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I have mentioned the green belt and neighbourhood planning. A neighbourhood plan, of course, does not have to be ratified to have legal weight in the planning process. There is the “town centre first” policy—an issue that the hon. Member for City of Durham (Roberta Blackman-Woods) raised—and “infrastructure first”, which the hon. Member for North Durham (Mr Jones) mentioned. Perhaps it would be useful if I wrote to hon. Members to outline matters in detail; that may give hon. Members’ constituents some comfort.
I turn to the issues that the inspector raised. It is true that the plan would enable growth, but the inspector is not convinced, on the basis of the current evidence, that the level of growth proposed would be achievable, and that it would not adversely affect the council’s other city-centre strategies and the world heritage site status of Durham. The inspector is also of the view that more could be done to show how growth in Durham would interact positively or negatively with the growth being proposed by other north-east authorities. In summary, the inspector explains that, at present,
“the failure to fully assess the social, economic and environmental implications of lower growth options…is a serious omission”.
Let me be clear: that does not mean that the inspector has suggested that Durham should be less ambitious in its plan; it means that Durham needs to show clearly why the approach it proposes is the most appropriate strategy.
The plan clearly seeks to enable more housing than past trends would indicate, but the inspector has indicated that there are shortcomings in the methodology for establishing housing needs; for example, there is the question of whether the predicted in-migration levels are realistic.
In relation to housing provision, the inspector’s view is that the plan could do more to take into account the contribution that could be made to housing delivery by reusing brownfield land, potentially for around 2,000 homes; I hope that addresses the issue that the hon. Member for City of Durham mentioned. Based on these assumptions about housing growth, the plan allocates some 4,000 homes in the green belt. On this point, the inspector is clear that
“The process and evidence relating to the proposed amendments to the Green Belt boundary are flawed, particularly in relation to the release of sites to accommodate some 4,000 unnecessary dwellings...A full review of non-Green Belt sources of supply should be undertaken.”
The plan further advocates two relief roads in the green belt, but the inspector also has concerns about their justification and impact. Although planning inevitably involves difficult decisions that will not please everyone, the inspector points to significant concerns raised by a broad section of the public in relation to the proposed strategy.
The shortcomings identified in the current version of the plan may yet be resolvable at examination, as the inspector’s report sets out. I understand that the council is due to meet the inspectorate in March to discuss options for how to proceed, and I am pleased that the inspectorate is engaging openly with the local authority.
I can reassure hon. Members who have spoken today that the Planning Inspectorate is as pragmatic as possible when it comes to examining local plans. However, this is
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the crux of the matter: the inspector would not have arrived at his interim findings if there were not significant grounds for concern.
In summary, hon. Members who have spoken today have expressed their support for a plan that the inspector considers is not currently supported by robust evidence. In the absence of such evidence, the plan advocates a strategy that is potentially unrealistic or possibly detrimental to Durham, its sustainable development and in particular its green belt.
Mr Kevan Jones: I take exception to the Minister saying that, because what has been put forward is an ambitious plan. She seems to be saying that on the one hand we need economic growth for the north-east, but on the other the plan is not achievable. The problem is treating County Durham as a small market county; it is a large county. If housing is not put in my area, it will be put somewhere else, which means my area will suffer as part of this plan.
Penny Mordaunt: I thank the hon. Gentleman for that intervention. I am simply stating the concerns that the inspectorate has raised. Clearly, I hope that we have a local plan in place for his area sooner rather than later. However, that plan needs to be based on good evidence if it is to be successful. I hope that, if the dialogue with the inspectorate is successful, the plan that emerges at the end of the process will be stronger for it.
Phil Wilson: The objective of trying to generate 30,000 jobs between now and 2030 is in line with what the Chancellor said on Friday about generating 50,000 jobs between now and 2020. If the figures for the county over 15 years are out of kilter, so are the Chancellor’s figures. That is why the Government need to look at this matter closely; it affects not only the growth patterns for the county, but those for the whole of the north-east, as laid out by the Chancellor.
Penny Mordaunt: I will come on to answer the first point that the hon. Gentleman raised. In answer to his second point, there is no doubt that the ambition is the right one. The figures, both on jobs and the inward investment that we expect, are absolutely right. The issue at stake is how that growth in jobs and investment is achieved. I have just given one example. Based on current evidence, the inspectorate feels deeply that building on the green belt is not justified, and that the plan would benefit from a piece of work that examines the reuse of brownfield sites. We do not want to slow down progress; we want to keep up momentum on this issue. I am pleased that the inspectorate is due to meet the council.
Let me turn to the first point the hon. Gentleman raised, which was about Government assistance. I will write to hon. Members in detail about planning policy, which may give them some comfort. I will also follow up on the issue that he raised about the Hitachi business park and the science innovation park; I will certainly seek to get him some answers on that issue and will write to him about it. We have already been of assistance in setting up the meeting that is due to take place in March. We will assist in any way we can, not only in my Department but across Government.
