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Ms Hewitt: I am sure that the hon. Gentleman will readily acknowledge that in his constituency, as everywhere else in the country, far more money than ever before is going into the NHS. I am not aware of the specific proposals for changes to the accident and emergency services to which he refers, but I will look
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into that and, if necessary, write to him with further information. I stress that such changes in NHS services have to be subject to full public consultation before decisions are taken and changes made.

Several hon. Members rose—

Madam Deputy Speaker (Sylvia Heal): Order. It is clear that a lot of hon. Members wish to respond to this statement. I therefore hope that they will limit their contribution to one question, perhaps followed by a short reply, so that more of them can be successful.

Chris Mole (Ipswich) (Lab): Brokerage was clearly the drug to which the NHS should never have become addicted. Anyone who has run a large public organisation will recognise the need to drive out overspends on a continuing basis. Where trusts still have to recover debts and the financial recovery plans that protect patient services take perhaps two years, rather than one, to take effect, will the fund that the Secretary of State hopes that strategic health authorities will hold enable trusts—where such a fund is available—to deliver over the longer term, rather than the shorter term?

Ms Hewitt: Yes, but as I stressed earlier we want that to happen only in exceptional cases and for the reason that I gave, which is that, where an organisation is taking longer to return to balance, another organisation will have to underspend and thereby postpone improvements that they want and need to make for their own patients.

Angela Watkinson (Upminster) (Con): Barking, Havering and Redbridge Hospitals NHS Trust is entering a year of great change, in which services and patients will have to be transferred from two old hospitals to one new one. That in itself is an enormous management challenge and has cost implications. Does the Secretary of State agree that it is almost too much to ask the trust to achieve that and to recover its budget deficit in one year? Will she seriously consider allowing the trust to recover its budget deficit over two years, or even three, in order to protect services to the public?

Ms Hewitt: I am sure that the hon. Lady and her constituents will warmly welcome the new hospital and the far better facilities that it will offer patients. I have no doubt that the point that she makes is also being made by many hospitals that have been overspending. The chief executive and chair of her local hospital will of course be discussing this matter with the London strategic authority, which has a reserve power; it has the discretion—but only in exceptional circumstances—to allow longer for that recovery to take place.

Joan Walley (Stoke-on-Trent, North) (Lab): I appreciate my right hon. Friend’s acknowledgement that some trusts and local health economies will have serious problems in coming to terms with the deficit. I ask her to continue to take a keen interest in our efforts to move the north Staffordshire health economy out of deficit, which will take longer than the time that the
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Government are allocating. Will she make sure that, in addition to the £60 million that has just been announced for the new building programme, we can get early closure in respect of the fit for the future project and an early decision on the North Staffordshire community hospital?

Ms Hewitt: My hon. Friend has been assiduous in supporting staff and her constituents in the very difficult situation that North Staffordshire hospital faces. I will continue to stay closely involved as their hospital and health community are supported in returning to balance, and I am sure that she will wish to join me in thanking the new chief executive of the hospital, the primary care trust and the acting chairman of the hospital for the work that they are doing with front-line staff to ensure that difficult decisions are taken in a way that has the least possible impact on patients, and that any staff affected are given all the support that they need.

Mike Penning (Hemel Hempstead) (Con): Let me explain one of the reasons why there is such a problem with finances in West Hertfordshire Hospitals NHS Trust, which is in my constituency. Sedgefield, for instance, gets £1,210 per head, whereas last year in Hemel Hempstead, Dacorum primary care trust received £960 per head. There is a clear problem across the country in this regard. On Monday night, the health trust announced, in essence, the closure of Hemel Hempstead hospital, as it is facing £450 million-worth of debts. My constituents will be astonished at the complacent and patronising way in which the Secretary of State has addressed this problem. Their hospital, which was built for their community, is to close.

