Allocations to Health Authorities (Hansard, 16 December 1987)

§ Lord Skelmersdale
My Lords, with the leave of the House I shall now repeat a Statement that has been made in another place on allocations to health authorities. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on allocations to health authorities. As my right honourable friend announced on 3rd November, for 1988–89 we are increasing the provision for current expenditure on the hospital and community health services in England by £707 million, to a total of nearly £12,000 million. This includes an additional £50 million towards the rising cost of care and treatment for people with AIDS or HIV infection; an additional £9 million for the further development of the breast cancer screening programme; and an additional £5 million to reinforce our programme of projects to reduce waiting lists and times.
758 "Details of the overall increases in allocations to individual regional health authorities, which take account also of the £15 million special fund to help ease transitional problems in regions receiving the lowest growth, and of other allocations including the funding for AIDS, are in the Vote Office. For every region, the extra allocations represent an increase over their current allocations of at least 5.6 per cent., compared with forecast general inflation of 4.5 per cent. We shall shortly also he seeking bids for 1988–89 projects under the waiting list initiative, for which £30 million is available.
"We remain committed to the principle of ensuring the fair distribution of resources across the country, and that part of the allocations which depends on what is known as RAWP is based on the existing formula. Extensive work to examine possible improvements to it is however nearing completion, with a view to considering changes for future years. Separately, there are additional capital allocations of nearly £26 million. Together with receipts from land sales which are forecast at over £200 million, this will sustain the hospital building and improvement programme in which over 450 major projects are currently being planned, designed or constructed.
"Both current and capital allocations provide for 40 further breast cancer screening centres by Spring 1989, over and above the 14 we expect to be in operation by Spring 1988. They also provide for over £40 million of expenditure on services which need to be financed on a wider than regional basis. Full details of these supra-regional allocations are also in the Vote Office. They include increases for neo-natal and infant cardiac surgery and for spinal injury services; the designation of a new liver transplant centre in Leeds; and the designation of a fourth heart transplant centre at the Wythenshawe Hospital in Manchester.
"All these additional resources, together with those released by continuing our successful cost improvement programme and new money arising from income generation schemes, will enable health authorities to continue developing their services. At the same time, we are also taking action to ensure that we have speedier and more accurate information about the financial and service position of the health authorities. I shall return to this important matter in a moment.
"In so far as this financial year is concerned, our monitoring arrangements have revealed a shortfall in income that could only be eliminated by short-term measures that would not improve health care or efficiency. This is clearly unacceptable and we have concluded that in order to meet the immediate problem it would be right to increase health authority cash limits throughout the United Kingdom by almost £90 million, of which £75 million is for English health authorities. That includes some £10 million in further recognition of the particular pressures from the steadily rising number of AIDS cases which three of the Thames regions are facing this year. We have also decided to make a further £13.3 million available to offset the costs of damage caused by the severe weather on 16th October, thus bringing the additional 759 funding for 1987–88 to over £100 million for the United Kingdom as a whole.
"As I have already indicated, we are taking steps to improve significantly the monitoring of health authorities' performance, with the intention of ensuring that resources are spent to maximum effect. These new arrangements will include formal and regular monitoring of income and expenditure level, and of output and activity. In addition we shall shortly be setting up a special unit to help authorities take full advantage of income generation opportunities. We shall continue to encourage practical partnerships between the public and private sector where this will clearly benefit the patients of the National Health Service.
"Mr. Speaker, the £7 billion a year of extra resources this Government have already invested in our hospital services since taking office have enabled it, by any measure, to provide more care to more people than ever before. What I have announced today will help us to build on that."