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There is one other area that is worth exploring. When I looked at the local plan that is being proposed, and mapped it to the plans and priorities of the local enterprise partnership, I saw that there is perhaps a job of work to do that would strengthen the position that the hon. Gentleman is setting out. I am one of a number of Ministers who could help to facilitate that work, which may yield further evidence to support the plan as currently set out. Of course, the Chancellor has also offered his assistance and offered to work with local stakeholders.
In answer to the hon. Gentleman’s first point, therefore, we are ready to assist in any way we can. Clearly, the area will benefit from having a strong, robust, evidence-based local plan, and I hope that we will see one before too long.
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Children’s Palliative Care
4 pm
Steve McCabe (Birmingham, Selly Oak) (Lab): I am grateful to have secured this debate and glad to have the opportunity to serve under your chairmanship, Mrs Main. I first became interested in this area through the work of Acorns children’s hospice in my constituency, which provides a valuable service to children and families from all over Birmingham. I cannot praise its work too highly.
I begin by acknowledging that I believe the Government are genuine in trying to establish a clear funding path for children’s palliative care and hospice services. I understand that the major change envisaged by the Government is the new per-patient funding system. It would be helpful if the Minister said more about how it will work and how he plans to ensure that it is properly monitored and reviewed. I also want to raise the issue of short breaks and bereavement care, as these elements are not included in the per-patient funding strategy.
The children’s hospice movement supports the principle of per-patient funding for children’s palliative care as a means of providing more sustainable, transparent funding through an NHS currency, commissioned by clinical commissioning groups and designed to complement NHS England’s commissioning of specialised children’s palliative care services.
I understand that the third strand of Government thinking is that local authorities should continue to be responsible for commissioning necessary elements of social care and that together this should create an overarching system where all elements of the care—clinical and non-clinical aspects, short breaks and bereavement support—are all provided for.
My purpose in seeking this debate is to address a genuine fear that the impending general election and uncertainty over the new system could lead to a funding hiatus that could have a damaging effect on the children’s hospice movement. If I have understood it correctly, the per-patient system is designed to reimburse providers according to the activity they undertake, and to incentivise both commissioners and providers to deliver palliative care in a child’s home, community or hospice setting, if that is consistent with the wishes of the child and the family, and clinically appropriate.
The idea of the currency is set out in NHS England’s 2014 document, “Developing a new approach to palliative care funding: A revised draft for discussion”, in which it is argued that the currency should make it easy for clinical commissioning groups to understand the specific needs of children with life-limiting conditions. It should also be possible for clinical commissioning groups to have a better understanding of what constitutes palliative care and of the potential cost drivers for commissioning.
What steps have the Government planned to ensure that those elements of palliative care not covered by the new per-patient funding system will be properly funded by local authorities and clinical commissioning groups? This new system is the product of hard work and, as I have indicated, the sector is generally favourable towards it, but it is worried about a number of aspects. For example, how will the costs incurred by providers during
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the transition be met, including costs of setting up new systems to record activity and of ongoing data collection demands?
The Government-commissioned palliative care funding review by Hughes-Hallett, Craft and Davies in 2011, was clear that introducing and implementing the new system should be cost-neutral to the sector. What support does the Minister envisage for the voluntary sector providers to enable them to implement this new approach?
It would be useful if the Minister outlined any plans to provide models of practice that show how the currency will work, especially in situations for children and young people subject to continuing care packages and personal budgets, as introduced by the Children and Families Act 2014. It would also be useful to understand how the data quality will be monitored and how comparisons of models of care and outcomes will be assessed.
It is not clear to me how the new system will deal with the issue of transition from child to teenager to young adult.
Mr Robin Walker (Worcester) (Con): I congratulate the hon. Gentleman on securing this important debate. Acorns children’s hospice serves my constituency as it serves his. It has a fantastic hospice in Worcester. It has done some important work on transition space and supporting the many people who, because of advances in medicine, are living longer. Does he agree that it is vital that the Government engage with it on this work, to make sure that transition is properly supported by the future funding system?
Steve McCabe: Yes, I agree. That is exactly the point. It is fantastic that so many children now survive for so much longer. That creates new demands and service needs that have to be considered. I should be grateful if the Minister said what work is being undertaken, both within Government and the NHS, to ensure that these transition issues are being considered in any new funding plans. I concur with the hon. Gentleman on that. The Care Quality Commission report, “From the pond into the sea: children’s transition to adult health services”—that is its title, I kid you not—also indicated that this focus is important.
We are moving towards the election, so it would help if the Minister clarified where we are with all these plans. As I have said, I acknowledge that the intention is to create a fair and sustainable framework, but we are now in March—the projected launch date for the introduction of the new non-mandatory currency is March—and as yet, unless I have missed something, we do not know the Government’s intention. What I would really like to know, and what I think the hospices would like to know, is what is going to happen with the hospice grant? Is the intention that it should continue during 2015-16 and beyond? I am sure that the Minister appreciates that not knowing is a real source of anxiety and a blow to any attempts at long-term planning.
Almost 96% of children’s hospice organisations are worried, according to the Together for Short Lives survey, that CCG funding will be less than their existing grant and harder to access. That grant covered about 13% of the care costs incurred by children’s hospices and existing clinical commissioning group funding
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represents about another 12%. Uncertainty over almost 25% of previously guaranteed funding is a difficult basis from which to operate.
