HC Deb 02 May 1984 vol 59 cc425-34

'The following subsection shall be inserted after subsection (7) of section 97 of the National Health Service Act 1977 (means of meeting expenditure of health authorities)—

"(8) At the time that the authority is notified of the amount allotted to it by the Secretary of State or as the case may be, the Regional Health Authority, the Secretary of State shall inform each district health authority and the appropriate community health council of the assumptions on which the allotment to that district health authority is based, such information to include:

  1. (a) the total population of that district in the year for which the allotment is made, the preceding year and the projections for the succeeding years in decile groups;
  2. (b) the number of residents over 65 and over 75 in the year for which the allotment is made, the preceding year and the projections for the succeeding year;
  3. (c) the number of women of child bearing age in the year for which the allotment is made, the preceding year and the projections for the succeeding year;
  4. (d) the number of live births, still births and terminations of pregnancy in the year for which the allotment is made, the preceding year and the projections for the succeeding year;
  5. (e) the number of weeks estimated to be necessary to clear the urgent and non-urgent waiting lists in each specialisation in the year for which allotment is made, the preceding and succeeding year;
  6. (f) the number of hospital beds available in the district in the year for which allotment is made, the preceding year and the projection for the succeeding year;
  7. (g) an itemised statement of community care facilities and staff, whether provided by the authority or any other body in the year for which allotment is made, the preceding year and a projection for the succeeding year;
  8. (h) the numbers on the hospital waiting list awaiting coronary bypass surgery, hip replacement and varicose vein operation and the estimated length of time to clear the list in the year for which allotment is made, the preceding year and the projection for the succeeding year;
  9. (i) the provisions for renal dialysis for the age groups 15–44, 45–64 and 65–74 for the year for which allotment is made, the preceding year and a projection for the succeeding year;
  10. (j)the backlog of maintenance, expressed in terms of both cost and time to clear for the year for which allotment is made, the preceding year and a projection for the succeeding year;
  11. (k) an estimate of the revenue consequences of capital schemes approved in the year for which allotment is made, the preceding year and the succeeding year;
  12. (l) details of requests for scientific and medical equipment met and not met in the year for which allotment is made and the preceding year;
  13. (m) the average length of stay in hospital by specialties in the year for which allotment is made, the preceding year and a projection for the succeeding year together with details of the number of elderly living alone and people living in housing without basic amenities.".'. —[Mr. Dobson.]

Brought up, and read the First time.

Mr. Dobson

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

With this it will be convenient to take the following amendments:

Government amendment No. 13.

ii Amendment No. 14, in clause 3, page 5, line 41, at end insert 'provided that the Secretary of State or, as the case may be, the regional health authority, shall not reduce an allotment made for a given financial year after 31st December in that financial year'. Government amendments Nos. 15, 78, 104 and 106.

Mr. Dobson

I deal now with a matter that is almost unrelated to the optical service. When the Secretary of State for Social Services allocates funds to regional health authorities, regional health authorities allocate funds to districts. When the inhabitants of those districts, staff working in the Health Service in those districts or even Members of Parliament who are trying to represent members in those districts ask the Minister what is happening in their districts, he always replies, "It is nothing to do with me. All we do is allocate the funds, and the district health authority or the regional health authority decides what is provided in its area." In effect, the Minister is washing his hands of what is happening on the ground, just like Pontius Pilate. Indeed, in many senses it could be said that Pontius Pilate is the patron saint of the Department of Health and Social Security. Whatever goes wrong, it is always somebody else's decision. When anything goes right, a press statement is made, stating what a wonderful thing the Minister and the Department have achieved. When anything goes wrong, the finger is pointed at someone else. Thus new clause 9 could be described as the anti-Pontius Pilate clause.

I have drafted almost all the clause myself. It may well be that it includes significant drafting errors, and odd things which were better left out. In its modest way, the new clause says that, when the Secretary of State centrally allocates money to regions, which they subsequently allocate to districts, the Secretary of State, as the person ultimately responsible for what is happening, should state to the regional and district health authorities, and to the community health council in the areas affected, how he thinks things stand in health provision in each district at the time, and how he thinks they will stand at the end of the period for which he is allocating the money. As I said, I do not claim that new clause 9 is perfect. It may have many shortcomings, and I am happy to accept any changes that the Minister wants, as long as he is willing to concede the principle that the Department should accept responsibility for what it is doing.

