HL Deb 08 February 1994 vol 551 cc1495-7

2.50 p.m.

Lord Howell asked Her Majesty's Government:

Why the weighted capitation formula is being adjusted, thereby depriving health authorities in areas of deprivation of the funds necessary to treat illnesses arising from such deprivation, and whether they will state the amount of such reductions, which will affect Birmingham, London, Liverpool and Manchester.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege)

My Lords, a review of the weighted capitation formula is nearing completion with the prime purpose of improving its sensitivity. It is likely that the recommended formula will include variables linked to deprivation.

Lord Howell

My Lords, that reply is very welcome. Does the noble Baroness agree that the present system is likely to deprive Birmingham of £29 million next year because of the three elements of a ridiculous formula: first, the 1991 census, which is out of date; secondly, an amount of money related to the age of everybody living in the area, ranging from £1,000 for babies and people over the age of 85 to £250 for people aged 45 to 65, a large group in which deaths unfortunately occur; and thirdly, a lunatic accountancy exercise built into the system and called the standard mortality rate which, your Lordships will be interested to hear, consists of taking the actual deaths in the area, dividing them by the expected death rate, multiplying that figure by 100 and then taking its square root? Could there be a more ridiculous and lunatic way in which to finance our hospitals?

Baroness Cumberlege

My Lords, the noble Lord is absolutely right; it is a very complicated formula. Indeed, I believe that Lord Palmerston would have found it simple compared with the Schleswig-Holstein question. It is very complicated. That is why we are trying to simplify it.

Lord Dean of Beswick

My Lords, is the Minister aware that, whatever the system used to apportion resources, the city of Manchester comes right at the top of the list of health deprivation? Expectation of death at birth in Manchester is the highest in the country. Deaths before the age of one are also the highest. In the case of coronaries, among both men and women the expectation of survival is the lowest in the UK. Is it not time that a formula was found to target increasing resources in areas like Manchester which appear on a list of shame I have before me?

Baroness Cumberlege

My Lords, I should like to reassure the House that this year Manchester will receive an increase in funding. I take the noble Lord's point on deprivation. That is why we have commissioned work with York University to see whether we can find a more sensitive formula.

Lord Molloy

My Lords, I acknowledge the replies the noble Baroness has given. She has obviously studied the situation. However, does she not agree that deprivation and the illnesses caused by deprivation are among the saddest examples of what some British people are suffering? People should be protected from deprivation in the first place. Those who are deprived should, more than anyone else, be protected from appalling illnesses. Does the noble Baroness agree that if there is one area where we should not reduce finance it is this particular one?

Baroness Cumberlege

My Lords, there clearly is a link between poverty and health, including housing, unemployment and of course income. But that is true of every country in the world. We are tackling the problem with the Health of the Nation strategy. Some diseases, for example breast cancer, afflict the wealthy population more than the poor. So there are variations.

Baroness Jay of Paddington

My Lords, can the Minister confirm that the work being done with York University on increasing the sensitivity of these very complicated methods of coming to resource decisions will include the very serious concerns of many health authorities in inner city districts about, for example, the problem of the homeless and under-weighted capitation and, even more, the problem of the increasing number of the mentally ill within that population?

Baroness Cumberlege

My Lords, those are all aspects which the University of York is taking into consideration in studying the formula. The university will report to Ministers in March.

Lord Howell

My Lords, will the Minister agree to add to whatever York University does, which we welcome, the proposition that the best way to finance hospitals is to start by asking them how many patients they treat every year and proceed to allocate finance on the basis of the work they do?

Baroness Cumberlege

My Lords, with the internal market one of the factors now being taken into consideration is the number of patients who are treated in hospitals. I should say to the noble Lord that hospitals are not the sum total of the health service. We are trying to put more and more money into primary care and the prevention of sickness and ill health. That is where the capitation formula, which is based on populations, is so important.