§ Mr. Charles Kennedy (Ross, Cromarty and Skye)I am grateful for the timely opportunity to raise this issue, and I look forward to the Minister's response. The debate is occasioned by two issues on the immediate agenda of health provision. I wish to refer to the care of the elderly in the highlands in particular, but I will touch on a more deep-seated anxiety in a moment.
Two specific issues have given rise to the debate. First, there has been huge controversy and complexity regarding the funding of long-term residential care for the elderly. Secondly, an apparent impasse has been reached in the contract negotiations between Highland health board and the respective health trusts. At the Raigmore Hospital NHS trust in particular, there is a £2 million gap between the board and the trust in the discussions that are taking place.
I am not against the move towards the purchaser-provider split—nor was I when it was proposed—and I did not oppose the previous move towards general management within the health service; I thought that those were sensible reforms. Over the years, I have not always been a fan of Highland health board. It has been the subject of controversy, ranging from its ill-fated attempt to site a private pay bed at Broadford hospital on the Isle of Skye—a proposal vetoed by the then Minister with responsibility for health, now the Secretary of State for Scotland—to its abortive attempt at pre-emptive closure of Gesto hospital on the Isle of Skye. The health board and I have not always seen eye to eye, and I am not here to defend the status quo.
I was opposed to the move towards trust status that built on the internal market in health care in the highlands. That was partly because of the well-rehearsed national arguments at the time and partly because of two specific local factors that struck me as making full trust status within an internal health market particularly inappropriate in the context of a vast rural area such as the highlands. The geography of the area and the pressure that that places on the delivery of health care inevitably make the practical grafting of an internal market on to the system extremely difficult, if not totally counter to the principles that are supposed underpin it.
§ Mr. KennedyMy hon. Friend, whom I am delighted to see in the Chamber, shares my concerns.
§ Mrs. MichieMy hon. Friend referred to the geography of the area. Does he agree that there is also a problem facing remote, rural and inducement practices? Since 1985, those practices no longer receive expenses for postgraduate training. That puts those practices at a severe disadvantage in terms of keeping up to date with modern medical practices—
§ Madam Deputy Speaker (Dame Janet Fookes)Order. This is a rather long intervention in a half-hour debate.
§ Mrs. MichieI am sure that my hon. Friend understands what I am talking about.
§ Mr. KennedyI certainly do understand, and we live in hope that the Minister also understands. I see that some consultation is going on to that effect. My hon. Friend has offered a good specific example of the kind of practical difficulties that arise.
The artificiality of competition in the health market within the highlands comes into most sharp focus when one looks at the position of the Highland health board as the purchaser and the Raigmore Hospital NHS trust as the provider. We know that the health board has nowhere else to go to place its contract each year, as it has no alternative regional acute facility providing the range of specialties offered by Raigmore. There is an artificiality to the debate, and if the system becomes bogged down—as it has done—it will create problems in the current financial year for the managers of the trust and the management of the health board.
Last year, the Minister established an important principle—although perhaps he was not particularly anxious so to do. When the Highland communities trust and similar operations in Grampian ran into financial difficulties, he was obliged to step in and acknowledge that, to a certain extent, the public purse would have to bail out trusts with funding problems. That development was indicative of a wider anxiety. The trusts in Grampian and Highland were at the head of the queue in Scotland, and the fact that they are in some financial difficulty this early suggests that we are seeing the tip of a national iceberg. There is a further example in Ayrshire of the difficulties being encountered by trusts, a subject that will be hotly debated in the Scottish Grand Committee in Ayr next week.
Last year, the crisis in the Highlands communities trust was overcome, but problems remain for it. The locum chief executive, Fiona Mackenzie, told me in anticipation of this debate that the first financial problem related to bridging finance for the on-going project closure of Craig Dunain hospital in Inverness. There have been meetings between the health board, the trust and the Scottish Office, and it would be timely if the Minister would tell us where the matter now stands.
The second problem stems in the main from the logjam that has been reached on the Raigmore trust, but the fact that contracts have still not been agreed for the current year has also had an effect. There is a difference of £2 million between the trust's price, £46.8 million, and what the health board is willing to offer, £44.8 million. The difference relates to activity levels and the fact that, in the past year, the trust has been operating with a busier throughput than was expected and is incurring larger overheads as a result.
If one looks at the range of options—perhaps I should say the range of dilemmas—facing the trust's management at the moment, one sees that, to a certain extent, the trust has been a victim of its own activities. It is considering a number of options. Given the rising number of out-patients, the trust is increasingly unable to meet its own target times, and a decrease in the extent of out-patient facilities provided is being considered. Another option concerns the vexed issue of ward closures.
