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Mr. Lansley: My hon. Friend makes a very interesting point. In itself, payment by results is not a problem; indeed, it is necessary. When we were in government, we made it clear that we wanted a system in which the money follows the patient. If a hospital does the work, it should be paid for it, but in any rational system one would combine the implementation of payment by results in the hospital sector with a process of demand management in primary care. Of course, when we were in government we implemented hospital sector reforms that incentivised activity, while at the same time introducing
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GP fundholding, which provided effective demand management in the primary care sector. The evidence on deficits that was given to the Select Committee makes it clear that many NHS managers have experienced centrally imposed change, costs and upheaval, which has destroyed any ability that they might otherwise have had to conduct their business planning.

During the early part of this year the Department of Health incompetently got the tariff wrong, and it had to be completely changed. One chief executive complained to the Select Committee that changes to the purchasing parity adjustment completely tore up the business planning. Those are precisely the matters that Ministers are responsible for. It is no good their pointing the finger—as the Secretary of State is always doing—at NHS managers, saying that they are responsible for the deficits; the Government are responsible for them. By having a debate on this subject today, we saved the Secretary of State from having to meet the Select Committee this morning—she will have to do so next Tuesday—and offer it an explanation. The Committee said in a previous report that PCT reorganisation would be a costly distraction in the NHS—a claim that she rubbished at the time. However, last week the Department of Health produced a document stating that one main reason for the deficit is the additional cost of PCT reorganisation.

Paddy Tipping (Sherwood) (Lab): Does the hon. Gentleman stand by his claim that 20,000 people currently working in the NHS are going to lose their jobs, and in particular, that 1,200 people currently in work at the Nottingham University Hospitals NHS Trust are to lose their jobs? No redundancies have been made in Nottinghamshire; it is the hon. Gentleman who is causing worries about job losses.

Mr. Lansley: The hon. Gentleman is misrepresenting what I have said—and, indeed, what NHS employers and the Royal College of Nursing have said. We have all been entirely consistent. We have been talking about up to 20,000 jobs being lost in the hospital sector alone this year, not across the whole of the NHS. The hon. Gentleman cites Nottingham. Well, I visited the Queen’s Medical Centre in late May, just after the announcements were made, and the figure that I gave is precisely the one that I was told about: 1,200 potential job losses. At the time, at the end of May —[Interruption.] Yes, I have always made it perfectly clear that the figure is up to 20,000 jobs. If the Minister of State, Department of Health, the hon. Member for Leigh (Andy Burnham), is disputing it, I should point out that in a briefing for a debate that took place in the latter part of last month, NHS employers made it clear that it is now their view—as it is that of the Royal College of Nursing—that that is a perfectly straightforward estimate of the number of jobs that will be lost in the NHS.

At the time, it was anticipated that 1,200 jobs would be lost in Nottingham University Hospitals NHS Trust, and it was believed that 600 of those might be lost by way of redundancy. Those figures will have changed because, as the hon. Member for Sherwood
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(Paddy Tipping) and others have rightly said to Ministers, the trust was being asked to make changes and financial cuts to a wholly impractical time scale that did not match its business plan. It has been given more time, but many other NHS organisations in other places are not being given the time or opportunity that it has rightly been given.

The Minister of State, Department of Health (Andy Burnham): If I understand the hon. Gentleman correctly, he is now saying that the figures in his party’s campaign document are wrong. Will he and the right hon. Member for Witney (Mr. Cameron) stop repeatedly quoting the 20,000 figure in this House? Will he withdraw those figures and make it absolutely plain that they are inaccurate?

Mr. Lansley: No, I will not withdraw them, because they accurately reflect what has been said inside the NHS. They accurately reflect what NHS employers say are the potential job losses in the NHS this year, and they are precisely the figures that Beverley Malone and others at the Royal College of Nursing say reflect their view.

