Mid Cheshire Hospital Trust

HC Deb 02 April 1993 vol 222 cc744-53 10.16 am

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

The maintenance of free speech is the basis of everything we do in the House, and the use of Adjournment debates or debates generally to raise matters that are of great concern to our constituents is strongly cherished by hon. Members, especially with the growing habit of Ministers creating agencies or commercial units that remove responsibilities from them to a third party on the basis of a commercial interest.

When the national health service trusts were set up, many of us warned that the theory that one could bring about a major change in health care without first explaining and exploring the ways in which it could be done would lead to a considerable set of problems. I am sorry to say—I make it clear that I take no pleasure in this—that in my constituency, the Mid Cheshire hospital trust, which was one of the first trusts to be set up, has proved conclusively that, far from working, as the Secretary of State delights in telling us, national health service trusts are now running into considerable problems. The problems are becoming obvious to patients and to their families, and they are also having direct effects on health care.

When the Mid Cheshire trust was set up, the then Secretary of State for Health sent me a warm and reassuring letter. It is important to quote his words exactly: that establishment of a Trust will give clear benefits and improved quality of service to patients; that management has the skills and capacity—including strong, effective leadership, sufficient financial and personal management expertise and adequate information systems—to run the unit effectively; that senior professional staff, especially consultants, are involved in the management of the unit; that the Trust will be financially viable. I should make it clear that that letter was written not by the present Secretary of State, but by the male who preceded her. The style of English does not change although Secretaries of State may change from time to time

I was then told: I am now writing to tell you that I have decided to establish The Mid Cheshire Hospitals as an NHS Trust, to become operational from 1 April 1991. It is important to understand that Leighton hospital, which was the centre of the Mid Cheshire hospital trust, has consistently been underfunded. Physically, it is at the bottom of the Mersey region and, before the creation of the trust, it never received sufficient cash to deal with the real health care problems of the Crewe and Nantwich area.

When the move towards a trust was mooted, I asked general practitioners in the area whether they foresaw any great inward movement of patients which would somehow transform the trust's financial situation, having been assured that that was what was intended. Unfortunately, far from the hospital suddenly becoming magically viable—even with the extra sums of money donated by the region to set up the political stalking horse—although more patients were certainly treated, there was an overspend every year, and we are now approaching the second major crisis.

Initially—I suspect because it was an election year—it was somehow possible for the region to find an extra sum of money to assist the Mid Cheshire trust last year when it had financial difficulties. We all knew what was happening; we knew that the trust was overspent and was madly trying to take money from its reserves and from other sources to try to balance the books. The executives were not especially secretive about it, although I received large numbers of reassuring letters telling me that they could not understand why I did not trust their financial doings, and that they were dealing with the problems more than adequately.

The chief executive wrote to me on 20 March 1992: You will be pleased to know that the Trust will meet all its financial obligations at the end of the financial year, including a virtual break-even position against budget. This is a result of the tight financial management of the Trust's affairs, which has prevented the potential for financial problems which was identified earlier in the financial year. Anyone who deals with that district hospital knows that, whatever else is happening, the standard of health care is becoming a matter of considerable worry. That is due not to members of staff but to difficulties in specific areas. First, there is a problem with closed wards. Whatever the Department of Health says, the reality is that, before the trust was created, wards were open and, after its creation, a number of wards were closed. Before the trust was created, we had full use of all the wards; now, several are only partially used.

I am perfectly happy for the Minister to tell me that that is because we are so much more efficient; we wheel people in and out with such speed that they do not need wards or beds. That is a medical argument which can be defended in general medical terms, but the increasing evidence that this year we have reached a financial crunch cannot be defended.

Not for the first time, the trust is badly overspent; it is £2 million short of the amount required. It has held a number of talks with the regions and with other financial controllers within the NHS, according to evidence given to me by the Minister. The trust was then told that it must rapidly find £700,000—there was some suggestion that it was required to find it within two weeks. It could only meet that enormous overspend by shutting down facilities and beginning to sack staff, which has happened. That makes nonsense of all the information that has been handed out officially by the Mid Cheshire hospitals.

