§ 7. Mr. Mike Gapes (Ilford, South)
What plans he has to review the financial allocation formula for health authorities. 
§ The Minister of State, Department of Health (Mr. John Denham)
A review of the formula is already under way. We want a fairer formula that contributes to our goal of reducing health inequalities. All parts of the NHS will benefit from the cash boost announced last week. Redbridge and Waltham Forest health authority's share of the first £660 million is more than £6 million. That will give the health authority an 8.23 per cent. cash increase for the coming year.
§ Mr. Gapes
My hon. Friend's announcement of extra money will be most welcome in Redbridge and Waltham Forest. However, does he agree that the existing allocations formula, with its staff market forces factor, causes difficulties for several London health authorities for whom there is a distinct cliff edge between one authority and its neighbour? Will he look closely at the 210 impact of higher wages in the City of London? Those high wages mean that, because of the formula, people in outer-London boroughs lose out financially.
§ Mr. Denham
The advisory committee that is considering the formula is examining many issues; for example, market forces; rurality; and the number of the older population. They must all be taken into account; it will be some time before there is any prospect of a change to the formula.
However, with the additional £6 million, on top of the large increase in resources already announced for next year, the key priority for the health authority, the trust, and, indeed, for my hon. Friend, must be to ensure that every penny is used effectively, so that we do not just spend more money in his area but modernise the health service and improve services to patients.
§ Mr. Nicholas Soames (Mid-Sussex)
Is the hon. Gentleman aware of the serious difficulty that has arisen in West Sussex as a result of the extremely bad funding arrangement for West Sussex county council? That has left many geriatric beds in hospitals blocked with people who should rightfully be cared for in old people's homes. Will the hon. Gentleman liaise with his colleagues in other Departments to see what help can be given to West Sussex county council to overcome that problem? It has led to the council being unable to cope with its obligations.
§ Mr. Denham
I hear what the hon. Gentleman has to say. I am not familiar with the details of the situation in West Sussex, although I know that social services departments throughout England received a good increase in their standing spending assessments last year. I shall look into his particular concerns.
However, the additional £9.95 million of health resources heading to the West Sussex health authority, under the announcement made by my right hon. Friend the Secretary of State today, will make a significant difference. Among the matters that we have suggested that health authorities should consider is the development of intermediate care provision—to offer that bridge between hospital and home that can prevent bed blocking.
If the hon. Gentleman really believes that that amount is not enough, he should look back at the record of the previous Government. During 18 years, they never dreamt of investing in the health service in that way.
§ Mr. David Hinchliffe (Wakefield)
Do the allocation arrangements mentioned by the Secretary of State today, which bypass health authorities, indicate some thinking about the possible future role of those authorities?
§ Mr. Denham
We simply wanted to achieve one important effect: we want the money to be spent on real services and not on red tape. We want to put it into the hands of front-line doctors and nurses in primary care groups, who, in any case, would have been responsible for commissioning at least 60 per cent. of services from this April. By making it clear that the money must go into front-line services for patients, we can ensure that the extra investment will have the fastest possible impact on real patients and their treatment in the health service.
§ Mr. Philip Hammond (Runnymede and Weybridge)
Can the Minister give the House an assurance that he will 211 use the allocation of £600 million to address the grotesque distortions in funding between NHS areas? That distortion means that, for example, in my constituency, where NHS spending is just £615 per head, the percentage of patients waiting for 12 months or more for surgery is 10 times higher than in the Secretary of State's constituency, where NHS spending is £730 per head—nearly 20 per cent. higher than in mine.
§ Mr. Denham
In answer to an earlier question, I said that a review of the allocation formula was under way. It will consider a wide range of factors. If the hon. Gentleman is seriously suggesting that a Conservative Government would wish to adopt a purely per capita system of funding that took no account of, for example, providing services in rural areas, inequalities in health needs or the size of health populations, that is astonishing. Such an approach would amount to a huge shift of resources away from those people who suffer most from ill health and who die earlier towards those areas where health provision is best. Some changes may be necessary to the allocation formula in relation to a range of issues. However, the hon. Gentleman should think again about going in the direction that he suggested.