§ Lord Prys-Davies
My Lords, I thank the Minister for repeating the Statement made in the other place. The Minister will know only too well that the under-funding of the NHS has in recent weeks been the subject of frequent constructive and well-informed exchanges in your Lordships' House. Fortunately the NHS and the patients have friends in your Lordships' House.
We welcome the Statement. The additional allocation of £75 million comes late in the day—just in the last quarter of the financial year—but it is still quite welcome. It will help the NHS to get over the immediate, most pressing short-term difficulties. The additional allocation of £700 million which was foreshadowed in the Statement made on 3rd November is also welcome, although it will still mean a shortfall of £200 million in 1988–89 according to the advice of the BMA and the AHAs.
I have five brief questions for the Minister. First, has the department calculated how much more additional funds are necessary if the health service is to provide the facilities which are necessary in accordance with its own guidelines and its own norms? Is it in a position to challenge the estimate of £200 million put forward by the health authorities and the BMA?
Secondly. when the new monitoring machinery which is referred to in the Statement is in place, will the department then know centrally the total number of wards or beds which are unused, because of shortage of staff or lack of funding? I understand that that information is not currently available to the department.
Thirdly, will the additional funding of £75 million for the rest of this financial year mean that there will be no more temporary closures of wards, beds and theatres due to shortage of funding? Fourthly, are the Government aware of the complaints made by some doctors and nurses that the new breed of managers are too often insensitive to their reasonable requirements, and that the new management 760 structure may be inappropriate to the needs of the National Health Service?
Finally, given the widespread disquiet about the health service expressed in every part of the country and by every part of the NHS, might there not be a case for an inquiry into the management and working of the NHS and for saying that the department should not rely on the new monitoring machinery?

§ Lord Kilmarnock
My Lords, we on these Benches should also like to thank the noble Lord for having repeated the Statement and, like the noble Lord, Lord Prys-Davies, we are able to welcome certain aspects of it. I should like to ask the noble Lord whether he could clarify some of the figures for me. Perhaps it is my fault, but it seems that this Statement is not quite so explicit as Government statements usually are.
I note that there is mention of an additional £50 million for AIDS. This was, I think, the subject of a Question which I asked the noble Lord not long ago. My understanding then was that it was to be a special allocation for that problem. But I see that, in fact, it is included in the £707 million which is mentioned in the Statement, which presumably reduces the sum by that amount. Perhaps the noble Lord would confirm that, or otherwise. I note that there is another £5 million allocated for the waiting list project. That is welcome but it seems to me to be rather an inadequate response to the enormous problem of about 700,000 people who are still on waiting lists.
A little lower down the Statement mentions that bids will shortly be called for under the waiting list initiative. I hope that the noble Lord will be able to confirm that successful bids will not be confined to those which involve farming out to the private sector. There is nothing wrong with collaboration with the private sector but it should not be dictated by the Government. Local health authorities should be able to use the money to the best advantage, as they see it.
I notice that at the bottom of the first page of the Statement there is a reference to 450 major projects which are currently being planned. That takes one back to Mr. Fowler's famous list of additional hospital building which was unfurled with such a flourish at the last election. But does the noble Lord agree that that building programme will not be much use if it ends up with empty wards and insufficient nursing staff? Will he say whether the Government will be funding nurses' pay awards? We learnt that some special arrangements will be made for nurses as regards mortgages. I believe that they will be private arrangements with the Nationwide Building Society, but can he again tell me what is planned for the nurses in relation to the poll tax? I know that the noble Lord, Lord Elton, asked the Minister a question on that not long ago, but I think that the House would be interested to hear about that.
As regards new money arising from income generation schemes, can we be assured that it will be new money and that authorities will not be penalised for whatever they make on that side? I have noticed the reference to £10 million in additional funding for the three Thames regions which are principally 761 concerned with dealing with the AIDS problem. Those regions are the North-West Thames, the North-East Thames and the South-West Thames. That presumably leaves £40 million from the £50 million that was mentioned at the beginning of the Statement, but in the penultimate column of the figures at the hack of the Statement there is a figure of £24 million, which, it is stated, includes the balance of AIDS allocation plus an additional £5 million for the waiting lists. I am not quite sure how one can get another £40 million out of £19 million. Will the noble Lord comment on that?
Finally as regards the question of the monitoring of the health authorities' performance, that is perfectly all right provided that it does not develop into a civil war with the doctors. It is obviously proper to study the reasons for different performances by different authorities but that should be done objectively, as I think the noble Lord, Lord Prys-Davies, implied. There should be an objective inquiry into the measurement of different performances by different health authorities, because that may depend very much on local conditions.
Last of all, I note that the Government state that they will continue to encourage practical partnerships between the public and private sectors where this will clearly benefit the patients of the National Health Service. Encouragement is acceptable to me. There will have to be more collaboration between the public and the private sectors in the future but it should be encouragement and not dictation. Will the noble Lord confirm that those arrangements will be left to the various authorities to work out in accordance with their own best interests and not as a result of being dictated to by the Government?

