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16 May 2007 : Column 304WHcontinued
Ms Abraham commented on the positive way in which HM Revenue and Customs...had worked constructively with her office on the issue of tax credits. HMRC responded to her report to Parliament in June 2005 with some substantial changes to the administration of the system and agreed new ways of handling complaints.
I want to touch on the comments made by the hon. Member for Ludlow, even though he is not still in his place, because he is a member of the Public Accounts Committee and I think it right to do so.
Danny Alexander: The Minister indicated that he is keen for information to be provided on tax credits, and I welcome that. Will he ensure that information about the pilot in relation to couples is published, so that those of us on these Benches, and indeed organisations outside the House, can scrutinise and evaluate it along with Treasury officials?
John Healey: In the Treasury and HMRC, we are keen to respond when we can to suggestions or requests for greater information about how the tax credit system is working. We shall certainly aim to do that, and the pilot is clearly of significance to not only HMRC and Treasury Ministers, but a much wider audience.
The hon. Member for Ludlow basically said that the tax credit system is complex. With the important aspect of flexibility in the system inevitably comes a degree of complexity, and in the end the judgment has to be whether the advantages of the flexible system outweigh the disadvantages and difficulties that can be caused by the system becoming more complex to understand. The flexible system of tax credits means that families can get extra support when their needs are greatest. That is particularly important in todays modern labour
market, in which in any one year 3 million people change jobs and at least 200,000 men and women move into new, better jobs and see their family income rise by more than £10,000.
The only way to avoid end-of-year adjustments would be to have a system in which the payments were fixed and based on past information. In 2004-05, 700,000 families had a fall in their income but increased entitlement to tax credits. Under a fixed system they might have had to wait for up to two years before their income was reflected in their tax credit entitlement. If their income were to fall by £5,000, that could mean that they would lose out on about £2,000 of tax credits each year. Similarly, if someone receiving tax credits for a child had a second baby, they would have to wait until the end of the tax year to get any extra money. That would mean that they could lose out on nearly £2,400.
HMRC is keen to deliver better improvements to the system, and it has clarified the reasonable belief test that it uses to determine whether an overpayment is recoverable. The test is based on long-standing practice in the system and sets out that tax credit overpayments will be written off when there has been a mistake by HMRC and it was not reasonable for the claimant to have spotted the error. I wish to dwell on that for a moment, because a couple of hon. Members have asked me about it.
Let me be clear: HMRC does not expect people to check whether their award has been calculated correctly. If the helpline wrongly tells a claimant that their award is correct, even though they have questioned it, HMRC will rightly accept that as passing the reasonable belief test. In short, it expects claimants to check the factual information on their award notices, such as how many children they have and what their income is. It also expects them to check whether the amount going into their bank accounts matches the amount in the award notice. Building on those improvements, a pilot will start in the next few months to provide an independent review of HMRC decisions on whether to recover an overpayment caused by official error. That will give claimants the option of having their cases reviewed by the adjudicator by a fast-track process.
The hon. Member for East Dunbartonshire (Jo Swinson) was concerned about hardship. The measures recently put in place to help that include reduced recovery rates for those on low incomes. For those who no longer receive an award, 12-month instalment plans are available with longer repayment periods where necessary. Where there are difficulties in the system, we are working hard to deal with them.
In debates such as this and as Back Benchers in Committee, hon. Members play a useful part in ensuring that HMRCs attention is concentrated on the problems. However, tax credits have helped to increase the number of people in work, improved the incentives to work, reduced the tax burden for many families and helped to reduce child poverty dramatically in the past decade.
Mr. Philip Hollobone (Kettering) (Con): I thank Mr. Speaker for granting permission for the debate to be held. I welcome the Minister and look forward to hearing his response in due course. I am pleased to welcome my hon. Friend the Member for Wellingborough (Mr. Bone), who, with your permission, Dr. McCrea, will also participate in the debate and concentrate on some aspects of the future funding of the hospital.