My constituents have found that there is enormous pressure on hospital services. The staff have had considerable and constant worries about their jobs. Although we were told that front-line staff would not go, there were already instances of re-evaluation—a nice word for moving people around—of nurses' jobs, which meant that many had lost their existing status and been moved to other jobs.

During the year, I received a number of statements, such as that the trust must carry over to subsequent financial years any over or underspending against its budget. I was also told that the likely outturn for Mid Cheshire hospital trust would be in the range of £100,000 either side of a break-even position against the budget. Frankly, that has not been our experience.

As a result, when the chief executive asked the regional hospital authority for extra money he was told, somewhat sharply, that it would not be forthcoming. I can only assume that his naivety had not made it clear to him that the money made available at the time of the general election will not be made available when there are four years to go before the Government have to put their health policies to the test of the local populace.

The role of the regional hospital authority ought to be considered in great detail. There is no independent way for the actions of anyone within the national health service to be monitored properly. Luckily, there are forms of monitoring for the care given by medical professionals. If we are to believe the Conservative Government's theories, the running of trusts ought to be transparent, but they are far from clear.

Within our region, the chairman, Sir Donald Wilson, has taken some major decisions, which have led to considerable questioning from elected members. He decided, with his colleagues, that it would be a good idea if the regional hospital trust authority bought a very expensive flat and furnished it, because it would somehow save money when visiting firemen needed to be put up for the night. I want to see the figures on which such decisions were based before deciding that they were sensible financial decisions. That example demonstrates the level of management in the regional hospital authority.

When the continuing underfunding of Crewe became clear, it was obvious that the regional health authority had decided that one way to solve the difficulty would be by amalgamating the Crewe district, which was underfunded, with the Macclesfield district, which in theory was overfunded—if that is possible. It therefore began to moot the question of a reorganisation. It was not merely a reorganisation. When the authority advertised the jobs concerned, there was such a poor response that the young lady drawing up the short list suddenly decided, after the closing date, to put her name on the list. She was appointed to the job—I am sure that it was on the basis of her brilliance.

In case there are any doubts about the reasons for mooting the reorganisation, a consultation document—a laughable title—was produced entitled, "A new district health authority for the people of Crewe and Macclesfield." That gave the game away. It said: Crewe District Health Authority is presently £8.1 million short of its full weighted capitation position"— that refers to the new form of calculation that the Department intends to use— and is moving towards its target as resources are allocated each year. Macclesfield District Health Authority is £5.4 million above its weighted capitation and must therefore lose this amount over future years. In other words, the region's answer is not to examine the needs of Crewe district health authority but to say, "If we jam these two awkward health authorities together, we can somehow balance the books at the end of three or four years, because no one will notice that what we are doing is taking money from Macclesfield and losing it in Crewe."

Not surprisingly, that news did not delight the hon. Member for Macclesfield (Mr. Winterton) or me. One might have thought, Mr. Deputy Speaker, that that combination of hon. Members would be designed to make even the present Health Minister think twice, but apparently we are having no effect whatever. So impressed are Ministers with the quality of management of Sir Donald Wilson that, when the east midlands got into real problems, they did not look outside or advertise from some brilliant brain to come in, but went instead to the Mersey region and asked Sir Donald Wilson to take over. That was astonishing to those of us in the Crewe area, who had already seen the effects of decisions that were being taken by Sir Donald and his cronies in our area and who had considerable reservations about the quality of those decisions.

We have been told in a short space of time not only that Crewe must find £700,000, because it is £2 million overspent, and lose a number of jobs, some of them by compulsory redundancy—the figure given in the original assessment was 50—but that the £700,000 is just the first step to reducing the gap of £2 million that has been identified.

Then, surprise surprise, this chief executive gentleman who has been so lauded and who is apparently so active in the defence of the extraordinary finances of the department, resigns at very short notice—because, we are told, he has been headhunted. The joke on the wards goes: "They've had the head. When will they come and collect the rest of the body?" We have considerable doubts about whether that gentleman's expertise is what has recommended him to the region. One might have thought that, even under the present Government, anyone who gets more than £2 million overspent on two years would find himself in some considerable difficulty.

Crewe has always faced problems of underfunding. It needed considerable injections of money for staff, and faces a £4 million bill for building work. The roof of the hospital built by a gentleman called Poulson is now collapsing, even though the building has not been there for very long. I am no great architect, but I suspect that, in a hospital, a roof is quite useful. I do not know how many things can be done without, but doing without a roof could be mildly embarrassing.