A third option—to which I wish to refer specifically, as it has in many ways been the most emotive locally—is to increase the rent levels for student nurses in Inverness. Indeed, it was revealed in March that it was intended to increase rent from £54.64 a month to £150. That is an 583 exorbitant increase and, despite the fact there has been some to-ing and fro-ing between the student nurses and the trust, the issue is far from resolved.
The options are a range of dilemmas, which are far from satisfactory. They suggest that a number of questions remain outstanding. First, why is there such a gap in perception between the management of the health board and the management of the trust over what is the right price and the right level of activity that can be delivered on budget? Two sets of professionals are involved in the same service, so why are they £2 million apart this far into the financial year?
Secondly, given the examples I have cited, the Minister would surely accept that to expect the trust to go on and on with its downward drive for on-going 3 per cent. efficiency savings is just not realistic in the context of the Highland health board area, not least given the kind of geographical overheads that accrue, to which my hon. Friend the Member for Argyll and Bute (Mrs. Michie) referred. Thirdly, the Minister should not set his face against having to provide further cash for Raigmore, if need be, as he had to do last year with the Highland communities trust, to make possible an agreement on a reasonable level of contract which is not detrimental to the overall levels of patient care.
Such is the problem as seen from the point of view of the trust, but what about the perspective of the Highland health board? Its general difficulty in funding is that it is one of only two health boards in Scotland to find themselves more than 1 per cent. below the SHARE—Scottish health authorities revenue equalisation—formula for annual allocation. That shortfall again relates to geography, because that formula, when applied to the Highland health board area, does not take adequate account of the sparsity factor. I know that the management executive of the health service in Scotland is to review the funding formula. I hope that the Minister can guarantee that the specific difficulties being experienced by the Highland health board will be carefully taken into account and that that review will be sensitive to its difficulties.
I reiterate what I said about judging the issue in terms of what happened to the Highland communities trust. The health board is involved in the long-term closure of Craig Dunain and the transfer to community care, so I hope that the Minister can give us a more detailed update from its point of view on the additional bridging finance that it is seeking to give effect to that transfer.
The final problem relating to funding difficulties refers to the social work budget of Highland council, which has a £350,000 shortfall. It is having to consider, as Perth and Kinross council was obliged to do recently, the transfer of its residential care of the elderly from council auspices to the private sector. When that suggestion was first mooted a few weeks ago, it caused sheer uproar throughout the length and breadth of the Highland council area. I went to visit one of the four homes on the initial hit list, Urray house at Muir of Ord in my constituency. The sense of horror among the elderly patients at what may happen to them was saddening and sickening.
I have raised the issue with the Minister at a recent sitting of the Scottish Grand Committee. There appears to be a gulf between what the social work directorate tells me about funding and what the Minister is being advised about that by his Department. The Minister has agreed to 584 a meeting, and I would be grateful if he would get around the table with representatives of the Highland council, and if necessary the relevant sectors within the Convention of Scottish Local Authorities, to see whether the shortfalls in the social work budget identified by the director, Mr. Jim Dick, match the account that the Minister put forward, I do not doubt with good intent, during our previous exchanges on the subject.
I welcome the fact that, in providing the crucial service of residential care for the elderly, the Highland council has by no means shelved the option of opting wholesale for the private sector. It has, however, announced plans for a seminar later in the year to look at the subject in a slightly broader and more measured context than has been possible. That seminar, which would offer a broader review, accompanied by a detailed comparison of the figures at the Scottish Office level and those at the directorate level of the council, would be extremely helpful.
Three broad issues must be considered. First, one must consider the transfers as a result of the closure of Craig Dunain hospital and the bridging finance that is important to the health board and the communities trust. Secondly, one must consider the on-going difficulties surrounding the contract discussion and the £2 million gap between the Raigmore trust and the health board. Thirdly, one must consider the health board's perception of its own on-going problem—persistent under-funding due to the inflexibility of the SHARE formula in terms of the sparsity factor.
The Minister should note that there is a great feeling of unease and alarm across the highlands at the moment concerning specific provision for the elderly as well as health care in general. In his reply, I hope that he will make a significant contribution to allay the anxieties of those in most immediate care as well as to meet the perceptions of those who feel that they or their loved ones will be in need of care in times to come.
§ The Minister of State, Scottish Office (Lord James Douglas-Hamilton)If Highland council disagrees with the distribution formula as operated by COSLA, the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) should advise it to make strong representations, to send in all the available evidence and to copy it for my hon. Friend the Under-Secretary of State for Scotland, who has responsibility for the highlands, and also for me. We will look at it.
On 28 May, the health board submitted an application for bridging finance in 1996–97. A preliminary meeting involving the Scottish Office, the health board, the Highland communities trust and the social work department was held on 30 May. That meeting provided an opportunity for helpful and constructive exchange of views. It is essential to be clear, however, that bridging finance is not the principle means of enabling community development. Funding must continue to come from resources released from the hospital sector for reinvestment in community health services and transfers to local authorities for social care provision.