People in and around Kettering are extremely proud of our local hospital. It was founded in 1897, so this is its 110th year on the same site in Kettering. It would be remiss of me to proceed further without placing on the parliamentary record my thanks and those of all my constituents to the doctors, nurses and ancillary and administrative staff at Kettering general hospital for their wonderful work for local people, which is widely appreciated.
Kettering general hospital does wonderful work, and a report by the Healthcare Commission, its latest in-patient survey, which was released today, shows that 95 per cent. of patients at the hospital have rated the overall care that they received as either excellent, very good or good. Only 4 per cent. rated it as fair, and only 1 per cent. as poor. That is a tremendous record. Having said that, it would be remiss of me not to say that there are people in serious circumstances who have been let down by the hospital. The situation of those patientsI am sure that you have such patients in your constituency, Dr. McCreais extremely serious, and it is our job as Members of Parliament to ensure that they get the appropriate redress.
I wish to invite the Minister to visit Kettering general hospital. His colleague the Prime Minister visited in February 2005, but his visit was wholly inappropriate. He visited the hospital not as Prime Minister but as leader of the Labour party and held an election rally on the hospital premises. That was a black day for the hospital. I would welcome the Minister, in his capacity as Health Minister, visiting the hospital to see the wonderful work that goes on there and learn first-hand about the challenges that it faces in the years ahead. I hope that he will give that invitation, which I deliver on behalf of the Kettering General Hospital NHS Trust, full and proper consideration. He would get a warm welcome.
I applied for this debate because Kettering general hospital faces real challenges in the next 10 or 20 years, primarily because of the rapid growth that will take place in the local population up to 2031 as a result of the sustainable communities plan promoted by the Department for Communities and Local Government. In north Northamptonshire an extra 52,000 houses are to be built by 2021in other words, over the next 14 years. The local population will increase by at least a third, and possibly more, which is one of the fastest rates of population growth anywhere in the country. One does not need to be a rocket scientist to work out that if the local population is to increase by at least a third, the medical needs of the population will also increase by at least at third. That, crudely, means that we will need one third more GPs and a one-third increase in hospital facilities.
Unfortunately, against the background of rapid and significant population growth there are significant capacity shortfalls at Kettering general hospital, and the staff are working flat out to meet the health needs of the local population, not least in the accident and emergency department. The situation has been made worse by the forced merger of the local primary care trusts by the Department of Health last year. That was bad news for Kettering general hospital because the now combined Northamptonshire PCT has a cumulative deficit of £44 million, which is to be shared out across the whole of the county. The problem for Kettering general hospital is that it is an extremely efficient hospital, in the way that such things are measured, and the deficit of the Northamptonshire Heartlands PCT, which was responsible for the north of Northamptonshire, was not anything like the deficit of the Daventry and South Northamptonshire PCT.
In other words, health services for constituents in Kettering, Wellingborough and Corby are being cut back because of financial overspends elsewhere in Northamptonshire, and the effect of that has been that Kettering general hospital has had to cut back on some of its procedures. It had to delay the opening of its wonderful new treatment centre in October last year until this April, wards have been closed, procedures have been cancelled and waits have been extended. All of that was the result of the Departments wrong decision to merge the PCTs in Northamptonshire, against the wishes of the countys Members of Parliament, including myself.
The cuts have not helped the serious infection control situation at Kettering general hospital. Local people are rightly proud of the work that the hospital does, but it is sad indeed that in 2006 it had the worst record in the whole country for clostridium difficile infections. The figures are slightly distorted because the method for collecting them means that community-based infections are included with the hospitals infections. Nevertheless, there were 641 cases in 2006the countrys worst. That rather contrasts with the Prime Ministers remarks when he visited in February 2005. He said that Kettering was a world-class hospital, but since his visit we have seen not only ward closures, further underfunding, the countrys worst record for hospital-acquired infections and some of the highest mortality rates in the country but also staffing levels driven to what one member of staff who I spoke to in preparation for this debate described as crisis levels. Those are the problems that the hospital has faced, and I commend all the staff for the way in which they have tried to address challenges that have been made worse by some of the decisions made in Whitehall.