I am sure the Minister knows that these bodies rely massively on public generosity and fund-raising efforts, but they also need some core guaranteed funding. If the grant ceases and is not matched by equal funding elsewhere, 89% of children’s hospice organisations could be forced to reduce their services. Areas at risk include short-break services for 60% of users.
Stuart Andrew (Pudsey) (Con): As someone who has spent 14 years working for the children’s hospice movement as a fundraiser, I am completely aware of the point that the hon. Gentleman is making. Short breaks are incredibly important, because they are not only a break for the child, but for the whole family. Often people arrive on a Friday looking utterly exhausted. Just being able to have some normal family time until Monday is a great relief for them. Is that not the importance of these short breaks?
Steve McCabe: I do not think we can in any way overestimate the importance of short breaks to families and to children. Both need space at times, and the hon. Gentleman is absolutely right. The survey suggests that more than 60% of users could lose that service. There is also a risk of a 35% reduction in family support work, which is connected with short breaks and enables many families to keep going in stressful situations. There is also a risk of a 23% reduction in the amount of end-of-life care support provided.
Short breaks provide respite for carers and families and should be funded by local authorities and the NHS under their respective legal short-break duties. Despite being key providers of short breaks, a third of children’s hospices are not recognised by local authorities as being short-break providers. Some 42% of children’s hospice organisations receive no funding from local authorities. Page 56 of the palliative care funding review report states that
“pre-bereavement support is an absolutely essential part of palliative care and should be fully funded by the state.”
The review goes on to state, however, that far from being universal, only 65% to 70% of local authorities have open access services. Without the children’s hospice movement, there will be a gaping hole in end-of-life care.
I am not here to criticise the Government’s intentions, but the combination of the election and a new system with many unanswered questions risks significant funding problems. As organisations try to tighten their belts and take on new responsibilities, there is a danger that they will fall back on what they know or believe they know. It will not help the children or families of children with life-limiting conditions if clinical commissioning groups fall back on a narrow, clinical model that focuses on the child’s health needs as defined by doctors. The currency should not be used as a top-up for the acute sector providers, who can access other tariffs to fund care for children with life-limiting conditions.
Palliative care for children with a life-limiting or life-threatening condition is an active and total approach to care, from the point of recognition or diagnosis through the child’s life to death. It embraces emotional, social and spiritual elements and focuses on enhancing quality of life. It also supports the family and includes
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managing distressing symptoms, providing short breaks and care right through to the point of death and bereavement. That more holistic understanding of palliative care is reflected in national policy documents such as NHS England’s “Actions for End of Life Care: 2014-16” and the 2014 Care Quality Commission handbook. I welcome the interest that the Government have shown in an often neglected area, but we now need some clear messages, actions and signals to ensure that valuable work is not wasted and that an easily avoidable funding crisis is not allowed to develop. Local authorities under significant financial pressures are highly unlikely to fund what they might see as additional services unless required to do so. NHS England’s draft currency for children’s palliative care should be accompanied by clear guidance to local authorities on funding short breaks and bereavement care.
I would like the Minister to give an assurance that the structure is clear and that the intention is to have a three-source funding arrangement, with NHS England commissioning specialised children’s palliative care and utilising the experience of the children’s hospice movement, with CCGs commissioning general children’s palliative care using the new per-patient funding system and working closely with children’s hospices and with local authorities required to commission social elements of palliative care, such as short breaks, bereavement care and support for siblings and other family members, and seeing it as their duty to work with children’s hospices. It is vital that all three funding sources complement one another. If not, there is a risk that local authorities will regard those services included within per-patient funding as the entirety of palliative care and avoid playing their part. NHS England’s specialised care could fall prey to a narrow medical model and never leave the acute hospitals.
The Government need to provide some specific distinctions between specialised and general palliative care, so that one side is not tempted to avoid its responsibilities by relying on the funding of the other. We also need to know that NHS and local authorities are clear about their duties under the Children and Families Act 2014. It places a duty on them to jointly commission care for children and young people with special educational needs and disabilities up to the age of 25. I urge the Minister to provide what answers he can today to a valuable sector, which eagerly awaits his response.
4.17 pm
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (George Freeman): It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate the hon. Member for Birmingham, Selly Oak (Steve McCabe) on securing this debate and for his gracious recognition of the Government’s commitment to, and good faith in, trying to get this right. I begin by paying tribute to the efforts of the thousands of people who work so selflessly for children’s hospices across the country. Without their efforts supporting the most gravely ill children and young people, we would not have our world-class hospices and palliative care services. I thank my hon. Friends the Members for Worcester (Mr Walker) and for Pudsey (Stuart Andrew) for their comments in support.