The hon. Member is obviously interested in service developments at Raigmore. I am aware that the trust has developed proposals to open a new haematology-oncology facility at Raigmore. That will be dependent on the necessary resources being in place. It is one of the 585 issues being discussed within the current contract negotiations. As hon. Members will appreciate, it is simply not possible to fund all the developments that one might wish to see simultaneously introduced since, despite the billions of pounds of public funds devoted to the NHS, we still have to work within finite resources.
I know that the hon. Member is interested in the proposals that the trust has in mind for increasing the number of clinical sessions for rheumatoid arthritis sufferers. The position on that initiative is similar in that much depends on the outcome of the contract negotiations.
The hon. Member touched on rent increases for student nurses at Raigmore, as did the hon. Member for Moray (Mrs. Ewing) earlier. I understand that the previous rent levels were unrealistically low compared with market levels and levels paid by students in other areas. I understand that the increased rents are now being phased in over one year instead of six months as originally planned.
The hon. Member may be interested to know that there is to be a primary care resource centre at Easter Ross. I congratulate the local Members of Parliament on taking the initiative in undertaking the feasibility study. We welcome the vision and concept behind the proposal and look to purchasers for a definite local commitment on how the proposal is to be developed. The ensuing business case will be considered on its merits.
I welcome the opportunity for the debate. The principle to which the hon. Member alluded is extremely important: patient standards and patient care must not be allowed to suffer. It is, of course, the responsibility of the Minister with responsibility for health to ensure that that does not happen.
I am well aware that the Highland health board has definite challenges because of its particular geographical circumstances, which mean that it is spread over such a large area. It has to strike a balance between delivering services in small local communities and more centrally at Inverness. It is working hard on the development of locality plans in partnership with the trust, the Highland council and other agencies. It is working with local health councils and taking the views of the local communities. I am sure that the board will take those views into account when drawing up its strategy for health care services in the highlands.
The hon. Member mentioned the contract negotiation position affecting the Raigmore Hospital NHS trust. In the current contracting round, a gap remains between what is proposed and the price that the board is prepared to pay for an agreed and appropriate level of service. Several trusts in Scotland are still negotiating with their purchasers about contracts for this year, and Raigmore is no exception. That is not unusual at this stage in the process.
These exchanges are designed to produce better outcomes for patients and better value for money locally. The provision of a high and continuing standard of patient care is of the utmost importance, and all concerned are working to resolve the outstanding contracting issues to maintain and improve the level of services to patients. My officials in the management executive are in close contact with the board and the trust about the current state of negotiations and will press for a resolution to be achieved as soon as possible.
§ Mr. KennedyWill the Minister reflect on a phrase he used? He said that it was "not unusual" for contracts not 586 to be agreed by this stage in the financial year, and that it was most important to maintain standards of patient care. From the management point of view, the longer the uncertainty continues, the deeper the cuts they must make the further into the financial year one gets. How come, therefore, standards in patient delivery will not suffer because of the change that has been made? That does not make sense.
§ Lord James Douglas-HamiltonAs I have said, we want to reach a settlement as soon as possible. The officials of the management executive stand ready to give guidance, should there be any impasse in the negotiations.
§ Mrs. Margaret Ewing (Moray)Is a deadline being set?
§ Lord James Douglas-HamiltonAll I can say is that we shall work extremely hard to ensure that the necessary agreements are reached, and at this stage it is not necessary for me to intervene. I believe that the negotiations are proceeding well, and we shall closely monitor the position and keep a close eye on it.
In general, the Highland communities trust has introduced a range of innovative developments, including new facilities for the treatment of Parkinson's disease and a new drug and alcohol dependency centre. It has begun upgrading the Belford hospital in Fort William, as well as completing new community health centres in Gairloch and Dundonald.
Specific issues confront the Highland health board. For example, I know that facilities for the patients of Craig Dunain are far from ideal at Inverness. I am pleased to hear, therefore, that the health board, the Highland communities trust and Highland council social work department, working together, have made significant progress in developing plans for the care of the mentally ill. There are already some excellent examples of well-resourced care facilities in the highland region for patients discharged from Craig Dunain.
The Highland communities trust has developed proposals for a new acute facility. I also understand that plans for a long-stay unit are well developed. That is encouraging, and we look forward to reading, in the very near future, the finalised and locally agreed plans, which will deliver improved services to all who need them. We will monitor the position.
I now turn to the issue of community care in the Highland health board area. The board is working with the local social work and housing authorities in continuing joint assessments of local care needs. They are working towards the organisation of best local care that matches local needs. In doing so, they are aware of my position that, for the NHS continuing care sector, no long-stay hospital will close before appropriate care facilities and services are well in place in the community, and no long-stay patient should be transferred to alternative models of care before that care and the necessary support and accommodation are in place and available.
