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NHS Deficits

First, let me say how pleased I am that we have this opportunity to debate the Health Committee’s report on national health service deficits and the Government’s response. I thank the Liaison Committee and the scrutiny unit of the House of Commons for assisting us in this process. I thank members of the Health Committee, some of whom are in their places this afternoon. They have spent many weeks and months working on the report. I thank the secretariat and the special advisers who helped us to draw up the report, which we published before Christmas. I would also like to thank the Department of Health. It published not only the response to our report on 20 February, but, by coincidence, its own examination into deficits—[Interruption.] The Department published a document to explain the national health service deficits. It was conducted by the chief economist of the Department’s corporate analytical team. Coincidentally again, on the same day that the Government response to our report was published, they also published quarter three of the NHS returns for this financial year. I want to pick up some of the more serious points that we made in the report and consider the Government’s response to them. Let me begin with the introduction in 2004-05 of resource accounting and budgeting. The Health Committee considered that in great detail and took evidence from the Audit Commission, which had also examined the change in accounting in NHS bodies. It and the Health Committee were critical of resource accounting and budgeting. I appreciate that the Minister of State, Department of Health, my hon. Friend the Member for Leigh (Andy Burnham) will doubtless speak about the matter at some length, but let me cite paragraph 25 of the Government response, which states:"““In this context, the Department is looking seriously at the case for reversing the impact of past RAB deductions for NHS trusts for delivery of financial balance in 2006-07 and at the future application of the RAB regime for NHS trusts.””" Will my hon. Friend the Minister tell the House the Government’s exact thinking on the matter? It worried the Committee, the Audit Commission and many parts of the NHS.