We are fully aware that the reliance of children’s hospices on volunteers and charitable fundraising reflects their comparatively recent historical development. They
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do not receive as significant a proportion of their funding from local health and social care commissioners as their adult counterparts. That is a long-standing anomaly that many in the sector perceive as threatening the sustainability of children’s hospices. Since taking office, the Government have taken that extremely seriously. As has been mentioned, we made a commitment in the coalition agreement specifically to place hospice funding on a more equitable and sustainable footing through the development of a new per-patient funding system for all hospices and providers of palliative care for adults and children. That would provide a transparent basis for local commissioning of palliative care services.
I am proud to say that that process has been accompanied by unprecedented direct investment in children’s hospices. We pledged in the coalition agreement to continue the annual allocation of £10 million to children’s hospices, and I am delighted to say that that was increased by 7% in 2012 to take account of new providers. Now allocated by NHS England, the grant has been increased again to £11 million. In addition, there were ad hoc grants of £19 million in 2010-11, and more than £7 million in capital grants in 2013 directly to children’s palliative care. We should not lose sight, however, of the fact that the annual allocation is a central grant in lieu of consistent, locally based commissioning, and it is to that which we need to move, not least because local commissioners have a better understanding of local need and how palliative care services can be integrated with other care.
The 2011 independent palliative care funding review highlighted the absence of good data on the costs of palliative care and proposed the collection of data on an unprecedented scale through a series of pilots, one of which looked specifically at children’s palliative care. Since the pilots concluded in April 2014, the considerable data generated, which cover all aspects of contact between someone being supported with care and the professionals delivering that support, have been analysed with the aim of identifying a currency that captures patients’ clinical and resource needs.
Hon. Members will understand that a useful currency has to group health care into units or packages that are broadly similar in terms of what is provided and the resources required, and that provide a common language for discussing the commissioning and delivery of palliative care. Ultimately, the aim is to give local commissioners the basis for discussions with providers about what is needed and how it is to be resourced, and clear, reliable data on the complex care that is provided to severely ill children. Good progress has been made in developing the currency, although none of the many providers and professionals that have been involved have been under any illusions about the complexity of the task or the importance of getting it right.
A document setting out currency units has been published and engagement has taken place with clinicians, providers and commissioners to test it out. The currency units are being developed into a currency framework that can be used locally by health economies for further testing. NHS England intends to make that available for 2015-16, along with supporting guidance. Hon. Members will note that we have not rushed into imposing a new funding system on the palliative care sector. We have worked extremely closely with many different providers in taking the work forward.
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I know that unease is felt in some quarters about the prospect of a sudden transition to a new funding model. However, as we have previously placed on record—I am happy to do so again today—our aim is for the commissioning of children’s and adult hospices to be fit for purpose. That can be guaranteed only by testing the implications of a new funding approach with palliative care services themselves and by exploring locally how that would support more effective local commissioning, including how it must dovetail with other local services. There must be a planned and gradual transition to a new system, with clinical commissioning groups supported and able to take a strategic view of how palliative care for children fits into other services for children with complex needs, such as special educational provision and social care.
I entirely agree with the concerns that have been expressed about the commissioning of different services for children with life-limiting conditions and their families being integrated as much as possible, although we believe that there must be flexibility as to how different commissioners work together to co-ordinate provision. Supporting that joint working, and exploring how to effect the correlation of specialised and local commissioning of palliative care with social care, will be an important part of the guidance and other support made available during transition. It would be up to NHS England to consider what direct financial support might be necessary for hospices and other providers. That decision cannot be made before the thorough testing of the currency has enabled us to understand the implications. Clearly, appropriate guidance and case studies of good practice will be an important part of that, as the hon. Gentleman said.
On future allocations, just as we do not wish to see an abrupt transition to a new funding system, we do not intend to end abruptly the existing financial support provided to children’s hospices. We are committed to ensuring that children’s hospices are properly supported in a fair and sustainable way, which means ensuring that, when the time is right, there is a planned transition from a central grant to local funding. NHS England has responsibility for determining the future of the allocation to children’s hospices, and I know that that allocation has been prioritised as a commitment for 2015-16. Although it has not happened yet, when the route towards the implementation of the new currency is clearly mapped, I expect consideration to be given to the effect of transition on providers and how that might be reflected in any allocations made centrally during that period. A decision on programme budgets more generally is expected before the end of March.
The hon. Gentleman asked about transition. Of course, ensuring the sustainability of funding is not the only issue facing the children’s palliative care sector, as we have heard. My hon. Friend the Member for Worcester mentioned that as increasing numbers of young people with life-limiting conditions are benefiting from advances in medical science, allowing their condition to be stabilised, there is a growing demand for the more effective management of the transition to adulthood. Palliative care is not only about end-of-life care; it can provide vital support for living one’s life, but the setting must be age-appropriate and geared towards supporting the move
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to independent living, further education and employment. Typically, adult hospices do not provide the right environment for that, and children’s hospices are often not resourced to provide a separate and markedly different type of care for young adults, although I know that some people are developing facilities that cater for independent young people.
We know from the Care Quality Commission’s report that there is a pressing need for action across the NHS as a whole to improve how we meet the challenges of transition. Our system-wide pledge, “Better Health Outcomes For Children And Young People”, which the major health organisations signed in 2013, includes the ambition to secure care that is co-ordinated around the individual young person with complex needs in order to deliver a positive transition to adult services. There is undoubtedly more to be done, and it must be taken forward as part of a co-ordinated approach to meeting the needs of young people with complex needs.