Ms Hewitt: As the hon. Gentleman knows, the deficit and overspending problems not only in Hemel Hempstead but across Bedfordshire and Hertfordshire are extremely serious. They have to be tackled, and there has been lengthy debate and full consultation on the changes that are needed in respect of different hospitals in that area. He talked about funding, but I should point out that in his constituency there are 65 general practitioners per 100,000 population, which is significantly more than the average and significantly more than in a constituency such as Sedgefield. I am sure that the entire House and the public will be interested to hear that what the hon. Gentleman is asking for is less money for areas such as Sedgefield, which have far greater health needs, and more money for his area. However, his area has already received enormous increases in its NHS budget, and, on average, it has a healthier and wealthier population than the areas from which he would seek to take money.

Mr. Dennis Skinner (Bolsover) (Lab): I say to the Secretary of State on behalf of people such as me and Ronnie that age does not travel alone, and that we use the national health service. He has got a brand new knee—and he is proud of it—and I have been in the cardiac and cancer wards and the rest, and, like Eartha Kitt, I am still here. I have got the national health service to thank for that.

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It is high time that there was some balance in this debate. If the Rover plant had had financial figures of the kind referred to today, it would still be open. If Peugeot had been able to produce the same results, its workers would still be at work, and if the National Coal Board had been able to produce those results, there would be 200 or 300 pits open today. The truth is that this is nothing other than a success story for people like me and the 30 others who had open-heart surgery. But the BBC, which joined with the Tories, refused to come to Brompton hospital and do a success story about the 30-odd people who had open-heart surgery and managed to survive.

Ms Hewitt: My hon. Friend is absolutely right and I certainly could not have put it better myself.

Mr. Edward Leigh (Gainsborough) (Con): At 12.30 pm today, the National Audit Office published the summarised accounts for 2004-05. The Secretary of State has announced today an unaudited deficit for 2005-06 of £512 million. For foundation hospitals, that will rise to £536 million. However, if we look at the audited accounts for 2004-05, we see that the audited account deficit was almost twice as much as the unaudited deficit. In light of what has happened in the last year, what credence can we give to these figures, which are unaudited, and how much trust can we have in financial management in some parts of the NHS?

Ms Hewitt: I made it clear that the figures are unaudited, but I thought it right to publish them for the House, as I undertook to do and as I did last year, rather than wait for the audited figures, which are some months away. The hon. Gentleman is quite right: last year saw a significant shift between the unaudited figures and the audited accounts. Obviously, we do not yet know what the audited accounts will show this year, but for several months the finance and turnaround teams have been crawling over the accounts of the organisations with the biggest financial problems, which has revealed problems that had not been acknowledged or discovered at the point of the mid-year accounts.

The hon. Gentleman mentions the National Audit Office report, of which I have had early sight, and I am grateful to the NAO and the Audit Commission for their recognition that our reforms to bring about greater transparency in the NHS are helping to uncover, and therefore to tackle, some of the longstanding problems.

Mr. Chris Mullin (Sunderland, South) (Lab): But it is true, is it not, that a major cause of some of the deficit is unfunded or underfunded centrally imposed initiatives or wage settlements? What is my right hon. Friend doing to take that into account for the future?

Ms Hewitt: As I said earlier, I am proud of the fact that we are paying our staff more. “Agenda for Change”, in particular, has been a huge step forward, ensuring that we can guarantee our staff equal pay for work of equal value and reward them for taking on
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greater responsibilities. We have put more than £1 billion additional funding into the NHS simply to fund “Agenda for Change”. The great majority of NHS organisations are meeting those obligations, paying staff more and employing more staff, but doing so within their budgets, which we expect the rest of the NHS to do.

Andrew George (St. Ives) (LD): Is the Secretary of State aware that it has been announced today that Royal Cornwall Hospitals Trust—it covers not a better-off area, but the poorest region in the UK—has an estimated deficit of £15.7 million, which is double what was announced only three months ago? Will the Secretary of State inform the House who is responsible for that? Is it the trust, which is appointed by her; is it the perpetual and expensive Government gimmicks endorsed by her Department; is it the funding formula that leaves Cornwall at the bottom of the earnings league table; or is it, in fact, the Secretary of State herself?

