?

Mr. Lansley: Let me give an example. I am sure that the hon. Gentleman knows that finished consultant episodes are a measure of activity levels in hospitals—

The Secretary of State for Health (Dr. John Reid) rose—

Mr. Lansley: The right hon. Gentleman will have to wait until I have answered the hon. Member for Wakefield (Mr. Hinchliffe).

Hospital activity from 1998 to 2003 cost an extra 28 per cent. in real terms. The number of finished consultant episodes increased by 5 per cent. in hospitals. I am not talking about what happened outside hospitals. The rate of increase in finished consultant episodes after 1997 was slower than the rate of increase in activity in hospitals
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prior to 1997. Perhaps the Secretary of State will explain why NHS productivity has fallen rather than risen under this Government.

Dr. Reid: The problem relates to the position that the hon. Gentleman accepts, which is incorporated in the calculations. When he says that he is not talking about what happens outside hospitals, he makes the very point. The number of people who are living longer and better lives, and who are not coming into hospital, includes the 125,000 people who are saved in the primary sector, and by better drugs. Will he confirm that those 125,000 lives are regarded not as an increase in productivity, but as a decrease in productivity?

Mr. Lansley: No. The Secretary of State does not understand—[Interruption.] If he will forgive me, I shall attempt to answer his question before he shouts at me. I am not ignoring what is happening outside hospitals. The Secretary of State previously said that we cannot compare the increase in activity in hospitals with expenditure in the NHS as a whole because some activity has shifted out of hospitals into the primary care context. My point is that we should at least look at what has happened in hospitals in direct response to the increase in expenditure in hospitals.

As for the wider circumstances beyond hospitals, the purpose of the ONS study was to capture changes in productivity. It made certain assumptions. For example, it assumed that productivity in Scotland and Wales matched productivity in England, because it had no separate figures. Most of us would say that that was not justified. None the less, its assumptions, which are favourable to the Government, still end up with an 8 per cent. reduction in productivity, which the Secretary of State cannot explain.

Dr. Reid: In fairness to NHS staff, will the hon. Gentleman be good enough to note that the ONS press release explains that it failed to capture those things that it had tried to capture? Will he accept, and admit to the House, that if 125,000 people, who 10 years ago would have died, are saved today by the people who work in the NHS, it is absurd that that does not count as an increase in productivity for our health care system? Will he please stop running down the staff of the NHS, who have saved those very lives?

Mr. Lansley: That is a bit rich coming from the Secretary of State. People across the NHS know perfectly well that the bureaucracy, the central controls and the extent to which money is leached out of the system by administration instead of getting to the front line are the reasons why people in hospitals are unable to deliver increases in productivity commensurate with the increases in resources. That is what is going on, and he simply will not admit it.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): Does the hon. Gentleman accept that much of the increased spending has gone to improve the salaries of nurses, doctors and others within the NHS? That means that my area has the doctors, nurses, physiotherapists, occupational therapists and speech therapists for whom we receive funding, because they are staying in the NHS—and, in particular, in the NHS in the south-east.

Mr. Lansley: Of course there are changes in costs inside the NHS, but incorporated into the calculation of
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the ONS statistics is a deflator for NHS prices of something like 6 per cent. The figures would have been different had a GDP deflator been applied. An allowance is made for that. The hon. Lady and I know—and I think that my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), too, made this point—that this year hospitals are experiencing increases in costs well in excess of that. Part of that is due to increases in contracts and changes in pay, whether they result from "Agenda for Change" or from the consultants contract.

Hospitals, rightly, are saying that it is all very well Ministers talking about 9 per cent. increases in expenditure, but if costs are rising by more than 9 per cent., how can increases in activity throughout the NHS be delivered? They are asking how that will be possible. There must come a point when people in the NHS find that they have centrally imposed costs from the Government that exceed the willingness of the Government to provide resources. They must arrive at the point where they get the resources, and there are free resources that can deliver growth in the service.

As we discussed during the debate on the Queen's Speech yesterday, the people's priorities would have been, for example, strengthening school discipline or promoting cleaner hospitals. I will not dwell on promoting cleaner hospitals because we have had debates during which we have challenged the Secretary of State to come forward with the urgent action that is necessary. That is not happening. Perhaps he can tell us why we do not have information from clinical departments that will enable people working in the NHS and those who might be referred for operations to judge where there are cleaner infection-free hospitals and where there are not.

If there is to be a matrons charter, which the Government have announced, where is the model cleaning contract referred to in that charter but not yet published? It is almost a year to the day since the chief medical officer's report entitled "Winning Ways", which said that there would be a rapid review panel for products and processes. Nothing happened for nine months, and even today, nearly a year on, the so-called rapid review has delivered no additional advice to the NHS.

The National Audit Office said that four years ago the Department began working on a national infection control manual. I met staff through a Patients Association meeting that I hosted in the House last week, and they said that it would be extremely helpful for infection control teams to have access to such a manual in providing guidance to their hospitals. It is not available, and the NAO found that no substantive action had been taken. "Winning Ways", published a year ago, referred to hazard analysis critical control point methodology, and said:

A year later, I can find no evidence that that work has been taken forward. Even pilot operations are not under way.
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The Secretary of State's response to all the pressure that we have put on him to deliver action is typical. He talks about nothing more than the importance of dealing with infection, and promises one more target. That target is to reduce the level of MRSA—only the bit that he measures, not the whole of MRSA infection—by half by 2008, as if there is an acceptable level of MRSA infection, equivalent to the level that the Government inherited in 1997. The chief medical officer's report stated, as was made clear in the document published a year ago, that the proportion of staphylococcus aureus in this country that is MRSA is 44 per cent. The proportion in Demark and the Netherlands is just 1 per cent. The Secretary of State's ambitious and challenging target, as he describes it, is to bring the percentage down by half. That is not good enough.

The chief medical officer said that it was known how the Dutch had been able to achieve such a proportion. They did so through a search-and-destroy mechanism. It is about time there was a search-and-destroy philosophy inside the NHS to identify outbreaks of MRSA infection and destroy it to deliver cleaner hospitals, which is not happening under this Government.

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