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Mr. Lansley: My hon. Friend gives a figure above and beyond the numbers that we have been able to establish in the survey that we have undertaken of possible bed closures across the country. That figure adds to those that I was about to give the House.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): As my hon. Friend knows from his excellent visit to Tetbury hospital, four cottage hospitals in my constituency face severe cuts. Is he aware that the Government made two fundamental pledges in their manifesto at the last election: to strengthen our national health service and to increase the number of intermediate care beds? Is it not about time that the Government allocated whatever resources they have got for the health service more fairly?

Mr. Lansley: Yes. I did indeed visit Tetbury hospital in my hon. Friend's constituency. Given the valuable
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work done there and the opportunity for patients to be sent closer to home for further rehabilitation after operations, in refurbished and well-appointed small wards, I was astonished that the PCT proposes to close them at the end of December. That seems outrageous and he was right to receive a substantial local petition on the subject.

I want to pick up the thread of where we are with the number of beds. Our analysis—clearly, the figure is greater than we knew—is that 2,500 additional NHS beds are threatened with closure this year in the 43 trusts that we identified from our survey. In the five years since the publication of the NHS plan, instead of 7,000 more hospital beds, there will be 7,000 fewer. Five years ago,    we had 186,000 beds in the NHS and 159,000 administrators. By the end of this year, we will have fewer than 180,000 NHS beds, yet more than 211,000 administrators.

What has been going on? Why have these deficits occurred? It is partly because the Government have been decreeing the cost structure of the NHS and costs have been rising dramatically. About 80 per cent. of the additional cash provided for the NHS has been consumed by spending pressures: pensions indexation; National Institute for Health and Clinical Excellence guidelines; the consultants' contract, the cost of which the Government underestimated; the general practitioner contract, the cost of which was substantially underestimated; the drugs bill; and the implications of the working time directive, which means that many more medical staff must be employed to undertake the same work as previously. Additionally, £500 million extra has been spent on "Agenda for Change" and information technology costs have been higher than predicted. I am reliably informed that, if the NHS tariff had had to incorporate all the additional spending pressures last year, it would have increased by more than 8 per cent. All the extra cash thus would not have bought anything extra, which is interesting because that is precisely what happened. We had all the extra cash, but there was no increase whatsoever in the number of elective operations—that is, planned operations—carried out in NHS hospitals between 2003–04 and 2004–05.

Grant Shapps (Welwyn Hatfield) (Con): Has my hon. Friend included in the category of wasted money the amount spent on consultants? My East and North Hertfordshire NHS Trust recently called in an outside consultancy firm at a cost of more than £300,000. The upshot was a recommendation to close the children's accident and emergency department, the blue light A and E service that is for everyone, all maternity services and all facilities for elective operations. The general hospital has been turned into nothing more than a community hospital. That is where the money is going.

Mr. Lansley: I have every sympathy with my hon. Friend. We visited that hospital together and I entirely understand his point.

Management should be effective. Monitor has employed some management consultants and, frankly, that spending represented better value for money than the amounts spent year after year on the strategic health authorities that are supposed to be responsible for performance and financial management in the NHS, but
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have palpably failed to deliver on that responsibility. Under the Government, we get more management, but not better management. There are now 52,000 more administrators than there were not in 1997, but in 2000.

Mr. Jim Cunningham (Coventry, South) (Lab): Does the hon. Gentleman recall that one reason why we had hospital closures was the lack of investment in doctors and consultants and the fact that nurses were made redundant? More importantly, he is missing this point: we do not hear about many cases of people on trolleys because there are no beds for them in hospitals any more.

Mr. Lansley: We are debating the NHS as it is today, not the hon. Gentleman's representation of how it might have been in the past.

Kali Mountford rose—

Mr. Lansley: I have more to say and I do not want to intrude on the time of hon. Members who want to speak.

In four years, the number of administrators has increased by a third, which is twice the rate of increase in the number of doctors and nurses. The cost of salaries for administrators—not the other bureaucratic costs imposed on the system—rose over those four years by £1.3 billion in real terms. However, half that amount represents the deficit in the NHS. If the cost of bureaucracy in the NHS had been held down over the past four years, the money would have been available to enable many of the deficits to have been met and avoided.

As my hon. Friends have made clear, the consequences of the situation for community hospitals are dramatic. We have a list of 90 community hospitals that are threatened. However, the Government said during the election that they wanted to build new community hospitals. The NHS plan said that they wanted more intermediate care beds, but community hospitals and intermediate care beds are being closed.

Ann Winterton (Congleton) (Con): Is my hon. Friend aware that it is not only community hospitals that are under threat? I am the greatest supporter of community hospitals, and the Congleton War Memorial hospital gives a fantastic service, but district general hospitals are now under threat. If accident and emergency, children's and maternity services are stripped away from a district general hospital, one has only a community hospital. I represent a rural area from which people will have to travel to Stockport, Leighton and north Staffordshire for treatment. Given that the Government are trying to get us all off the roads, does he agree that that seems stupid?

Mr. Lansley: I do agree. My hon. Friend will no doubt know—I cannot see any Members of Parliament from north Staffordshire here at the moment—of the difficulties that the university hospital at north Staffordshire itself faces and the threat to services there.

The issue of community hospitals is a classic illustration of precisely the point of this debate. Primary care trusts that are running deficits are trying to deal
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with the implications of payment by results and paying for the activity in hospitals—principally the emergency and unplanned activity—while at the same time having to pay enormous amounts through the GP contract. Their solution is to cut the budget of the one part of the scene that they control. That is often the contracts with community hospitals. That is fool's gold—it is penny-wise and pound-foolish—because in the longer run, we will have less accessible services and less appropriate services clinically. Patients should be discharged from the acute district general hospitals to relieve pressure there and would be seen more appropriately in community hospitals.

Mr. Nick Hurd (Ruislip-Northwood) (Con): My hon. Friend may be aware that Hillingdon primary care trust forecasts a deficit of £31 million in 2005–06. It admits that the only solution is substantial closure of beds at Hillingdon hospital. In the meantime, it tinkers with cuts to services which, in its sensitive way, it deems low priority, but which are highly valued by those who are about to lose them. Are my constituents wrong to feel angry at the amount of time and money that the same strategic health authority spent on the Paddington health campus fiasco?

Mr. Lansley: My hon. Friend is right: his constituents should feel angry at the fact that £14 million has been wasted on consultancy and the like on the Paddington health campus scheme. In addition, the National Audit Office report suggested that the opportunity cost of that scheme was £100 million. Where was the statement from Ministers? Which Minister told the House about that? The Minister formerly responsible for that, the new Secretary of State for Work and Pensions, did not even have the courage to give an interview to the independent review into the Paddington health campus scheme, such is the complete absence of accountability on the part of this Government.

I want to mention two more things. Is there any answer to all this in the primary care trust restructuring that the Government have proposed? There is no answer at all. We know what is really going on. There are deficits and difficult, sometimes painful and wrong-headed decisions to be taken, often without the benefit of realistic or real consultation with local people, but lo and behold, in a year or two, all the organisations that take those decisions will disappear and be submerged into a bigger organisation. There is everything to be said for cutting bureaucracy in the NHS—we recommended that, but we were clear at the time of the election about the future functions of PCTs. This Government—I do not know where the Secretary of State was when the announcement was sent out, for which she has apologised—dictated changes in the form of primary care trusts but at no point said what their functions would be. There has been utter confusion since.

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