Ms Hewitt: There are different specific reasons for the deficits that have arisen in a minority of organisations—there is no single cause. If it were the targets or the pay rises, the deficits would arise everywhere, which is not the case. The Royal Cornwall hospital and the health community there must look into the same issues as other parts of the NHS are having to look into. For instance, are they doing enough day case surgery? Are they doing enough in the community to reduce the number of emergency admissions? Are they carrying out all the proven measures that are being used in other parts of the NHS to deliver better care to patients, with better value for money? The hon. Gentleman mentioned the funding formula, which we have made fairer. It now takes account of issues such as the demands of a rural economy, the proportion of elderly people living within the community and, above all, social and economic deprivation. That is why, over this year and the next, the poorest areas with the biggest health needs that are furthest from their target funding will get the biggest increases. I think that that is fair, and I regret the fact that the Opposition parties do not agree.

Andrew Gwynne (Denton and Reddish) (Lab): I welcome today’s statement, not least because my own strategic health authority and two primary care trusts are in reasonable financial positions. However, can the Secretary of State guarantee that people in Denton and Reddish and elsewhere in Greater Manchester—areas with real health inequalities and real health needs—will not lose out to other areas, often more prosperous, which have run up financial problems?

Ms Hewitt: My hon. Friend raises an extremely important point, which is why I stressed to strategic health authorities that money contributed by primary care trusts such as my hon. Friend’s to help manage the deficit in a different part of the north-west will be
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repaid, and it should be repaid to areas with the biggest health problems and the poorest populations before it is paid to others.

Dr. Richard Taylor (Wyre Forest) (Ind): I gladly acknowledge the improvements, particularly in cancer and cardiac care, but I am completely puzzled by why morale is so low among NHS staff. Why are so many medical staff counting the days to retirement?

Ms Hewitt: I am grateful to the hon. Gentleman for acknowledging the superb work that is being done. He reflects the fact that an enormous amount of change is and has been going on in the NHS for some years, and of course that is enormously demanding for staff. The reason that change is continuing is, first, because it is working. I am sure that the hon. Gentleman would, like me, welcome the fact that the latest survey of patients showed that 90 per cent. believed that their NHS care was good, very good or excellent—the highest-ever level of patient satisfaction. That places demands on staff and we have to continue to change within the NHS in order to meet all the challenges of which the hon. Gentleman is so well aware, including the need to release resources for the new drugs and treatments that are becoming available, which patients quite rightly want to receive as quickly as possible.

Hugh Bayley (City of York) (Lab): Does my right hon. Friend agree that it would be unacceptable if deficits created a new postcode lottery whereby patients from one area had to wait longer for treatment than patients in a neighbouring area? Selby and York primary care trust has the worst deficit by far in the north of England. If it had been required to balance its books in a single year, it would have had to cut spending by more than 15 per cent., which would have had devastating consequences for patient care. I welcome my right hon. Friend’s decision that some PCTs with the worst deficits will have longer than a single year to balance their books, but would she be prepared to meet me and senior health leaders from York and Selby to discuss the recovery strategy and reassure herself that she is not imposing conditions that would lead to an unacceptable postcode lottery?

Ms Hewitt: Let me stress that our targets—the six-month maximum wait, or for dramatically improved cancer care—apply everywhere. We expect them to be achieved even in organisations with serious financial problems. Of course, I readily agree to meet my hon. Friend to discuss those matters in more detail.

Sir George Young (North-West Hampshire) (Con): I welcome the increased investment in the NHS, but is not the introduction of practice-based commissioning, payment by results, patient choice, the merger of the primary care trusts, the abolition of the strategic health authorities, the roll-out of foundation trusts and the introduction of a new IT system simply imposing too much change at the same time? The people trying to manage those changes are currently having to bid for their own jobs. Does not the NHS really need a period of stability and fewer initiatives from Whitehall?

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Ms Hewitt: When the Minister of State, Department of Health, my hon. Friend the Member for Leigh (Andy Burnham) recently announced, in my unavoidable absence, changes to the primary care trusts, they were widely welcomed. I know from my own city of Leicester that people have felt for some time that it was wrong and unnecessary to have two PCTs when one PCT, coterminous with social services, could do even better than the existing organisations. I believe that those changes were necessary. The right hon. Gentleman mentioned practice-based commissioning, and I am delighted that already a number of GP practices are signing up to it. That work will continue because it provides a way of ensuring that we can deliver better care more conveniently for patients and closer to home. We want to provide better care and better value for money as well.

