HC Deb 22 February 1994 vol 238 cc133-4
2. Mr. Connarty

To ask the Secretary of State for Health what advice she has given to health authorities and trusts on how to raise funds to finance pay increases; and if she will make a statement.

The Secretary of State for Health (Mrs. Virginia Bottomley)

The £1.6 billion additional resources in 1994–95 announced in the unified Budget includes sufficient to allow for pay increases, provided that they are broadly in line with efficiency improvements.

Mr. Connarty

I thank the Minister for that reply. Does she not realise that there is some absurdity in the estimate of £450 million in efficiency savings and a pay award which will cost £418 million? Is it not true that, particularly with inflation, there will be very little left for increased services? Would it not be better to scrap the wasteful market model and put the £1 billion savings into patient care?

Mrs. Bottomley

This year, an extra £1,600 million is going into the national health service. Those are enormous sums of money together with the efficiency improvements that have been progressively made possible with the reforms. We are treating more patients more effectively. That is better for staff and better for patients.

Mr. Rowe

My right hon. Friend will be well aware that the trusts vary tremendously in quality and in the skill with which they manage their budgets. Will she give an assurance that, as her policy develops, she will find a way of rewarding those trusts that have made a good show and make it easier for them to meet the ever-increasing efficiency targets? There will come a time when the best run trusts will find it difficult to make the efficiency savings that she keeps demanding.

Mrs. Bottomley

The best-run trusts are progressively moving towards devolved pay arrangements. One of the great freedoms of the trusts is that they can manage their own pay. We welcome review body reports which recognise that this a transitional year. They heralded the move towards devolved pay. I well understand that it will not be to the liking of Labour Front-Bench Members, sponsored as they are to a man by the health unions.

Mr. Blunkett

Can we try the question from my hon. Friend the Member for Falkirk, East (Mr. Connarty) again? If £450 million has to be found through so-called efficiency savings to meet the 4 per cent. increase in activity levels promised, and if the NHS has to find the same amount of money to implement the proposals for pay increases by efficiency savings, which of the two pledges—the increase in activity or the refusal to acknowledge that there will be major cuts—does the Secretary of State accept this afternoon?

Mrs. Bottomley

The hon. Gentleman, having so singularly failed to convince the shadow Chancellor of his spending commitments in the document that the Labour party has recently produced, has failed to recognise that I was able to persuade our Chancellor that the national health service needed an extra £1,600 million this year. With that extra money and the efficiency savings that are now possible, I am confident that we can not only pay the staff fairly but increase patient care.

Mr. Dickens

Would my right hon. Friend concede that the £1.6 billion extra that has been found this year for the health service represents £83 per household, which brings a total of £1,565 per household into the NHS? Why do we need to play politics at Question Time when the facts speak for themselves?

Mrs. Bottomley

As ever, my hon. Friend has it. He will agree with me that it is not only the input into the NHS, but what we do with that money. There are still a large number of areas in which we can improve the efficiency of the NHS, including the Audit Commission, whether through skill mix, the use of beds, or prescribing. With a generous settlement for the health service this year, our task now is to use it efficiently and effectively for patients.