There is increasing emphasis on the integrated commissioning and delivery of public services by the NHS and local government. We have recently introduced a new statutory framework for the integrated support of young people up to age 25 with special educational needs or a disability, which brings together the local authority and CCG to drive the co-ordinated assessment of need and planning for the individual child. Arguably, the role of palliative care for young adults should be fully integrated into such a framework of holistic support. It goes without saying that that would go beyond a narrowly medical model of care.
We would all agree that developing a new currency and a new funding framework for children’s palliative care is only part of developing more integrated services for children and young people. I would highlight that from 2011 to 2015-16 we have separately invested £54 million in the children and young people’s improving access to psychological therapies programme, which intervenes to help children and young people who have been affected by family bereavement.
The hon. Member for Birmingham, Selly Oak mentioned short-break services, which remain a key priority for the Government. We are very much aware of the invaluable support that they provide to disabled children and their families, including those who need palliative care. That is why, between 2011-12 and 2014-15, £800 million has been made available to local authorities through grants for short breaks. We have also introduced a short-breaks duty that requires all local authorities to provide a range of short-break services for disabled children and young people, and to publish a short-breaks statement explaining what is available locally and how it can be accessed. I would be happy to consider how we might ensure that local authorities are fully aware of the role of children’s hospices in acting as potential providers of short breaks.
In the final few minutes of the debate, I want to try to deal with all the questions raised by the hon. Member for Birmingham, Selly Oak. If I fail, perhaps I can undertake to write to him to address them properly. He asked what is going to happen to the hospice grant and whether it will continue. NHS England has made it a priority for next year. It has not yet formally agreed its programme budgets, but, going by the undertakings I have received, I believe we can be confident that it will continue as it is.
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The hon. Gentleman asked about support for voluntary providers. It is clear that that will emerge from the testing of the currency—there is no dispute about it being included. He asked about plans to provide models of practice: yes, guidance on implementation will cover that. He asked about how data quality will be maintained: the testing of currency will include built-in quality assurance.
The hon. Gentleman also asked about whether we would commit to maintaining the NHS England children’s hospices grant until a new system is in place. I can guarantee that we will ensure that children’s hospices continue to be supported in their work. There is no question of the grant stopping before alternative arrangements are in place. NHS England has made it a priority, but has not yet agreed its programme budgets.
Finally, the hon. Gentleman asked about the new funding system for palliative care. We have published the currency document and commenced testing locally. We do not want to rush into a system that is not fit for purpose; we want to work with local providers and commissioners in order to empower them to have effective commissioning discussions.
I hope that I have provided some reassurance to the hon. Gentleman that the Government are firmly committed to seeing the children’s hospice sector supported. Given the strength of cross-party feeling on the importance of these issues, as highlighted today by the contributions of my hon. Friends the Members for Pudsey and for Worcester, I would expect any future Government to continue that and, in particular, to continue the work that we have commenced in providing a stronger local basis for the commissioning of children’s palliative care. I will happily write to the hon. Member for Birmingham, Selly Oak to respond to any points that I have not been able to address properly in this short debate.
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Bank Closure (Stone)
4.28 pm
Sir William Cash (Stone) (Con): It is a great pleasure to serve under your chairmanship, Mrs Main.
Following the news of the decision to close the Eccleshall branch of NatWest bank, I called for a meeting with the head spokesman for Royal Bank of Scotland, which owns NatWest. Eccleshall is in my constituency, and I support my constituents to the hilt in this important matter, not least because the branch is the last bank in Eccleshall. I urge RBS to keep the essential facility open as a key service. My constituents in Eccleshall, including businesses, the elderly and the infirm, need access to bank services. They should not be made to travel, using cars and increasing traffic; their local banking facilities should be in the town where they live.
Eccleshall is a vibrant, attractive place with many small businesses, pubs and restaurants, and farmers nearby, all of whom need banking facilities daily. The bank will be keeping the ATM—I asked for how long—and has reached some agreement with the Post Office, but our local concerns in Eccleshall far outweigh any of that.
Accounting procedures within the bank’s internal systems remove large chunks of income, such as business, wealth management and mortgages, from the branch income measurement. As a result, only large city branches are likely to be shown as profitable. Were interest rates to rise again to a higher rate, would not small town branches such as Eccleshall become profitable again? Furthermore, banks go on and on about their good customer service, while often making huge losses—even when not in turmoil—but closing a bank in a place such as Eccleshall is the opposite of good customer service.
Stafford borough council’s letter on the matter followed an emergency motion and stated:
“The council expresses its disappointment at the decision by National Westminster Bank to close its branch in Eccleshall. This is the ‘last bank’ in Eccleshall and leaves all residents, particularly the elderly, vulnerable and those in remote areas without an adequate banking service.”
Such an emergency motion is a most unusual step for a borough council. It was also supported by 780 signatures on a petition and, indeed, I will be presenting a parliamentary petition after the debate.