New clause 9 itemises some of the information which, in a rational society, should be considered when deciding the health policy and the health funding for a particular area. I shall give some examples from the clause. The information should include the total population of a district in the year for which the allotment is made, and in the preceding year, and the projections for the succeeding years in decile groups, namely, in age bands of 10 years. The Minister ought also to indicate his assessment of the number of residents over 65 and 75, the number of women of child-bearing age, the number of weeks estimated to be necessary to clear the urgent and non-urgent waiting lists in each district at present, and as a result of the allocations of funds that he may be making, an itemised statement of community care facilities and staff, whether they are provided by the health authority or by any other body, the present provision for renal dialysis, and the provision as a result of the allocation that the Minister is making. It may be that the Minister will welcome the provisions, and propose adding to the list. If so, I am sure that Labour Members of the House of Lords will be happy to accept additions to the list, if the Minister is willing to accept the new clause.

We are attempting to build into the present system what is presently missing, an element of responsibility, so that the person ultimately responsible for funding and for health provision in each district takes some responsibility.

At present we have an extremely irresponsible system of funding and directing health provision. If anything goes wrong—if the number of hospital beds is reduced, if cuts are made and clinics are eliminated—the Secretary of State can say, "I know nowt about it, you had better get in touch with the authority." When one does so, the authority may say, "We can do nothing. It is all the fault of the Secretary of State. He is not supplying us with enough money to do what we want."

In my view the authorities say that with more justice than the Secretary of State displays when he blames them. But whatever the merits of the claims and counter-claims, accusations and counter-accusations, the present system is a perfect formula for buck-passing. The people who suffer are those who rely on the district health service as well as those who work in the service and do their best to provide a decent standard of care. When they legitimately ask for more resources and want to change the provision, they are usually told by the health authority, "We cannot do so because we do not have the money." That is usually the case, but it is not always so. Therefore, the new clause is not only intended to make the Secretary of State carry out his responsibilities properly. It will also mean that anyone else who does not discharge his responsibilities properly can be more exposed to criticism than at present.

Among the amendments is one dealing with the timing of the allotment of funds by the Government. This poses another problem. I have not checked, but for all I know it may have arisen with previous Governments as well. Sometimes the funds are allocated so late in a financial year that they cannot be spent. In other circumstances:, a reduction in funding comes so late that it is extremely damaging to the district health authority, which cannot cope. We shall therefore support the amendment, which will ensure that the allotment of funds cannot be reduced after 31 December in any financial year, because in all conscience the health authorities cannot be expected to reduce their spending after that time.

It would be better if the Minister were to accept the general principle so that the allotments could not be changed at all. In the past, some district health authorities have been allotted funds so late that they did not have time to spend them, and when the DHSS and the regions began looking at the allocations for the succeeding year they said with brass-necked cheek, "We gave you the money and you never spent it." The timing was perfect, because it was known that the money would never be spent—it was ever thus with hierarchical bureaucracies. We should, therefore, limit the powers of the Secretary of State to make changes in spending, be they increases or decreases.

Even if the Minister does not like the new clause as it stands, I hope that he will accept the principle that when funds are allocated the Secretary of State should have to identify the assumptions on which he, his colleagues and subsequently the regions make that funding. That is only fair to everyone. This will identify the Secretary of State's responsibilities. He and his senior civil servants are paid a lot of money, and many pleasant things go with being important people, but when it comes to the crunch they do not accept the responsibility that goes with such privileges. The idea behind the new clause is that people should accept the responsibilities that go with the privileges of power.

Mr. Archy Kirkwood (Roxburgh and Berwickshire):

I am pleased to be able to contribute briefly to the debate. My right hon. and hon. Friends were unable to serve in Committee and so we are trying at this stage to redress the balance by tabling amendments such as amendment No. 14.

I take up the argument of the hon. Member for Holborn and St. Pancras (Mr. Dobson) by saying that it is the experience of my colleagues and I that the Secretary of State has in the recent past adopted a financial system that has been cavalier in the way in which it has affected regional and district health authorities. The way in which changes have been made, and the timing of them, has made long-term or even short-term financial planning almost impossible for the authorities.

