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The thing that makes me cross is that all this is unnecessary. Of course I do not disagree with the direction of a health policy that is an attempt to put commissioning back in the hands of GPs, to give the power to manage hospitals back to hospitals and to distance the Department of Health from the day-to-day micro-management of the NHS. I could hardly disagree with that direction of policy because it was the
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one that we pursued when I was both a junior Health Minister and Secretary of State for Health. However, it makes me cross that nine years after the Government came to power—it has been nine years of confusion, wasted resources and demotivation—they have made a 360° U-turn. That is a major factor behind the demotivation of the staff of the NHS.

Let me move on to another reason the Secretary of State received the reaction that she did. There is emerging knowledge in the NHS that the good times are over and that there has been, to an almost criminal extent, a wasted opportunity. That is not to say to the right hon. Member for Rother Valley that no good has been done—of course good has been done—but people in the NHS understand and increasingly reflect on the scale of financial mismanagement during the growth years as they find that the years of plenty are inevitably, under Governments of any political complexion, coming to an end. The Government get credit, as they should, for the fact that they have doubled the resources going into the NHS, but they must accept responsibility for management decisions on the use of money and the consequences of those decisions as they work themselves out in the coming years, as people in the service are increasingly seeing that they will.

I will offer two examples that people working in the NHS increasingly cite when they talk to me. They talk about the employment prospects for doctors and nurses coming out of the medical and nurse training schools. The Government are keen to claim credit for committing substantial extra resources to increasing the number of people going into medical schools and nurse training so that a greater number of skilled clinicians is available to the NHS. However, they do not tell us that there is no model for the future funding of the NHS that offers job opportunities for all the people coming out of the expanded nurse and doctor training schools. Those who are coming out of the schools have a pretty significant vested interest in understanding the economics and dynamics. They have done the maths and know that there are not enough jobs to go round. We are heading into a period in which there will be unemployed nurses and doctors because the Government have got their staff planning wrong and are producing more trained doctors and nurses than the NHS will be able to employ in any likely scenario over the next decade. That is mismanagement of resources and is known to be such by those who work in the service.

There is a second area of mismanagement of resources of which people are becoming increasingly aware, and it is not dissimilar to the one to which I have just referred. The Government are proud that in constituencies throughout the country they have launched the biggest capital investment programme in the history of the NHS, and that throughout the country there are new, expanded and renovated hospitals that reflect that huge investment programme. The Government do not tell us—the hon. Member for Northavon (Steve Webb) touched on this—that resources have been pre-empted elsewhere, and that the intelligent commissioners in the health service increasingly see that resources should have been made available in greater proportion to the development of the community-based and the less politically sexy aspects of the delivery of health care.

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The NHS that the Government will bequeath their successors is one where major capital investment has committed resources for a generation to come that do not reflect—this is what the commissioners fear—the priorities of the NHS during the life of the investments that have been made and which have secured so many brownie points for the Government during their time in office. It is ironic that the Government should have issued a White Paper within the past 12 months stressing once again, as Health Secretaries have since Enoch Powell and before, the importance of moving health care out of the big general hospitals into the communities so that it is close to where patients live, is accessible to patients and uses the latest technology to deliver day case and ambulatory care, for example.

The Government talk the talk of the development of community-based health care while at the same time putting shedloads of money into a new district general hospital investment programme, which is preventing them from delivering the model of health service delivery that is so articulately described in the Secretary of State’s White Paper.

Ms Diana R. Johnson (Kingston upon Hull, North) (Lab): Will the right hon. Gentleman comment on the shedloads of money, as he puts it, that are going through the LIFT schemes to build in communities the general practitioner practices to provide integrated services with social services and the voluntary sector? It seems to me that the investment is being made.

Mr. Dorrell: I am not saying that there has been no investment in community-based care. There has been a huge investment programme. As someone who supports the principles of the NHS, I welcome that investment programme. However, the Government must be held to account for a series of investment decisions that I do not believe in 10 years’ time will represent the optimum use of that investment resource to support the delivery of health care that we will want to see, as described in the Government’s White Paper.

