Health Authorities Act 1995 (Hansard, 24 June 1997)

§ 8. Mr. Whittingdale
To ask the Secretary of State for Health what assessment has been made of the likely savings to be made for patient care as a result of the Health Authorities Act 1995. [3473]

§ 20. Mr. Forth
To ask the Secretary of State for Health what estimate he has made of the projected savings to the national health service from the implementation of the Health Authorities Act 1995. [3486]

§ Mr. Milburn
It is estimated that annual savings of around £150 million were made as a result of the 1995 Act, but it took three years to get there. We have already announced a £100 million reduction in management costs to be achieved in the current year alone and we are looking carefully at the scope for further savings in 1998–99 and beyond.

§ Mr. Whittingdale
Given that answer, can the hon. Gentleman say whether he still supports the establishment of a regional tier of administration for the national health service, as was called for in his party's policy document "Renewing the NHS"?

§ Mr. Milburn
We have no plans to reinstate regional health authorities.

§ Mr. Forth
That sounds a bit bizarre to me. Was the Minister's party not the party which opposed the 1995 Act and all the savings that he has just told the House flowed from it? Has he not now admitted that he has done a U-turn on one of the undertakings in his party's policy document? How can we place any credibility on the Government's undertakings about savings in the NHS if, on the one hand, they opposed the measures that gave real savings—our measures—and, on the other, the hon. Gentleman is going back on his policy?

§ Mr. Milburn
I know that the right hon. Gentleman wants to dwell on the past. That is because he and the Conservative party represent the past—they are living in the past. As he well knows, the Conservative party is not the enemy but the friend of red tape. It increased bureaucracy in the NHS and gave us more invoices, more paper, more red tape, more managers, more administrators and more accountants—but it gave us fewer nurses.

§ Mr. Rhodri Morgan
As well as the savings from cutting red tape, which can be diverted into patient care, does my hon. Friend agree that another potentially fruitful source of resources could be made available to the health service by removing the problem of bed blocking, whereby patients cannot be moved from health authority hospitals, where they cost more than £1,000 a week, to old people's homes or nursing homes, where they would 662 be looked after for £300 or £400 a week or less, because local social services departments do not have the money to pay for the patients' stay in an old people's home? Does he agree that if local authority social service departments—with their present bankrupt budgets—and health authorities could co-ordinate their budgets more tightly, savings of about £700 a week per patient could be achieved by removing that bed blocking problem?

§ Mr. Milburn
My hon. Friend raises an important issue. As he will be aware, the interface between personal social services and the health service is crucial in ensuring that very vulnerable people in the community are cared for—particularly the elderly, but also people with disabilities and mental health problems. Sometimes, the gaps in provision mean that such people are not looked after in the most appropriate way.
My hon. Friend should consider two points: first, in planning for this winter, we will expect health authorities and local authorities to work closely together, precisely to achieve the co-operation that he advocates. Secondly, in the longer term, we will consider how best to pool resources to ensure that the gaps between social care and health care are closed.

§ Mr. Hogg
Does the Minister accept that any savings that he might make through the Health Authorities Act 1995 would be dwarfed by the additional costs attributable to the minimum wage and to any restrictions that might be placed on competitive tendering?

§ Mr. Milburn
The right hon. and learned Gentleman is the master of the red herring—although, in view of his former responsibilities, I apologise for the unintended pun. The Government are committed to ensuring that, in the future, health service resources go where they are most needed: not into back-line bureaucracy but into front-line patient services, where they should have gone in the first place.

§ Mr. Campbell-Savours
On the question of savings, my hon. Friend the Minister will have heard my right hon. Friend the Secretary of State say that he expected to receive financial plans from health authorities, and trusts in particular, by a date in July. May we therefore assume that the documents submitted by trusts will include their proposals for reducing deficits by 1 April 1998?

§ Mr. Milburn
It is important that all trusts and health authorities should set out clearly how they intend to cope with the financial deficits that many of them have, often through no fault of their own. We will scrutinise extremely carefully the plans from both health authorities and trusts, to ensure that they maximise value for money, and also lead to improvements in patient care.

§ Dr. Harris
Given the Minister's surprising answer to the original question on health authorities, how will the Government bring back the necessary strategic planning, democratic accountability and openness in local services without a regional tier of health authorities?

§ Mr. Milburn
As the hon. Gentleman knows fine well from his experience in the national health service, there is a regional tier. We intend to work through the regional offices to ensure, for example, that capital developments 663 in the NHS are much more strategically planned. As my right hon. Friend the Secretary of State said a few minutes ago, we will no longer countenance a situation in which the private finance initiative is driven by the needs of the market; instead, we would expect regional offices to identify those capital schemes that best meet strategic health needs in their areas. We are, as it were, reinstating strategic planning at a regional level.