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Mr. Geoffrey Cox (Torridge and West Devon) (Con): I shall try to be brief, as I know that others of my hon. Friends want to speak.
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I listened to the hon. Member for Denton and Reddish (Andrew Gwynne) with fascination. I have begun to realise what it must have been like for the little boy pressing his nose to the window of the pie shop, wishing he could get his hands on some of the goodies. I represent Torridge and West Devon, which is one of the most rural constituencies in England. In the few minutes of the House's time that I shall occupy, I shall concentrate on rural health inequalities.

The constituency that I represent cannot tell a story of such gladness and happiness as the hon. Gentleman has just recited. It is suffering cuts. Constituents who are in need of medical services often have to travel dozens, if not hundreds of miles to receive it. We have acute and primary care trusts in deficit. They are closing community beds, have shut down minor injuries units, and are considering further cuts on top of those. An acute hospital trust is £9 million in debt and two out of three primary care trusts are between £1 million and £3 million in debt. I know that the Government will say that mismanagement is almost certainly the only explanation for those predicaments, but I submit to the House that there is another, longer-term reason, and it has to do with the system of allocation of resources to rural areas in England.

On 10 January this year, my hon. Friend the Member for Mid-Worcestershire (Peter Luff) asked the Secretary of State to look again at the resource allocation system for rural PCTs. He was told that a review had been carried out by the advisory committee on resource allocation and that as a result,

However, things are definitely not all right. It is widely recognised by experts who have examined the subject that the indices of deprivation which partly govern the allocation of resources fail to capture rural health needs. The characteristics that make that so are reasonably well understood, although perhaps their quantitative effects are not. What is to blame is the national weighted capitation formula, which is based on the age distribution of the population, additional need, and unavoidable geographical variations in the cost of providing services. The indices adopted by the formula use inappropriate proxies for deprivation in rural communities, and research has highlighted an inherent bias towards urban areas.

It is absurd to apply to Torridge and West Devon a measurement that depends on car ownership. Everybody in the countryside who can possibly scrimp and save to buy a car will do so. It must be the same in the rural constituencies represented by Labour Members. If we adopt a proxy for rural health need that is based on car ownership, we will get a distorted picture of the needs in that rural area. It is absurd to base an assessment or measurement of health needs on the proportion of ethnic minorities in the seat. As we know, it is a documented fact that there are fewer ethnic minorities in rural areas, but that does not mean that there is less isolation, less poverty and less financial disadvantage. Nevertheless, that is the effect of the formula.
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As we heard earlier, rural deprivation tends to be hidden, because people living in poverty in rural areas are dispersed across heterogeneous communities. Therefore, the indices that aim to define areas as deprived ignore profound and genuine need in rural areas. People in the countryside are a hardy breed. They are proud, self-reliant and independent-minded, and there is characteristically—a researched and documented fact—a low uptake of benefits. That, too, disguises the true level of deprivation in rural areas.

The costs of geographical variations are underestimated. Delivering services in rural areas is more expensive because of poor economies of scale, unproductive time spent travelling by health care professionals and patients alike, and additional telecommunication costs. There are additional expenses associated with transport, including higher fuel costs, providing mobile and outreach services, maintaining branch surgeries, dispersed community hospitals and providing training and support.

The Minister has said that the current formula for resource allocation to PCTs takes rural factors into account, but if one examines the fifth edition of the weighted capitation formula, which is an 88-page document, the word "rural" appears seven times in a single section about ambulance trusts. That document states, for example, that need is assessed with reference to the number of GP surgery visits, but people in rural areas do not go to their doctors as often as people in urban areas. In rural areas, GP surgeries often involve single-handed practices; people find it difficult to attend GP surgeries for want of transport; and cultural factors sometimes prevent people from admitting that they are ill. In rural areas, one cannot depend on the number of people who visit GPs to assess the primary medical services component.

Those are the reasons why the people of rural communities do not believe the Government when they talk a good game on delivering rural health services and tackling rural deprivation. The people do not believe them on health, and they do not believe them on education, which is another important factor in any assessment of deprivation. This year, the schoolchildren of Devon will receive £308 a pupil less than the national funding average, and next year they will receive £330 less, which is a function of the sixth worst education grant in the country. The people are entitled to doubt the Government's commitment to rural areas in the south-west.

A radical change in direction is needed. In countries such as Australia, Canada and even Scotland, rural adjustments are made, and it is accepted that the indices for the allocation of resources are flawed when they are applied to rural areas. In those countries, systematic research is conducted to capture those needs, and although the Government have made pious noises about compiling a rural database from which to make an accurate assessment of rural needs, little has been done.

In an earlier intervention, I referred to the December 2004 DEFRA technical report, which shows that most of the agencies from which DEFRA seeks information are simply not equipped to distinguish between the rural and the urban in the data that they collect. The health funding formula is based on the work of those agencies. Only last week, the Government's chief medical officer, Sir Liam Donaldson, said in the foreword to a booklet:
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A concerted multi-agency approach is required, and every agency and every Department should ensure that information distinguishes between the urban and the rural. It is time for the Government to live up to the CMO's admirable sentiments.

The Government have wept crocodile tears over the plight of the countryside for eight and a half years. Farming and tourism are the twin pillars of the rural economy, but as farming has declined, English tourism has been undersold and the way of life in rural communities has been decimated by insensitivity and neglect, we have been told that it is all right, because Labour is concentrating on the things that matter to people in the towns and the countryside—education, health and poverty. However, those claims ring hollow when they are judged by the reality in the rural south-west, where people perceive a casual indifference to their areas.