Letters went from the council to the chief executives of RBS and NatWest, copying in the Chancellor, the Secretary of State for Communities and Local Government and the Secretary of State for Business, Innovation and Skills. In addition, I wrote to the Minister for Business and Enterprise. I asked and continue to ask RBS to review its decision in the light of those letters and the strength of feeling against the closure. In its letter to the NatWest chief executive, Stafford borough council requested that the bank review its decision. In 2010, RBS as a whole had committed to maintain a bank in communities where—I emphasise—it was the last branch in town, even identifying 168 communities where it was already the only branch in town. In 2014, however, at least 25 of those were closed, and Eccleshall appears to be facing the same fate soon. Through the Minister, I ask RBS not to close our NatWest branch.
In the past five years alone, 431 communities have lost their last surviving bank branch. The nearest alternative NatWest branches for Eccleshall residents are in Stone,
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which is a 12-mile round trip; Stafford, a 16-mile round trip; Trentham or Newport, each a 19-mile round trip; and Market Drayton, a 25-mile round trip. The banks seem to want to accelerate the rate of closure, especially in rural communities, in spite of the speech by the Secretary of State for Business, Innovation and Skills the other day, and what about the national NatWest pledge not to close the last branch in town? Why can RBS not branch-share, while maintaining the Eccleshall branch to achieve its existing targets? We only need the one branch. The fact that NatWest is part of RBS, with all its historic difficulties, only makes the proposed closure worse.
My broader personal interest derives from the fact that my family founded the Abbey National building society and the National Provident in the mid-19th century, and in my view and that of many of my constituents, banks also have a social purpose. NatWest data claim to show low usage of the Eccleshall branch, but the data is contrary to local reports. People have noticed that queues for the counter service are often extremely vibrant and visible.
The post office, which is intended to offer substitute services, according to the bank, can undertake a wide range of counter transaction services, but it does not have significant capacity to provide a real alternative. The queuing area in the post office is too small and it has only one full-time staff member and two counter positions. How long will the queues be when businesses pay in their weekend takings, especially the pubs and restaurants, on Mondays? As I said, there are plenty of pubs and small businesses in my constituency, so the banking of weekend takings will make things worse, especially for the disabled and elderly if coinciding with pension days and so on.
Banks offer a core service to all in the community, not only to individual people, but to businesses and groups, whether families, single people, the elderly, the infirm, farmers and so on—every stratum of society. If there is a mobile banking service limited to an hour, what happens if people cannot get to Eccleshall at that time? The post office has no disability compliance and wheelchair users cannot obtain access, while its standard paying-in maximum for business is £1,000 per day, which is far below what the pubs need to pay in each Monday. Also, the bank branch can amend or cancel standing orders, but the post office cannot.
On communications about the closure, I have been told that five NatWest Eccleshall business customers merely received a letter and that no meetings have been held. On internet banking, Eccleshall does not fit a pattern of internet-subscribed services and telephone banking. My constituents will be forced to use online or telephone banking services. Many do not have access to the internet and do not feel safe talking to people on the telephone about personal finance.
There has been no effective community involvement in the closure decision. If my constituents are to have a growing and diverse community in their local area, with local employment and services and increased housing, they need to be supported by a local bank in the community, rather than decision making being taken away from their people and business. The Eccleshall community is a caring one, and as I go around the town I know that people feel strongly about the issue. My
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constituents in Eccleshall value the local NatWest branch and want to retain it. The town is a small, vibrant community. I urge the Minister to intervene with RBS to recommit to maintaining the “last branch in town” policy commitment.
The chief executive of RBS, Mr Ross McEwan, wrote to me last week with the RBS 2014 full-year results. Part of that correspondence refers to a section in the results entitled “A better bank for customers”, in which he says that for too long UK banks have focused on “market share”, rather than “customer care”:
“It is why over the last year our people have worked hard to embed this ‘customer first’ mentality into everything we do as a bank…we are determined to reach our aspiration of being number 1 for customer service, trust and advocacy”—
“It won’t be easy, but I firmly believe it is doable.”
At the end of the letter, he says:
“We will continue to focus on doing what is right for our customers.”
All I have to say is: we shall see.
RBS has an operating profit of £3.5 billion, with an underlying operating profit that increased by £l billion in 2014, less the £2 billion in fines—the ones we know about. That is not good. Thus, in 2015, we might reasonably expect profits to exceed £5 billion, but what about my constituents and their service from the bank in Eccleshall? The chairman and chief executive both reiterated their “customer first” policy. The chairman stated that NatWest must become the No. l bank for trust, service and advocacy, with the chief executive adding that
“the customer has to come first in everything that we do”.
The chief executive met the Chancellor to discuss bank branch closures on the very same day that I was meeting NatWest executives to discuss the closure of the NatWest bank in Eccleshall. That was on Tuesday 27 January 2015. The Chancellor called for a minimum standard for managing any bank branch closure. That speaks for itself.