Richard Burden (Birmingham, Northfield) (Lab): My right hon. Friend will be aware that South Birmingham primary care trust is one of the better-managed PCTs that has kept to budget and contributed to improvements in patient care. Indeed, some of the local hospitals, such as University hospital, also have a good financial record. Although they and I understand the logic behind the reserve and the fact that they will need to contribute to it, does she understand that they need some more reassurance that, while the much-needed improvements that they have planned may be delayed somewhat, they need to come on stream, so that their health needs and the needs of those communities, which are often uneven but nevertheless very severe, will be addressed and so that they will not have to wait an unreasonable time for that to happen?

Ms Hewitt: I can certainly give my hon. Friend that reassurance. One of the reasons I am being so tough on the overspending organisations is that I am not prepared to allow the areas with the greatest health needs, such as his constituency, to go on bailing out overspending in areas that often have more NHS services than those poorer areas. I know that he and his constituents very much welcome the recent announcement that University Hospital Birmingham Trust will have a badly needed new hospital, which will enable it to go on improving the care that it offers to the people of Birmingham and the west midlands.

Mr. Shailesh Vara (North-West Cambridgeshire) (Con): By the Secretary of State’s own admission, three out of 10 NHS organisations are in deficit. Although she tried to diminish the importance of that figure by making excuses, the reality is that 30 per cent. of NHS organisations are in deficit, the impact of which is felt by thousands and thousands of people who receive less treatment than they would otherwise. It is regrettable that the Secretary of State cannot bring herself to admit that failure under her stewardship, but it is worse still that she cannot bring herself to apologise to those thousands and thousands of people. I invite her to review the position and to consider apologising to the thousands of people who are suffering.

Ms Hewitt: The hon. Gentleman, whose party voted against the increased investment in the NHS, really ought to acknowledge the fact that thousands of
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patients who were waiting in pain for months—sometimes years—for operations under the Conservative Government are now being treated better and faster than ever before. It is high time that he acknowledged that and praised the NHS staff for those achievements.

Ms Diana R. Johnson (Kingston upon Hull, North) (Lab): What extra resources will my right hon. Friend provide to those areas, such as my constituency in Hull, whose PCTs are in balance and well managed, despite the huge health challenges that they face?

Ms Hewitt: The extra funding that is going into the NHS this year and next year will be more than 9 per cent. of budget, and because of the fair funding that we are introducing, the areas with the greatest need will get the greatest funding increases. I know that that will be welcomed by my hon. Friend and her constituents.

Mr. Gregory Campbell (East Londonderry) (DUP): There has undoubtedly been a massive increase in expenditure on the NHS, but in some areas, particularly in Northern Ireland, substantial and significant problems remain. Will the Secretary of State confirm that the Government will undertake a comprehensive and radical review of NHS funding, along with many more preventive measures aimed at the higher risk groups in society?

Ms Hewitt: The NHS in Northern Ireland is, of course, a devolved matter, but we have already undertaken a substantial review of NHS funding; the report of Sir Derek Wanless, in particular, made it clear that we have the fairest and the most efficient funding system in the world. Labour Members would certainly never want to depart from the basic values of the NHS: funding from general taxation and treatment based on clinical needs, not on ability to pay.

Mr. Bob Blizzard (Waveney) (Lab): The James Paget health care trust, which runs my local hospital, has no deficit. It has met and, indeed, exceeded all its waiting list targets and every other target that it has ever been asked to meet. That is why it is a well-managed, three-star hospital. Waveney primary care trust has a small but manageable deficit. We are delighted that we are about to be merged with Great Yarmouth PCT. I thank my right hon. Friend for that decision. The Great Yarmouth PCT has no deficit, but the strategic health authority is requiring it to loan about £3 million to other trusts. Will she guarantee that we will get that money back? Can we be in the first group of trusts to get it back, bearing in mind our levels of deprivation and health inequality?

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