I find it absolutely intolerable that Ministers are parading the fact that they can make nurses compulsorily redundant. Some 135 nurses are to be made redundant, and for Ministers, that is a cause for self-congratulation. They say, “Oh, only 1,000 people are being made compulsorily redundant.” It has always been true that up to 20,000 jobs will be lost. Some of those will be compulsory redundancies and others will be voluntary, and many more will be lost by not filling vacancies. The consequences of that are being felt, in that 50 per cent. of nurses coming out of college cannot find jobs, and physiotherapists cannot find jobs, either. It is outrageous that Ministers are trying to misrepresent what is going on in the NHS. That is why NHS staff look to us, to the Royal College of Nursing and to their representatives—including Unison and other trade unions—who came here to meet my right hon. Friend the Member for Witney and me. They made their points, and they may have met the Minister as well, but if they did he clearly was not listening.

Daniel Kawczynski (Shrewsbury and Atcham) (Con): In reply to my hon. Friend the Member for The Wrekin (Mark Pritchard), the Secretary of State said that Shropshire health authorities had been overspending, which has led to a £34 million deficit at the Royal Shrewsbury. But surely the people who are making such decisions are spending the money on vital services and staff salaries, so it is not overspending, but spending on what is required for the people of Shropshire.

Mr. Lansley: I understand the point that my hon. Friend makes. It is this Government’s past failure to make appropriate decisions that has put hospitals such as the Royal Shrewsbury and the Princess Royal, in Telford, in their current situation. They should have been given much greater support at an earlier stage to help with redesigning.

Several hon. Members rose—

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Mr. Lansley: I shall give way to my hon. Friend the Member for Upminster (Angela Watkinson), and then I really must make progress.

Angela Watkinson (Upminster) (Con): My hon. Friend will appreciate that Havering PCT is efficient and well run, but that its budget has been top-sliced to subsidise other, less well-managed PCTs in London. Does he agree with me that that is demotivating, and that there is no incentive for PCTs to balance their budgets if they know that they will have to subsidise others?

Mr. Lansley: I understand the point that my hon. Friend makes. London PCTs top-sliced not just once but twice, in order to deal with a ballooning deficit. Indeed, the London-wide NHS is forecasting a bigger deficit. A well-run PCT is, unfortunately, the exception rather than the rule. Ministers appear not to take responsibility for that, but it was they who established PCTs. Just last month, the Healthcare Commission told us its view of PCTs’ financial resource management record. Apparently, 80 per cent. of financial resources go through the hands of PCTs. What about the effectiveness of PCTs? How many PCTs did the commission regard as “excellent” in their use of financial resources? None—not one out of 303. How many were regarded as weak, with immediate action needed to remedy failures? The answer is 124. That is outrageous, and a condemnation of the Government’s failure in financial control—a failure that begins in the Department of Health and goes all the way down to PCTs.

Steve Webb: I want to be clear about whether the hon. Gentleman is for or against using top-slicing to support struggling PCTs. The hon. Member for Upminster (Angela Watkinson) obviously does not want top-slicing, because her PCT would be okay without it. If the hon. Gentleman agrees with her, is he saying that struggling PCTs should not have the money that they would otherwise get?

Mr. Lansley: I have always made it clear that indiscriminate top-slicing is highly undesirable. The Government are returning to an indiscriminate form of brokerage. In the past, the NHS bank system was meant to be transparent. Indeed, the Audit Commission has said that we need a much more transparent NHS banking function, although there was no mention of that in the Queen’s Speech. The job of PCTs is to spend the money that they are allocated as effectively as they can, for the benefit of their populations, not to generate artificial surpluses to be allocated across the country.

That is a tough message. Some PCTs and hospitals have plunged into deficit over the past two years and will have to balance their books over a period, but there is no managed system to allow that to happen. Instead, we have a system of indiscriminate top-slicing that is meant to try to offset the deficits, and that is not good enough.

The Queen’s Speech of 18 months ago said:

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Yesterday, it said:

If it seemed that we had heard it all before, it was because we had. Of course the NHS must remain true to its founding principles, but it also needs investment with reform. The Government talked about that, but they never achieved it. The Conservative Government of the early 1990s introduced reform and, for a while, we had investment with reform. However, I admit that the investment was not sufficiently sustained through the 1990s to maintain progress —[ Interruption. ] Well, it might be useful to do some honest talking in the House for a change, and I shall talk about some honest figures in a while.

No one disputes that under Labour a great deal of extra money has been made available to the NHS, but there has been a complete lack of consistency and coherence in reform. Instead, we have had the sort of organisational upheavals that I discussed with my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton).