I also now have problems with closures by the Co-operative bank. It, too, has a poor history. I met with the head of branch network for the Co-operative bank last Wednesday to oppose its decision to close branches at Blythe Bridge, Cheadle and Stone in my constituency. The nearest alternative branch will now be in Longton, which is approximately eight miles from all the other branches. The branches are scheduled to close by the end of July. The Co-operative bank also claims that its customers are its main priority, but how can customers be its main priority if it is removing banks in such key local towns? It says it will write to affected customers to let them know about the changes and the alternatives available to them.
I understand that Bob Rickert, the chief operating officer tasked with helping restructure the bank, left it last week, and last October saw the departure of its chairman, Richard Pym. The Co-operative bank is struggling to turn itself around after facing a £1.5 billion financial black hole, which we have all heard about and was quite clearly self-induced. The bank is not expected to make a profit until at least 2017, and in December, it failed the Bank of England stress tests, designed to scrutinise banks’ ability to weather a downturn.
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My constituents in Stone do not want the Co-op bank in their town to close. They banked with its predecessor for 30 years and want a full local branch. The post office is not a good alternative, as it could not offer a full service and the queues are long. The same applies in Cheadle and Blythe Bridge.
I call on the Minister to intervene by writing to the banks and to do everything possible to try to prevent the proposed Co-op closures in Cheadle, Stone and Blythe Bridge, as well as the closure of the NatWest branch in Eccleshall.
4.40 pm
The Economic Secretary to the Treasury (Andrea Leadsom): It is a great to serve under your chairmanship today, Mrs Main. I congratulate my hon. Friend the Member for Stone (Sir William Cash) on securing this debate and on presenting his case as compellingly as he always does. He has made good points to which I am extremely sympathetic. I well understand—I have my own constituency cases on the issue—how people feel when a bank in their area is to be closed. Bank branches are often felt to be at the heart of a local community. I appreciate that, as he said, the people of Eccleshall have produced a petition with close to 800 signatures expressing their concern at the loss of their bank branch. Each of those people, and those in the neighbouring communities in Blythe Bridge, Cheadle and Stone who are losing a branch of the Co-operative bank, will feel, quite rightly, that their town is losing a little piece of its identity.
Eccleshall has had a NatWest branch since 1970, and has had a bank branch operating since the 1870s on what I can well imagine is a well loved local site, so the situation must be unsettling for local people. I am deeply concerned about closures not just in my hon. Friend’s constituency but across the country. I therefore want to tell him a bit about what I and others in the Government have been doing to try to make sense of the situation and to protect the important local access to banking services that so many people need and want.
At the same time, my hon. Friend will appreciate that the way we bank is going through an unprecedented period of change. Customers are reducing their use of high street branches and embracing new online and mobile technology. Although we all recognise that decisions on where branches are located are commercial ones, I assure him that the Government can set the tone, stressing the importance of day-to-day banking services to everyone’s daily life. As Economic Secretary, I have made that a personal priority and have worked hard to make sure that the vital services that the banking industry provides remain as widely available as possible.
NatWest has set out its case that the number of transactions at its Eccleshall branch is low compared with the rest of its branch network, but I absolutely recognise the disappointment felt by customers more broadly in the local area at the news of the closure. People often feel that there is inadequate consultation with the community and local stakeholders who may be affected. NatWest has followed current best practice, giving customers a three-month notice period and contacting its most active and most vulnerable customers to help them find alternative ways to bank. However, if people are to feel that their concerns have been heard, and if local businesses are to feel that the services underpinning their livelihoods are safe, banks must go
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much further. That is why I have been working to encourage the industry to adopt a new protocol that each bank will undertake to follow so as to mitigate the impact of a local branch closure.
Sir William Cash: Did my hon. Friend hear the interview on this morning’s “Today” programme with the chief executive of Barclays bank, in which he talked about the amount of money he is earning and about bank bonuses, which are also under wider discussion? The chief executive and chairman of the Royal Bank of Scotland keep making statements about customer service—we have heard much the same sort of thing from the Co-op—but that does not help my constituents or anyone else in the country. They then find a little edge here or there with regard to the profitability of a particular branch. Does she agree that if banks want a reputation that is worth maintaining, it will involve making sure that people in communities such as Eccleshall have actual access to the kinds of services that the banks say they are offering in their annual reports and in the public arena—on radio and television?
Andrea Leadsom: I agree to a great extent with my hon. Friend. There is no doubt that banks are keen to restore their damaged reputations and that the big UK banks in particular are determined to show that they are there for their customers. I therefore agree with what he says about the need to make sure that they are addressing the needs of those customers and not looking only at commercial realities. Equally, however, I know he will agree that it is not for Government to intervene in private businesses to force them to retain completely unviable branches. We need instead to make sure that banks pay careful attention to the balance between commercial realities and the needs of local communities.
Sir William Cash: On Government activity, I seem to remember only a few years ago an extensive bail-out for RBS. There are also questions in relation to the Co-op. It seems to me that when banks want help—and by help, I mean monumental bail-outs—it comes from the Government and the taxpayer, yet when they say they are putting customer service first they close small but important branches in places such as Eccleshall, which needs its branch.