§ Lord Skelmersdale
My Lords, I am grateful to both noble Lords for their reception of the Statement, although it was rather muted in the case of the noble Lord, Lord Kilmarnock. I shall try to answer as many as possible of the questions I have been asked. Both noble Lords referred to the £707 million for the next financial year. I can confirm that the £50 million for AIDS for the regions which are most affected by this particular and unfortunate scourge is in effect top-sliced from that £707 million. So, yes, that reduces the amount for general distribution, as indeed does the £15 million in the special fund which goes towards those inner city regions which are dramatic losers because of the redistributional effects of the RAWP formula.
The Statement also dealt with the extra money available for this year. There may have been a little misunderstanding in the mind of the noble Lord, Lord Pry's-Davies. What in fact is happening is that £103.3 million is spread over the whole of the country. That is made up of £13.3 million available to offset the cost of the damage caused by the severe weather of 16th October. A sum of £75 million is available for English health authorities; the rest is for Wales, Ireland and Scotland. I hope that that is helpful.
762 The noble Lord asked whether we had calculated how much more money would be needed completely to fund the health service. I regret that that is a totally unanswerable question. I have been at pains to point out over recent weeks that the more money and the more expensive operations that are conducted by the health service, the more the need for the health service grows, so that one is always running to stand still.
Both noble Lords asked about monitoring. We shall indeed know the number of beds that are occupied at any particular point in time—that is to say, three months back, because, as I explained, the figures are to be collected on a three-monthly basis—but we shall not be collecting the detailed numbers of the wards in use or indeed closed. As I understand it we have never in the history of the health service collected such things centrally.
As to whether the £75 million for the English health authorities means no more closures, the only people who can give your Lordships that guarantee are the people who actually operate the hospitals themselves, namely, the district health authorities. The purpose of that money is for it to go some way towards fulfilling their perceived need, which your Lordships have pointed out to me now over several weeks.
As regards the question of whether the new breed of managers is insensitive, I think that good managers have a habit of being somewhat insensitive. I can well understand that in some places this has come as a shock to some health service employees. But as regards whether we should have another inquiry into the management of the health service, I pointed out yesterday that we have had several reviews of the health service in recent years not the least of which was possibly the greatest one, the Griffiths Report, which came to resolution in 1984. I and my right honourable friend believe that another restructuring of the health service would be counterproductive. Therefore I shall not ask him for another such inquiry.
The 450 major projects that are currently being planned are scrutinised at the approval stage to make sure that they do not end up with empty unstaffed beds, because clearly there is no point in spending this enormous amount of money on capital improvements if it does not go directly to patient care once the projects are completed.
I am afraid that I became totally lost with the question of the noble Lord, Lord Kilmarnock, on the AIDS money and whether 19 into £40 million did or did not go. Perhaps he will either explain it to me again and I shall try to answer it or once I have read the Official Report I can write to him.

§ Lord Kilmarnock
My Lords, I am grateful to the noble Lord for that reply. I should be very happy if when he has read the Official Report he could write to me.

