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NHS Trust Debts

I congratulate the hon. Member for Northavon (Steve Webb) on securing this important and timely debate. He obviously wanted the opportunity to return to the health portfolio. In the time that is left to me after nearly an hour of a Lib Dem fest, I want to start by reiterating my and my party’s unequivocal support for all the wonderful work of the clinical and the non-clinical NHS staff. Too often as we lay bare the myriad incompetences of the Government, we hear the silly accusation that we are attacking NHS staff. It is terribly important that we place on the record the fact that we salute and applaud them for what they do. However, there are big issues of strategic direction, management and Government responsibility that we have to discuss without that being considered unfair or inappropriate. The Labour Government have presided over the biggest deficit ever in our NHS. The Minister will no doubt talk about the extra investment, but as we approach conditions of famine following the feast, we have to examine the effect that the deficits are having on the overall confidence that many trusts and the public at large have in the Government’s ability to manage the crisis, which is of their own making. Let me remind the Minister of the figures. In the last financial year—2005-06—NHS trusts had gross deficits of £1.312 billion. A third of acute trusts and PCTs were in deficit, and 42 organisations had deficits of more than £10 million—a huge increase on the two organisations with such a debt in the financial year 2003-04. It would be wrong of the Minister to repeat his mantra that most of the debt is concentrated in a small number of trusts. It is true that in the last financial year, 11 per cent. of the 174 trusts in deficit accounted for 70 per cent. of the gross deficit, but the Minister’s protestations on that score have been misplaced and will be again if he repeats them today. First, the argument is irrelevant, as NHS organisations are, rightly, not profit-making organisations—that is, they cannot recoup the deficits of one year through what might be described as a bumper year the following year, if they are fortunate enough to have one. Secondly, and more importantly, the Labour Government’s system for solving the deficit crisis has impacted adversely on the finances of all trusts and, consequently, on front-line services to patients. A rigid system has been put in place this year to try to recoup the deficit money. It looks as though the Government may have skimmed off enough money to deliver something approaching a net run rate balance by the end of the current financial year at the end of this month. However, the figures tell a different story. Labour has imposed draconian measures on the NHS. Patients, students and NHS staff—we have read this week about junior doctors, in particular—have borne the brunt of the Government’s financial management. That is unfairness of the highest order. We have seen about 20,000 job cuts—I hope that the Minister is listening; the phrase is ““job cuts””—through vacancy freezing, post cutting, wastage and redundancies. Training budgets have been savaged—behaviour that is utterly short-sighted. The derisory pay settlements that the Government have put in place for this year are a naive attempt to claw back some cash, but no credibility, after the mess they made of renegotiating salaries with NHS staff.