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Department of Health

I went to Crawley and to Reigate prior to the last election, and I have been to the East Surrey hospital. I remember the conversation exactly. The hon. Lady has to deal with the point that my hon. Friend the Member for Reigate (Mr. Blunt) made. Instead of making cheap shots, she might contemplate the expense that she has caused her constituents. With one or two unhappy exceptions, it has been a good and important debate, and I congratulate the right hon. Member for Rother Valley (Mr. Barron) on securing it. It comes at precisely the right moment. That was reflected not least in the contributions by Government Back Benchers, who displayed an attitude that was not present, by and large, in mid-November, when we initiated a debate in our own time on deficits. We said then that we believed that £1 billion of gross deficits and several hundred million pounds of net deficits were in prospect this year. The Secretary of State came to that debate and said, in effect, that recovery plans were in place and that it was going to better this year than last year. Frankly, the Government have been, and remain, in denial. On 6 December, in front of the Health Committee, the Secretary of State said:"““We believe that by managing this very closely we will get the net overall deficit back to around £250 million at the end of this year and we will, at the very least, get back to balance by the end of next year.””" One has to wonder what world she was living in at that point, as at about the same time she admitted that the net deficit was rising to £620 million. We now know, although the Government still will not admit it, that subsequent forecasts by strategic health authorities add up to some £755 million. There are some very serious deficits in several trusts, but there are also deficits across a much larger number of trusts. Our latest estimate from board papers suggests that more than 139 trusts are experiencing deficits. It is a system-wide problem. The right hon. Member for Rother Valley was right to say that we know what the NHS spends, but we do not know what it costs. The system has to be open and transparent. He has not heard from me, and he will not hear from me, the idea that we should go back to the bad old days of everybody covering everything up. However, he should talk to his Front-Bench colleagues who, far from pursuing a direction of openness and reform, are, through the proposal that primary care trusts should top-slice allocations, moving in precisely the opposite direction. Contrary to shifting the balance of power, they are taking control of the budgets. The Government will renationalise much of the growth money, which will then be spread around the system to try to obscure the financial consequences of necessary reform. The hon. Member for Birmingham, Yardley (John Hemming) understands such matters, but reached the wrong conclusion about what is required. It is necessary not to delay the structure of reform, but to complete it consistently. One of the central problems is not too many changes at once—if they were all mutually reinforcing because a clear strategy existed, managers and others in the NHS would understand and accept them. However, they find constant, mutually inconsistent changes impossible to tackle. For example, how is it possible for the chief executive of the NHS to say one thing about the future structure of PCTs and their functions—that they are commissioning, not provider bodies—at the end of July, yet, two months later, they become provider bodies again? The same is happening to allocations. Contrary actions will not deliver successful reform. I have every sympathy for the position of the hon. Member for City of York, which requires reform. I suspect that he believes in the structure of reform and that we need devolved decision making and the provider trusts to be held to account for their productivity. The consultants’ contract did not achieve that. Simon Stevens, who was special adviser at No. 10 at the time, subsequently admitted that the contracts were negotiated without building in productivity. Provider trusts, like foundation hospitals, should have the freedom to manage their costs more effectively. The Government’s imposing of costs lies at the heart of much of the problem. There is a 7 per cent. increase in costs on the tariff this year compared with last year. Is it any wonder that the hospitals that receive increases in cash resources find that most of it goes straight out of the door? The tariff takes no account of the impact of the working time directive. The 7 per cent. includes nothing for the costs of implementing the NHS programme for IT, as if hospitals paid nothing for that. It also contains nothing directly for implementing waiting time targets. I have asked Ministers which part of the tariff for next year reflects the Government’s proposal to move towards 18-week waiting times. I am sure that the Minister has included something in her speech about that. However, I have also received replies to questions that show that, next year, the Government estimate that the move will cost £1 billion, yet that is not included in the tariff. Where, therefore, will those costs be met? We heard conflicting and contrasting speeches about the circumstances at the university hospital of North Staffordshire. I shall not comment on that except to say that a central question for the hon. Members for Newcastle-under-Lyme (Paul Farrelly) and for Staffordshire, Moorlands (Charlotte Atkins) is how the University hospital of North Staffordshire can possibly afford rebuilding. That can happen through only two means. Either the tariff—the payment by results—adjusts in future to reflect the costs of building new hospitals and providing new services, or hospitals cut back their activities so dramatically that they are deemed affordable by the Government and Monitor. Clearly, the University hospital of North Staffordshire is moving in the latter direction. It must do that because the Government are telling us nothing about the former possibility. The operating rule book for 2006–07 was published at the end of January and it stated that the Government would shortly publish new affordability criteria for PFI projects. That has not happened, just as we do not know what will happen to the tariff after the end of this year. We discussed the possibility of marginal pricing Upstairs in Committee. Time and again, I said that, if the NHS has capacity and primary care trusts have patients who need treating but constrained budgets, one might at least allow for the possibility that they could reach agreement between themselves about marginal pricing of additional capacity towards the end of the year for treating those patients. The hon. Member for Dartford (Dr. Stoate) appears to consider it reasonable that Darent Valley hospital should spend 10 months treating patients over trade and then stop. That is not a sensible approach.