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Several hon. Members rose—

Ms Hewitt: I am going to make some progress.

In the last financial year, nearly three quarters of NHS organisations ended the year in balance or with a surplus. A minority of trusts had a deficit, half of which was in just 5 per cent. of NHS organisations—nine primary care trusts and 22 hospitals and mental health trusts.

Mr. Jim Cunningham : We are going to get a new hospital in Coventry. It is in the process of being constructed, and I recognise that there has been a lot of investment in it. However, I am concerned about University Hospitals Coventry and Warwickshire NHS Trust. I wrote to it five weeks ago asking it to justify a £7 million deficit, but still have not had a reply. There are press reports that 250 health workers are likely to
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lose their jobs, which could lead to a problem with cancer treatment. Can my right hon. Friend sort that out?

Ms Hewitt: We are ensuring that every hospital or trust that experiences a deficit problem has proper support to sort out its finances and continue to improve its clinical services. I shall say a little more about that shortly. I shall certainly ensure that my hon. Friend receives a reply to his letter. I was glad that he mentioned the new hospital in Coventry—it is one of 138 hospitals that have been modernised, rebuilt or are under way.

Dr. Julian Lewis (New Forest, East) (Con): The Secretary of State has spoken a great deal about value for money. Does she accept that community hospitals are great value for money? Does she agree that the deficit is not the result of the costs of community hospitals? Does she accept that when she boasts in the amendment about a programme of investment in community hospitals, it is hard to square that with the more than 90 community hospitals that are at risk of closure or serious service cuts? Will she confirm that the closure of community hospitals is not a matter of dogma for the Government?

Ms Hewitt: As the hon. Gentleman knows, we are strongly in favour of modern community hospitals that bring more services into the community. I shall have more to say about that shortly. I want to develop the hon. Gentleman's first point about the reason for deficits.

The hon. Member for South Cambridgeshire painted a lurid picture of a national health service in crisis. In reality, the vast majority of NHS hospitals and other organisations are cutting waiting times, improving services, treating more patients and living within their means. We expect that from every part of the NHS. The hon. Gentleman blames the deficit on managers and administrators. He claims that too many bureaucrats are wasting taxpayers' money.

Mr. McFadden : My right hon. Friend compared the deficit in 1997, when the Conservative party was in charge of the NHS, with that today. Would she also like to compare waiting times in the period when the Conservative party was in charge of the NHS with those of today? When the Conservative party was in charge, more than 30,000 people waited longer than 12 months for an operation. How many people today wait more than 12 months for an operation?

Ms Hewitt: I am happy to say that nobody now waits more than 12 months. Waiting times have fallen as investment has risen.

Several hon. Members rose—

Ms Hewitt: I want to make progress.

In trying to describe what he regards as the cause of the problem, the hon. Member for South Cambridgeshire called administrators a waste of taxpayers' money. I call them medical secretaries, records clerks, receptionists, caterers, launderers and cleaners—the hon. Gentleman claims that he is worried about MRSA. Those people also
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include health educators, medical librarians, financial managers and human resources specialists. I have examined all the groups that are included in the administration category. They also include IT technicians, maintenance staff and all other support staff.

Mr. Lansley rose—

Ms Hewitt: I shall give way to the hon. Gentleman because perhaps he would like to thank them.

Mr. Lansley: In the figures that I used—159,000 to 201,000—I expressly included managers and senior managers, who increased by 50 per cent., and staff employed in central functions and clerical and administrative support. I did not include cleaners or porters. If I had included all the support staff, the figure would have been 431,000 rising to 521,000. I left them out.

Ms Hewitt: I have looked at what the hon. Gentleman put on the website and the press release that he issued this morning. I have examined the additional £1.2 billion, not £1.3 billion, that is spent on administrative staff. I assure him that all the medical secretaries, record keepers, health educators, IT technicians and financial managers, without whom our doctors, nurses, therapists and health care professionals simply cannot do their job, are counted among those administrative staff.

Stephen Hesford : The hon. Member for South Cambridgeshire (Mr. Lansley) claims that his figures refer to management. Has my right hon. Friend seen the figures from the NHS Confederation, which show, contrary to the erroneous assertion by the hon. Gentleman, that from 1999, the increase in management across the board has been only 2.8 per cent. of the work force, which is less than it was in 1999?

Ms Hewitt: My hon. Friend is absolutely right and he anticipates a point that I wanted to make. In every year since 1996, administrative costs as a proportion of the total NHS budget have been falling. Exactly the same is true of management costs. They constituted 5 per cent. of the NHS budget under the Conservatives; they constitute just over 3.5 per cent. today under Labour. We can do even better than that, however. As part of the Gershon review, we have cut the number of staff employed in the Department of Health from more than 3,500 in 2001 to just over 2,000 by this year.

On the investment that we are making in information technology, I was shown this morning the transformational effects of the electronic patient record that is being trialled at Newham hospital. That investment will slash the amount of time that clinicians and other staff have to spend chasing paper records. At Hinchingbrooke hospital, I saw the new electronic imaging and scanning system that has helped staff to cut the time taken to deliver a report to the consultant and the GP from anything up to 24 days to less than 24 hours. That is a massive saving in clinicians' and support staff's time.

Mr. Jim Cunningham: Earlier, my right hon. Friend said that she would get a reply to the letter that I sent to
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the University Hospitals Coventry and Warwickshire NHS Trust. Will she also look into why there is a £7 million deficit and a threat to 250 jobs there? I would appreciate it if she could do that for me.

Ms Hewitt: As I was saying, the reason there are deficits in a minority of trusts is that, in some cases, there has been overspending, sometimes for several years, or poor financial management, or poor organisation of clinical services. We are taking the steps needed to reduce the overall deficit this year and to ensure that, at the end of the next financial year, the NHS will again be in balance.

Several hon. Members rose—

Ms Hewitt: No; I am going to make some progress.

In the NHS in the past—this goes back decades—deficits in a minority of organisations were covered up. Money was moved around the system from a surplus organisation to a deficit organisation. The deficit trusts, those parts of the NHS that were overspending, were bailed out by other parts of the NHS that often had equal or greater health care needs. There was no incentive in the system that we inherited from the Conservatives to change or to improve. That is why we are changing the system.

Mr. Graham Brady (Altrincham and Sale, West) (Con): The Secretary of State mentioned cover-ups. Before the election, my local trust started to consult on the investment in and modernisation of Altrincham general hospital. Can she therefore explain why I have just heard that today, while this debate has been proceeding, the trust has adopted proposals to close Altrincham general hospital and massively to reduce services at Trafford general hospital? Do we not deserve some honesty from the Government? How can the public ever believe what the Government are saying when they are deceived in that way?

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