HC Deb 14 May 2004 vol 421 cc649-56

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

2.31 pm
Sir Michael Spicer (West Worcestershire)

I begin by thanking the Minister for his courtesy in seeing me earlier this week. For each of us it was a useful dress rehearsal for the debate.

There are two root causes of the health service crisis in West Worcestershire and, in particular, of the problems facing my constituency. The first is the extraordinary overspend by the Worcestershire Acute Hospitals NHS Trust, especially by the new Worcestershire Royal hospital. The second is the retrospective decision last year by the Government to cap the funding of eight out of 13 South Worcestershire primary care trust GP-based capital projects.

Since the national health service is a centrally directed public service funded almost exclusively by the taxpayer, the Government must ultimately take responsibility for a situation that in Worcestershire threatens to cut the present quality of health services. That is despite the fact that the Government have raised taxes, ostensibly in order to provide for better health services. Worcestershire is a good example of the coincidence of taxes going up steeply and the quality of services threatening to decline.

Two particular matters are currently in the forefront of the minds of many of my constituents. The first is the question of the threat to the provision in my constituency of new GP medical centres in Malvern, Upton-upon-Severn and Pershore. These centres were part of a list of 13 projects submitted for approval by the Government, of which only five were actually approved. The Government argue that at no time did they indicate that all 13 would be approved. I am told that that does not accurately reflect the practice that was in place before the Government changed the rules, in this instance after some of the preparatory contracts had been placed.

The position before the rules were changed was that the non-cash-limited programme received almost automatic approval once it had been cleared by the local health authority. This may not have been good practice, but it was the system under which health authorities made their plans and let out their contracts. I do not necessarily quarrel with the Government's judgment in tightening these rules. I do question the way in which they did it. What has thrown the system in Worcestershire into disarray has been the fact that the new rules were introduced without warning and with a retrospective effect on local plans and contracts. I understand that that may even have made the South Worcestershire primary care trust liable to be sued for damages.

One particular GP practice scheme has been put at risk, and if it does not go ahead it will have a severe knock-on effect that could threaten the building of the new community hospital at Pershore. Capital has been allocated for the building of the Pershore hospital by the Wychavon district council on the basis of the return in rents from the hospital itself and the medical centre that is to be housed in the overall premises. Without the rent from the medical centre, which is now under threat, the building of the hospital is unlikely to go ahead, at least for the time being. That will cause grave anguish and if it happens it will be a tragedy for the people of Pershore, who deeply value their existing community hospital and who have been led to believe that a start to building a new one will be made later this year.

The Government now say that it is up to the strategic health authority and the primary care trusts in Worcestershire, Warwickshire, Coventry and Herefordshire to prioritise their investment projects within the overall budget. As a matter of fact, they are trying to do just that in a meeting that is going on as we speak. The task would have been made immensely easier if the policy had been introduced in a less erratic fashion and with proper warning. False hopes would not have been raised and contracts would not have been entered into. Those involved would have been able to plan on a more realistic basis. As it is, an immense amount of work has gone into preparing the projects, some of which will, presumably, be delayed well into the future at best. Frankly, that is not good enough. The Government should be prepared to reconsider their position—certainly with respect to the four medical centres that it had been thought would be built in my constituency over the next few months. Under the old rules, they certainly would have been.

The second big issue facing the health service in Worcestershire is the uncertainty that now surrounds the future of the general practitioner contracts, which were signed nationally months ago. The Government and their local agencies are legally committed to them. In the case of Worcestershire, there is grave doubt on the part of health officials—and, indeed, among the doctors themselves—about how the contracts are to be fully implemented.

Three aspects of the contracts are causing particular concern. First, there is the so-called quality formula, by which doctors are paid for achieving standards in respect of a range of some 1,050 quality points. Some might argue that that is a pretty bizarre way of paying doctors, but it is what the agreed contracts say. The particular problem for the South Worcestershire PCT is that funding the quality aspect of the contracts is based on the notion that doctors will achieve, on average, 750 quality points. In Worcestershire, where the quality performance has been high, doctors are averaging around 900 points. That alone is putting pressure on the PCT budget.

Then there is the vexed question of out-of-hours service. There does not seem to be even a basis for an agreement here. It is not yet clear how many GP practices want to take part in the service—or, critically, at what hourly rate. Some people are talking about £80 an hour to cover the cost of doctors being called out at night, but the PCT does not have the funds from central Government to pay those rates without cutting other services. The same is true of the more discretionary elements in the contract, such as preventive counselling services, GP operative services, drug abuse prevention and so forth. Each of those and similar discretionary services are at risk—at least in their present form.

I am told that all this adds up nationally to underfunding the agreed GP contract arrangements to the tune of about £1 billion. If so, this is another example of central Government laying down detailed targets and directions without providing the necessary funding to meet them.