§ Lord Skelmersdale
My Lords, I am grateful to the noble Lord.
The waiting list project, although £5 million is mentioned in the Statement, has an allocation of £30 763 million in all for the next financial year as opposed to £25 million this year. This year we are expecting 100,000 people to come off the waiting list as a result of that expenditure. Clearly the number will be even larger next year. That is certainly not confined to the private sector. We shall look at any worthwhile scheme which the health authorities put up to us and which we regard as a going concern to take people off the waiting list.
I am extremely keen to see a real partnership between the public and the private sectors. One of the things which we need to know and which has not been made available to me by the health authorities is how much individual operations in the public sector cost, so that managers themselves can decide whether it is cheaper to carry out operations in the health service or contract them out to the private sector.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware that the reference by the noble Lord, Lord Prys-Davies, to the underfunding of the health service is to some of us a little difficult to reconcile with the accepted fact that expenditure on the National Health Service, even before the increases which my noble friend has just announced, is at the highest level ever? Can he confirm that that considerable achievement results from the good management of the national economy by the Government which has enabled them to maintain that large increase in provision for the health service at a level which is far higher than, with the best will in the world, Labour Governments were able to attain?

§ Lord Skelmersdale
My Lords, I am extremely grateful to my noble friend for giving me the opportunity to say that in 1986, 6.4 million patient treatments were carried out. More will be carried out in 1987. As a result of the figures that I have been able to announce to your Lordships today, even more will be carried out in 1988. The financial management of the economy is exactly why we can afford to spend those record amounts of money and get those record numbers of patient treatments.

§ Lord Hunter of Newington
My Lords, perhaps the Minister will consider in the future when giving information about the National Health Service to the House the practicability of giving three figures. The first is the figure for administration and whether it is increasing or decreasing. The second figure is that for public health and preventive medicine on which substantial resources have been spent in recent years. Thirdly, we need the figure for diagnostic and treatment services. That may not be practical. However, I think that those three figures are keys to the delivery of medical care. The third matter is the most important one for the ordinary person.

§ Lord Skelmersdale
Yes, my Lords, I listen with great respect to the noble Lord. As far as administration is concerned, I know that some 5.3 per cent. is spent on administration in the National Health Service. Any large business in the 764 private sector would be extremely proud of that. As far as costs for public health, preventive measures and diagnosis are concerned, I do not have the answer. I shall consider whether it is possible to get such figures and I shall refer to them as often as I decently can.

§ Lord Peston
My Lords, I am sure that everyone who is involved with health care will be pleased to hear about the extra £100 million, although I think that many will see it more as a sticking plaster than a fundamental intervention that is required to deal with a crisis. Perhaps the noble Lord can tell us, first, how the extra £100 million will actually be allocated between health authorities; secondly, where the extra £100 million is coming from; and, thirdly, whether the extra £100 million is a once-and-for-all allocation, which means that it will merely postpone the crisis, or can one rely on it to be next year's base.

§ Lord Skelmersdale
No, my Lords. The £100 million is the result of special circumstances which health authorities face this year, concerning which your Lordships have been advising me for the last few months. As far as the allocation of the extra money is concerned, I think it will be helpful to the House if I put that information in the Library. It is extremely complicated. The short answer to the noble Lord's question is that the money will be allocated as revenue allocations are made now.

§ Lord Peston
My Lords, perhaps I may interrupt the Minister for a moment. What I had in mind was whether the allocations were according to the present shortfall as seen in the accounts of the health authorities or whether they were going to be related to medical need in some more positive way.

§ Lord Skelmersdale
No, my Lords. It is done on the basis of existing allocations for this financial year.

§ Lord Auckland
My Lords, is my noble friend aware that this is a welcome Statement in many ways? Without attempting to turn to nurses' pay, which is one of the focal points of the National Health Service and is the subject of a future pay review, may I ask him in relation to the 400 major projects whether he is aware that casualty departments in hospitals are a major problem at the present time? Can he say what priority is being given to the provision of casualty departments in those new and major projects, particularly if they are large new district hospitals? In Surrey, where I live, there is a great shortage of adequate casualty departments in the area to deal with major accidents, say, on the M.25. Although we have not had a chance to see the figures, perhaps my noble friend can tell me what priorities the Government have in mind.

