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Department of Health

I certainly will not give way to the hon. Gentleman. [Hon. Members: ““Ooh.””] Well, he made what I consider a most sarcastic contribution and made a number of interventions, so if the House will allow me, I will move on. We are establishing the right culture for financial balance. We are changing the incentives associated with the performance-rating system, so that those hospitals and PCTs that are failing to meet their financial duties are identified in performance reviews. We are also designing a major drive to improve NHS productivity and efficiency. For example, we know that cutting unnecessary emergency admissions—an issue mentioned by several Labour Members—could help the NHS to save more than £400 million a year through better assessment processes and improved patient care in primary and community settings. In the minority of organisations where there are significant overspends, we are taking action now to identify and correct the financial problems. I anticipate that this work will continue for at least 18 months, and it will be driven from the centre. At the same time, it will aim to build turnaround experience within the NHS to reduce reliance on external support. In some of these organisations, the overspend is large and it may take more than one year—I hope that my hon. Friends hear what I am saying—to return to financial balance. In these cases, we expect the new strategic health authorities to take the lead in developing and implementing a financial strategy for managing the situation in their locality. This will include creating local reserves to deal with local problems. The size of the reserves and the contribution from each PCT will vary according to local circumstances, but the underlying principle will be fairness. The House will want to know that we expect SHAs to repay any contributions to reserves over time.