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NHS Deficits

I follow the hon. Member for Harrogate and Knaresborough (Mr. Willis), and I share some of his dilemmas, in that I come from an area in which the health authority was running things in line with the financial restraints imposed on it and is being punished for the sins of others, as we try to bail them out. I commend the Chairman and Members of the Select Committee that produced the report. I agree with the hon. Member for Wyre Forest (Dr. Taylor): this is a seriously hard-hitting report. It explains why, fundamentally, all the extra money that has gone into the health service has had so little beneficial effect. The money has cushioned the health service against the need to reform, when the reforms should have been prepared in advance of the extra money going in. Unfortunately, we have seen a huge increase in budgets and little reform. The report does not pull its punches. I invite hon. Members to look at paragraph 63 onwards. The headings tell the story: ““Poor local management””, ““Poor accounting and financial management””, ““Lack of leadership and loss of management control””, ““Poor central management by the Department of Health””, and ““Badly-costed work contracts””. Those are just the headings for the litany of management and financial failure in the health service, which has affected it at every single level. The East of England strategic health authority, my local strategic health authority, is cited in paragraph 24 as one of"““the four areas…in greatest difficulty””." Colchester and Tendring primary care trusts, which are now called the North East Essex primary care trust, are paying the price for the financial failures of other areas. We have to recover a deficit of £6 million in the current financial year, because the East of England strategic health authority appears to have removed £7.8 million of our spending capacity in the present financial year. Next year it will take another £5 million of our spending capacity. That is because of deficits in Suffolk of £30 million, in Cambridgeshire of £52 million, and in Hertfordshire of, I was told, £42 million, although I now hear that it is £55 million. The impact of those deficits on the health care in my constituency is considerable. I have hospital consultants telling their patients and me that they have been instructed by their management to lengthen the waiting times to the maximum period—not to shorten them or reduce suffering—in order to delay expenditure until the following financial year. I have a LIFT, or local improvement finance trust, programme—a GP surgery improvement programme—that is being thrown into suspense. A number of substandard surgeries in my constituency, in West Mersea and other areas such as Wivenhoe, have been told that they have to wait even though their expectation was, years ago, that they were going to be given new modern surgeries. I cannot let the moment pass without adding my voice to the concerns about some of the private finance initiatives that we have seen in the area. They have turned out significantly more expensive and significantly wrongly specified. Whether that is the fault of the contractors or the health authorities is a matter of dispute. They have locked in a degree of expenditure that is therefore not available for spending on other things. The solutions are obvious: much stronger financial management, much less central Government interference, and fewer initiatives and short-term targets from the centre. I commend the Government’s endorsement of reserves, which is set out in paragraph 80 of their response. They say that they wish to"““now encourage the NHS to plan towards achieving surpluses””." Particularly where there is to be increased volatility in trusts as a result of payment by results, a more businesslike approach to cash management and cash reserves will be a necessity. The funding of the NHS will have to reflect that. I conclude my brief remarks by simply saying that the past 10 years of management of the health service reflect not so much the Prime Minister’s intentions for the direction of the health service as the Chancellor of the Exchequer’s control of the health service. The present mess is the Chancellor of the Exchequer’s mess. Like us all, he will have to confront the truth of why, as the country nears a European average spend on health, health outcomes in this country are still so inferior to those in so many of our European partners. That has much to do with the whole concept of the NHS as presently conceived, with too much central direction and control and not nearly enough local management and control. Unless we all embrace that, more money will be wasted, more patients left untreated and more misery inflicted on our constituents. I know who my voters will blame. After all the promises that the Government made about improving and saving the NHS, my voters, and I guess voters all over the country, are more bitterly disappointed and disillusioned with all politicians—as a result of the Government’s failure on the NHS—than I have ever known them.