Anne Milton: The hon. Member for Kingston upon Hull, North (Ms Johnson) mentioned the LIFT scheme. I have had phone calls from and meetings with the people who are holding the finance. They are appalled by the behaviour of the Government because they cannot get them to make a decision. Does my right hon. Friend agree that part of the confusion is that nobody really knows what the Government’s plan is?

Mr. Dorrell: I could not agree more with my hon. Friend. I think that we know what the Government’s aspiration is, but we are seeing increasingly as the months turn into years that it is dawning on the Government, after it has dawned on those making the policy within the service, that they do not have enough money to deliver all the things that they want to do. They have lived in a world where somehow money was no object. They took the view, “We can do everything because we, the Labour party, are committed to the NHS.” They are discovering that in reality all of us are committed to the principles of the NHS. The thing that
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marks the Government out is that they are only now starting to address the hard questions that must be answered if we are to deliver the objectives of the NHS that we all share.

I think that I have probably taken up enough time of the House. I shall conclude by saying that there is no division in the House—I know that it suits the party political purpose of the Labour party to assert that there is a difference, but there is in reality no difference—in terms of our commitment to the principles of the NHS. We, the Conservative Opposition, the Liberal Democrats and the Labour party, are all committed to the delivery of the core principles of the NHS: high-quality medicine that is available on the basis of clinical need and on the principle of equitable access.

The issue is which party is prepared to face the difficult questions that will turn those fine words into actions that are experienced daily by clinicians and by patients of the NHS. It is the dawning recognition on the part of those who work in the service that their political masters, over the past nine years, have been more interested in their political skins than they have been in the delivery of the core principles of the NHS that led to the Secretary of State receiving the reaction that she did to her words a couple of weeks ago.

6.16 pm

Dr. Howard Stoate (Dartford) (Lab): It gives me great pleasure to follow the eloquent speech of the right hon. Member for Charnwood (Mr. Dorrell). We are told—breaking news—that the national health service faces a funding challenge. Was it not ever thus? I have been in the NHS now for more years than I care to share, and in every one there have been funding crises. We are in the difficulties that we now face because we are taking tough decisions that were avoided for far too many decades, let alone years. These decisions should have been taken many years ago.

I was talking extremely recently to someone who has been put in one of the turnaround teams to consider some of the failing and problematic primary care trusts, to see what he can do. He told me—this was off the record because he did not want to be quoted—“The problem is that because by avoiding making tough decisions for so long, because decisions have been swept under the carpet and because they have hoped that decisions will go away if they wait long enough, and because they hoped also that someone would come along and bail them out if only they kept their heads down, it was thought that everything would be all right.” It is not all okay, and as my right hon. Friend the Secretary of State said, someone eventually has to make some extremely tough decisions. If not, the very fabric of the NHS will be undermined and under threat. It cannot continue as in the past.

The right hon. Member for Charnwood said that there are significant problems in producing too many medical students and too many trained nurses who will not be able to find jobs. Not only is that scaremongering for those people who dedicate their lives to the NHS, but it is not true. The NHS has imported doctors and nurses for the past 30 or 40 years because we have not produced anything like enough of them. The NHS has had an expanded medical school programme and an
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expanded nurse training programme so as to reduce our reliance on overseas trained nurses and doctors, who are often sorely missed by the countries we take them from.

We are accused by the Royal College of Nursing and the British Medical Association of stripping countries bare that can ill afford to lose their trained doctors and nurses. Yet now we are suddenly told we have far too many of our own doctors and nurses. It is not true. I think that we are training about 5,000 doctors a year. That is barely enough. Indeed, I do not think that it is enough to keep up with natural wastage in the form of people retiring, leaving, emigrating and so on. Far from producing doctors and nurses who will not have jobs, we will still find in future that we are short of doctors and nurses and will need to fill the extra places that we are creating.

My right hon. Friend the Member for Rother Valley (Mr. Barron) eloquently produced statistics to illustrate the increased number of operations, reduced waiting times and the new treatments that are available. That being so, I need not go into those matters in great detail. However, I shall raise one issue with the House, and that is nurses’ pay. Nurses are angry. We have heard many theories about why they might be so angry.

Mr. Devine: There was clearly an organised demonstration. As a former full-time union official I was capable of doing exactly the same thing when the Conservative party was in Government.

