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Mr. Graham Stuart: Will the Minister give way?

Jane Kennedy: I certainly will not give way to the hon. Gentleman. [Hon. Members: "Ooh."] Well, he made what I consider a most sarcastic contribution and made a number of interventions, so if the House will allow me, I will move on.

We are establishing the right culture for financial balance. We are changing the incentives associated with the performance-rating system, so that those hospitals and PCTs that are failing to meet their financial duties are identified in performance reviews. We are also designing a major drive to improve NHS productivity and efficiency. For example, we know that cutting unnecessary emergency admissions—an issue mentioned by several Labour Members—could help the NHS to save more than £400 million a year through better assessment processes and improved patient care in primary and community settings.

In the minority of organisations where there are significant overspends, we are taking action now to identify and correct the financial problems. I anticipate that this work will continue for at least 18 months, and it will be driven from the centre. At the same time, it will aim to build turnaround experience within the NHS to reduce reliance on external support. In some of these organisations, the overspend is large and it may take more than one year—I hope that my hon. Friends hear what I am saying—to return to financial balance. In these cases, we expect the new strategic health authorities to take the lead in developing and implementing a financial strategy for managing the situation in their locality. This will include creating local reserves to deal with local problems. The size of the reserves and the contribution from each PCT will vary according to local circumstances, but the underlying principle will be fairness.
 
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The House will want to know that we expect SHAs to repay any contributions to reserves over time.

Martin Horwood: Will the Minister give way?

Jane Kennedy: If the hon. Gentleman will forgive me, I will not as I have only one minute left. We expect SHAs to have full regard to the financial and service position of each organisation in determining how reserves are generated and applied. However, some SHAs may not be able to deliver a financially balanced position next year without unacceptable service consequences—a point made by a number of my hon. Friends. Where that is so, we will incentivise others to deliver a surplus to cover the situation. The money will not be moved and underspending SHAs will retain the resources for spend in future years, but the system as a whole will balance.

There is no trade-off between meeting standards in service and financial rigour. Excellent patient care and financial control are usually associated with each other. They go hand in hand.

It being Ten o'clock, Mr. Deputy Speaker proceeded to put forthwith the Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 54(4) and (5) (Consideration of estimates) and Order [9 March].

MINISTRY OF DEFENCE

Resolved,

DEPARTMENT OF HEALTH

Resolved,

It being after Ten o'clock, Mr. Deputy Speaker proceeded to put forthwith the Questions relating to Estimates which he was directed to put at that hour, pursuant to Standing Order No. 55(1) and (3) (Questions on voting of estimates, &c.) and Order [9 March].

ESTIMATES, 2006–07 (NAVY) VOTE A

Resolved,


 
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ESTIMATES, 2006–07 (ARMY) VOTE A

Resolved,

ESTIMATES, 2006–07 (AIR) VOTE A

Resolved,

ESTIMATES, EXCESSES, 2004–05

Resolved,

SUPPLEMENTARY ESTIMATES, 2005–06

Resolved,

Ordered,


Consolidated Fund (Appropriation) (No. 2) Bill

John Healey accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31st March 2005 and 31st March 2006 and to apply certain sums out of the Consolidated Fund to the service of the year ending with 31st March 2006; and to appropriate the supply authorised in this Session of Parliament for the service of the year ending with 31st March 2005 and the further supply authorised in this session of Parliament for the service of the year ending with 31st March 2006. And the same was read the first time; and ordered to be printed [Bill 149].

CONSOLIDATED FUND (APPROPRIATION) (NO. 2) BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith, pursuant to Standing Order No. 56 (Consolidated Fund Bills) and Order [9 March], and agreed to.

Bill accordingly read a Second time.


 
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Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

DELEGATED LEGISLATION

Ordered,


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