I know from my constituency experience—I accept that the financial situation is slightly different in Scotland—that health authorities are extremely worried about the changes that can be visited upon them at short notice, especially when they have a long-term commitment to wages and salaries and other costs and charges on their budgets. They contend that sensible financial planning is almost impossible. Therefore, we think it right that the Secretary of State should be subject to some limitations, and amendment No. 14 seeks to impose them.

The Secretary of State and the Minister for Health have an onerous responsibility to consider the amendment carefully. I know that there are difficulties in these days of financial constraints which produce difficulties for central Government, but unreasonable constraints have been put on those in the regions and districts who are doing the work. That criticism applies to both Conservative and Labour Governments and it is not, therefore, a party political point.

The amendment is a positive and constructive attempt to try to put a longstop on the Secretary of State's ability to impose financial changes on health authorities. We think that it is a sensible amendment and I hope that the Minister will consider it carefully. If he is not happy with the detail of it, I hope that he will feel able to make a statement on how the Government in future may be able to redress the balance by guaranteeing at least an element of financial security in planning that will be helpful to the regional and district health authorities.

Mr. Kenneth Clarke

The hon. Member for Holborn and St. Pancras (Mr. Dobson) advanced his arguments firmly and clearly as he usually does. I accept that the allocation of funds to individual health authorities is a difficult matter. I was rather puzzled when the hon. Gentleman said that it is difficult to pin down anyone, especially a Minister, who has responsibility for the allocation of funds. Whatever else my right hon. Friend the Secretary of State and I may do, we try to act on the principle that the buck stops with us. I hope that I shall be able to explain how we provide moneys that will make it easier for the hon. Gentleman and others to fasten responsibility properly upon us if they wish to make us answer for our allocation policy.

There is always a distinction to be drawn between our responsibilities for overall planning and the distribution of resources throughout the country and the day-to-day decision making, which we think should rightly be left to those in the district health authorities and in the units below them. We believe that that should take place as close to the patient—to the coalface as it were—as is possible.

9.15 pm

It will never be possible to devise a system for allocating funds across the country that will, at all times, be accepted by each and every health authority as fair and proper. We all know that funds are not distributed fairly and evenly now, so we try to adjust their distribution within the growing resources that we are allocating to the NHS. Whatever the system, those who receive a larger share of the growth money will still complain and will want a larger share. Those not receiving any growth money—or even suffering a reduction if they are overresourced or over-provided with acute beds, such as the authority that serves the constituency of the hon. Member for Holborn and St. Pancras—will always complain.

We divide the national cake between 14 regional health authorities. It would be impossible, from the centre, to achieve the right result for 192 district health authorities. To apply centrally the criteria set out in paragraphs (a) to (m) of the new clause would involve a substantial number of additional officials, with the result that Ministers and officials together could get it wrong in many areas. We must distribute to the regions and allow them to distribute to the districts.

We work on the basis that we inherited—a formula devised in 1976 by the resource allocation working party under the previous Labour Government. The formula does not go into the detail suggested by the hon. Gentleman in the new clause. It identifies a target allocation for each region, which is principally derived from population data weighted by age, sex and mortality rates. We apply that formula to each region and a RAWP target is produced. The Government's policy is to distribute resources in the light of those targets, trying to equalise them fairly across the country.

I never leap to the defence of RAWP as the perfect formula, but I do not criticise it because I use it. Nor do I criticise the Labour Government for introducing it. The hon. Member for Holborn and St. Pancras lives in an over-target district in an over-target region and, perhaps, may not see the qualities of RAWP. I defend the RAWP system as the only formula that we have and the only formula on which anybody is likely to agree in the foreseeable future.

When, by common consent across the country, we achieve an understanding that there are some imperfections in the formula, we make adjustments. For example, cases are made by regions such as Oxford, which said that we were not taking adequate account of anticipated population growth and that we were looking backwards too much, so we made some recent changes to the capital allocation. I do not believe that a better formula will be devised for our allocations to regions. Therefore, we propose to continue to distribute using that target.

The regions allocate to each of their districts. Regional health authority to regional health authority, they do not all adopt the same policy of distribution. Most of them use RAWP or a version of it, but take into account other matters such as the revenue consequences of capital schemes and so on.

The Government do not wash their hands of any responsibility. As part of our annual review and accountability process, we sometimes discuss with regions the distribution of resources to their districts. In our annual review and discussions on future policy, we reach agreement with the regions so that when they distribute their money we do not wash our hands of it. They are distributing it on a basis that we have found satisfactory, so we share responsibility with them.