The Worcestershire health service has a particular problem, in that it must try to meet the requirements in the context of closing an acute hospital deficit of more than £200 million for a two-year period. It is no good the Government passing all the blame to its local agents—for that, in a nationalised health system, is exactly what they are: local offices of a central Administration. Under a centralised command system—which is what the NHS is, however it is dressed up—the responsibility lies at the centre and with the Minister. This is especially true of a Government prone to setting detailed targets and giving strict instructions on objectives. Such a Government are especially ill suited to claiming that it is someone else's fault down the line when things go wrong, as they certainly are in Worcestershire.

It is true that more money has been allocated, but the problem is that the imposed costs have grown faster than the revenue. For this reason, there are now the makings of a financial crisis in the health services in Worcestershire, and it is the Government's job to find a way out.

Matters may not be quite so dire where the finances are to an extent ring-fenced. An example is the proposed building of a new community hospital in Malvern. In this case, a business plan can be created whereby the proceeds of the sale of the existing hospital are applied to make the project viable. The Minister need merely give the plan his blessing and encourage all concerned to implement it as soon as possible—preferably within the next few months.

As for the rest, the Government must either lower their sights and shut down the rhetoric and hyperbole, or up the ante, which will mean even higher taxes. This is a dilemma of their own making: it was they who claimed that the nation's health problems would be cured simply by throwing more money at them. Live by spin and die by spin. The problem for the Government is that the reality has taken over from the spin. In Worcestershire at least, the money has not matched the rhetoric and there is now a crisis in the health service. I look forward to the Minister's response.

2.42 pm
The Parliamentary Under-Secretary of State for Health (Dr. Stephen Ladyman)

First, I congratulate the hon. Member for West Worcestershire (Sir Michael Spicer) on securing this debate and on the interest that he has shown in the matter. As he said, we have already met this week, we have exchanged comments at oral questions on a number of recent occasions, and we have corresponded. The same goes for some of his Worcestershire colleagues. I know that he takes a great interest in this.

Before I answer the hon. Gentleman's specific points, let me put the health situation in his constituency in context, because, with the greatest respect, his final comments took it well out of context. First, I must emphasise that South Worcestershire primary care trust is responsible for commissioning health care in west Worcestershire. We have shifted the balance of power to the front line of the health service, quite deliberately, so, contrary to his opening comments. Ministers no longer make local decisions—they are made by local people with local knowledge. The idea of a central command and control system is something that this Government abandoned. I do not know whether he is suggesting that, were his party to return to power, it would reinstate it, but I know that it would be a disaster.

That process of local decision making and substantial extra resources have meant that the dedicated and hard-working NHS staff in Worcestershire have been able to deliver some remarkable achievements. It is a shame that the hon. Gentleman does not mention them a little more often.

For example, in 1997 it was common for patients to wait 18 months or longer for in-patient treatment, but in the South Worcestershire primary care trust area since March 2003, no patient has had to wait more than 12 months for in-patient treatment, and by the end of March this year, no patient was waiting more than nine months. Waits for appointments with GPs are coming down, too. In December 2003, all patients in south Worcestershire could be offered an appointment with their GP within two days. Out-patient waits are also coming down. At the end of March, nobody was waiting for more than 17 weeks for a first out-patient appointment. At Worcestershire Acute Hospitals NHS Trust, 98 per cent. of patients suspected of having cancer are seen by a specialist within two weeks of an urgent referral. Since the PCT was established in 2002, the number of GPs has risen from 172 to 201. At the acute trust, the number of consultants has risen from 144 at its formation in September 2000 to 175. There are also more nurses, therapists, midwives and health care assistants. I could go on and on.

Let me also put the record straight on funding. In 1996–97, the former Worcestershire health authority spent £623 per head on health services for its population. By 2002–03, South Worcestershire PCT spent £894 per head. The final accounts for 2003–04 are not yet available, but South Worcestershire PCT received an 8.9 per cent. increase for 2003–04 and a further increase of 9.7 per cent. for 2004–05, and it will receive another increase of 9.2 per cent. for 2005–06. That will, by then, equate to an allocation of £1,061 per head. In other words, there has been something in the region of a 70 per cent. increase in spending per capita on health services for the residents of south Worcestershire. Whatever tough decisions and problems have to be faced, they are the problems that come with managing growth, not the problems of past years when decision makers had to manage decline and decide which services to cut. That is the context in which we must discuss the specific issues raised by the hon. Gentleman.