This Queen’s Speech should have delivered a future framework for the NHS that would have allowed us to see the direction of travel routinely talked about in the Department of Health. That framework needs to be independent; it should help people working in the NHS to understand how the future will be for them, and give them the freedoms at every level of the organisation necessary to allow them to focus on patients.

However, Ministers at the Department of Health are like rabbits caught in the headlights of NHS deficits. They appear incapable of delivering even on their own reform promises. In her first flush of enthusiasm, the Secretary of State asked Lord Currie of Marylebone and a regulatory review panel to advise what the regulatory framework should look like. He produced a report before Christmas last year, but she has neglected to publish it. She said that there would be a document in the spring, but spring came and went and nothing happened, and now the Department is promising a White Paper—at some point. We will arrive in 2008 and NHS staff will still have no idea what the future will look like. They will look to a Conservative Government to deliver that future.

Tony Baldry: Does my hon. Friend agree that it was extraordinary that the Secretary of State did not refer to reorganisation? Maternity, paediatric and accident and emergency services across the country are being downgraded. Last year we had Currie; this year, we have Carruthers, but the Secretary of State did not mention him or say what he was meant to be doing. People confronted with downgraded services remain in the dark about what the right hon. Lady and her Department intend.

Mr. Lansley: My hon. Friend makes a good point. The Secretary of State is not talking about such matters because she has no credibility. We in this House and people across the country know that Ministers have been poring over so-called “heat maps” to identify where the media pressure on them will come from, and where the political advantage lies with NHS reorganisation. The Department’s credibility has diminished to the
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point where the NHS chief executive has to write to Members of Parliament to restore some faith in the Government’s policy.

We need more than just letters from the NHS chief executive. Service reorganisations around the country have to be justified on straightforward, clinical service grounds. The specialisation of services must be balanced with the access available to them, and NHS staff must understand the arguments involved. Moreover, consultation with the public must be real and genuinely taken into account. At present, that consultation is driven by the Department of Health on financial grounds, or is held as a result of staffing pressures stemming from the working time directive. Two and a half years ago, Ministers said that the directive would not impact on services, but it has done. They failed to amend it, and they failed again at last month’s European Council. A change in the working time directive would make a big difference to NHS staff.

Ms Hewitt: The hon. Gentleman should admit that the previous Conservative Government negotiated the working time directive. They did it so badly that its wording, and the judgments that have flowed from it, mean that the NHS faces severe costs and challenges. Whenever a local NHS proposes a reorganisation on clinical grounds—the recent decision to reorganise maternity services in Calderdale and Huddersfield is an example—the hon. Gentleman goes out on the streets to oppose it. Will he start supporting those decisions instead?

Mr. Lansley: First, it would make a difference if we knew what the clinical arguments were. At present, financial and staffing issues are meshed together with clinical service issues. It is not a coincidence that Ministers and the NHS chief executive say that 60 accident and emergency departments and maternity units across the country must be downgraded, just at the moment when they have deficits worth £1.3 billion. That is cause and effect: if the service redesign were based on clinical reasons, such changes would be happening locally and on a planned basis, not as a result of financial crisis.

The Secretary of State mentioned the working time directive. Two and half years ago, the Government never suggested that the previous Conservative Government had failed in the negotiations on the directive. We had an opt-out on the social chapter, and the new deal for junior doctors meant that their hours were being reduced anyway. The working time directive was not going to interfere with that, as Ministers made clear. Indeed, in mid-2004, the present Secretary of State for Work and Pensions—then a Minister of State at the Department of Health—said that no adverse service consequences would arise from the directive’s implementation. The Government said that they would renegotiate the directive to remove any adverse effects, but they did not do so. They have continued to fail in that respect, so we need to hear no more nonsense from the right hon. Lady about that.

It is time to get some facts on the record. Of course there have been improvements over the past nine years. When I said at a recent Prime Minister’s Question Time
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that the NHS had improved over the past decade, the Prime Minister seemed to think that that was an admission on my part. Crikey, it is precisely because of the hard work done by NHS staff that things have improved, but they know—

Andy Burnham: Will the hon. Gentleman give way?

