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Andy Burnham: The hon. Gentleman mentions efficiency and effectiveness. Does he accept that it might be more efficient to ensure that, if patients do
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not need to go to hospital for an out-patient appointment, they have the appointment in a community setting?

Mr. Burns: I completely accept that, but it is not the point that I am making. A GP is qualified to decide whether patients need to be seen in a community setting or whether they should see a consultant at the local hospital. The GP has the expertise, training and capabilities to make that decision.

Mike Penning: Does my hon. Friend know that, even if one sees a consultant, and the consultant, who is much more qualified than a GP, decides that one needs to see another consultant because the ailment requires the opinion of two consultants, one has to be referred back to the committee? It appears that even consultants are not qualified to refer.

Mr. Burns: I knew about that, although I confess that I had forgotten my hon. Friend’s valid point. After many years of GPs throughout the country working well, I do not understand the need for them to be second-guessed now. I should like the Minister to intervene because he could also tell me who conducts the assessment.

Andy Burnham: Does not the hon. Gentleman accept that many such services throughout the country are clinically led? They ensure that, if possible, someone can be treated outside a hospital setting, at less cost to the whole local health economy and the potential benefit of the individual patient, who will not have to go into the hospital system, with all the inconvenience that that can cause. That makes sense for everybody. Will not the hon. Gentleman balance his remarks and consider for a moment that there may be a positive outcome all round?

Mr. Burns: The Minister and I may have to agree to differ because I have more faith in the judgment of GPs to cut out bureaucracy, but let us not argue about it. Even if one takes the Minister’s view that there should be an assessment committee—

Andy Burnham: Committee?

Mr. Burns: All right, an assessment group— [Interruption.] Let us not quibble about figures and simply say an assessment. Even if one agrees with the Minister that there should be an assessment, why does a four-page letter have to be sent from the GP’s practice, not the hospital? If the assessment confirms the GP’s decision, why cannot the hospital chosen by the patient simply write, as happened before choose and book, to accept the patient’s need to see a consultant and to invite them to turn up at the hospital on whatever day and time is suitable? That would cut out a lot of inefficiency. Of course, one then has the joy—I cannot tell the House about it today because the seven days have not expired—of finding out how many times I will have to ring this number to get through to the appointments people.

In conclusion, I ask for more thought to be given before bringing in unnecessary assessments, extra paperwork, extra costs and extra time-consuming demands. What will happen is that one will not get an
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appointment for 13 days at the earliest, whereas under the old system one had an appointment within seven days—although when one actually saw the consultant and treatment started was indeterminate. That is my simple point. I ask for the House’s forgiveness because I am due to attend a meeting and have to leave now, but I certainly hope to return to hear the winding-up speeches.

6.1 pm

Mr. Stewart Jackson (Peterborough) (Con): It is appropriate to examine the financial and political context of our debate on NHS deficits. I concede that there has been a 7.5 per cent. real-terms increase in funding over the last 10 years under this Government. Indeed, the only promise that the Prime Minister has kept is that our spending on health is now at the European average. By the end of the financial year 2008, we are looking at spending £92.6 billion on health care. There have been some successes, as I say, with improvements in mortality rates in cancer, coronary heart disease and in-patient waiting times.

There have also been significant areas of failure, however. Mental health services and stroke care have deteriorated and obesity has gone up by 500 per cent. since 1980. Last week, we were quizzing the Under-Secretary of State for Health on audiology services—a major area of failure by the Government, who have done nothing to alleviate the problem in the last 10 years.

I believe that the Government have tested to destruction the idea that it is possible to transform the NHS by spending money—without fully costed, comprehensive reform of how the NHS works. The notion that increased funding was all that was needed certainly held sway under the calamitous stewardship of the right hon. Member for Holborn and St. Pancras (Frank Dobson) at the end of the 1990s. It was a theory completely without foundation. Between 1979 and 1997, real expenditure on the NHS went up by 74 per cent.; nurses’ pay went up 79 per cent. between 1988 to 1995 when the economy grew by only 54 per cent.; and infant mortality in the first 12 months was more than halved between 1979 and 1997. As the hon. Member for Romsey (Sandra Gidley) said, the taxpayer is entitled to ask where all the money has gone.

As we enter the period of the comprehensive spending review, one third of NHS organisations are in deficit—a gross deficit of £1.33 billion and a net deficit of £600 million. A wider question is why the NHS is not delivering more wide-ranging reforms and is doing so relatively badly by international comparisons. The most recent Organisation for Economic Co-operation and Development data—published last year—on mortality rates and potential years of lives lost that are a priori preventable show that we rank 22nd out of 26 OECD countries and that we have fallen two places in the period between 1999 and 2003. In fact, the UK has seen no real improvement on mortality rates in respect of stroke care, for instance, and deaths from heart disease are significantly in excess of other OECD members—with the exception, I concede, of the United States.

