HC Deb 27 November 1996 vol 286 cc437-44

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Lair]

10 pm

Mr. Simon Hughes (Southwark and Bermondsey)

This debate concerns a matter no less important than the Budget: the funding of health services in south London. Before the Budget, concerns were expressed by the Greater London branch of the Association of Community Health Councils for England and Wales, the Association of London Government and many others that the funding allocation for next year, let alone this year, would be far less than was needed.

My office carried out a survey, of which the Minister is aware, in October. It confirmed that the six south London health authorities projected a deficit of £20.2 million for this year. Lambeth, Southwark and Lewisham was £4 million down; Kingston and Richmond, £2.7 million; Bexley and Greenwich £2.3 million; and Merton, Sutton and Wandsworth had the largest deficit projection, of £11.2 million.

The Minister gave the hon. Member for Newham, South (Mr. Spearing) an answer late in October that confirmed that significant deficits were projected for this year. That remains the view of many of the health authorities in question. The day after the Budget, we must ask whether it has made any difference, and whether health services in south London will be any more secure in the months ahead.

I shall give just one example to personalise what would otherwise be a debate about facts and figures and miss being a debate about people. On 15 October, I received a letter from a pensioner living in Walworth. It began: I would like to introduce myself to you with a very big complaint. My name is Lilian Burkhard and I am 74 years of age. From the age of 16 yrs until past retirement age, I was never unemployed or a burden to the country. In fact apart from my Old Age Pension (which I paid for) I have never received a penny of help. In their retirement, Mrs. Burkhard and her husband live roughly equidistant from St. Thomas's hospital, King's college hospital and Guy's hospital, three of the best and most famous hospitals in the country.

Mrs. Burkhard continues: In February 1994 as I was having difficulty in walking and was in great pain, my doctor sent me to Kings College Hospital for X-rays on back and hip. These proved that I had a damaged spine and arthritis in the hip. I was informed that the hospital would send for me to have a pain killing injection. This was to ascertain which was causing the most pain. If it was back they could do nothing but a hip replacement was possible. After waiting two years and not hearing from them, finding I could get no help on the telephone as my notes had been conveniently lost; my doctor sent a letter to St. Thomas Hospital as by this time I was suffering severe pain and discomfort. This letter was sent in February 1996 and I received acknowledgment in May 1996 making an appointment with a consultant for 31st October 96. In August 96 I had a letter delaying my appointment for another three months until 30th January 1997. Note that to date I had been waiting from February 1994 and had not yet even seen a consultant. By this time I was walking with a stick and in extreme pain so my Dr. wrote to the Chelsea and Westminster Hospital, (a friend of mine had only been waiting a fraction of the time I had and was already booked for her operation at this hospital). Within a week I had a letter making an appointment for 10th October 96. My appointment was kept and after the X-rays I was told I urgently needed a hip replacement and they would send for me in the New Year. So far so good! I thought I was getting somewhere but alas! Today just five days after being told the good news, I received a letter to tell me that the Health Authority covering my area cannot fund the operation. The health authority, in a letter to me last week, just before I saw Mrs. Burkhard and her husband, confirmed the facts, apologised for the history of the case, but could give no guarantee as to when Mrs. Burkhard would have the operation which, since February 1994, it appears she has so urgently required. That is just one example; not the most dramatic, not someone about to die, but a deserving pensioner waiting for an important operation to give mobility, take away pain and give a decent quality of life.

Yesterday, the Chancellor made great play of the fact that he was being significantly generous to the health service. A Department of Health press release said: Stephen Dorrell announces £1.6 billion budget boost for patient services. That is true, and I welcome all additional money for the health service. But the reality—we will debate this in full on Monday—is that next year will effectively see a standstill budget for the NHS, as the Government define it, and a reduced budget as the patients feel it.

The Chancellor yesterday acknowledged expressly that inflation rates in the NHS are higher than general inflation and—I heard the debate earlier between the shadow Chancellor of the Exchequer and the Chief Secretary—the reality is that the Department of Health spending figures, which appear in the press release, the Red Book and yesterday's publications, represent an increase of 2.8 per cent. next year.

That increase assumes a level of inflation within the Government target of 2 per cent., an assumption difficult for most people to believe, and health service inflation of no more than 0.7 per cent., again probably unprecedented in this Administration. Otherwise, there will be a standstill or a decrease in the NHS budget. After that—the figures are clear—a 0.7 per cent. reduction is projected for the following year, and only a 0.1 per cent. increase the year after. It does not matter whether one takes the current spending figures, the family health service figures, the central health figures, or the total revenue figures—the picture is similar.

The revenue spending total is up only 2.9 per cent. next year, as projected by Government yesterday, and 0.2 per cent. and 0.1 per cent. in the following years. Capital spending is up only 0.8 per cent. next year on the Government's figures, even after taking into account the private finance initiative, then a reduction of 0.7 per cent. and a 0.1 per cent. gross thereafter.

