HC Deb 11 February 1992 vol 203 cc949-56

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neil Hamilton.]

1.26 am
Mr. Denis Howell (Birmingham, Small Heath)

I am pleased to have the opportunity to raise with the Under-Secretary of State for Health the formula for the allocation of funds to hospitals and area health authorities in places of great deprivation. [Interruption.] I do not know what the little conversation on the Government Front Bench is about, but as this is likely to be the last time that I shall speak in an Adjournment debate I should appreciate the attention of the Minister for the Arts as well as the Under-Secretary in this debate.

As I am concerned about Dudley Road hospital, where in the past 12 months I have had three periods of hospitalisation, I get a sense of satisfaction in raising this matter on its behalf. I may be performing a service to it. It carries an enormous weight of care for people in deprived circumstances, and it deserves every possible support. I am glad to pay tribute to the excellence of the work of the surgeons, physicians, nurses and ancillary staff, without whom we would be in serious difficulty in the city of Birmingham.

The debate arises because of the Government's crazy attempt to rationalise health service expenditure in a way that seeks to take money from areas of the greatest deprivation to build up other districts with nothing like similar social problems. As we are talking about the health of thousands of people, that is not only financially unjustified but morally indefensible.

I am concerned about the effect of this recently imposed formula, particularly as it affects West Birmingham health district. I have had correspondence with the Secretary of State about it and I appreciate the courteous way in which he replied, although I am raising this matter now because I am not altogether happy that the situation will be rectified, particularly as it affects Dudley Road hospital.

This matter affects not just hospitals in Birmingham. I understand that other hospitals and health authorities serving inner-city areas of deprivation are equally affected: in Wandsworth, Camberwell, Southwark, central Manchester, north Manchester and Hackney, among others. I learned today that those authorities are coming together at the end of the month to discuss this common problem, which now affects many hospitals and health authorities.

I have to acknowledge that, as a result of recent protests, there have been some changes in the formula concerning births, and I welcome that. There have been adjustments, I am told, to provide a 2 per cent. improvement at Dudley Road hospital. Although that hospital will be 2 per cent. better off under this formula, it will still be 20 per cent. worse off overall. The hospital believes that it will lose £15 million a year, which will be an absolute disaster. Anyone making proposals to take away such a large amount of money from such a hospital must be out of his mind, and I hope that the Government will give urgent consideration to that matter.

As I said, Dudley Road is a wonderful hospital, and it serves an area with the highest deprivation in the country. I have had three spells in the hospital in the past three months and one cannot lie in the vascular surgery ward that I was in without seeing the tremendous devotion of the staff. There was not one moment when I saw an empty bed. I do not know what the Minister for Health is thinking about when she suggests that people are lingering on unnecessarily in hospital wards. That is totally contrary to my experience.

I do not believe that the Minister who is to reply tonight, and for whom I have a high regard, would ever say such a thing. The only people who ought not to have been in a hospital ward when I was there were people for whom the authorities could find no other place. That is regrettable, but we know that it happens, because we do not have sufficient halfway accommodation to deal with it.

What is this formula, which I can only describe as a lunatic formula? It is based on a 10-year population forecast. That in itself, because of population movements in inner cities, renders it very suspect. It certainly ought not to be the basis on which one then calculates funds for hospitals for the next 10 years. Funding should be based on the known workload of each hospital.

The formula for West Birmingham is estimated according to a 3 per cent. reduction in the size of the population, but the grant now applied to Dudley Road hospital is for a 20 per cent. reduction. That illustrates my point about the stupidity of the formula.

Then there is what has come to be known as the mortality factor, which takes us almost to the crux of the matter. Under the formula, a payment is made to the health authority based on estimated population and age. The authority receives £149 per head for people between 45 and 64. For people between 75 and 85, the amount is £927 per head, while for people aged 85 or above it is ®1,452 per head. I presume that those amounts reflect the fact that people who live to an advanced age are likely to require more medical attention, but as I saw for myself at Dudley Road hospital, that is a complete fallacy.

