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Hugh Bayley (City of York) (Lab): Selby and York faces the most severe primary care trust deficit in the north of England, and it is not a consequence of underfunding. This year the PCT will receive £307 million. Three years ago it received £199 million. That is an increase of £108 million a year, about £2 million a week, £300,000 a day extra for the NHS or about £470 a year extra for each person in the catchment area. The extra spending is being used to buy more treatment for more patients. It is saving lives and reducing waiting times for treatment.

The problem that the PCT faces is not underfunding, but poor management of the fastest growth in NHS spending in the history of the NHS. That view is shared by local clinicians—GPs have made similar comments to me—and by managers in the health service. Nationally, the deficit is projected at £800 million or roughly 1 per cent. of NHS spending. That, perhaps, is not a huge problem when the NHS budget is due to increase by some 6 per cent. above inflation this year.

But 1 per cent. is the average, and averages can be misleading. If my head is in the fire and my feet are in an ice bucket, my average temperature is probably fairly good, but that would not make me comfortable. In Selby and York we will be extremely uncomfortable because of the size of the deficit. The end of year deficit is about £24 million or about 8 per cent. of expenditure.

Despite the growth in this year's allocation, the PCT will need to cut £21.5 million if it is to break even in the forthcoming year. That will be painful. Already the PCT has cut the hours of the NHS walk-in centre in York and reduced the night-time GP cover between the hours of midnight and 8 am to just a single doctor for the 270,000 in the area. I am afraid that worse is to follow: the hospital will need to cut excess bed days—that is to say, to discharge patients earlier—and it may end up ending or limiting treatment for some non-life-threatening conditions. It could well be forced, as in Staffordshire, to make staff redundant, and GPs will need to change their referral rates if the deficit is to be brought into balance.

The real problem that we face in Selby and York is that under the Government's financial rules, the PCT does not need only to reduce expenditure in the forthcoming year by £21.5 million to bring its budget into balance. It will be required to make savings of about £45 million, first to break even, and secondly, to repay last year's £23.5 million overspend. If a £45 million cut were actually required to be made in Selby and York, the results would be catastrophic, as it would mean a cut of some 15 per cent. in expenditure. We could be left with little more than an emergency service.

I ask the Government to give Selby and York PCT some additional time to repay the accumulated deficit. I am not asking for a blank cheque. The Government need to know that the bad management that led to the overspend has ended. The Department of Health has put its turnaround manager into the PCT, and the PCT has already clawed back the deficit from a predicted end-
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of-year shortfall of £32 million to £23 million. My question to the Minister is: when the Department is satisfied that the PCT budget is back in balance, will it extend the time scale for clearing the accumulated deficit? If £45 million had to be saved in the forthcoming year, a postcode lottery would be created in our area compared to neighbouring areas. NHS treatments for patients in Selby and York would be based not on objective need, but on the PCT's ability to pay.

There is relatively little further time for this debate. I challenged the hon. Member for Beverley and Holderness (Mr. Stuart) to set out ideas for how his party would increase productivity for the national health service. I am afraid to say that he flannelled, but I have some specific proposals to make. First, much of the additional money for the NHS has been spent on increased remuneration for doctors and other health service staff. Much of it has been earned and is deserved, but as other hon. Members have made clear, the increase in pay has not been matched by an increase in activity or the number of treatments for patients. I recommend that the Government publish data drawn from the hospital episode statistics on the activity rates—the number of patients treated—of each consultant. Those rates vary enormously from consultant to consultant. The Government should change the consultant merit award system so that additional awards are tied to improved productivity, ensuring that it is the doctors who treat greater numbers of patients successfully who get the awards.

Secondly, spending on drugs has spiralled. Hitherto, under the pharmaceutical price regulation scheme, the Government have controlled pharmaceutical company profits, not prices. Given the very high price of some new drugs that are being introduced, however, I believe that the Government now need to control both. Herceptin, for instance, costs £21,500 per patient per year, and it is being provided on the NHS even though it is a drug that has not been licensed for general use among cancer patients. That will add £0.5 million to Selby and York PCT's costs in the forthcoming year—£0.5 million less for it to spend on other treatments, such as hip replacement, which is a proven treatment. I ask the Government to look at the question of price regulation as well as profit regulation for the pharmaceutical industry.

Thirdly, I believe that the National Institute for Health and Clinical Excellence should be asked to evaluate existing health technologies and not just new technologies. When it publishes guidelines, those guidelines should be followed. For instance, on hip replacement, it has recommended the general use of the Charnley prosthesis, which would save money and produce better outcomes if it were to become standard.

I agree with the hon. Member for Wyre Forest (Dr. Taylor) about two matters. First, once PCTs and trusts that are in the same difficult position as Selby and York have stabilised the overspend, they need time to pay back the accumulated deficit. Secondly, he is right to raise the issue of rationing, without which there could be a feast in parts of the NHS and a famine in others. During the second world war, we introduced rationing to ensure that everybody had access to their necessary diet. We must engage with the rationing debate, as people are doing in other countries. If we do not do so,
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we will face the problems of variable patterns of health expenditure and variable levels of health care across the country.

9.25 pm

Laura Moffatt (Crawley) (Lab): I promise faithfully to finish before 9.30 pm, Mr. Deputy Speaker, and I am deeply grateful for the opportunity briefly to participate in this debate. I am pleased to follow my hon. Friend the Member for City of York (Hugh Bayley), whose reasoned arguments about how deficits occur were in marked contrast to some of the contributions from Opposition Members—I began to lose the will to live given some of the nonsense that they came out with.

Most hon. Members have to spend time considering these issues. That certainly applies to me because the acute trust that covers my constituents, who desperately need care, has the mother and father of a deficit. I have attempted to work with the acute trust for many years to try and ensure that it delivers a good service for my constituents. I understand that we should concentrate on the issue of deficits, but the matter is about getting the best care for our constituents, and I have no doubt that poor financial management often goes hand in hand with poor clinical outcomes.

Surrey and Sussex Healthcare NHS Trust is at the last chance saloon, and we must get things straight so that it delivers health care properly. The turnaround team has been called in, a public interest report has been produced and we are beginning to know exactly where all the money went. Some hon. Members have said that deficits are caused by one or two issues, but that is just not true. In my area, for example, we have examined the use of agency staff. It is difficult for a trust to recruit when it is unattractive to staff, and we need to assist such trusts.

I have noticed what has not been at the top of the agenda in this debate, although hon. Members have rightly raised examples of trusts that have maintained financial order and have delivered an excellent service. In my area, Crawley PCT has provided a fantastic service under budget for the fourth year, and it has picked up all the community services that were so poorly developed in 1997—it has done an excellent job. The Sussex Partnership Trust looks after people with learning disabilities and mental health problems. I know that it is in a challenging financial position, but it is delivering a new hospital in my area. That is not top news in this debate, and all we have heard about are crises and disasters, but that is not the case, and I make that point as an MP who represents one of the areas with the greatest difficulties.

My PCT wants to ensure that the acute trust delivers, because it understands that its patients and those of the acute trust are the same people and that it must work with the acute trust to make sure that that happens. Getting that trust into order is our first priority, and I desperately hope that the debate will be very different for me this time next year.

9.29 pm

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