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Mr. Lansley rose—

Dr. Stoate: I will give way to the hon. Gentleman. I should like to hear what he has to say.

Mr. Lansley: I laughed because, according to the Government's own figures, in January only 13,000 direct bookings were made through choose-and-book. According to the commitment that they made,
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everyone would be able to book an appointment directly through choose-and-book by the end of December 2005. It just is not happening.

Dr. Stoate: I assure the hon. Gentleman that it is happening. It is certainly happening in my constituency, in my practice and in my primary care trust area. Of course there are teething problems; of course it is taking longer than we thought it would take; of course there are massive difficulties with an IT system that is as enormous as the new NHS IT programme. I am not saying that the arrangements are perfect. I am not saying that the NHS has achieved nirvana, because clearly it has not. Nevertheless, it has travelled a long way.

That is not to say that there are no issues of concern. There certainly are such issues, and I should like to raise a couple. My local hospital, which is involved in the private finance initiative, has a turnover of about £100 million, with a PFI access charge of about £18.9 million this year. Yes, it is in financial difficulties. I met the chief executive last week to discuss how that would be managed, and heard about his robust programme to keep the deficit at least to a reasonable level. It is not a crisis, but it is a matter of concern, and of course it matters to patients.

The hospital is having to scale down some of the elective operations scheduled for this side of the end of the financial year, because in 10 months it has engaged in the amount of activity that would normally have filled 12 months. The results have been excellent, with improved efficiency and productivity, but of course budgets are stretched towards the end of the financial year, and some operations will need to be postponed until April. That is worrying for patients, but I have been assured that they will still be treated within the six-month time scale set by the Department. That is much better than anything that happened in earlier times.

I believe that there are things that we can do to improve NHS efficiency and reduce some of the worrying overspends. I should like acute trusts and primary care trusts to work far more closely together, with regular updates and meetings to plan expenditure and activity, so that we do not see, year after year, February deficits and end-of-financial-year meltdowns and disasters that are avoidable and foreseeable, and should be a thing of the past. If the PCTs and acute trusts sat down together to plan expenditure over the year, many of those difficulties could be removed.

There is also a need for acute trusts to work together. All too often, an acute trust that finds itself in difficulty will ignore what other trusts are doing down the road and will duplicate services, trying to increase income by concentrating on what they see as their strengths, regardless of what else is happening in the local health economy. That is inefficient, and I believe that it destabilises some areas.

I feel that payment by results encourages hospitals to generate as much business as they can in order to stay healthy. It has encouraged some hospitals to adopt the approach that the more patients they admit, the more money they can earn. That distorts local priorities. An analysis of the impact of the system, which was introduced in 2004, found that it had led to an increase in the number of short-stay admissions to foundation
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hospitals—as opposed to non-foundation hospitals, which were still operating under the old block contract payment system. Between April and September 2004, the number of short-term admissions rose by an average of 24 per cent. in the 10 foundation trusts, and by only 17 per cent. in similar non-foundation trusts. Research by the Audit Commission found that overall hospital activity in foundation trusts had increased by 1 per cent., and that the number of short-stay admissions had risen by 7 per cent. Some of those hospitals are driving up activity in a way that does not necessarily reflect local health need, and could destabilise and undermine PCTs' efforts to keep their budgets under control.

The accident and emergency waiting target may also cause problems. Because some hospitals have found it impossible, or very difficult, to discharge patients within four hours, there is an increasing tendency to admit patients. Not only does that avoid the four-hour target, it increases hospitals' income significantly. There is a driver in the system which, in some hospitals, has caused inefficiency to push up the costs to the local health economy. There is also a tendency for some hospital trusts to exaggerate the complexity of patients' illnesses, which again pushes up the tariff for the care that those patients receive.

Those are not acute structural problems, but they should cause concern. I should like Ministers—especially when they engage in discussions with trusts and others—to think about how the distortions can be levelled out. Many of the overspends are not all that enormous, but they can build up over a period, and such levels of inefficiency in the system can cause unnecessary destabilisation.

There are also far too many follow-up out-patient appointments; indeed, my research shows that some two thirds of all NHS out-patient appointments are follow-up appointments. I do not know what research has been done on how unnecessary they are, but my understanding and belief is that many could easily be carried out by the GP or practice nurse, and some of them are probably not even necessary. They give rise to significant cost pressures in an acute hospital setting, where many patients simply do not need to be and, frankly, do not want to be. Many would probably be happier at their GP's surgery, and if the GP feels that the problem is beyond his or her capability a referral back to the hospital would be a much more efficient use of facilities and finance.

I shall not dwell on these issues, as other Members wish to speak in this important debate. This is not a crisis, a meltdown or a catastrophe, but it is worrying that the health service should end up with yearly deficits, despite the record amounts of money going in. It is very important for Members to reflect on the significant improvements in patient care. Patient satisfaction is rising and all GPs now have to conduct yearly independent patient satisfaction surveys in order to show the PCT that they are doing a good job. The vast majority are indeed doing a good job, and through the new pharmacy contract pharmacists are making significant improvements. Moreover, nurse practitioners and specialist nurses are making incredible improvements in health service care.

Our patients have never had such a good health service. The Government are rightly praised for the huge efforts that they have made and the sums that they have invested in the NHS. Instead of soundbites and
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shouting, we should have a responsible debate that reflects the fact that a great deal of work has been done, but that does not mean that there are no concerns or issues that need to be dealt with. I shall be interested to hear the rest of this debate.