§ Lord Skelmersdale
My Lords, again I shall make a list available in the Library concerning the 400-odd major projects. Certainly casualty departments are included. So far as nurses' pay is concerned, I made the point to your Lordships the other day that this Government had set up the Nurses and Midwives Salary Review Body and had accepted every one of its four recommendations. That is not to say that I 765 can guarantee that there will be 100 per cent. acceptance of next year's recommendations. No Minister could say that because we do not know what next year's recommendations will be. However, I take my noble friend's point.

Lord Winstanley
My Lords, is not the most worrying aspect of this Statement—which all of us welcome, as my noble friend Lord Kilmarnock said—that what has recently been happening in the National Health Service appears to have taken the Government by surprise to such an extent that they are now establishing a new monitoring system—I welcome that—so that they will not be taken by surprise in the future? How does the Minister equate that with the fact that what has been happening in the health service recently is precisely what those working in it have been telling the Government was bound to happen? I plead most earnestly that Ministers will listen more carefully to what they are told by the people who work in the health service and in particular by the nurses.

§ Lord Skelmersdale
My Lords, I must reject the underlying theology of the noble Lord's supplementary question. It takes a phenomenally long time for the Government to wring money, first, out of the taxpayer's pocket, and, secondly, out of themselves. Although this Statement may come as a surprise to your Lordships, to my certain knowledge we have been working on it for some time.

§ Lord Underhill
My Lords, perhaps the Minister can clarify one point. Did he say that the monitoring exercise would not take account of the number of wards closed? Is that not the most vital information which we ought to have concerning wards which are not in use and the reason why they are not in use?

§ Lord Skelmersdale
No, my Lords. I do not think that it is the most vital matter. What matters to everybody is the number of beds. Whether they are in a whole ward or scattered through a hospital is not particularly pertinent.

§ Lord Ferrier
My Lords, can my noble friend assure the House that, despite this substantial and welcome boost which the Government are giving to the National Health Service, they will not relax their efforts to improve the service in terms of treatment and to economise by the acceptance of manipulative therapy under the health service? The economies could be substantial if the present progress is continued.

§ Lord Skelmersdale
My Lords, there is certainly no intention to interfere with the clinical judgment of the doctors whether in manipulative therapy or in any other way.

§ Lord Mulley
My Lords, did I hear the Minister correctly when he said that it took the Government a long time to get money from themselves? In this Government does not a decision by the Cabinet take immediate effect in the Treasury or is the Treasury a separate institution?

§ Lord Skelmersdale
My Lords, I should not wish to get into an argument with the noble Lord over Cabinet government because, as I understand the matter, he has been a member of a Cabinet and I have not. However, as he will know even better than I, it takes a long time for matters even to reach the Cabinet.

§ Lord Pitt of Hampstead
My Lords, there is one matter that worries me and I hope the Minister will not mind my putting it to him. We are in a difficult position now and it strikes me that from all that has been said we may find ourselves in a similar position next year. The Government were asked for £900 million and have given £700 million. The Minister need not tell me now but I wonder whether he could confirm that the sum of £700 million will meet the needs. That is my worry.

§ Lord Skelmersdale
My Lords, I have been at great pains over recent weeks to explain that "the needs" of the health service are infinite. It may be extremely difficult to answer the noble Lord's question, but if it is possible to find an answer I shall write to him.

§ Lord Pitt of Hampstead
My Lords, the Minister's answer covers the needs in a general sense. The £900 million was obviously not infinite; it was a calculated amount that the health authorities thought they needed. The Government are giving them £700 million; therefore the Government start with a shortfall of £200 million. All I am asking is for them to try to justify it.

§ Lord Skelmersdale
My Lords, any organisation always wants more from the bank. It is a salutary experience not to receive the full amount from one's bank because it means that one has to try harder.