I have spoken with consultants at the hospital, and they are confident that measures are now in place to ensure that the hospitals record of hospital-acquired infections improves. The Department has granted a further £300,000 to help in the fight against clostridium difficile infections. One medical ward is to be fully refurbished, a decontamination room for cleaning hospital equipment is to be set up, hand-washing facilities are to be upgraded and large, high-impact floor signs will be installed to remind all staff, patients
and visitors of the need to wash their hands. I hope that the clostridium difficile infection rates at the hospital will improve as those measures work themselves through. Nevertheless, for every one of my constituents who goes into hospital to be treated, only to find themselves staying there longer because they have acquired an extra infection while in hospital, there is a tragic and unacceptable tale.
In preparation for this debate, I was careful to engage with as many representatives of the local health service as I could. I spoke to senior managers at the trust, local GPs, members of the local patient and public involvement forum, consultants and staff. There is very much a shared sense of Kettering general hospital being a valued community facility in which everyone is doing their best against a difficult background. I know that the Health Minister must receive many representations from Members of Parliament across the country for extra resources for their hospital, but as my hon. Friend will demonstrate in a moment, Kettering general hospital faces an almost unique background of consistent and persistent central Government underfunding going back some time. Although attempts have been made to address that, the cumulative underfunding over many years will not be caught up with overnight.
The crisis is made worse by the increase in the local population, and I urge the Minister to ensure that the population statistics that his officials give him match the reality on the ground. If he were to accept the trusts invitation to come and see the hospital for himself, he would see the pressure that accident and emergency is under, especially at weekends, and the pressure that other wards are under as they do their best to treat local patients.
I will give way now to my hon. Friend, but I would like to impress on the Minister the fact that local people are proud of Kettering general hospital. Everyone wants it to succeed. I hope that the Government recognise the challenges that it faces, and that the Department will do its best to ensure that whoever the Member for Kettering is in another 110 years time, they will be able to look back at this debate and say, Yes, the Government understood the problems that local people faced in respect of their hospital and responded to the challenges.
Mr. Peter Bone (Wellingborough) (Con): I congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing this very important debate. The Minister is very able. I often find that when he is wheeled out, it is because the Government are defending the indefensible, so he appears on television and in debates quite often. I appreciate his attending today.
I am here to talk about Kettering general hospital, because it is the hospital for Wellingboroughthere is no hospital in my constituency. My constituents have to go to Kettering, which sometimes involves a journey of up to three quarters of an hour. One of the biggest concerns expressed in surveys in Wellingborough and Rushden is the health service and the fact that we do not have our own local hospital. More than 94 per cent. of local people think that there should be a community
hospital in Wellingborough with minor accident and emergency facilities, partly to offset the problems at Kettering general hospital. Kettering would be the major hospital, but a lot of my constituents could go to Wellingborough.
The Minister might say, That is all well and good, but how are we to fund it? The problem in our area has been consistent underfunding by central Government. The figures are not mine but the Ministersthey are Government figures. The situation is perhaps best explained by Sir Richard Tilt, who was chairman of the Leicestershire, Northamptonshire and Rutland strategic health authority. In a letter to the Secretary of State for Health on 15 August 2005, he stated:
We have an impressive track record of achieving national targets and delivering financial balance. The SHA was categorised as high performing...We are however the worst funded SHA relative to the national capitation formula which seeks to enable a fair, equitable distribution across the NHS...Kettering General Hospital for example has a reference cost index of 89. Indeed North Northamptonshire is our most pressurised health community. Northamptonshire Heartlands PCT which covers this population (including Corby with its severe health problems) is 32 million pounds (9.9%) below capitation...I am sure you will not be surprised that we believe we cannot deliver both financial and non-financial targets in 2005/06...It will be a simple and inevitable consequence of a growing gap between our allocated funding and the monies we need (as defined by the national formula) to meet the needs of our population.
