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Martin Horwood: Will the hon. Gentleman give way?
Michael Jabez Foster: I am sorry, but I shall get through my speech quickly because many hon. Members want to speak.
I was especially excited when, six weeks ago, I received a letter from my right hon. Friend the Secretary of State to say that, in recognition of the continued challenges in Hastings, which is the 34th poorest town in Britain, there would be a boost to funding. I shall briefly quote from the letter, which stated:
"Today I am publishing a new White Paper that explains how we will tackle health inequalities to give all communities equal access to care.
The first step is fairer funding. All PCTs are getting more money, with the biggest increases for those areas most in need. Your PCT, as one of the thirty most under-doctored PCTs, will by 2007/08 receive average funding of £1,552 . . . compared to the national average of £1,388."
I believed that that was brilliant news. It represented almost a trebling of resources in cash terms since 1997. Unfortunately, I must tell my right hon. Friend the Minister that the euphoria was short lived. Last week, instructions arrived from the Surrey and Sussex strategic health authority to require the Hastings PCT to hand back the £500,000 that it had underspent this year. It was expected to return 3 per cent. of its planned budget for next year and 3 per cent. for the subsequent year. I do not understand those figures, given that the country overall has a funding deficit of 1 per cent. I stress that it still means an increase for the Hastings and
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Rother PCTs of approximately 2 per cent. or 3 per cent. in real terms, which is much more than was historically the case, but it is, none the less, a disappointment.
I want to support the Government in their effort to rein back those health trusts that are overspending. The media often suggest that that involves cuts, but they are not cuts. It is nonsense to say that the significant extra funding that all health trusts have received is a cut. Nor am I suggesting that ever-increasing demand and new procedures and developments will ever result in a surplus of cash in the health service. They will not, and those needs will always be there.
In Hastings and Rye, we have a very good, competent primary care trust. The House will be interested to know that that PCT and the Bexhill and Rother PCT have already pooled their senior management resources and costs. Marie Casey, the chair of the Hastings PCT, and John Barnes, who chairs the Bexhill and Rother PCT, have placed their confidence in an excellent management team that is led by Toni Wilkinson, the chief executive, to manage within the increased budgets provided. Those PCTs have done what they were asked to do. Indeed, the Hastings PCT will finish the year with about a £500,000 underspend.
It so happens that the East Sussex Hospitals NHS Trust, our main hospitals provider, has found the going tough and has significantly overspent. However, the PCT has not bailed it out. Instead, it has insisted on stringent financial management at the hospital. The hospital trust was £5 million overspent at the beginning of this financial year and heading for a £16 million overspend. So it took on Kim Hodgson as its new chief executive. She has applied the pain—even though she is a nurse—and it is now likely that the hospital will finish the year in no worse a position than it was in at the beginning, and that by the end of the calendar year it will be in balance. This shows what can be done without a bail-out from the PCT.
My PCTs have important plans for delivering the Government's agenda for locality health centres. They are working to provide three new centres in the area, and they have relied on the money that they were promised to make that possible. It will not be possible if they do not have the money that they have been promised. What we are seeing in those PCTs and in that hospital trust is gold-standard management. They acknowledge and accept the Government's belief that if fair funding is provided, as it has been, it is their duty and responsibility to manage. That is why I am so angry about what the strategic health authority is now seeking to do.
The SHA is saying that, as the Government require it to balance its books, it wants the money back from the PCTs that have underspent this year. It also wants the PCTs to accept a massive 3 per cent. reduction in their planned spending for next year and the year after. That would mean putting all their plans on hold. I regard such management on the part of the SHA as deplorable. How can it behave in a manner that is so contrary to the intentions set out in the letter from the Secretary of State that I have just mentioned? How can it take money from the successful to give to the hopeless?
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The Under-Secretary of State, Lord Warner, wrote a letter to me that I received on 6 March. He mentioned overspending, and said:
"The reconfiguration should not be used locally to move resources from high performing areas to underperforming areas. Local managers should be ensuring that the quality of financial management in all organisations is raised to the level of the best."
I could not agree more with what Ministers have said on this matter. They were absolutely right, and they should insist on their wishes being carried out now. The SHA is proposing to reward the bad and punish the good, but that is precisely the opposite of what Ministers were saying. If trusts believe that they can be bailed out, what message does that send to others? I know what message has been sent to my local PCT, and I certainly know what some of the GPs are saying. They are saying, "Why bother?" What is the point of enduring the pain if they are to be punished in this way?
In Hastings, we have always had the problem of being a poor area in a rich region. I understand that that does create a problem, but that problem needs to be addressed by targeting the resources even more. It is also a reason why we can ill afford to lose our local PCT, because that kind of spreading of resources would occur as a consequence.
I shall conclude by referring to the prodigal son. For anyone who has not heard the story, it was about a guy who went away and was profligate. He came back and, it is said, all was forgiven. Well, not quite. The real story of the prodigal son is that he went away, he came back, and he was indeed forgiven. But he never got his cash twice. He had spent his money and that was the end of it. He was looked after and cared for, but he never got his helping of cash twice over. I want to suggest to the Minister that that is the message here. These trusts have had their money, and they have spent it. It is important that they should not gain any benefit from overspending. That sends out the wrong message, and it is unfair to those who work hard and comply with the Government's entreaties.
8.14 pm
Mr. Graham Stuart (Beverley and Holderness) (Con): We have heard an interesting series of contributions today, including that of the hon. Member for Hastings and Rye (Michael Jabez Foster), who seemed to give two speeches. One resembled a job application; the second was closer to reality. The question underlying his speech was, why did the SHA decide to top-slice by 3 per cent. his excellent local health care trust, thus calling a halt to any hope of the growth and improvement for his constituents for which he obviously devoutly wishes? The answer is that that order came from the Secretary of State; it was not dreamt up by the SHA. If Ministers have not told Back Benchers that truth, perhaps they ought to.
The hon. Member for Staffordshire, Moorlands (Charlotte Atkins) is unfortunately no longer in her place. She made what is probably the most extraordinary speech I have heard in the Chamber. She appeared to be supporting the actions of her local health service that will lead to 1,000 job cuts. I realise the seriousness of my saying that, which is why I am extremely glad to have the support of other hon. Members. I would hesitate to say such a thing otherwise.
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It is astonishing for her to be in that position. She asked for a Rover-style bail-out. I think that the penny is finally beginning to drop, even among Labour Members, that despite the huge spending by the Government, there is a need for Rover-style bail-outs in parts of the NHS.
On NHS deficits, Ministers have moved from denial to outright panic. The truth is that the NHS budget increased by 40 per cent. between 1999 and 2004. It will have tripled in cash terms, but by 2007–08 the budget will have increased in real terms by 75 per cent. There is increasing bewilderment not only in the House, but across the country about where the money has gone. The hon. Member for Southport (Dr. Pugh) asked where it had gone, as does everyone else. In 2004, it was leaked—admittedly—from the Prime Minister's strategy unit that there had been a reduction in NHS productivity of up to 20 per cent. by 2004, despite Government spending. So Labour Members might sing the praises of the vast sums that have been spent on health care, but the truth is that productivity has fallen. It was surging in the early 1990s.
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