Crewe will now have to find the money not only from health care but from jobs. These days, people in hospitals do not carry normal titles; for example, we have people responsible for "hotel services"—a laughable title. I suppose that hospitals may bear some resemblance to British hotels, but that simply tells us something about the problems of the tourist industry. Such was the level of expertise within the trust that, at the very moment when the person responsible for hotel services was being told that the job no longer existed, management were seeking to appoint someone from the commercial sector to run the laundry and other so-called services. That is extraordinary and cannot in any way be defended.

The Minister may say that I am not giving an accurate picture. His own Department engaged Price Waterhouse to do a survey of the hospital recently and, in the past three months, Price Waterhouse has reported—for some reason, the Government seem to be keeping quiet about it—that the hospital is not only efficient but very efficient. It is not the staff who are the problem—nor is it the delivery of health care, even in the extraordinarily difficult conditions under which staff are operating, with wards closed at weekends and people being moved around. Quality of care is not the problem.

I should have thought that the Minister would now think to himself, "Price Waterhouse says that the place is efficient; there is an overspend of £2 million for the second year running; the money can no longer be taken out of the reserves, so the business of sacking staff has to be considered" and ask himself—or better still, the Secretary of State should ask herself—"What is really wrong? Is it the fact that we do not allow enough money to the district hospital to provide the services that we demand of it?"

The Secretary of State has frequently told me, in letters and in the House, that I should be proud of the hospital, because it is treating more people. I have no doubt that the Minister has the figures today and will be saying, "Look how clever we are. More people are being treated." But if Leighton hospital is overtrading and if the Secretary of State demands that that level of care is kept up—and she has given the instructions that it should not only continue to give that level of care but increase the rate at which it is treating patients—how does the Minister explain the gap between the resources needed for the jobs and the amount of money that is available for the trust?

Perhaps the Minister will say that that is a matter for the trust itself. He must know that the staff are now at risk and that morale at the hospital is dangerously and unacceptably low—and I have lived in hospitals for much of my life. People are deeply worried about the future of their jobs. It is important to understand that the lessons of Crewe trust and its problems have not been lost on the surrounding areas. Halton trust, which became a trust yesterday, learned its first lesson from Crewe, closing one of its best and most well-equipped wards on the very first day. Crewe is offering an example to people in the north-west region of how not to run a hospital.

There is also the problem of community care. So far, no one has worked out that, whereas hospital treatment is free at the point of use, once the social services act as a filter between elderly and mentally handicapped people and the services they require, a larger part of the cost will inevitably be paid by the patients themselves. That has not been sufficiently highlighted in the run-up to community care.

I have a number of questions to ask the Minister, but I must tell him that the recitation of a series of very spurious statistics will not be a sufficient response to my points of concern. Does the Minister accept that there are such severe problems in the Mid Cheshire hospital trust that it requires an independent investigation into the financial management, into staff and patient care and, above all, into the amount of money available to the trust from the regional hospital authority?

Will the Minister also instigate an urgent inquiry into what is happening at regional level? How does he justify the decisions being taken, such as the purchase of flats, at a time when health authorities are being told to cut the level of services they provide?

How on earth can the Minister justify the arbitrary and outrageous decision to force the two health authorities—Crewe and Macclesfield—to combine in order to save money? After all, that is what it is all about. There is no suggestion that there will be a better level of health care; there is simply the suggestion in the so-called consultation document that it is a way to make the two budgets balance.

The experiment has failed—the creation of trusts has not provided better care and the money has not followed the patient. All it means is that the Government are increasingly able to run down our hospitals on the very weak pretext that somehow or other the decision is being made by local people, who, the Government say, are now able to decide their own health care priorities.

That is a manifest farce. Local people have no say in what happens in their hospitals; they have no say in what happens with staffing levels; they have no say in what wards are closed; they have no say in the decision on which people are moved around on weekends; they have no say in who should be sacked—they have absolutely no say in what happens either in the regional hospital authority or in their local hospital trust.