I shall start with the GP contract. I am aware of local media speculation that there is a risk of doctors being laid off. Frankly, it is untrue and misleading to say that South Worcestershire PCT will have insufficient funds to honour the new general medical services contracts. There has even been a suggestion that there is a £1 billion shortfall nationally. That is completely unfounded. The new contract is accompanied by an unprecedented increase in the funding available for primary care. Over the three years of the deal, investment in primary care will rise by a third, and that investment is protected by the gross investment guarantee. The new GMS contract represents an excellent opportunity for GPs. Over the current three-year period, funding in primary care across the UK will increase by 33 per cent. from £6.1 billion in 2002–03 to £8 billion in 2005–06.

I should also point out that the contract was negotiated and agreed by the British Medical Association and the NHS Confederation, and all the GP practices in south Worcestershire have signed up to it. Revenue streams are in place to pay for primary care services. We have given practices permanent protection through a minimum practice income guarantee so that no practice loses out under the new formula. South Worcestershire PCT has been allocated £21.8 million to provide primary care services for 2004–05, some £5.4 million of which is for the minimum practice income guarantee. Under the new system, resources will be allocated more fairly on the basis of patient need, practice work load and costs. That surely represents progress and reflects the Government's determination to modernise the NHS.

Sir Michael Spicer

Part of what the Minister is saying is, "It's not me, guv. All this is not my responsibility." If that were the case, one would be tempted to ask what the point of his job is and why he does not do something else. Of course, it is not the case. The fact is that the Minister gives out the money, and he who calls the piper plays the tune.

The Minister will surely accept that the GP practice arrangements were largely negotiated by the Government. He is being disingenuous in saying that he has no power or responsibility and that it has all been devolved. The local people are agents of his, in effect.

Dr. Ladyman

My job, and the job of my colleagues in the Department of Health, is to set the national framework within which local decisions must be made. In the old days, I agree, Ministers at the centre set the national framework and made decisions about how it was to be implemented locally. Now, though, we have a quite clear distinction between my responsibility as a Minister to agree national priorities and set the framework and the responsibility of local managers to deliver and to make the choices that matter to local people. I am sorry that there appears to be someone in his local PCT, presumably someone in a position of seniority, who ought to know what their responsibilities for managing the local situation now are, but does not seem to have grasped that yet, and still thinks that they can harp back to the old days, when we took all the decisions, the responsibility and the blame. That is now very much the job of people in the local PCT.

The hon. Gentleman is right to say that we negotiated the GP contract, but we did that with the NHS Confederation, which represents all the people on the front line, and with the representatives of the doctors themselves. Having done that, we then provided the money needed to implement it. I believe that the local PCT has the resources that it needs, and the power to implement the contract in a way that will benefit the local population.

The other part of the issue that the hon. Gentleman raised was the quality and outcomes framework, which is part of the general medical services contract. GP practices are being rewarded for their performance against a number of quality indicators by scoring points. A point is worth £75 in 2004–05 and £120 in 2005–06 for the average practice. Practices could score a maximum of 1,050 points.

Practices receive three types of payment: quality preparation payments to help practices get ready for the new scheme, quality aspiration payments, which are paid up front to help fund practices' quality achievement, and quality achievement payments—a reward for the final level of quality service achieved. Practices will agree with their PCT what level of points they aspire to achieve for the year ahead, and I am informed by West Midlands South strategic health authority that the average score for GP practices in south Worcestershire is 940 points, which reflects the perceived high standard of primary care provision in the area covered by the trust.

It remains to be seen how well practices perform against their aspirations. We have no way of knowing at this stage of the year whether practices will achieve their aspirations. As one would expect, some will perform better and some will perform below expectations.

The NHS Confederation and the general practitioner council agreed that a budget of more than £500 million for quality arrangements across primary care would be realistic. That sum forms part of the gross investment guarantee. From this, primary care trusts have already or will soon receive full funding for the quality preparation and quality aspiration payments that they need to make.

Funding for quality achievement payments is currently held by the NHS bank. This is in line with the principles of "Shifting the Balance of Power", and is sensible as accurate allocations for achievement cannot yet be made, and the differences between aspiration and achievement will need to be managed.

Sir Michael Spicer

The word "managed" is a euphemism for saying that if the notional amount were 750 quality points and the budget were based on that, if others, because of good quality in the past, have a much higher total of quality points, there will be a shortfall in the money. The result of that could be a deterioration in quality, because presumably people will try to get lower points, if they can, which is surely a step backwards.

Dr. Ladyman

That is not the situation. The money for achievement is being held by the NHS bank, and it will be distributed according to where it is necessary to meet the quality points targets in any particular area. There is no reason to believe, and I certainly do not believe, that the hon. Gentleman's PCT will be underfunded when the achievement money is ultimately distributed.

I believe that high-quality primary care is worth paying for, and I am advised that the South Worcestershire primary care trust has identified the quality payments as a priority for investment, so I do not share the hon. Gentleman's concern that the scheme will impose unacceptable pressure on the trust's finances.