In deprived areas people die much younger. I was appalled to learn that the majority of deaths in Dudley Road hospital are of people below the age of 65. They die as a result of all sorts of illnesses, which I shall shortly describe, and all the patients suffering from those diseases need considerable care and attention. The cost of looking after them, even though they die at a comparatively early age, is just as great as the cost of looking after more elderly people.

For diabetes, there are 8.1 deaths per 1,000 people in the West Midlands region. In the West Birmingham region, at Dudley Road hospital, the figure is 18.1 per 1,000. That means that the load at Dudley Road is 133 per cent. higher than the average. For tuberculosis, which unfortunately is making a recurrence, there is one death per 1,000 people in the West Midlands region, whereas at Dudley Road the figure is 4.7 per 1,000, which is 370 per cent. above the average.

For liver disease, there are 146.8 deaths per 1,000 in the West Midlands region, but in the Dudley Road hospital area 164.3 people per 1,000 die from such diseases, which is 12 per cent. above the average. For strokes, there are 36.6 deaths per 1,000 in the West Midlands region and 41.4 per 1,000 in the health district covered by Dudley Road hospital, an increase of 13 per cent. on the average. There are 30.9 suicides per 1,000 of the population in the West Midlands region, but the figure for the Dudley Road hospital area is 44.5 per 1,000 which is 44 per cent. above the average.

For gastric cancer, the corresponding figures are 113 and 133 per 1,000 of the population, 20 per cent. higher than the average. For colon cancers, the figures are 106 and 120 per 1,000, an increase of 14 per cent. For lung cancers, the figures are 97 and 119 per 1,000, an increase of 22 per cent. There are other astonishing and tragic figures. For example, in the Nechells ward in my constituency, the infant mortality rate is 22 per 1,000 live births. That is a terrible figure, and the highest rate in Europe. It grieves me to relate that information at a time when I am about to leave the service of the House.

All that arises from deprivation. Unemployment is well over 30 per cent. I have corresponded with the Secretary of State on the matter and, to be fair, he has not challenged any of the figures. Therefore, I assume that they are accurate and are accepted. What we need, in order to make sure that funds move to where deprivation causes great social and health problems, is some sort of index of deprivation. I am told that there was such an index, called the Jarman formula, which attempted to assess the level of deprivation, and I should like to know why it has been disregarded under this new formula.

West Midlands regional health authority, and particularly its chairman, Sir James Ackers, shares my concern. I have criticised Sir James many times on aspects of health policy, but I must pay tribute to him here: I am sure that he is well seized of the importance of the matter, and he has assured me today that he will do his level best to see that Dudley Road hospital does not lose out in the new formula. For the year 1992–93, because the Government have made some more money available, which I acknowledge, the region has used the extra money to change the formula so that Dudley Road loses no money this year; but there is as yet no guarantee about future years—which is one of the main reasons for this debate. Nor is there any adjustment that can be made internally, as far as I can see, for what I would term the "fairness" factor to come in, so as to allow Dudley Road not only to maintain the present level of funding but to have the sort of increase that it needs for technological and staffing reasons, to keep on all fours with the expansion that may occur at other hospitals, something that seems to me perfectly reasonable. At present, we have a one-year solution.

In Birmingham yesterday the Secretary of State himself was speaking. He was asked about this matter and he told Dr. Iles of Dudley Road hospital, as reported in the Evening Mail, that health managers did not have to be "formula bound". I am pleased to hear that because it is good news for us in the west midlands. We have not been told before that the regions can depart from this national formula. In a way, that itself is a bit of a nonsense, because if regions can depart from the national formula—if they can, I am sure that in the West Midlands region they will do so, to benefit Dudley Road hospital—it must mean that they will have to take money away from other people who currently expect to receive more; there must be a readjustment within the region. Although I welcome what the Secretary of State has said, I hope that he understands the wrath that he will bring down on his head from other hospitals that will find their formula readjusted.