The Institute of Fiscal Studies, in its summary of the Budget today, said: overall Department of Health spending over the next three years is hopelessly tight. What about the effect of yesterday's Budget, therefore, on south London? We shall be told the allocations tomorrow, but I want to give notice that we are expecting them and we need them to meet the deficit; otherwise there will be severe health service problems ahead.

In Merton, Sutton and Wandsworth, a deficit of £14.2 million next year has been projected. It is officially proposed to make up the difference by reducing expenditure on elective surgery, specifically proposing a 75 per cent. reduction in eye treatment, a 57 per cent. reduction in ear, nose and throat treatment, and a 90 per cent. reduction in teeth and mouth treatment. The authority is already at the limit of its patients charter waiting list requirement, which is 18 months. That would be considerably lengthened if any further cuts were made.

Kingston and Richmond health authority has a current deficit of £2.7 million. The projected savings needed are £6.6 million. The main savings are to come from a review of community health services". That may mean a reduction in family planning services and services to older people with mental health needs. I was in Kingston at the weekend. The Acacia unit at Tolworth hospital has a ward for older mental health patients which is being cleared to make way for elderly patients who are blocking beds at Kingston hospital. There will also be further delays in elective operations in that authority.

According to the Department of the Environment national deprivation index, my own authority, Lambeth, Southwark and Lewisham, is the second most deprived health authority in the country. I quote from this year's annual report of our director of public health, who states that these three boroughs are three of the most deprived boroughs in England. Local residents experience increased premature mortality, and higher than average death rates from lung cancer and stroke, mental illness, accidents and violence. Communicable disease including TB, HIV and malaria are more common locally. There are many other quotes which endorse that account of health deprivation.

A document on purchasing intentions was sent out by the health authority for consultation, which ends in the middle of December. A minimum reduction of £18.8 million is identified. There is an inherited commitment of £7.9 million from the last contracting round.

What, in particular, are we under pressure to fund? First, the largest number of mentally disordered offenders in the country, as the Government are aware. I understand that we need an additional £7 million next year, over the £3 million grant for this year. Secondly, we need help to give us a nationally adequate minimum mental health service, especially in psychotherapy and counselling services.

Thirdly, the acute sector is probably facing £7.5 million-worth of cuts next year. This year, waiting lists have gone up for non-fundholder patients from 12 months to 18 months. That is confirmed in a letter from the chief executive. We are already up to the patients charter limit. What next will happen?

I am told that there is likely to be a reduction of 15 to 20 per cent. in day case and elective admissions. Waiting times for many patients may be increased by a year. I am told by consultants across the authority that operations and numbers of occupied beds in many hospitals are being cut by 25 per cent. Almost every patient without a life-threatening condition is guaranteed to wait at least a year and possibly 18 months.

That is not just a statistic. Every delay in treatment reduces the chance of a cure and the possibility of an effective recovery. Furthermore, if only the most acute cases are treated when they desperately need treatment, medical students may never see routine elective patients at all.

The last sector that is likely to be cut, about which I am receiving increasing numbers of letters, are other community services such as complementary therapies for AIDS and HIV treatment.

Of the acute health authority budget—about £500 million-70 per cent. is fixed costs. The cuts will therefore have to come out of the remaining costs. The situation is dire already, and I do not believe that the Budget will make it much less dire in the months ahead.

Guy's and St Thomas's hospital trust, King's healthcare trust and Bethlehem and Maudsley trust, I gather, all face a similar pattern of elective surgery concerns and delays in non-emergency operations. Lewisham hospital trust has a work load 8 per cent. larger than last year. The three main purchasers have asked it to stop admitting any non-urgent waiting list cases for the remainder of this year, as of next month, and the health authority has said that it must reduce by a quarter the number of non-emergency treatments it purchases next year.

The Lewisham and Guy's mental health NHS trust is particularly concerned about services such as psychotherapy, and the Optimum health services NHS trust in my area of Southwark faces cuts of almost £1 million and will probably have to abolish hospital-at-home services, paediatric home care teams and possibly family planning clinics.

I have a shopping list for the Minister, to which I still hope he will be sympathetic—particularly regarding my last item. First, in the announcements tomorrow and in the Budget debate on health next Monday, we need some assurance that money will be provided this winter to meet this year's deficits and to close the gaps. Secondly, we need to know that health trusts and health authorities—particularly Lambeth, Southwark and Lewisham and Merton, Wandsworth and Sutton—will have the money next year to fund projected deficits.

Thirdly, as recommended by the Health Select Committee in June this year and as clearly represented by the health authority, we need a distribution of health service resources accurately weighted for social need—including racial mix, homelessness and mental health—to take effect from next April. The Government failed to respond adequately to that request in their reply in October, and have not yet agreed to rethink the formula from April next year.