It is right to leave it to the regions to sort out the rows between Southend on the one hand and Hackney on the other. They must look at the detail and make their best assessment of the relative needs of districts. Even though gainers and losers complain about the regions, if Ministers and officials tried to do the job centrally, they would complain even more.

As part of the accountability process, we make sure that we are on the same wavelength as the regions, that they follow a policy with which we are happy and that they can defend, and for which we can hold them to account. We also give general guidance on the development of services.

We have used that role to ask regional health authorities to give high priority in their policies to the services identified, for instance, in Care in Action. Thus, all the time we are looking at allocation policies by regions to make sure that high priority is given, for example, to geriatrics, the needs of the mentally handicapped, the mentally ill and so on.

We also identify specific problem areas. This year we are asking authorities to pay special attention to developing services for renal failure, coronary artery surgery, joint replacements—principally hip replacements — and bone marrow transplantation. We have identified those as areas where more needs to be done in large parts of the country. In other words, our central guidance is that those matters should receive attention in allocation policy.

Mr. D. N. Campbell-Savours (Workington)

Why is central provision not made in respect of fires in hospitals, an example of which has been drawn to the right hon. and learned Gentleman's attention? Why must there be reliance on regions to provide the funds, particularly when patient care is involved?

Mr. Clarke

The hon. Gentleman raises a valid point. There could be difficulties if there was an absolutely catastrophic fire and the entire district general hospital of an authority burnt down. During a year all sorts of unexpected events can occur within the territory of an authority; there might be a local dispute, an epidemic or a fire. Normally, contingency planning within an authority is expected to take care of such eventualities.

The problem that would be faced if we followed the suggestion of the hon. Member for Workington (Mr. Campbell-Savours) and made central provision is that we should have to hold back some central reserve for that purpose. At present, we dispense the maximum money to health authorities and we have to say when people ask, "Why are you unable to find a few million pounds for this or that local project or service?" that we do not have the few million extra in our back pocket. "We have put the money out where it is needed," we say, "to the regional and district health authorities, and the result is that we do not have a contingency fund."

I accept, however, that if an utter catastrophe struck a district, we should probably, in the first instance, give the standard reply that it must deal with it out of its own budget, but we try not to be unreal in such matters, and circumstances could arise when we would have to intervene.

Mr. Campbell-Savours

As the Minister will be aware, there are people in the northern region, and particularly in my constituency, who are asking why funds were found immediately for a hospital in Port Stanley, but were not found for the hospital that services my constituency, where doctors suffered professionally, where nurses suffered and where, most of all, patients suffered as a result of the inflexibility of the authorities concerned in providing the money necessary to secure repairs and restoration.

Mr. Clarke

I accept that the members and staff of the authority in question had an extremely difficult time following that event. The answer to the hon. Gentleman's first, and somewhat political, question is that the budget of that health authority is vastly greater than the budget of a little hospital at Port Stanley. It has proved, and usually is, possible in the kind of budgeting about which we are speaking—of the £15.5 billion distributed to 192 health authorities—to cope with contingencies; and I doubt whether they have quite the same slack in the budget in Port Stanley. Other than that, whatever the clause refers to and whatever my responsibilities extend to, they do not extend to the hospital at Port Stanley.

As for changes in allocations, I accept that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has a valid point—that it is made more difficult for health authorities when changes are made in the allocation at any stage after the start of the financial year—and he asked me to give an undertaking in principle, which I will, that wherever possible we should try to give authorities some certainty because any adjustments mid-year to the allocations of authorities are bound to be disruptive of planning and so on.

We cannot give an absolute guarantee never to adjust budgets for major purposes. A classic example of that, which caused a tremendous amount of controversy, was the July measures following the decision of my right hon. Friend the Chancellor of the Exchequer after the last election. All cash-limited programmes throughout the Government were adjusted equally, and the effect on the Health Service was extremely difficult. Indeed, the two men who have cause to be grateful are the hon. Member for Oldham, West (Mr. Meacher) and the hon. Member for Holborn and St. Pancras (Mr. Dobson). Their whole campaign for cuts was given a new impetus by the July measures.

Mr. Dobson

Against cuts.