Working towards the aim of improving the daily lives of vulnerable people in the area who need support, last year alone the health board transferred about £3.4 million to the local authority towards the cost of care in the community.
The hon. Member for Ross, Cromarty and Skye may wish to know that the sum total of the resources transferred from health to local authorities throughout 587 Scotland last year was £45 million. Substantial additional resources have been allocated to local authorities to meet their community care responsibilities. In the current year, Highland council has £24.5 million compared with £23.9 million in 1995–96.
The allocation to the former Highland regional council was generous. The council was one of two in Scotland that received additional resources in the form of transitional protection. That reflected the historically high level of Department of Social Security expenditure in the region. Transitional protection was provided for three years to give the council time to plan for the eventual position. The scheme was initiated by the Scottish Office, against initial opposition by COSLA representatives on the distribution committee.
This year, the DSS transfer resources already in the baseline, and the new resources for 1996–97, have been made available to Highland on the same basis as to all other authorities—that is, on the basis of a distribution weighted by the proportion of elderly and disabled people in each area. That is the approach agreed with COSLA' s distribution committee, and I am sure that the hon. Member for Ross, Cromarty and Skye will agree that that is a fair and reasonable basis on which to distribute resources.
It should be mentioned that the Highland health board area has low occupation levels in private and voluntary sector residential homes. Given the lower cost of homes in those sectors relative to the council's homes, there is obviously scope for the council to make more cost-effective use of its resources by making more placements in independent homes.
I now turn to some specific issues relating to the trust in the highlands and to the hon. Gentleman's constituents.
§ Mr. KennedyThe Minister phrased that last part very neutrally. Does he support that approach?
§ Lord James Douglas-HamiltonWhether appropriate standards are maintained must be ascertained. A Scottish Office working group is considering residential care and is due to report in approximately three weeks' time. It has been considering the difficult issues that have occurred the length and breadth of Scotland. We intend to act on the group's recommendations. I have not seen the fine print yet, but we believe that they will in principle be soundly based and we intend to act on that report as soon as it comes to hand. This is essentially a matter for local decision, provided the necessary high standards are maintained.
I shall now discuss in more detail the constituency problems of the hon. Member for Ross, Cromarty and Skye. As he will recall, we had a helpful discussion on 17 October 1995 when, in an Adjournment debate, he raised the problems then affecting the Highland communities trust. At that stage, the trust faced a shortfall of about £1.4 million between its expenditure and its contract income. I hope that, during the debate, I made it clear that my main concern was the action being taken by the trust to resolve its financial difficulties and to ensure that patient care was not compromised.
Following the resignation of the chief executive of the trust and the departure of the finance director, officials in the Scottish Office Department of Health and I moved swiftly to ensure that a sound management scheme was 588 in place. From a projected deficit of approximately £1.4 million, the new management team produced a financial strategy that balanced the books and put the trust on a sound financial footing for the future.
A key component in the plan was the identification of a cost improvement programme to deliver reductions in recurring revenue expenditure and a revamping of the organisational structure. I was pleased to note the streamlining of the management structure to make it more appropriate to the tasks that lie ahead for the trust.
My right hon. Friend the Secretary of State and I have been especially anxious to ensure that, throughout the health service, management costs are reduced to a minimum consistent with the effective and efficient running of the NHS, so that the maximum possible amount of resources can be devoted to direct patient care. The locum management team and the board at Highland communities trust are to be commended for the way in which they have brought the trust's finances back on track and shown what can be achieved with commitment and resolution.
The Caithness and Sutherland trust, although one of the smallest in terms of operating income, has been especially successful in developing new services. Four new health centres were opened in 1995 at Durness, Tongue, Brora and Helmsdale, and two more are planned for completion in the current financial year at Dunbeath and Kinlochbervie. This is an impressive programme of work, designed to ensure that, even for communities in the more remote parts of the country, high-quality health care can and will still be delivered.
Those developments are hardly signs of a trust being in financial trouble—quite the reverse. The reform of the health service and the creation of trusts have resulted in more patients than ever being treated more quickly by more clinical staff delivering better services.
I now turn to primary care. Patients in the highlands receive a good level of screening and preventative services from GPs in the area, especially on immunisation, child health surveillance and cervical cytology. Primary care also provides chronic disease management for conditions such as asthma and diabetes. Patients also benefit from GP fundholding, which has brought physiotherapy into a practice setting and open access for endoscopy.
There are eight standard fundholding practices and 12 primary care purchasing practices, covering 27 per cent. of the population. Two of these standard fundholding practices are taking part in a total purchasing pilot, which enables GPs to purchase all health care services for their patients. I am aware, as I mentioned earlier, of the feasibility study for a primary care resource centre. The GPs are to be warmly congratulated. We welcome their vision and the determination behind that proposal.
In the past four years, Highland health board has secured funding of more than—
§ It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.