8.36 pm

Dr. Richard Taylor (Wyre Forest) (Ind): As you and the House know, Mr. Deputy Speaker, I have no party political axe to grind; my aim tonight is simply to get at the truth. It is entirely natural that the Government should minimise the scale of the deficits, saying that only a quarter of trusts are in deficit and that the projected £800 million deficit is only 1 per cent. of the total budget, but I am not at all sure that that is the true figure.

This year—2005–06—trusts have been allowed to use brokerage, short-term loans and cost improvement programmes and, at the half-yearly point, the projected deficit was £620 million. At that time, one trust in my locality admitted to a deficit of £3.8 million; it now has to save £20 million to get into balance. Another trust admitted to a £10 million deficit; it now has to save £36 million to get into balance. The hon. Member for Guildford (Anne Milton) said that her trust has to save £16 million, yet according to its six-monthly forecast it was going to be in balance. If those examples mirror the picture across the country, the gross deficit is far greater than the £800 million that is being admitted to. We should also consider reports of the scale of redundancies in trusts such as Cornwall and North Staffordshire. Technically, the Queen Elizabeth hospital, Woolwich, is insolvent. Many Members have mentioned top-slicing at 2 to 3 per cent., but if that is to be the right answer, the figure would have to be even higher.

What has happened to the extra money that has been invested, rightly, in the health service? The figures given to the Health Committee by the think-tank Reform were passed to the Department of Health and have not been queried. Some £3.7 billion of the extra £6.6 billion has gone automatically on cost increases. That leaves £2.9 billion, which has been spent on meeting underestimates of the cost of the new contracts, of the cost of recommendations by the National Institute for Health and Clinical Excellence, and of the cost of private finance initiatives and pensions. That leaves very little to pay for employing the extra consultants and nurses being trained, or to meet the 18-week target.

If we could get at the truth of the real scale of the deficits, the Government would have to agree to give more time to achieve balance. It is ridiculous to try to achieve balance in precisely 12 months. The Royal College of Nursing, in a letter that I suspect that it sent to many hon. Members, stated:

Apart from the delay, what should we do? It is obvious what we should do. First, we need to examine the equality of funding. Some hon. Members have already mentioned work that suggests that funding is not equitable. We do not just condemn management; we examine the quality of management and see where it is
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good and where it is not. We ask the Department of Health not to make any more mistakes. It was admitted in a letter dated, I think, 22 February, that the Department had got the national tariff wrong. How can one calculate how to spend one's money if the tariff is wrong? We should allow time for payment by results to happen and for practice-based commissioning. We should put an embargo on further use of private independent sector treatment centres until we really know—when they have been evaluated—if they are value for money.

We should put a temporary halt on PFIs. Some 60 trusts have PFIs tying up about 11 per cent. of their income. That is the first call on the income. We have had 28 reorganisations since 1982. As I keep telling the House, for goodness' sake, do not have any more reorganisations for the moment. The Government must avoid knee-jerk reactions. Top-slicing the primary care trusts is not right and neither is shifting the cost of long-term care. As for the suggestion that asthma and heart disease can be treated more in the community, doctors do not send patients to hospital for fun and patients do not go for fun. Virtually every case of asthma or heart disease that can be treated in the community is being treated in the community. When the people concerned go to hospital, they do so because they need a consultant opinion, consultant investigations, consultant treatment or intensive nursing care. I cannot imagine where the suggestion has come from. What medical advice did the Secretary of State take on that? Did she ask the royal colleges, the chief nursing officer or the chief medical officer? That sort of plan is a knee-jerk reaction.

There is a lot that can be done. I held an Adjournment debate just last week on the logical reconfiguration of acute hospitals, because there is scope for that. I want to make it absolutely clear that I am not talking about community hospitals, which are a cost-effective way of saving acute hospitals work, but there are logical reconfigurations of acute hospitals. Let us take the example of Hartlepool, Stockton and Middlesbrough, which are within 8 miles of each other in an equilateral triangle. One cannot keep three all-singing, all-dancing hospitals with everything there, but services can be shared.

There should be a logical review of the work force, with joined-up thinking. We should not train 30,000 extra consultants unless we can employ them and at the moment, we certainly cannot. The move to care in the community might mean that we do not need them all. Perhaps the most important thing is to have an open debate on health care rationing and on what people would be prepared to pay and what sort of NHS charges are realistic. Not very long ago, BMA News carried out a survey of its readers and 96 per cent. of doctors who responded said that health care rationing was one of the most important things that should be discussed.

I wonder why Ministers are so scared of rationing. Concluding an article with the headline, "Why rationing looms for the NHS", the health correspondent of The Independent said that rationing

If one has a child who is afraid of the dark, one takes them up the darkened stairs and shows them that there is nothing to fear. The Government have to be treated like that. They have to be shown that the fear of health
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care rationing is completely irrational and that people would welcome such rationing. We must consider it because demand will simply outstrip the money available due to increased longevity and more possibilities for treatment.

We should allow beleaguered trusts a little more time while debate continues on all these measures, which would be possible to implement. In my heart of hearts, I would like to abolish the market and go back to what I believe were the halcyon years of the NHS in the 1970s and 1980s. Sadly, that is not possible, but the market is not working at the moment. We must find out whether, with sensible changes, we can make it work.

8.46 pm

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