Where has all the money gone? The King’s Fund found that in the financial year 2005-06, almost half
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the growth in spending had gone on higher pay for general practitioners and consultants. Indeed, the Secretary of State confirmed in her oral evidence that in the three years to 2005, GP salaries had gone up by 50 per cent. and hospital consultant salaries by 27 per cent.

At the Select Committee hearings in November, the Secretary of State also conceded that administrative and clerical staff had risen by 72,695 posts since 1997 and that there are now 230,000 administrative and clerical staff employed in the NHS. As I mentioned earlier to the hon. Member for Romsey, Ministers are unable to tell us what contribution they are making to wider strategic plans in the NHS because they do not collect such data. We await with interest the Select Committee report on work force planning, which I am sure will be a smorgasbord of similarly disobliging data.

The Select Committee learned that the total capital cost of 54 major PFI projects was more than £25 million—we are not talking about loose change here—and had risen by an average of 31 per cent. after the outline business case. No wonder nurses feel aggrieved about being forced to accept a derisory 1.9 per cent. pay rise to fund this incompetence on an epic scale. The working time directive, “Agenda for Change”, GP consultant contracts have all contributed to significant cost pressures.

Andy Burnham: Is the hon. Gentleman suggesting that he and his party would favour repealing elements of “Agenda for Change”?

Mr. Jackson: I am merely saying that the Government’s incompetence when it comes to executing “Agenda for Change” is awe-inspiring. A Conservative Government would not have gone about it in such a cack-handed and incompetent manner.

We have seen no evidence of increased productivity over the last 10 years. The Government have preferred to focus on endless reorganisations, which have had little or no impact on patient care. Forty central NHS agencies have been created since 1997; and 400 or more performance targets mean a constant between balancing the books and meeting centralised targets. As we know, targets can be manipulated. In 2004, the Audit Commission cited evidence that in some trusts patients were removed from waiting lists once they had been provided with a future date for an appointment. They were given immediate appointments that they were not able to attend and then classed as refusing treatment or having treatment inappropriately suspended.

Anyone who genuinely believes in real reform of the NHS would welcome the Government’s moves in that direction over the next few years. Conservative Members agree with patient choice and plurality of providers. We believe that independent sector treatment centres are a good development, as are payment by results and practice-based commissioning, but where is the commitment to support the development of care networks and integrated services and why the palpable failure to develop community hospitals, which was a manifesto commitment in May 2005?

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Bob Spink (Castle Point) (Con): While my hon. Friend is discussing independent treatment centres, may I ask him whether he saw the written answer that the Minister—in his place there on the Treasury Bench—gave me on Tuesday 6 March? It said:

Does my hon. Friend agree that ISTCs will get the less costly more straightforward cases to deal with—and deal with them very well, I am sure—leaving the NHS trusts with the more complex, more costly cases, yet without unit price increases to reflect that change? Is it not another disaster in the making for NHS funding?

Mr. Jackson: My hon. Friend makes a valid point. It would have helped if the Government had introduced the new tariff on time and given trusts the ability to make the appropriate provision in that regard.

I share the concern of the right hon. Member for Rother Valley (Mr. Barron) that funding increases in the post-2008 era might be as little as 2 to 2.5 per cent. up to 2011, yet evidence-based outcome measurement barely features in Department of Health policies. Activity does not, of itself, mean improved outcome productivity. Professor Alan Maynard of York university has observed that patient reported outcome measures—PROM—barely register in respect of incentives for GPs and consultants and that, at present, we are talking about a cultural issue. He states:

Regrettably, we are a long way from the example of Kaiser Permanente, which delivers better quality care to patients through close alignment between managers and clinicians in acute hospitals and primary care, as reported in an article in the British Medical Journal by C. Ham in 2003 entitled “Hospital bed utilisation in the NHS, Kaiser Permanente and the US Medicare Programme”.

In its most recent paper on the issue, published in February 2006, entitled “Public Sector Productivity”, the Office for National Statistics found that productivity in the NHS lies anywhere on a continuum between an increase of 0.2 per cent. per annum in 1999-2004 and a decrease of 0.5 per cent. in the same period. That is set against a background of unprecedented spending and output and activity levels.

Mr. Graham Stuart (Beverley and Holderness) (Con): Does my hon. Friend know from his experience before entering the House whether any chief executive would have kept his job if he had doubled spending while seeing no increase—and, in all likelihood, a decrease—in productivity?

Mr. Jackson: The Select Committee heard significant evidence from many people in the private and public sectors. There was a huge amount of anecdotal and empirical evidence pointing to an enormous amount of mismanagement, mainly at Government level through
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the Department, but also—I have to say, in fairness—at local level. The answer to my hon. Friend’s question is an emphatic no.