That was Sir Richard Tilt in August 2005.
The crux of my argument is that we have a wonderful hospital and terrific staff, but the Government work out what the hospital should get through the PCT and then deliberately and systematically underfund it. I have not heard any Minister defend that and say why it is the case. It is not good enough to say that other areas get more money. That is not an argument to underfund Kettering hospital, and we are not talking about a small amount of money.
In 2003-04, when the Government allocated funding directly to PCTs for the first time, the PCT that covers Kettering hospital received 90 per cent. of the funding that it should have had. The Government said they would give a certain amount, but they gave only 90 per cent. of that figure, which created a shortfall of £22.2 million. In 2004-05, again we received only 90 per cent. of what the Government said that we should have got, which was a shortfall of £24.4 million. Almost unbelievably, in 2005-06 the figure fell to 89 per cent., which increased the shortfall to £29.37 million in that year. The following year the shortfall was £20.16 million, and this year it is predicted to be £15.08 million. If the figures for the past few years are added together, the total underfunding is £111.21 million. That is not the level of underfunding that I have worked out; it is the Governments own figures.
The Government spend a lot of time trying to work out an equitable and fair funding system for across the country, so why are Kettering and north Northampton consistently underfunded? I am not asking for an unfair share of the national health service budget; I am just asking for what the Government have said the area should have. I hope that the Minister will take that point on board.
I know that the Minister understands the problem and that the Government are trying to reduce the
funding gap, but when there is £111 million of underfunding and then the Government say there is a deficit, there is something wrong with the Governments accountancy and thinking, and it needs to be corrected.
The Minister of State, Department of Health (Andy Burnham): I congratulate the hon. Member for Kettering (Mr. Hollobone) on securing the debate and thank the hon. Member for Wellingborough (Mr. Bone) for taking part. I do not doubt the sincerity of their commitment to Kettering General Hospital NHS Trust and to improving the national health service in their constituencies.
I will try to rebalance the debate slightly, because I do not believe that either hon. Member was entirely fair on the Governments record of investment in the hospital trust that we are discussing. On the record, it is important to emphasise the significant investment in capital, buildings and people who work for the trust. In the health service in Northamptonshire, there are 357 more GPs, 725 more consultants, more than 6,856 additional nurses and midwives and more than 3,000 additional health care assistants. That is within the East Midlands strategic health authority area, and it represents a big investment in the work force of the national health service. Such investment is having a big impact on improving patient care.
There has also been unprecedented improvement in the fabric of the health service during the past 10 years, and Northamptonshire and Kettering are no different in that regard. In April this year, a new £16 million treatment centre opened at Kettering general hospital, which will enable the trust to increase the proportion of its operations as short-stay procedures. Indeed, it is instrumental to the trusts plans to deliver the maximum 18-week target for the constituents of the hon. Members for Kettering and for Wellingborough. The treatment centre is the largest single development at the trust in 30 years, and I had hoped that I would hear something about that in the remarks of the hon. Member for Kettering. Other improvements at the trust include a £4.7 million cardiac catheter laboratory, which is being completed on site to improve care for people with heart problems, two new CAT scanners, a new MRI scanner, a new skin care unit, which opened in February 2003, a new ophthalmology unit and an extension to the intensive care unit. In fact, there is a long list of recent improvements to Kettering general hospital.
The hon. Member for Kettering questioned the motives of my right hon. Friend the Prime Minister in visiting the hospital. Given the levels of investment in bricks and mortar, capital, and services that the Government have made since 1997, the Prime Minister was perfectly entitled to visit Kettering general hospital. I challenge both hon. Members to answer a direct question: is Kettering general hospital better provided for today than in 1997?
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