Andrea Leadsom: I am grateful to my hon. Friend for those further remarks. Again, I completely agree that banks have a long way to go to restore confidence that they mean what they say when they talk about customer service. However, again, he will understand if I do not say that a bank must open a branch in this place or that. Those decisions are commercial ones. The Government need to ensure that banks balance the needs of customers with commercial realities.
I mentioned that I have been urging and encouraging the industry to adopt a protocol that each bank would follow to mitigate the impact of a local branch closure. The protocol should not simply set out a series of steps for individual banks to take before they close a branch, but should raise the game of the industry as a whole, including how it listens to the concerns of its customers, and, crucially, how it responds. I am pleased to say that discussions on the protocol are at an advanced stage, and agreement is expected soon, thanks to the help of the trade body for banks, the British Bankers Association. We are hopeful that we will get something positive that will address some of the issues my hon. Friend raised.
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My hon. Friend mentioned the availability of banking services through local post offices. I completely understand that for customers having a local post office is not the same as having a local bank branch. However, the services available through the Post Office offer most customers a real opportunity to continue to bank locally. We can and must do more to ensure that everybody understands and is comfortable with using the banking services available to them through their post office. For many customers, the Post Office can provide access to their bank account, including the ability to withdraw money, deposit cash and cheques and check their balance at all 11,700 of its branches throughout the UK—a huge network.
In some respects the Post Office can offer wider customer benefits. I know that a number of post offices, including in my constituency, have much longer opening hours than a typical high street bank and provide services seven days a week. Recently, I met the head of the post office network to talk about moves to improve the network, to provide more customer-facing space and more security, and to improve the range of financial services that it offers. The Post Office is working with its postmasters to ensure that facilities are upgraded and that appropriate security is put in place to enable customers to bank safely, and it is determined to do more to ensure that essential banking facilities remain available in as many communities as possible. The Government have committed almost £2 billion to protecting and modernising the post office network.
I believe that we can continue to improve the banking services that the Post Office offers and make them more consistent for customers, which is why I have encouraged the British Bankers Association and the Post Office to look at a standardised approach to counter banking services available through post offices. The Government expect a report on the progress of those talks in the near future.
My hon. Friend raised concerns about the future of banking beyond the traditional branch network, and about the services that will be accessible to all. It is vital that we ensure that vulnerable customers—particularly the elderly and those in rural constituencies—have suitable access. In Eccleshall, I believe that NatWest has made provision for a change to an existing mobile bank route, so a more traditional NatWest presence will still be available in the town.
A whole new world of banking is becoming available, and we should be excited about the opportunities that online and mobile technology can provide. The UK is positioning itself as a world leader in financial technology, and we can already see signs of the benefits that all the developments in financial technology can bring. For example, since April 2014, customers can securely transfer money instantly to other bank accounts using only their mobile phone number as identification, which means that they do not have to access a computer or travel to a branch to make a payment. From 31 July 2016, customers will be able to use their telephone to photograph cheques for payment into their bank account, making life easier
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for customers in remote areas. Several banks are taking action to help their customers use those new technologies with confidence.
We are also making progress on ATM provision. The number of free-to-use ATMs is at an all-time high, and 97% of withdrawals are now made free of charge. I understand that in Eccleshall NatWest will still provide an ATM in the local community. There are also two other free-to-use ATMs within 1 mile of the branch that is to close.
More generally, it is often the most isolated or disadvantaged communities that have the worst access to free-to-use ATMs, so the Government are working closely with the LINK network’s financial inclusion programme to subsidise free-to-use cash points in more than 1,400 remote and deprived areas across the UK. Importantly, members of the public can nominate their area for inclusion. I believe that the ATM network can play a more important role in addressing some of the concerns voiced by consumers whose local branch is closing.
On a trip to India last year as part of my job as Economic Secretary, I was impressed at the widespread use of smart ATMs, which have far greater functionality than those we tend to have in the UK. They allow customers not only to make withdrawals and deposits and check their balances, but to carry out a wider range of transactions, such as purchasing train tickets and bus passes. Progress in the UK could be made by simply ensuring that ATMs allowed customers to deposit cash. That facility would be particularly beneficial to local small and medium-sized enterprises if it were provided in a way that allowed depositors to feel safe and secure—for example, within the confines of a Post Office, a store or an e-lobby. I have raised that issue with the banking sector, and my officials are engaged with LINK to find a way forward.
In conclusion, although the Government recognise that individual branch closures are commercial decisions and must continue to be so, I fully understand the disappointment felt in Stone and other communities when local bank branches close. There is no doubt that customers’ usage of banking services is going through an unprecedented period of change, but it is vital that we ensure that vulnerable customers—particularly the elderly and those in rural constituencies—have suitable access.
I want to reassure my hon. Friend that it will continue to be my personal priority for the remaining weeks of this Parliament to ensure that the vital services that the banking industry provides remain as widely available as possible, wherever people live. I fully intend to make further progress on the initiatives to get banks to create a new protocol, to look at what services the Post Office provides, and to push further on using technology to provide solutions to businesses and customers in rural areas. Once again, I thank my hon. Friend for raising these important issues in this vital debate.