As for health centre developments, under the new contract there have been some changes to the method of funding GP premises development schemes. However, it is important to understand that the new contract was launched on 1 April 2004 and that decisions on the allocation of funding for new premises had to be taken well in advance of that date. It was for that reason that the mid-financial year date of 30 September 2003 was chosen as the point by which contracts had to be signed if health centre developments were to be funded under the old system. It was also important to use the date of 30 September so that the business cases for those developments could be properly evaluated. That decision was taken retrospectively to ensure that there was no "dash for the cash", with trusts submitting bids that were not robust.

Given the interest that the hon. Gentleman has taken in the issue, perhaps he should know that none of the eight bids submitted by South Worcestershire primary care trust in March this year to West Midlands South strategic health authority was robust enough. For example, I am informed by West Midlands South strategic health authority that the local authority rates were not included in the costings. In other words, even if we had not introduced a cut-off point, the bids would have been inadequate at the end of the year. It is frankly baffling that anyone could form the view that the PCT was in a position to enter into contracts. I should also like to stress that there has never been an open-ended commitment to fund all GP aspirations for premises developments.

However, based on information provided by the NHS, we have allocated significant funds to PCTs to support them in meeting existing commitments. The new arrangements include additional funding for new developments that will be prioritised and agreed locally. In 2004–05, nationally, a total of £534 million has been made available for primary care premises, due to rise to £655 million in 2005–06.

Under the new arrangements, decisions about prioritisation of growth funding for premises development in West Midlands South strategic health authority rest with a planning group comprising the eight PCT chief executives or nominated deputies. They have already met to agree the criteria for deciding the funding for individual projects and they are due to meet before the end of May to assess all the bids. Before that meeting, the chief executives have been asked to prioritise the schemes in their PCT.

South Worcestershire PCT will use the draft criteria that were decided in the group to assess its schemes. Of the eight south Worcestershire developments that have gone forward to the new working group, I understand that there are five health centres in the hon. Gentleman's constituency. The hon. Gentleman said that there were four but I am happy to discuss that with him later.

Two health centres are in the constituency of the hon. Member for Mid-Worcestershire (Mr. Luff) and one is in the constituency of my hon. Friend the Member for Worcester (Mr. Foster). Each hon. Member is doing his very best to lobby for his constituency interest. That is right and proper but it also demonstrates why it is right and proper that the decisions on prioritisation are taken locally.

Finally, I would like to say a few words about Worcestershire Acute Hospitals NHS trust, and especially about its financial position. I know that the hon. Member for West Worcestershire believes that that has generated what he perceives to be a crisis in the local area. I take a different view. Hon. Members will know that the trust was recently criticised by the National Audit Office for its financial management. The NAO report related to the 2002–03 financial year. Since then, the Worcestershire Acute Hospitals NHS trust has appointed a new chief executive and director of finance. A financial recovery plan has also been agreed with the West Midlands South strategic health authority and the trust is expected to break even at the end of the current financial year. The strategic health authority has told me that it has confidence in the new team to deliver the balance.

The hon. Gentleman is bound to be concerned about the financial contribution that South Worcestershire PCT will have to make towards the trust's recovery plan. Following my meeting with the hon. Gentleman earlier this week, I asked West Midlands South strategic health authority to confirm the amount that South Worcestershire PCT will be contributing towards tackling the financial difficulties at the Worcestershire Acute Hospitals NHS trust. I am now informed that each of the Worcestershire PCTs will be contributing 2 per cent. of their total allocation. In the case of the South Worcestershire PCT, that equates to £4.4 million, and the PCT has agreed to that. However, the South Worcestershire PCT's funding allocation will have grown by an unprecedented £60.6 million over the current three-year period, which places the amount they must contribute in context.

I should also like to reiterate that the health community in Worcestershire, along with the strategic health authority, must resolve the issues themselves as otherwise the burden would fall on the users of health services further afield.

I hope I have shown that we are putting decision making where it needs to be—in the hands of the local NHS—and that although the challenges raised by the hon. Gentleman must be faced they are not insurmountable. The money is there and I believe his fears are baseless. I have no doubt that we shall discuss the matter further in the weeks to come and I am happy to meet him again once he has had an opportunity to reflect on my comments and to see how things develop locally.

I can assure him that the local PCT is genuinely in a position for decision making. It has the power to make decisions and the resources with which to make them.

Sir Michael Spicer

The figure that the Minister gave as the contribution towards the hospital is more than would be required to build the health centres.

The motion having been made after half-past Two o'clock, and the debate having continued for half an hour, MR DEPUTY SPEAKERadjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Three o'clock.