HC Deb 31 October 1995 vol 265 cc84-7
4. Mr. Hoyle

To ask the Secretary of State for Health what proportion of the NHS budget was spent on management, administrative and clerical staff (a) in 1989 and (b) in the latest year for which figures are available. [38214]

13. Mr. Miller

To ask the Secretary of State for Health if he will make a statement on the variation of the proportion of NHS trusts' budgets spent on management and administration. [38224]

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

Expenditure on management and administrative staff as a proportion of total hospital and community health service expenditure was 8.8 per cent. in 1989–90 and 9.8 per cent. in 1993–94. I announced on 11 October that I am seeking a 5 per cent. cash reduction in the costs of running health authorities and in NHS trust management costs in 1996–1997 compared with planned spending in 1995–1996.

Mr. Hoyle

When the changes were made, we were promised that there would be a growth in efficiency. Instead, there has been a huge growth in bureaucracy, and resources that could have been spent on patient care and medical staff have gone to accountants and managers. How does the right hon. Gentleman account for the squandering of public money that has resulted in waste, inefficiency and more red tape?

Mr. Dorrell

That line would come a great deal better from the Opposition had it not been for the fact that they opposed the abolition of the regional health authorities, which added an extra and unnecessary tier of bureaucracy to the health service.

Mr. Miller

That line comes not just from the Opposition, as the chairman of a large trust in my area wrote to me this morning to point out the differences in the Secretary of State's position now from when he was a junior spokesman in the same Department. Will the Secretary of State now undertake unequivocally to ensure that his Department carries the can for all the inefficiencies which have been built into the system as a result of the ridiculous growth in management expenditure?

Mr. Dorrell

My position on this issue is exactly the same now as it was when I was a junior Minister at the Department of Health, and it is this—the traditional health service was under-managed. That view was shared by the right hon. Member for Derby, South (Mrs. Beckett) until she moved to her other responsibilities. We have built up the management function of the health service, and we are now requiring that management function to pass the same tests of efficiency as every other aspect of the health service.

Dame Jill Knight

Is it not the case that efficient management has achieved a much quicker input of patients and much shorter waiting lists, and that trusts hold their management costs at 3 per cent? Is that not extremely good value for money?

Mr. Dorrell

My hon. Friend is absolutely right. It is remarkable that the Opposition—or at least the Opposition's previous health spokesman—at least recognised that the traditional health service needed its management function to be strengthened, and yet opposed every single strengthening of that function. They now talk about administrative costs as though they were avoidable. Yet when we come forward with proposals to abolish excess administrative costs—as we did earlier this year—they oppose them.

Mr. Sims

I commend my right hon. Friend for his attempts to reduce bureaucracy in the NHS. Does he agree that occasional incidents where patients are left on trolleys for unreasonable lengths of time suggest that there is scope for improvement in the quality of management? What steps is my right hon. Friend taking to achieve that improvement?

Mr. Dorrell

I announced the squeeze on 11 October because I believe that it is necessary that the management and administration functions in the health service are subject to the same efficiency drive as every other aspect of the service. My hon. Friend referred to patients waiting for admission from accident and emergency departments, and he will know that that is a specific subject on which my predecessor as Secretary of State announced a tightening of patients charter standards, which will be effective from 1 April and towards which trusts are working.

Ms Lynne

Does the Secretary of State agree that, at the same time as so much is being spent on bureaucracy and administration, it is an absolute disgrace that so little is being spent on breast cancer research—£3 million precisely—when 300 women die of breast cancer a week? Can he make some commitment today, on the launch of the UK National Breast Cancer Coalition, that he will do something to address that problem?

Mr. Dorrell

As the hon. Lady has raised the subject of breast cancer on a question about administration costs, we might have expected her to welcome the fact that the national health service is a world leader in the development of a breast cancer screening service. It offers a service to British women that is not available in the huge majority of other equivalent countries. Why did she not mention that fact?

Mr. Atkins

Is my right hon. Friend aware that, in certain parts of England, notably Chorley and South Ribble, the increase in administrative staff that has come about as a result of the opening of Chorley and South Ribble hospital, which my right hon. Friend visited recently, goes down extremely well, is extremely popular and is further evidence of the amount of money that the Government are putting into the health service locally as well as in London?

Mr. Dorrell

My hon. Friend is right to mention the health service's investment programme. The hospital that we visited in his constituency is a result of, first, the Government's commitment to investing in the development of the NHS and, secondly, the commitment through effective management to ensure that those resources are used to deliver a high-quality service throughout the country.

Mr. Milburn

While the Secretary of State talks about a 5 per cent. cut in management costs, is not the reality that spending on managers has rocketed by 300 per cent. since the Government's changes to the health service? Is it not the case that millions of pounds of precious public resources continue to be lost from front-line patient services simply to finance the administration of that internal health market? Can the right hon. Gentleman explain how more managers but fewer nurses add up to a national health service in which the patient comes first?

Mr. Dorrell

I welcome the hon. Gentleman to his responsibilities. When he has had a little more time to think about them, perhaps he would like to tell the House which of the policies espoused by the predecessor of the hon. Member for Peckham (Ms Harman) he disagrees with. Does he disagree with her acceptance of the fact that the traditional health service was under-managed, in which case he supports the investment in management in the health service, or does he disagree with the stance that she took to oppose the abolition of regional health authorities? How does it help management and administrative efficiency in the health service to insist on maintaining an outdated regional health authority structure?

Mr. Hayes

Does my right hon. Friend agree that it is outrageous that managers are the latest scapegoat for the Opposition—managers who have worked hard to bring down waiting lists to the lowest level since records began and many of whom are regraded nurses? The Opposition's proposals would bring in more bureaucracy but, worst of all, political placemen.

Mr. Dorrell

My hon. Friend is almost right, but not quite. He is wrong in his suggestion that the Opposition would change anything substantial in terms of the administrative costs of the health service. Actually, they have opposed the changes that we introduced, the effect of which is to reduce the administrative burden on the health service.