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NHS Deficits

I am glad to follow my hon. Friend the Member for North Essex (Mr. Jenkin), who was admirably brief but very much to the point. He, like others in the debate, was speaking from experience of the impact of deficits on his constituents. As he said, not only will voters hold the Labour party responsible—comparing the situation with all the promises that they were given 10 years ago—but it is the Chancellor of the Exchequer’s responsibility. People say, ““How can it be? He’s not in charge of the Department of Health””, but when one looks at the report and sees the way in which accounting changes and things such as the abolition of capital-to-revenue transfer, the abolition of brokerage, and resource accounting and budgeting are affecting NHS trusts, one realises that such things are the responsibility of not only the Government, but the Treasury. The Chancellor of the Exchequer will not be able to escape responsibility. A number of Members were generous to the Minister who will respond to the debate, but when the time comes he is not going to escape responsibility either. If one wants to know how complacent the Government were, one has only to go back to March 2005, in the run-up to the general election, when we raised the difficulties with the emerging deficits in the 2004-05 financial year. What was the response of the Minister’s predecessor, the right hon. Member for Barrow and Furness (Mr. Hutton)? It was, ““Oh, they always say that there are going to be deficits at this time of the year and it always gets sorted out.”” The whole point is—the Select Committee’s report is perfectly correct in this respect—that it was in 2004-05 that capital-to-revenue transfers were eliminated. So, of course, the situation was not sorted out in the way that it always had been in previous years. Before I turn to the deficits, I want to say a word of commendation to colleagues who have spoken. The right hon. Member for Rother Valley (Mr. Barron) did justice to what is a good, robust report. As my hon. Friend the Member for Hemel Hempstead (Mike Penning) rightly said, it was agreed on a consensus basis, as I think that all Health Committee reports have been. Rightly, the report made some trenchant criticisms and I hope that, when the Minister replies, he will accept them. When senior officials in the Department of Health were asked last year whether the Department was good at managing change, 81 per cent. disagreed or disagreed strongly with that proposition. The Department does not believe that it is managing change well; it knows that it is getting these things wrong. We know from the Healthcare Commission that primary care trusts that have been plunging into deficit have poor financial management. None was given an excellent rating and 124 were given a weak rating. Weak means that they need immediate action to remedy their financial failings. Some important points were made during the debate. My hon. Friend the Member for West Chelmsford (Mr. Burns) made an important point about the nature of choose and book, and referral management. There are a number of Members from north Yorkshire present. I was talking to a GP in north Yorkshire who put things extremely well. He said, ““What is the point of having a system that allows us to exercise choice if I sit down with a patient and look at the waiting times and he can choose to be seen at Leeds, which is quicker than being seen in York, and we put that into the system and the information goes off to a referral management centre, only for him to be told that he can be seen at Leeds, but he’s going to have to wait 20 weeks anyway?”” As my hon. Friend the Member for North Essex said, the week before last the BBC found that 43 per cent. of primary care trusts throughout the country are imposing minimum, not maximum, waiting times, and saying that patients cannot be seen before a certain date. A question that I keep asking the Minister and to which I never receive a satisfactory reply is why, in the latter part of this financial year, have not the Government allowed primary care trusts and local hospital trusts to arrive at marginal pricing deals, whereby they say, ““We have capacity, you have limited resources; we can estimate our marginal cost of sustaining that capacity and treating patients, so let us treat more patients for a given budget.”” The tariff and the Government’s determination that it should only ever be a uniform price are damaging patients’ prospects. The hon. Member for Staffordshire, Moorlands (Charlotte Atkins) was the only other Labour Back Bencher who supported the Select Committee, which surprised me. There were many contributions from the Opposition Benches, but it is all too predictable that Labour Members will not come here to defend their record, even when a cross-party Select Committee is exposing the problems. The hon. Lady made an important point about nurses’ pay, which the Minister might want to explain. Since 1984, Governments have had independent pay reviews, and it has always been understood that one of the constraints on pay reviews is affordability. The Government went to the pay review body and said that 4 per cent. was the maximum affordable and that a 4 per cent. increase in average earnings for nurses in particular was consistent only with a 1.5 per cent. basic pay increase. The Committee then asked the Department for evidence that pay drift would be 2.5 per cent. so that it could see the justification for the case. If Labour Members read the relevant paragraphs of the report, they will see that the pay review body says that the Department could not produce the evidence and could not justify its case. The Department’s financial mismanagement is so profound that it cannot even justify its own arguments on pay. The Department ignored the pay review body and substituted its own belief, which is one reason nurses are angry. They were promised an independent pay review on the basis that it would not be overridden, but it is being overridden.