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NHS Deficits

My hon. Friend makes a good point. Evidence to our inquiry brought to light the fact that my constituency is in an interesting situation because not only does it have a very large pensioner and retired population, but it also has two of the most deprived estates in south-east England. Therefore, it meets the funding criteria in terms of both age and deprivation, so, in theory, we should benefit as a result, but we do not. The Government’s decision to spearhead—to borrow the terminology that is used—money into areas of social deprivation has not been addressed much in our debate. I could not find any reference in the Government response to how those amounts of money are calculated. Their response suggests why that happens, and I understand it—although I do not agree. How is each individual pound calculated in respect of the money that goes into those spearhead areas? It is worth noting that there are few spearhead areas in the south-east where most of the deficits occur, which is a surprise. The hon. Member for Staffordshire, Moorlands (Charlotte Atkins), who is no longer present, said that when the financial crisis in her area was exposed, the board concerned resigned en bloc. I wish that that was the case in my constituency, because perhaps we would then get to the bottom of why we have such a bad management structure in my area, and why we are in our current position. I say that because, although I am critical of the Government on account of the deficits that have been caused by the funding formula, there has also been acute bad management, as the report highlights. We cannot just blame local management: the Secretary of State is responsible for appointments—for signing off the appointments of chairs and chief executives of all health trusts in this country. That is her responsibility. I intend shortly to ask how on earth the Government failed to notice some of the problems that arose. It is true that the Government ploughed huge amounts of money in, but they set narrow targets in terms of how the money could be spent. That was highlighted in detail in evidence to the Committee. What clearly happened is that the targets were set—““You must reduce this, or else””—and the money was spent willy-nilly. As has been said, no other organisation would be allowed to get away with that. No other organisation would be allowed to have an open cheque book and to spend money, and just carry on spending it—taxpayers’ money—in that manner. I am particularly concerned about something that is not mentioned in the report: not only did the strategic health authorities not realise what was going on, nor did the Department of Health and its Ministers. On this occasion, I am not blaming the Minister, he will be pleased to know, because he was not around when most of that was going on, but the Secretary of State and some of the other current Ministers most certainly were. There have been huge increases in taxpayers’ expenditure on the NHS. The relevant sum is £100 billion—we have almost reached that amount this year. How on earth have we got into what is probably the biggest financial crisis since the NHS was established? In evidence, the Government were continually dismissive. The problem is not that bad, they said. I think that the phrase that the Secretary of State used was that it was merely a pebble in the pool. ““This is just a tiny ripple of a problem,”” they said, but every Committee member agreed that it was not a tiny problem, but a huge one. It is a problem that has arisen for lots of different reasons, not least inept financial management throughout the NHS, including right at the very top. How can one day the head economist of the Department of Health say in evidence that the funding formula is a major contributor to the deficits, and, at the following evidence session, the Secretary of State say, ““No, it’s not””? When I pointed out to the Secretary of State that her own economist had given evidence to the contrary to the Committee, she fobbed us off. Evidence to support my point is in the report. [Interruption.] Is the Minister agreeing with me from a sedentary position? If he is, he should have addressed that issue in the Government’s response to the report. The report is important, and the Government response does not do it justice. If Sir Humphrey is still wandering the corridors of the Department of Health when the current Conservative leadership is elected to government, he will get the bullet.