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Department of Health

I heard the hon. Gentleman’s question during Prime Minister’s Question Time last week and I am with him on that issue. The Bluebell Wood children’s hospice is being built in my constituency, so I shall have an even greater constituency interest in years to come. However, I would be misleading the House if I were to say that my Committee is likely to look into children’s hospice funding in the next few months. It is striking that there was no warning of the deficits. Last year, on a budget of £67 billion, there was a deficit of just £250 million. When they gave evidence to the Health Committee on 1 December last year, the former permanent secretary at the Department and the then NHS chief executive, Sir Nigel Crisp, told us:"““The actual overall deficit in gross terms, in proportion terms, is pretty small””." Perhaps so, but the House will have seen that when he left his post earlier this month, he was quoted in the press as saying:"““The deficits are clearly going to be too big, and I’m sorry we are going through a bad patch.””" I think that most of us who know Sir Nigel will congratulate him on his retirement and hope that it is a long and happy one. I do not know whether he will make it into the other place, but during the few short months that he and I were involved on the Health Committee, I regarded him as a good professional. I wish him well in whatever he does in the future. In 2004–05, the NHS overspent by just £250 million—the first time that it had overspent since 1999–2000. That was reported by the NHS director of finance in his January 2006 report to the Secretary of State for Health. The director of finance emphasised that the overspend was small in relation to the overall sum managed, but said that it was still a cause for concern. He highlighted three reasons for that concern. First,"““there was a significant deterioration between financial forecasts and””" financial outturn. Secondly,"““in some of the organisations with the largest deficits recovery plans were not delivering””." Thirdly, the overspend"““was arising at a time of . . . sustained growth in resources””." In some ways, everyone was surprised by such a large increase in deficits. The financial director also reported that"““despite the action taken, we were still seeing no improvement in the financial position””" and that the NHS estimated"““deficits for 2005–06 of £623 million net and £948 million gross.””" Those comments were made in the ““Financial Turnaround in the NHS”” report published in January. That represents an overall increase in the deficit of 150 per cent. on the £250 million deficit reported in 2004–05. That increased deficit threatens to destabilise the NHS, so we must control it. I am a great believer in the national health service—I always have been, and I always will be—but we will lose out if we do not gain control and find out what it costs to provide services for our constituents. The only way to do that is to ensure that bottom-line balances at the end of each year for all NHS trusts give a true and accurate picture of the level of activity and are not fictitious figures. Sadly, on occasion, people who have overspent have wanted to hide that fact by submitting fictitious figures.