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Mr. Graham Stuart (Beverley and Holderness) (Con): Is my hon. Friend aware that it is not just constituencies such as his that are affected? In extremely rural constituencies such as mine, the financial deficits in the NHS and the failure of money to reach the front line is leading to cuts and threats of closure to community hospitals on which the old, vulnerable and poor most depend. That crisis affects the whole NHS, across the whole country, not just Hertfordshire. Will he congratulate the more than 60 campaigners from across the country who attended the Community Hospitals Acting Nationally Together conference today, held jointly with the Community Hospitals Association, to work to change the Government's mind?

Grant Shapps: I concur completely with my hon. Friend's comments and I congratulate him on his work with the CHANT programme, which has been impressive. I have a word of reassurance for him—the Government are in the process, certainly in Hertfordshire, of turning acute, major, general hospitals into nothing more than community hospitals. I know that community hospitals do a wonderful job, but I am afraid that an extra hospital will be joining his CHANT group because of those closures. That is a huge worry—
 
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I mean no disrespect to my hon. Friend and his organisation. We need an acute hospital in our area, and we have the pledge of a new hospital.

Given the way in which the situation is developing in our part of Hertfordshire, does the Minister think that the problem lies with the local health chiefs who are somehow spending the money inappropriately, or is it the fault of the Government? Who is to blame for what is going on? Will she give us a categorical assurance that the funding of the Hatfield hospital project will go ahead? Can she reassure us that it is not part of the cuts mentioned in today's newspaper—the go-slow on £12 billion of PFI projects? Is Hatfield caught up in that number? How many people will have to die on the way to hospital before the Government realise that we on this side of the House are not simply scaremongering about the dangers and risks faced by our constituents? This is for real, so will she tell us when the Government plan to get a grip on the situation?

10.15 pm

The Parliamentary Under-Secretary of State for Health (Caroline Flint): I congratulate the hon. Member for Welwyn Hatfield (Grant Shapps) on securing the debate and I will try to address the points that he has raised, which are clearly of concern to him and to other hon. Members. I would also like to pay tribute to all the NHS staff in his constituency and elsewhere in Hertfordshire who are committed to the improvement of the local NHS.

From what I understand, there has been a debate in recent years in the area about how services might be improved for the future, part of which has been about the hospitals and what they have provided and can provide in the future. I will go through some of the new provision that is available in a number of the different hospitals in Watford and elsewhere.

There has also been a debate about what services are needed outside of hospitals and closer to where people live, as part of a more community-based approach to providing health services. That debate is taking place in Hertfordshire and up and down the country in recognition of the quality that can follow those community-based services and of the fact that they can sometimes represent better value for money, efficiency and quality in terms of health care. As the Minister with responsibility for public health, I am keen on preventing people from going into hospital.

The NHS as a whole, as the hon. Gentleman is aware, is in receipt of record resources because of the Government's policy of funding the NHS. The 2003–04 to 2005–06 revenue allocations to primary care trusts represent £148 billion of investment in the NHS. Over the three years covered by the allocations, PCTs will receive an average increase of 30.8 per cent. The most recent round of revenue allocations, covering 2006–07 and 2007–08, represents £135 billion investment in the NHS, a huge amount. Over the two years covered by this allocation, PCTs will receive an average increase of 19.5 per cent.
 
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Mr. Graham Stuart: The Minister, in the style of all Ministers of this Government, runs out the figures, but why are so many primary care trusts in deficit? Why are they expecting to go further into deficit this year while getting that increase?

Caroline Flint: The trusts in deficit are in a minority in the NHS. Most are balancing their books and achieving good quality outcomes from less money than is sometimes provided in areas that are in deficit. It is important to ask that question. We are addressing the issues in different ways—by payment by results and so forth—but there is a question about why, in some of our poorer neighbourhoods where the health inequalities are very clear, we are getting better value for money in delivery of health care than in other areas. As a direct result of the allocation, the hon. Member for Welwyn Hatfield's local PCT received £98.5 million in 2005–06 and will receive £119 million in 2006–07 and £129 million in 2007–08.

Grant Shapps: I am pleased to hear about those increases for the PCT, but does she accept that the problem in Hertfordshire is with the NHS acute trusts and not the PCTs, which are running in balance? The trusts are massively in deficit, by £43 million.

Caroline Flint: I appreciate that, but that is another reason why these trusts have to be brought into balance, as there can be knock-on effects in terms of primary care delivery. Therefore, primary care trusts who oversee this area in terms of spending obviously are mindful of what is provided in the hospitals, but are mindful also of what they want to fund in the community.

The hon. Gentleman will agree that, as I said earlier, a number of services could be provided outside of hospitals. Indeed, a number of services could help in the long, medium and short term to prevent people from turning up in hospital. There is accident and emergency provision in the hon. Gentleman's area, but decisions have been taken as to who should provide a blue-light service and who should not. But as I understand it, that does not mean that that there is no 24/7 accident and emergency coverage in his area.

Collectively, the eight Hertfordshire primary care trusts receive huge allocations. They received in excess of £858.5 million in 2005–06—a figure that will increase to £1.1 billion in 2007–08. Given such investment, all NHS bodies should be able to plan for, and achieve, financial balance each and every year. I should point out that the majority of NHS organisations are both delivering service improvements and living within their set budgets, but we recognise that a minority of organisations face challenging financial agendas. The Department and the strategic health authorities are trying to work with them to help restore financial balance.

Turnaround teams have been set up to support the NHS in identifying opportunities to deliver services with greater cost-effectiveness and to make financial savings. The teams consist of financial and management experts who are experienced in resolving financial problems and helping organisations to manage their resources better. West Hertfordshire Hospitals NHS Trust, and East and North Hertfordshire NHS Trust, have built on the work already commissioned by the SHA by undertaking
 
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baseline assessments and by bringing in PricewaterhouseCoopers to help address some of the financial difficulties that they face. A meeting took place on 10 January. The SHA received feedback from the turnaround teams' work and it is reviewing the results.

Before I discuss efficiency savings and the recovery plans, I want to point out that, despite the issues raised by the hon. Gentleman, there have been some significant developments in the county in terms of supporting new ways of addressing the provision of health care. For example, the Watford health village project, which will lead to the redevelopment by early 2013 of Watford general hospital and the immediate surrounding area, is proceeding well. One partner, the East of England Development Agency, recently agreed to contribute £750,000 over the next two years to pre-planning work for this scheme. The Bedfordshire and Hertfordshire postgraduate medical school, based in Hatfield, opened in September and will enable local NHS organisations to attract support and to retain the best talent in the region.

Through the surgery centres project, most elective surgery in Hertfordshire will take place in new, dedicated centres on the Hemel Hempstead and Lister hospital sites. The project is progressing well. Lister's £2.3 million cardiac suite was funded through the national lottery New Opportunities Fund and through the local NHS funding that we provided. It opened to patients in September 2004, and in its first year alone it cared for some 1,500 people from throughout east and north Hertfordshire. There is a new combined breast cancer and magnetic resonance imaging unit at the QE2 hospital, and the revamped Hertford county hospital was officially opened on 9 September. It will provide a range of services and open its doors to local people to provide a range of treatments. The capacity being built through those developments is doubtless welcomed by MPs throughout the county.

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