Mr. Clarke

Yes, against cuts. We are all against cuts. What happened then was that we had allocated growth money to the Health Service throughout the country. As a result of the economic crisis that we might have got into if the measures had not been taken, much of the growth had to be taken away from the health authorities and we were back where we started. The resulting difficulty for planning was successfully characterised as a cut by those who criticised it. Nevertheless, the Health Service, like every other service, would have suffered more if we had not taken the July measures and had gone on to the kind of grand slam currency and financial crisis in which the Labour party specialised when it was in office. That was an exceptional case. There have to be only good reasons for adjusting allocations in mid-year.

There are more mundane and day-to-day reasons why the Liberal amendment moved by the hon. Member for Roxburgh and Berwickshire would not be acceptable. Changes in the precise level of the cash limits of individual health authorities have to be made throughout the year for technical or managerial reasons. I shall give one straightforward example. We have a system that enables money to be moved about if one authority at one point has a slight excess of funds for its immediate needs for its capital programme and another authority is short of immediate funds. We call it a brokerage system. It is described as loans being made by one region to another. Regions operate the same brokerage arrangements between districts. If the new clause were made that could not continue. There would not be room for these straightforward modifications.

Sometimes we make other modifications, for example, to take account of movements in VAT. When we exempted contracted-out services from VAT that could have produced a windfall and caused great complaint from the Labour party if we had not adjusted the cash limits. These technical reasons would make the amendment impossible. In principle I agree with the hon. Member that it is desirable where possible to give certainty and not to make unnecessary adjustments in mid-year and certainly not in the last quarter of the year.

Turning briefly to Government amendments Nos. 13 and 15 and the consequential amendments that are being taken with them, these are technical amendments to a technical clause. Currently health authorities have a duty under section 97 of the National Health Service Act 1977, as amended by section 6 of the Health Services Act 1980, to contain expenditure within their allotments or cash limits. The Secretary of State is also required to fund that cash limit. The purpose of clause 3 is simply to make clear that these two duties receive quantitative definition on the date of notification of the cash limits. Looked at another way, the executive decision to set cash limits at a particular level becomes a statutory cash limit when it is notified or when any variation is notified. The purpose of the Government amendments before the House is to clarify that variations will include both increases and decreases in cash limits. I hope those amendments will be acceptable to the House.

For the reasons I have given I hope that hon. Members will withdraw the new clause and the amendments that they have tabled.

Mr. Dobson

I am reluctant to rise again as we have a lot before us, but I cannot let one or two things that the Minister has said go by, particularly his rewriting of economic history. I recall fighting a general election last year in which my Tory opponent was saying that everything was right in the world and the economy was booming. We now understand that the Lawson measures of July, about a month later, were introduced to prevent the underlying economic crisis getting out of hand. That is not as I recall it.

It is said that the Lord giveth and the Lord taketh away. The problem with Government Ministers is that they are quick to announce that they give but they are very reluctant to acknowledge that they also take away. The object of our amendment is to get them to acknowledge exactly what they are up to.

9.30 pm

I object to the resource allocation working party formula in practice. I objected to it before I was a Member for Parliament and I still object to it and its effects on my constituency. I do not object to its principles, which boil down to providing access to health care of equal standards to all citizens. It is a good formula for times of expansion, but the detailed formula as used at present would be inadequate in times of expansion and is particularly inadequate in times of retrenchment.

The Minister says that it would be wrong for him and the Secretary of State to be involved in the detail of health provision in each health district. They are reluctant in their humble, Uriah Heep-like way to become involved in determining the detail of what goes on in district health authorities, in spite of the fact that recently they took powers to dismiss members of local authorities who did not do what the Secretary of State told them to do.

How different that is from the home life of our own dear Queen—or, in this case, of the Secretary of State for the Environment. After all, previously he was Secretary of State for Health and Social Security. He also said that he could not intervene because if he did he would have to recruit hordes of civil servants to do the job. Now that he is at the Department of the Environment, he has introduced rate-capping legislation which will give him the power and the duty to intervene in the most detailed way in the budgets of local authorities.

We say that what is sauce for the goose is sauce for the gander, although we do not say that in relation to the new clause. We are not telling the Secretary of State that he should intervene in the actions of every district health authority in the country. We say that he should publicly acknowledge the effects on every district health authority of the funding that he proposes. If he did that he would be taking his responsibilities seriously, it would be fair to the district health authorities, fair to the people working in the Health Service and it would enable people to learn exactly who is responsible for what is wrong with aspects of the service in their area.

Question put and negatived.

Forward to