Dr. Stoate: I am interested to hear that from my hon. Friend. I do not wish to make points about the Royal College of Nursing. I speak to nurses daily. I talk to these people. Many have told me that they are embarrassed by the way in which their leadership has portrayed them in the media and has allowed them to be undermined, as well as allowing them to abuse the hospitality of the Secretary of State in the way that they did. That was unforgivable. I do not blame nurses for that, but I point the finger at some of the leaders who purportedly speak on their behalf. Let me cite some important statistics. Minimum starting pay for nurses is £19,000—a 55 per cent. increase since 1997. Nurse consultants start on £49,000 a year, senior professional nurses can earn up to £88,000, and modern matrons start on £35,000 a year. The typical starting pay for a junior doctor is £30,000—an increase of 40 per cent.—and a grade F nurse who earned £21,000 in 1998, received £28,200 in 2004, which represents a 23 per cent. increase. I could speak about those increases indefinitely, but it is not about pay or numbers.

Mr. Graham Stuart: As a general practitioner, is the hon. Gentleman embarrassed about the huge rises for general practitioners without a corresponding improvement in performance?

Dr. Stoate: The hon. Gentleman makes an interesting point, but I am not embarrassed at all, as most GPs do not earn anything like the figures that appear in the newspapers. According to the British Medical Association, the average pay for a general practitioner is £90,000 to £95,000, which is a reasonable rate for a good job. GPs
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undertake considerably more responsible work than before, and I shall come on to some of the things that they did not do a few years ago. For example, they have taken on some of the acute hospitals’ work load—five or 10 years ago that would not have been possible—and they can provide facilities that they did not have at their disposal only a few years ago.

Daniel Kawczynski: The hon. Gentleman spoke about nurses’ pay, but Macmillan nurses in Shrewsbury earn £5,000 a year less than Macmillan nurses on the same grade down the road at Wolverhampton. Does he share my concern about regional differences within such a small area, given that we may lose some of our Macmillan nurses to Wolverhampton?

Dr. Stoate: The hon. Gentleman is right. Those are matters for local decision making. It is not my responsibility to set the pay rate for nurses in different parts of country—it is not even Ministers’ responsibility—as primary care trusts and other employers set pay scales. GPs can pay nurses according to their skills and expertise. That is not a matter for the Government or for me—it is for nurses’ representatives to negotiate a rate with the employers, and that is how it has always been done.

Kali Mountford: My hon. Friend said that he will come on to GPs’ extra responsibilities, and I should like to correct an embarrassing slip of the tongue. I remind the House of what happened under GP fundholding, and the difference that we see in current GP practices.

Dr. Stoate: There are some incredible differences between the way in which GPs were treated before and how they are treated now, and I shall expand on that later.

I want to look at what we can do in the community to expand health care and health care facilities. The community services White Paper called for far more services to be delivered outside hospital, along with practice-based commissioning and new initiatives on prevention and chronic disease management, thus demonstrating that the NHS can become leaner, fitter, much more efficient and capable of delivering much greater value for money. I am concerned, however, that those reforms may not be sufficient to reshape the health care landscape in favour of primary care. How can we reconcile the goal of moving more care closer to home and encouraging more integrated pathways of care with the Government’s determination to allow more acute trusts to attain foundation status and to operate independently?

One problem is that, as a result of the NHS tariff system, acute sector providers are encouraged to try to generate as much business as possible to maximise their income. There is an increasing incentive for hospitals to treat more people more regularly than before, and I am afraid that that will put pressure on the NHS. Some have argued that more competition between trusts as a consequence of practice-based commissioning will help to negate any inflationary effect arising from the tariff-based system. Underperforming providers will be squeezed, and commissioners will seek to secure the
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greatest possible value for money. However, it is dangerous to rely on the market alone to achieve the reduction in acute activity needed to achieve the goals that the Government set out in the White Paper. Not only will that lead to imbalances in the way in which acute care is delivered but it will encourage acute trusts to concentrate on more lucrative health care activities at the expense of less lucrative ones.

Moreover, the experience of countries that have sought to shift more care into the community is that change is slower in health care systems composed of powerful, autonomous hospitals that compete with one another for patients. Having invested so much political capital in the foundation trust model, the Government would find it inconvenient to curb the very freedoms that it has worked so hard to give hospitals. Without a concerted and meaningful attempt to blur the boundaries between primary and secondary care to achieve vertical integration between the two sectors, we cannot achieve the vision of a prevention-oriented, primary care-led NHS that the Government wish to deliver.