If the real needs of rural people are not identified by a concerted and coherent effort, which I have discussed, health inequalities can only get worse. In Scotland and Wales, the devolved assemblies and their Executives recognise the importance of financial adjustments in the distribution of resources to their countryside communities. It is time that the Government did the same for England.

5.29 pm

Mr. Jeremy Hunt (South-West Surrey) (Con): I wanted to contribute to the debate because there is a fundamental flaw in the way in which the Government approach health inequalities that leads to serious discrimination against two groups of people. Let us take as an example a child who goes to St. Mark's Church of England primary school in Godalming, in my constituency. Godalming is an affluent Surrey town, which in many ways represents the stereotype of Surrey towns alluded to by Labour Members. For the children who go to St. Mark's, the reality is different.

Of the children at the school, 35 per cent. have special needs. Teachers have told me that in some classes 80 per cent. of the children have special needs. One teacher told me of a child fed on nothing but rice for five days. Staff turnover is high, and although the school is now on the up it is a pocket of deprivation in an otherwise affluent area and has the same health needs as the inner cities. It is somewhere where social breakdown, a lack of education and a lack of money lead to less healthy diets and worse health outcomes.

How does the NHS funding formula, designed to tackle health inequalities, treat the families of those who go to St. Mark's? If they need elective surgery, they will have to wait two to three times longer than people in virtually any city or virtually anywhere the north of the country. They will wait 26 weeks for ear, nose and throat surgery, compared with a 13 week wait in Manchester. They will wait 25 weeks for breast surgery, compared with 15 weeks in Leicester. They will wait 36 weeks for trauma and orthopaedics work, compared with 12 weeks in Sedgefield.

The NHS funding formula punishes poor families in rich areas, because it can only deal in averages. How does it work in practice? In Guildford and Waverley we
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get an increase of about 3 per cent. because of the high proportion of elderly people. The market forces factor, because of the cost of health care, increases the funding by 7 per cent. However, the additional needs factor decreases our funding by 25 per cent. because we are apparently an affluent area. So, somewhere that spends 3 per cent. less than the national per capita average is told that it should spend 20 per cent. less. Who suffers? The families of children who go to places such as St. Mark's.

St. Mark's is 2 miles away from Milford hospital, a specialist rehabilitation hospital that the PCT is trying to close. If it is closed, the poverty in the area surrounding St. Mark's will get worse. If Haslemere hospital, just up the road, is closed—the PCT is consulting about removing all the beds—those who will suffer are not the wealthy people who can afford to go private but the pensioners on a basic state pension who do not have that choice. That is the madness of a system based on a mathematical average of health outcomes that cannot account for individual circumstances.

One more group is badly discriminated against. Every week, 90 severely disabled children are born in this country. The lives of 90 families are turned upside down. One would think that in the fourth largest economy in the world we would look after those people properly, but for many families the help and support they get is little better than it would have been 100 years ago. A system that funds to reduce the inequality of the outcome inevitably prioritises acute care over chronic long-term conditions. According to a Mencap survey, 48 per cent. of the parents of severely disabled children get no care from the state. A further 30 per cent. get less than two hours care a week from the state. Only 20 per cent. of such families are able to get any respite at all. The result is a cycle of deprivation. Often the father cannot cope and leaves the mother to bring up the disabled child on her own. She cannot possibly work in such a situation, so the social exclusion starts and gets worse.

Why does the health inequalities agenda fail? As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, we share the objective of reducing inequalities. The agenda fails because of the neo-Stalinist focus on health outcome rather than on access to health care. If the objective is to equalise health outcomes so that people have the same life expectancy in Sheffield as they do in Somerset and in Bath as they do in Bolton, we have to be careful that a mathematical formula does not end up inadvertently denying health care to Surrey, Sussex and Hampshire to make people die more quickly there than they would in Sheffield, Manchester or Leeds.

That approach is flawed because it ignores the fact that health outcomes are the product of choice as well as of circumstance. It fails poorer families who happen to live in affluent areas and those with long-term chronic conditions because it prioritises outcomes, and those people have outcomes that will never improve. Most of all, the approach is flawed because it simply does not work. The point of targets is to motivate managers in organisations to decide on their priorities.

The national public service agreement on reducing health inequalities for heart disease, for example, talks of reducing mortality
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The crystal test of a target is whether an NHS manager can look at it and know what he or she should do next, but it is impossible to look at that target and know what should be done to achieve it. NHS mangers have similar targets for smoking, cancer, teenage pregnancy, obesity, infant mortality and mortality. These targets are failing, and that has been a fundamental element of this afternoon's debate. We all want to eliminate health inequalities, but we are failing to do so because the system of targets is over-focused on health outcomes and not focused enough on inequalities of access to health care.

I am generally suspicious of targets because I want a decentralised NHS in which local GPs and managers have the flexibility to determine the health needs of their own area. However, if we are going to use targets, there should be just one or two, related to absolute improvements in health outcomes for the lowest socio-economic groups, rather than a multiplicity of targets relating to relative improvements. We must prioritise equality of access to health care as much as equality of outcome. That is vital for the elderly on state pensions, for poor families—wherever they live—and for disabled people with chronic long-term conditions. They, after all, were the people for whom the NHS was set up.

5.37 pm

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