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NHS Deficits

That is why the inquiries instituted—one of which is supposed to report by autumn this year, and the tenders for the others are out—need to be completed as quickly as possible. On staff costs and reductions, it is not surprising that the Department does not agree with the Health Committee about the role that the underestimated costs of contracts played in the deficits. Obviously, it minimised the figures that other sources have emphasised. The Department has a marvellous way of deflecting criticism. Paragraph 57 of the Government’s response states:"““Each of the pay reforms addressed fundamental weaknesses in the previous pay contracts, including recruitment and ""retention problems, poor control over outputs provided by doctors and other staff, poor control over earnings growth, low productivity growth and significant exposure to equal pay risks. The fact that the contracts address these inherent weaknesses is evidence of good long-run financial management.””" The only way in which to reduce spending in an NHS that is very labour-intensive is obviously to reduce staff. Paragraph 61 of the Government’s response states"““As Trusts become more efficient, they can continue to provide high quality care with fewer staff. We know from individual Trusts and SHAs that reductions in posts are being managed in ways that minimise the needs for redundancies—for instance through recruitment freezes, natural wastage, and redeployment.””" That does not take account of the fact that, although the number of redundancies is not very great, because of those effective vacancy factor measures the reduction in staff numbers is really quite extensive. A Health Service Journal survey of 100 chief executives, published a week or so ago, revealed that more than two thirds believed that patient care would suffer as a result of short-term financial decisions. My own trust has a freeze on about 10 per cent. of its staff, and it is hard to see how that will not affect the quality of care. It told the Health Committee, referring to staff cuts,"““This will involve a comprehensive review of services across the three sites and serious questions about their sustainability.””" Important recommendations that have been rather brushed aside concern collective responsibility and value for money. In respect of collective responsibility, recommendation 22 speaks of the importance of including clinical staff, as spenders and as deciders of the way in which money is spent. The Government’s response to that is rather thin. In respect of value for money, recommendation 21 mentions a very good Department of Health paper, ““Better Care, Better Value Indicators””; but I wonder what the Department is doing about recommendations that could, if publicised, produce dramatic savings. Notwithstanding the Government’s response, my overall view remains that the Department of Health is largely responsible for the deficits. Following its interviews with health service chief executives, the Health Service Journal came up with some pretty strong quotations. One chief executive said of Ministers"““they never once stopped to find out what it would cost to implement the latest good idea.””" Another spoke of"““Blind panic as ever. No consistency of approach””." I absolve this Minister, because I know that he was not around at the time. The chief executive went on"““Bear in mind much of the financial challenges arise from centrally conceived pay schemes… which were ineptly designed and criminally costed by the Department of Health—despite warnings and advice from the service.””" I believe, and the Health Committee report emphasises, that the Department of Health must bear much of the blame for the state we are in.