Fourthly, I ask the Government to accept that we need a more accurate, revised calculation of the population. The Government rely on the 1991 census, which I am advised is inaccurate. If the new electoral register in my constituency is anything to go by, there has been a huge increase in numbers, and that fact should be reflected in the statistics used by the health service in allocating budgets.

Fifthly, we must have the money necessary to deal with the largest number of mentally disordered offenders in the country—funding used to be provided under the Home Office budget, but it has now come to the Department of Health. It would be grossly inequitable if that £7 million were not provided in addition to our other health authority budget.

Sixthly, we need a specific, adequate guarantee that we will receive funding to meet the minimum national standards of treatment for those suffering mental illness. I understand that, according to the formula, we do not have enough funding to do the minimum required of us by good practice and the Department of Health. That is nonsense. My experience is that mental health demands are growing; I know that the Secretary of State understands that, and is very sympathetic to the cause.

Seventhly—and ultimately—we must have a patients charter that means something. If the maximum waiting period for operations is 18 months from first being seen by a consultant until being treated, the funding must be provided to guarantee that time frame—18 months is too long, but it must be guaranteed.

Lastly, when the Budget announcement and the propaganda and counter-propaganda has faded into background, and the debate on Monday has concluded and the resources are allocated, I hope that the Minister or one of his colleagues will agree to meet the chairs and chief officers of south London health authorities and the community health councils, in light of the facts and figures, to examine the real needs and see what can be done to make up the funding gap next year. Sadly, I and the people of south London believe that that shortfall will amount to millions of pounds. Sadly also, it will mean that many people like Mrs. Burkhard—who should have been treated at least two years ago—will still have to wait too long for vital, quality-of-life NHS treatment she needs.

10.18 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Horam)

I congratulate the hon. Member for Southwark and Bermondsey (Mr. Hughes) on his success in securing the debate, and I am pleased to have the opportunity to respond to him. As always, he has spoken knowledgably and eloquently about health services for his constituents. The Government are equally concerned to ensure that the best possible health services are available to the people of south London, as the hon. Gentleman was no doubt assured by my right hon. Friend the Secretary of State for Health when they met two weeks ago.

I also have a copy of the letter to which the hon. Gentleman referred, from the chief executive of the health authority, about the sad case of Mrs. Burkhard, and that case being examined closely. I hope that something positive can come of that examination.

As the hon. Gentleman says, Lambeth, Southwark and Lewisham health authority is his local health authority, although his debate tonight covers five other health authorities as well. Like every health authority, it is responsible for studying the health needs of the local population and for ensuring the availability and provision of appropriate care and treatment for local residents. In that, it is extremely effective, as is abundantly clear from the ever-improving services that are available to the hon. Gentleman's constituents.

Lambeth, Southwark and Lewisham health authority is the largest in London, with a population of 732,000. This year, it received £390 million to spend on hospital and community health care for its residents, and each year it spends more than £45 million on general medical services. As well as these substantial sums, it is receiving additional funding this year—as the hon. Gentleman is aware—f3 million of which is to assist with the provision of services for mentally disordered offenders, who would otherwise be in the criminal justice system with their mental health needs ignored.

In addition, £1.4 million of mental health challenge fund money has been made available, and London initiative zone funding to the tune of £15 million has been provided this year to assist with the development of primary care services. It will get more next year, in line with our commitment to year-on-year increases in health service funding. In his Budget speech yesterday, the Chancellor said that the NHS will receive substantially more next year.

The hon. Gentleman commented on the percentage increase and the real increase, taking into account NHS service inflation as opposed to general inflation. He is wrong. As he knows, the overall increase in the health service budget is £1.6 billion, an increase of 2.9 per cent. in real terms—that is, taking off the standard retail prices index deflator, which is approximately 2 per cent. The amount available for the hospital and community health service part of the total budget is £1.2 billion—the amount, roughly, that goes to help authorities, as the hon. Gentleman is aware. That is an increase of 3 per cent. in real terms.

The hon. Gentleman seemed to be arguing—perhaps I misunderstood—that, as inflation in the health service is rather greater than the general rate, those sums will be taken away by national health service inflation. That cannot be so. Although inflation in the health service may be a bit greater than it is generally, it is not 150 per cent. greater, which it would need to be to take away all the extra money—for example, the 2.9 per cent. or 3 per cent. real increase as opposed to the 2 per cent. general inflation rate. I am surprised that he made that charge, but perhaps I misunderstood him. In my view, the increase is substantial.

