HC Deb 14 June 1988 vol 135 cc153-5
3. Mr. Chapman

To ask the Secretary of State for Social Services what steps have been taken to ensure that the resource allocation working party formula takes fully into account the proportion of funds which have to be devoted to wages, salaries, and so on in his Department's allocation of funds to regional health authorities.

The Minister for Health (Mr. Tony Newton)

The formula, which is about distribution of resources within an agreed national allocation, needs to reflect pay separately only to the extent that significant pay variations between regions occur. Thus, there are adjustments for London weighting and a specific market forces element for London. Thereafter, each authority is free to decide how to spend its allocation.

Mr. Chapman

I appreciate that answer, but is my right hon. Friend aware that if the Government decide to increase the resources and funding of the NHS nationally by 2 per cent. in real terms, the net effect, because of RAWP, in health authorities such as Barnet will be to be left with minus 2 per cent.? Given that three quarters of Barnet's budget goes on wages and salaries, which are increased by much more than the going rate of inflation, that leads to significant cuts in services, facilities and equipment in the NHS in Barnet or to a reduction in staff. Both things have been happening systematically over the years. Does my right hon. Friend accept that this is grossly unfair and unreasonable, and that radical changes should be made to the RAWP formula?

Mr. Newton

I shall carefully study the somewhat complicated proposition that my hon. Friend has put to me. I make two points in immediate response. First, the distribution of funds to Barnet depends not on the RAWP formula in the straightforward sense but on the judgments that North West Thames region makes within its allocation.

Secondly, the RAWP formula contains an allowance for what is called the market forces factor, which seeks to reflect the extent to which pay rates are higher in London than elsewhere.

Ms. Walley

Will the Minister take on board the comments made to me by the chairman and members of the North Staffordshire district health authority when I met them on Wednesday last? They are most concerned about proposed changes in the RAWP formula which may well lead to North Staffordshire ending up with an even worse allocation than it now has. If inner-city areas such as this are to be protected and safeguarded, the Minister should consult them before coming up with new proposals for the RAWP formula.

Mr. Newton

The working party that has been examining the RAWP formula has been extensively representative of regions throughout the country. That is not to say that everyone will be pleased by its proposals, in advance of whose publication I cannot speculate further.

Mrs. Ann Winterton

Will my right hon. Friend ensure that the RAWP formula takes into account the excellent work done by war memorial and cottage hospitals in serving their local communities? Will he reverse the decision of the Macclesfield health authority and ensure that the diminution of GP beds is reversed, and that the twilight hours services for the minor injuries unit in Congleton war memorial hospital are retained, so that that hospital can extend its useful work?

Mr. Newton

I do not think that the RAWP formula can be expected to take account of particular patterns of service as distinct from the needs of an area. It sounds to me as if the specific proposals to which my hon. Friend refers would be likely to be opposed by the Community Health Council and then come to Ministers, in which case I should not comment.

Mr. Morley

In the context of the RAWP formula proposals, will the Minister also take into account the fact that my health authority in Scunthorpe is embarking on a major council programme, with new wards and a new AED? The district health authority is worried that there may not be sufficient fund allocations to staff those new wards, because of the resource implications compared with the capital implications.

Mr. Newton

That is a matter for the regional health authority rather than the RAWP formula. Most authorities, in determining their allocation to the districts, take account of what are called the revenue consequences of capital schemes. That explains some variations in distance from target.

Mr. Bowis

My right hon. Friend will know of the wide welcome given to the generous pay settlement for nurses. Will he bear in mind the effect of that settlement on the hospice movement, which is not centrally funded and for which, because of the workings of RAWP, the local district health authority is not able to provide extra money for nurses' pay?

Mr. Newton

The RAWP formula is being blamed for an enormous amount. I must repeat the answer that I have given on previous occasions. Health authorities have been given substantial additional funding in connection with the nurses' pay award and they need to take that into account when considering their arrangements for hospices. Those arrangements vary from place to place.