Simply encouraging more consultants to see more patients in primary settings is not the answer. Primary and secondary-care consultants and professionals must be answerable to the same paymaster—a single care trust that it is openly committed to an integrated, primary care model—if we are to achieve meaningful change and resolve the problems facing the NHS. We could learn a great deal from the Kaiser Permanente model of health care in California, which has reduced secondary admissions and kept hospital stays to a minimum in a wide range of specialties. It owes much of its success to its decision to invest in a network of community-based specialty clinics, in which primary care professionals work alongside specialists. Those clinics have the facilities to cater for virtually every step of the patient pathway, from initial assessment to diagnosis, treatment and follow-up appointments.

One aspect of the Kaiser model is crucial to its success in reducing acute sector activity. Unlike the NHS, there are no structural distinctions between primary and secondary care. Not only is the model vertically integrated but the entire care package is based on prevention, integrated working and a belief that the most effective treatment is delivered as close to home as possible. The specialist doctors and nurses who work for Kaiser tend to support that model. It has been extremely successful, and we could learn a great deal from it.

Steve Webb: The hon. Gentleman is making a thoughtful contribution. If we blur the distinction between primary and secondary care, should we therefore blur the distinction between health and social care, and merge those budgets, too?

Dr. Stoate: Yes, I believe that we should. A few years ago, when I was a member of the Select Committee on Health, we looked at that issue and recommended blurring the boundary and breaking down that Berlin wall to achieve much more integration of budgets and personnel so that people work across both sectors.

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If we removed the boundary between primary and secondary care, we could provide the care that the patients need, whatever the location, without competing pressures between social and health care, or between primary and secondary care. The system would be much smoother, and patients could understand it. It would achieve what they want and deliver efficiencies. I would go further, as we need to ask what is the role of the acute hospital in the 21st century. That dangerous question needs to be handled subtly—Members on both sides may fear that there is threat to their own unit—but we must have that debate. An acute unit capable of delivering emergency care, followed if necessary by transfer to a more appropriate unit after stabilisation, is required in each district, but what should be provided beyond that? Does the district general hospital need all its acute beds? Is that requirement appropriate in every instance? Is it appropriate for every speciality to be provided in every district general hospital? Do we need a full range of services in each unit?

The vast majority of acute admissions are entirely avoidable, particularly for people with chronic conditions such as asthma or diabetes. Those admission should be regarded first and foremost as a sign that the system has failed. If I have to make a phone call as a GP to admit a patient to hospital, I always ask what went wrong with their care package. Sometimes there is a simple answer—they have had a heart attack or stroke and need to be admitted to hospital to be stabilised and treated—but often there is a failure of social care. I have to send a patient to hospital, because there is not a safety package in the community that I can put into action fast enough to enable them to stay in their own home.

When we send a patient to hospital, it is usually a nightmare. Elderly people, in particular, become institutionalised after only a few days, and it is much more difficult to rehabilitate them so that they can return to their own community. They become disoriented and, all too often, end up spending a long time in hospital or being transferred from hospital to a social care bed, all of which could have been avoided with more planning and blurring of boundaries. Putting people in hospital is expensive, and in many cases it is harmful to their health, particularly to their psychological well-being, as most people would far rather be treated by their family and friends in a familiar environment. Hospital-acquired infections are, by definition, acquired in hospital, not in the community. Far too many people succumb to those.

Reviewing acute sector capacity is not just financially desirable, but essential from a clinical and a patient perspective. In the early 1960s, when the present model of the district hospital was developed, there was a need for large-scale repositories in each area, given the rather limited range of treatments that we could provide and the rather rocky patient pathway that many people followed. It was inevitable that people were kept in hospital for long terms. When I was a junior doctor, I remember working in a district hospital that had access to 1,000 beds, and we were always full. I used to admit acute surgical patients to the ear, nose and throat ward because I had nowhere else to put them. That was 20 years ago. We now have far fewer beds and do not face anything like the same pressures on the beds. Times have changed.

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