If the Secretary of State is right—I am sure that he is —I must now call on the chairman and members of West Birmingham district health authority to declare at once that they will take advantage of this statement and make it clear that they will readjust their own formulas to take much greater account of the effects of deprivation as it applies to Dudley Road hospital and West Birmingham health authority than they have done hitherto.

There is one other matter that concerns me, and I am glad that the Under-Secretary of State for Health is present because I have to take him to task. Although I do not relish the opportunity of doing so, I have to take it. It arises from the speech that he made in replying to the last health debate that we had in the House. In the very last moments of that speech, at about five minutes to 10, he suddenly and with great relish read out a list of hospitals related to the constituencies of his right hon. and hon. Friends, all of which, he told the House to the accompaniment of great cheers from the Government Benches, would benefit from the adjustment of allocations. They all happened to be in marginal Tory seats.

I had not previously put the Minister in the same category as Machiavelli, but as he has exposed himself in that way, I think that we are entitled to ask him for an explanation.

The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell)

We shall call the right hon. Gentleman's constituency a marginal Tory seat.

Mr. Howell

I do not think that the hon. Gentleman would do so if he came to have a look at it. I cannot see any of these unfortunate mothers who are losing their babies at such a rate endorsing the Conservative party in view of that factor.

The reason why the Minister made this extraordinary statement has become apparent to me—it is called development addition. That factor has appeared in the figures of Birmingham regional hospital development board, which makes adjustments. One of the Tory marginal seats to which the Under-Secretary referred was that of Dudley. Under this development addition, Dudley Road hospital, Birmingham, gets an extra £96,000 and Dudley gets £3,138,000. That is disproportionate. The Minister may not have had time to look at this, so perhaps he will write to me about it, because there is considerable concern about development addition, which is one of the matters at which the regional health authority must look when it examines the new opportunities before it.

That is the case that I make tonight on behalf of my constituency and the Dudley Road hospital, of which I was chairman for 12 years and at which I was a patient. I wish to represent them as adequately as I can.

1.46 am
The Parliamentary Under-Secretary of State for Health (Mr. Stephen Dorrell)

The right hon. Member for Birmingham, Small Heath (Mr. Howell) began his speech by observing that this was likely to be the last occasion on which he addressed the House in an Adjournment debate, so it falls to me to say that the House will miss him when he moves on to other things. My first memories of the right hon. Gentleman were when I was a parliamentary candidate, and he was the expert first in the sun and then in the snow—or the other way around. He was a well-known figure throughout the country.

Tonight, the right hon. Gentleman has drawn attention to the fact that he has a long history of interest in the affairs of Dudley Road hospital and the hospital provision for his constituency. Therefore, he speaks not only with great authority but with a background of knowledge in the health service that goes back a long way further than mine. Conscious of that, I approach the subject with due trepidation.

The right hon. Gentleman has concentrated the attention of the House on an issue that is of real importance in the management not just of West Birmingham district health authority but the whole of the national health service, because it is central to the core activity of the NHS that we seek to secure equal access to health care for all our people, whether they come from the relatively leafy areas of Berkshire or Sussex or the more deprived areas of inner-city Birmingham. The formulae that help to determine the allocation of funds within the health service have an important part to play in the practical delivery of that basic objective.

The principle of an allocation formula that reflects a wide range of different pressures including social deprivation is not in dispute. The health service has, throughout the time of the right hon. Gentleman, had a succession of different ways to allocate funds so as to reflect identified need. The RAWP formula—that of the resource allocation working party—was used from 1976, and since the introduction of the health service reforms on 1 April we have changed to the weighted capitation formula. Both were directed to trying to deliver the objective of fair allocation of funds around the health service.

Although the objective is the same, the basis on which we seek that objective under the reformed managment of the NHS is rather different. In the old days, which the right hon. Gentleman will have known in his time as chairman of the hospital board, the health service funded the hospital directly. It was left largely to the local management to use the resources allocated to it to provide patients with the best possible care.