This debate is taking place the day before my right hon. Friend the Secretary of State for Health is due to announce the individual totals for each health authority. I remind hon. Members that not only is more money going to Lambeth, Southwark and Lewisham health authority, and others, this year than ever before, but, with the merger of district health authorities and family health service authorities from the beginning of last April, and with ever-increasing efficiency, more money is now available for health services and direct patient care. One should not forget that we also expect efficiency gains of several hundred million pounds.

Lambeth, Southwark and Lewisham's population is characteristic of London's densely populated inner-city areas. Hospital and community health services funding is largely based on a national formula worked out on the size of the local population, weighted for factors such as the number of very young or very old people and the degree of social deprivation that exists. It also takes account of market forces, such as the higher costs of staff, buildings and land in the south-east.

The new allocations formula includes two powerful and sensitive measures of need: one for general and acute services; the other for psychiatric services. These two measures take account of a wide variety of health and socio-economic factors associated with the need for health care, such as unemployment, permanent sickness, elderly people living alone, and single-parent households.

I must correct the hon. Gentleman on one point that he made about the 1991 census, on which he thought that the existing capitation formula relied over-heavily. Of course it takes it into account, but nonetheless the formula has been updated year by year for population factors. It is not simply based on the 1991 figures, which are obviously out of date.

Lambeth, Southwark and Lewisham health authority's funding this year is only slightly below the funding that it should receive according to the formula. The funding therefore well reflects the local social and economic situation. The same can be said for all six south London health authorities. As a whole, their combined allocations are slightly above their total capitation share.

We must await tomorrow's announcement to learn how close the authority will be to its weighted capitation position next year. However, with the increasing resources that are being made available to the NHS and our commitment to bring all health authorities to their capitation position as rapidly as possible, hon. Members might draw their own conclusions.

Before I say any more about funding or service planning for next year, I should say something about the financial position of the health authority this year, and the ability of the service to cope for the remainder of the year.

On current estimates, Lambeth, Southwark and Lewisham health authority is forecasting that it will overshoot the budget that it set at the beginning of the year by about £1 million, or about one quarter of 1 per cent. of its allocation. It considers the position to be manageable. The situation certainly does not suggest that local people should in any way be concerned about the continued availability of good-quality services; nor does it suggest a service close to collapse, as some commentators have implied.

Plans have been laid over recent months by the health authority, working closely with local trusts so that the surges in emergency demand that occur at times during the winter can be dealt with as effectively as possible.

I shall deal now with the position next year. First, I should say that the health authority has been extremely open with the local community about its hopes and fears for next year. I am glad that the hon. Gentleman acknowledges that. It is right that this openness should be commended, for it is right that health authorities should be frank and honest in their discussions.

The health authority has adopted a very cautious approach that has led to the prediction that its budget deficit next year will be about £18 million. I stress that that is not the actual position that it is likely to find itself in next year, and does not imply that it must find £18 million-worth of savings within the budget. I repeat that the figure is £18 million, not £80 million. The hon. Gentleman will know what I am talking about. I repeat the figure in the light of a mishearing that occurred the other night.

The initial purchasing plans produced by health authorities this September are a starting point for the development of local purchasing strategies for the next business year. They are, in effect, cock-shies to get the discussion going. As there are a number of unknowns at this stage, assumptions will certainly change with time. For example, I believe that one assumption that the authority is making now is that there will be certain capital charges arising from phase 3 at Guy's hospital, which is not necessarily correct. I give that as one example of the sort of assumptions that have been built into the figure of £18 million which are unlikely to be realised.

It is only right, given that health care resources can never be infinite, and that health authorities have to prioritise competing demands, that they should outline some of the difficult choices that they as purchasers must make, and involve the local community in making those choices. I know that the hon. Gentleman attaches great importance to that involvement. It appears to be happening in Lambeth, Southwark and Lewisham.

The health authority will be refining its plans as information about next year's resources becomes available and in the light of the comments elicited by the draft plan—including, of course, those of hon. Members. Final plans will be published in the spring of next year.

Health authority purchasing plans are developed and agreed in partnership with general practitioners, who are closest to the patient and uniquely placed to ensure that their needs and wishes are reflected in local strategies. Indeed, about 90 per cent. of all contact that patients have with the NHS takes place in GPs' practices, with patients' needs varying considerably between one practice and another.

Taking this diversity into account, Lambeth, Southwark and Lewisham health authority has been working closely with individual practices to obtain accurate information about local problems and requirements, so that the most appropriate services can be developed in every practice, and commissioned from local hospitals and specialist services, to enable the most effective use to be made of the very substantial resources available to the health authority.

The people of south London have access to first-rate services—services that are being further improved by the investment and restructuring that is taking place in both primary and secondary care. The funding of health services in south London, which is already at its highest ever level in real terms, is to be further increased ahead of inflation. This is all excellent news for the hon. Gentleman's constituents, and for the people of south London as a whole.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.