Mr. Lansley: No. Staff in the NHS know that that improvement has been in spite of the Government, not because of them. It has come about in spite of nine organisational upheavals in nine years, and in spite of bureaucracy that eats up all the extra money. The Secretary of State talks about the extra staff in the NHS, but she does not admit that, although there are 25 per cent. more nurses, there are also 54 per cent. more administrators and 75 per cent. more managers and senior managers. The rate of increase in the number of administrators is double that in the number of nurses, and the number of managers is rising at three times the nurses’ rate.

We do not argue that the NHS is not improving, nor that the staff are not delivering those improvements. What we say is that the rate of improvement is far lower than it ought to be, given that two and a half times as much money is being put in and that the Government have had nine years of opportunity to get things right. What about major hospital projects? Even with the private finance initiative, there have been only five additional major new hospital projects a year since 1997—the same rate as before.

The Prime Minister talks about cancer death rates as though the Labour Government were personally responsible for saving people from the threat of cancer. Let us look at the figures. In the seven years up to 1997, the rate of improvement in mortality for people with cancer aged under 75 fell by 19.6 points per 100,000 of the population; in the seven years since 1997, the rate fell by 17.3 points per 100,000. The rate of improvement in cancer mortality for the under-75s was higher before 1997. The comparable figures for coronary heart disease show that the reduction before 1997 was 42.7 and that since then it has been 44.3. Those are long-term trends, not just in the UK but in other countries. They are not the result of Government investment; even less are they the result of Government targets.

I have already mentioned waiting times. I have another statistic, derived from the answer to a question to the Department of Health in July about average waiting times: in 1997, according to hospital episode statistics, the average waiting time was 11.8 weeks, but in 2005 it was 12 weeks. That does not say much for the improvements under the Government.

In Wales— [ Interruption. ] The Minister of State, the hon. Member for Leigh, says that he is not responsible for Wales, but as this is a debate about the whole of the United Kingdom, he might have liked to bring along somebody who is responsible, because one in 10 people in Wales are waiting for an operation; 20,000 more people are waiting for operations in Scotland than in 1997.

The Government may say that 400,000 fewer people are on waiting lists than in 1997, but that is not because there has been a big increase in NHS capacity and more patients can be treated. The change is almost
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entirely explained by a reduction of 400,000 a year in the number of decisions to admit people for in-patient treatment. People are being kept as out-patients rather than being admitted to hospital.

Daniel Kawczynski: Will my hon. Friend give way?

Mr. Lansley: No, I apologise to my hon. Friend, but I must make some progress.

Productivity is at the heart of the issue. If public services are not improved through greater efficiency, the service cannot be delivered for patients. That relates to the structure of reform. In the run-up to 1997, we were reducing the average length of stay by 9 per cent. a year. The Secretary of State is always telling people in the NHS that they must reduce length of stay, because that is a means of delivering efficiency, yet since 1997 the time has been going down at the rate of 3.25 per cent. a year—about a third of the rate before 1997. If the productivity achieved in the run-up to 1997 had been maintained since then, 1.4 million more operations would have been carried out in the NHS this year. Waiting lists could indeed have been a thing of the past if the Government had remotely delivered on the productivity that we achieved before 1997 and allied to it the investment that they have been making in the health service. That will be our job in the future.

Where is the legislation that we thought would be included in the Queen’s Speech? The Secretary of State talks about looking for an early legislative opportunity to reform patient and public engagement, but first she will have to convince people that the Government have any idea about what they are doing on that subject. They abolished community health councils, and they are planning to abolish the Commission for Patient and Public Involvement in Health, and patients forums. There is little understanding or support for the new local involvement networks that the Government propose. However, as we are already discovering, there is far more support for a more independent structure of the kind that we are talking about—an independent health watch.

Where is the review of regulation? Where is the legislation for the proposed extension of direct payments in social care, especially to those who lack capacity? Where is the commitment to public health that ought to have been in the Queen’s Speech? Such a commitment is not just a matter of legislation, although there is a case for its review; it is needed to deal with rising health inequalities, to combat the fact that in his annual report in July the chief medical officer had to say that far from achieving the fully engaged scenario that was at the heart of his hopes for the NHS, we are now in the worst-case scenario. There are rising public health problems due to obesity, drug and alcohol abuse and sexually transmitted infections.

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