Now, instead of allocating funds directly to specific hospitals, we allocate funds to a health authority, which has an obligation to commission or secure health care for all people resident in its district. I believe that it is true to say that under the old system those who presented themselves at a hospital and knew how to get to the front of the queue tended to get better care than did those who were less skilled at working the system. By setting up powerful purchaser authorities within the health service we are requiring purchasing health authorities to address identified health needs for all groups within their geographic boundaries—something that did not happen previously. One of the key purposes served by that approach is that health authorities are encouraged to use the resources available to them specifically to counteract social deprivation issues such as those the right hon. Gentleman has referred to. The reformed health service seeks first to allocate funds to a purchasing health authority and then to ensure that they are used precisely to address those issues.

Clearly the key to success is the allocation mechanism and the formula that is adopted for the allocation of funds to different purchasing health districts. The formula that we adopt is determined centrally only in so far as it distributes funds from the Department down to regional level. I should like to correct one misinterpretation that the right hon. Gentleman put on recent words of my right hon. Friend. It is not true to say that there is a national formula that regional health authorities are required to observe in the further distribution of funds from regional level to districts. There is a national formula governing distribution from central level to regional level. Below that, it is for the regional health authorities themselves to determine the formula. We have always made that clear. At that level there is not a national formula that may be departed from. Regional authorities may adopt their own formulae for the further distribution of funds to district level.

Mr. Denis Howell

I thank the Minister for making that clear. So far as we are concerned, the statement that he has just made is very profound. The situation has not previously been made clear in the Birmingham region. What I have just heard changes the whole complexion of the situation. It is now clear that our campaign will have to be directed at the regional authority rather than at the Minister or the Secretary of State.

Mr. Dorrell

I am grateful to the right hon. Gentleman. Of course, I am not suggesting that we cut ourselves off from the decisions taken in the West Midlands region. The national health service is accountable, through my right hon. Friend, to this House for all the decisions taken there. Of course, we maintain a watching brief on all the formulae that are operated by the regions. However, we believe it sensible to leave to regional discretion the detail of the regional formulae for further distribution to districts so that it may be flexible and responsive to different circumstances.

I shall deal briefly with the factors which are taken into account in the national formula and which regions are encouraged to take into account in their regional formulae for the distribution of funds. First, and most obvious, the formula has to take account of population and weighted capitation. All the emphasis tends to be on the weighting formulae, but first, and most obvious, it is necessary to take account of movements in total population numbers. One of the influences in west Birmingham is that a fall in the population is taking place, which must in fairness be reflected in the level of funding that goes to the West Birmingham health authority. That will be confirmed or otherwise by the 1991 census, when the figures are available later in the year.

Mr. Dennis Howell

I accept that and I understand the importance of the population formula. The Minister will understand that there is a small reduction in population and that the failure of some to register because of the poll tax may be a significant factor.

Mr. Dorrell

I understand that, but there is a danger of double counting. The Office of Population Censuses and Surveys will be making an estimate of the degree of undercounting, and that will be included in the population figures that will be published by the OPCS.

From the specific capitation element of the formula we come to weighting. It is important for the right hon. Gentleman to separate in his mind the age structure element in the weighting, which is introduced to reflect the fact that there is a different level of demand for health-care facilities if someone is over 85 years or over than if someone comes within the five years to 14 years group. We believe that health care facilities for people who are older than 85 are about 17 times more expensive than those for the five years to 14 years group. There is a need to take account of the age structure.

There is a need also to take account of the incidence of illness as a separate factor. There we use standardised mortality as a proxy measure. We recognise that it is an unsatisfactory proxy measure for the incidence of illness.

Finally, we must take into account—this is the factor that the right hon. Gentleman seeks to ensure that we take properly on board—the different ways that are open to us to measure deprivation. Some regions have chosen not to include that element in their formula. The right hon. Gentleman will know that the West Midlands has taken it into account in a particular use of the standardised mortality ratio. We do not regard that as satisfactory, but we regard it as recognition of the importance of taking account of deprivation as a factor—

The motion having been made after Ten o'clock on Tuesday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at four minutes to Two o'clock.