What is more, the clear evidence of financial problems is never discussed in public. Indeed, even when I ask questions in this House, the Secretary of State simply says, "There has been a meeting between all the relevant authorities, it has all been sorted out, don't worry about it." I not only worry about it: I have a deep feeling of unease about the management in my hospitals and certainly in my region. Moving someone who is incompetent from one region to another simply because his predecessor was even more incompetent is a pretty poor decision.

If the Minister is not prepared to agree to an independent assessment, we will know that the Government are not serious about setting up trusts or the delivery of health care. If they want to privatise the health service through incompetence, they are doing well; but if they want to provide health care, the Miniser had better answer my questions today—otherwise we will know that elected Members of Parliament cannot even get answers on behalf of patients.

10.43 am

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville)

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) began by speaking about free speech. There is no danger that she will not continue to exercise that right very effectively. Nor is there any danger that we will not continue to answer her. She touched on ministerial accountability in the health service. I must tell her that I was in my place in the early minutes of April fool's day to discuss neurosciences in Liverpool. I was back in my place in the early hours of this morning—3.30 am—to debate the London ambulance service; I am here again now, self-evidently, to discuss a particular local hospital with the hon. Lady. I shall continue to be in my place to discuss mental health with my hon. Friend the Member for Bury St. Edmunds (Mr. Spring). Junior doctors have their little complaint about how long they work; junior Ministers occasionally find themselves in the same position, so we empathise.

The hon. Lady raised so many different points that I do not think that I can cover all of them. However, I start with her request for an independent inquiry into the finances of the trust and the local health authority. There is likely to be a deficit of about £500,000 at the end of the year, which is just over 1 per cent. of income. It is possible that that has been caused by the recruitment of additional consultants, without the total co-operation of the purchasers.

That is not an insurmountable problem. Several trusts have overspent, but the vast majority have balanced their books. It is certainly not something which I consider to be a proper matter for independent inquiry. The position is clear and it is being dealt with, so I see no reason to accede to the hon. Lady's request.

There are a great many good things about the trust. In-patient activity rose by 6 per cent. during the year, which is excellent news. It mirrors the experience of many other trusts.

Mrs. Dunwoody

Does the Minister accept the figure of £2 million that was given by the executives of the hospital?

Mr. Sackville

I am advised that, when the figures for 1992–93 are available, it is expected that the trust will show an operating loss of about £500,000.

Mrs. Dunwoody

No.

Mr. Sackville

That is the advice that I have been given and I have no reason to doubt it.

The hon. Lady made a number of specific points, but, in particular, she raised the question of a flat that has been purchased by the regional health authority. It decided to use endowment funds to purchase the flat so that it could save money on the very high hotel bills for people who visit the region. If there is any question of impropriety, I have no doubt that the district auditor will have something to say. The matter has been raised with me on more than one occasion and I have raised it with the region. I am satisfied that it took that decision in good faith. The hon. Lady is being a little mischievous in implying that there is something wrong or strange about it.

The hon. Lady said a great deal about trusts in general. It is becoming increasingly clear that trusts are providing the proper model for the delivery of health care. The hon. Lady should realise that a hospital running itself, with its own board of local people—who, together with management, take decisions that they believe to be in the best interests of patients—is the right way to proceed. Much better that than that the hospital should find itself an adjunct to a distant bureaucracy.

The experience of trusts to date has been most encouraging. The hon. Lady should not tarnish the name of trusts on the basis of a minor financial imbalance at her local trust hospital. We are receiving the message here and from abroad that people in other parts of Europe are examining the system that we are creating with the purchaser-provider split by giving hospitals trust status and, in turn, giving health authorities the funds with which to commission health care for the populations for which they are responsible.

People from other European countries are saying, "This is the model that we would like to set up." I have heard that said by officials from Spain and Germany. I am confident that others will be looking to us for the model for how to deliver internal market health care. Whether Hillary will grace us with a visit is something which is still in doubt, but I have no doubt that we shall be watched carefully by the rest of the world. As I have said, much of what the hon. Lady said about trusts was entirely unwarranted.

The hon. Lady talked about Sir Don Wilson, the regional chairman. He has done a remarkable job. The hon. Lady may disagree with some of the decisions that he has taken, but, with firm leadership, he has made a great many advances in the Mersey region that are the envy of other parts of the country. The fact that he has been asked to examine the problems of the west midlands is a further tribute to his skills. I do not know what evidence the hon. Lady can produce to cast aspersions on Sir Don Wilson's management skills.