In their paper for the King’s Fund, Appleby and Harrison found that the benefits of the extra funding would probably not outweigh the costs, if a traditional cost-benefit analysis were carried out. That is a damning finding. Unfortunately, that is the record of this Government.

I would like to focus on three key areas arising from the Select Committee report: the funding formula and the link to deficits; resource accounting and budgeting, and the target culture; and the impact on patient care, training and development of the cuts resulting from trusts’ deficits.

The Chairman of the Select Committee said that the funding formula dated roughly from 2003. Justified concern has been expressed over the fairness and accuracy—or otherwise—of the formula, and particularly over its static nature and the lack of proper accounting relating to rurality and to multi-site hospitals, particularly in acute trusts. In regard to methodological failings, I would draw to the House’s attention the comments of Professor Mervyn Stone of University college London, who described the methodology as based on “questionable” statistical methods, no less. He highlighted the fact that the present formula is based on the current use of health services and indirect measures of health care need. North East London strategic health authority made the point that the formula was

The Department’s chief economic adviser found only a

but it cannot be a coincidence that Professor Asthana told the Committee that there was a clear link between the level of growth in funding and deficits, with 34 out of 60 PCTs in deficit having received a smaller than average increase in funding. Only four receiving the biggest increases were in deficit.

Age is also a factor. Witnesses appearing before the Committee made the point that the funding formula makes no weighting provision for areas with a high proportion of older adults, such as the south-east and the east of England—my area—where the burden of disease is naturally higher among older people. In fairness, I am pleased to acknowledge that the Department has promised, in its response, a thorough review of the funding formula, including the market forces factor, rurality, and practice-level formulae. We look forward to seeing the results of the research being undertaken by the advisory committee, but I hope that it will act with a degree of alacrity that has not been present hitherto.

With respect to the resource accounting and budgeting system, I am disappointed that the Department is unwilling to offer assurances that the problem of double deficits caused by the RAB system, which has a direct impact on patient care, will be addressed. I hope that the Minister will be able to comment on that later, particularly as the Audit
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Commission and the Select Committee have found the RAB system to be an unsuitable and unsustainable accounting regime.

The Secretary of State’s pledge to bring the NHS into break-even or surplus by this month is built on assumptions that entail widespread underspends, recourse to contingency reserves and other smoke-and-mirrors accounting practices. I want to quote the Committee’s finding in this respect:

That is an important point.

We also know that targets for emergency admissions, accident and emergency services and waiting times have had a huge impact and resulted in a huge commitment of scarce resources, without the commensurate improvement in patient care. Indeed, a Healthcare Commission patient survey in 2005 found that 32 per cent. of patients were admitted to A and E within an hour in 2005, compared with 43 per cent. in 2004. That was within the four-hour target, but the service had none the less been reduced.

Deficits have clearly had a major impact and serious consequences, not least in the constituency of my hon. Friend the Member for Hemel Hempstead (Mike Penning) and those of other Members across Hertfordshire.

Mr. Charles Walker (Broxbourne) (Con): As a Member representing a Hertfordshire seat, I must point out that the deficits are being addressed in a completely brutal way, putting financial requirements ahead of clinical needs. We have been given two years to pay off a £55 million deficit. That will involve a significant reduction in services to my constituents in Hertfordshire.

Mr. Jackson: I sympathise greatly with my hon. Friend. My own trust has seen a £7.7 million deficit resulting in the loss of 185 posts and many bed and ward closures. I commend to the House the sterling efforts of all the Members of Parliament representing the Hertfordshire constituencies on behalf of their constituents to fight the Government’s wrong-headed plans.

The impact of double deficits, of the European working time directive, of the “Agenda for Change”, of the mismanaged consultant and GP contracts, of the ongoing IT debacle and of the many other examples of poor central management is best summed up by the hon. Member for Stroud (Mr. Drew), who is not in his place at the moment. He has fought a brave battle against reductions in services in his Gloucestershire constituency. In his evidence to the Committee, he said:

Across the country, more than 17,000 posts have been lost, operations have been delayed with the imposition of minimum waiting targets in at least 43 per cent. of acute trusts, funding has been reduced
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for soft targets such as public health, mental health and sexual health, and there has been a freeze or real terms cut in training and development and staffing posts, as evidenced by the contribution of the hon. Member for Staffordshire, Moorlands (Charlotte Atkins). Sadly, the Government have made no commitment as to when cuts in training budgets will end; that is as we enter an era of potential health spending famine, not feast. The Government have failed to make use of unprecedented and generous spending on health to deliver real and long-lasting reform—which is the basis of better health outcomes—and to achieve the target of reaching European levels of health care. As the report makes abundantly clear, they have missed an historic opportunity to do so.

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