I understand that the hon. Lady is much exercised about the proposed merger of the Crewe and Macclesfield authorities. She has described it as the merger of two awkward health authorities. I do not know whether that is a comment on the two Members concerned, but I am sure that my hon. Friend the Member for Macclesfield (Mr. Winterton) would be disappointed if he knew that he had been referred to in those terms. The two hon. Members, the hon. Lady and my hon. Friend, are both acknowledged experts in health care. If the merger takes place, I think that they will find it a stimulating partnership—a marriage made in heaven. I have no doubt that the people in both areas will find it greatly to their benefit.

The hon. Lady knows that there are advantages in some mergers of health authorities. The idea of 192 different authorities purchasing health care, as we have had in the past, may not be the best model. It may be much better that there should be larger configurations of perhaps 500,000 or more residents, so that there is more clout when it comes to exercising the purchasing function and dealing with providers.

Health authorities, as a result of mergers, will be able to make more sensible decisions over the gamut of the local population. It will probably be of great benefit to the local population to have a larger purchaser that can make the appropriate decisions and have much more flexibility in the purchasing of health care. I think that that will turn out to be true. The hon. Lady will find from the health authorities that have already merged that some of them have found an optimum size.

Purchasing is a new skill within the health service. Many of those who work for local health authorities are only now beginning to discover that they are no longer running hospitals. They are commissioners of health care, not hospital managers. It is a skill in itself. The contracting arrangements between health authorities, trusts and providers will be an important part of the system in future.

The hon. Lady mentioned other matters, including community care. Yesterday saw the first day of the new system. It poses a considerable challenge, and it will demand a great deal of give and take on all sides, between hospitals, the NHS and local authorities, to ensure that it works, that patients are assessed quickly and efficiently, that beds are not blocked as a result of failure to assess and that the right provision is made for people coming out of hospital or for others in the community. A great spirit of co-operation will be required. I take the opportunity further to emphasise that point.

There is no reason why community care should not work. We know that we need assessment in each area, and in this instance it will be carried out by the social services, of all those requiring care in the community, whether post-hospital or otherwise.

The hon. Lady mentioned morale. She is making a great deal of what are minor financial problems locally and painting the blackest possible picture. There is no point in doing that. She is helping only to exacerbate the problems of morale among staff locally. I do not see that that is doing any favours to her local health service.

The hon. Lady mentioned the departure of the chief executive. I cannot comment on that or on his decision to go. I can say only that his replacement is being sought. The hon. Lady should not seek to find conspiracy theories or any other excuses to write headlines on the chief executive's departure.

I am sure that the hon. Lady will agree with me that the hospital trust has already achieved much of which it can be proud. I have said that a record number of people have been treated during its first year. Out-patient attendance has increased by 2,000 and 70,000 accident and emergency cases were dealt with. The number of patients seen was 9 per cent. above the level that the trust was contracted to provide. That is one of the reasons why many trusts this year have run into temporary financial problems. They are the victims of their own success.

The numbers of patients treated during the year has been much greater than that budgeted for, mainly on the elective side. This has meant disruptions, which is unfortunate. Sometimes, there have been temporary ward closures. On the other hand, in many instances patients have been treated earlier than they would have been. I accept that any disruption is unsatisfactory, and guidance has been sent to the health service to ensure that the contracts work more flexibly over the year. Those in the health service will be advised to monitor contracts more carefully to ensure that what happened this year does not happen again.

The hon. Lady is trying to tell the House that everything is going wrong in the local health service. She is saying that it is underfunded. It is true that her local health authority is below capitation. There is the same problem in Bolton, and that has been the position for years. There is an intention in Bolton, as in Crewe, to bring the districts that are below target up to target. As the hon. Lady well knows, if the merger with Macclesfield goes ahead, that will lead to a change in the funding arrangements in her authority, to the benefit of her constituents.

It has been useful to have the debate. I think that the hon. Lady misrepresents the situation. There is much of which to be proud. Those who work in her local hospital have done a wonderful job and I have no doubt that they will continue to do so.