NHS: Additional Resources (Hansard, 22 June 2000)

§ The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath)
My Lords, it is not the case that the additional resources provided are being used to clear past deficits. The new resources will help the NHS achieve financial stability and provide additional services as part of the Government's agenda to develop the NHS.

§ Lord Clement-Jones
My Lords, I thank the Minister for that reply. In light of the fact that we expect shortly a new national plan for the NHS, it is vital to be clear about the state of NHS finances. It is estimated that the current accumulated deficit of the NHS is between £500 million and £1 billion. If, as the Minister states, the deficit is not being paid off by the new resources, how is it being paid off? Was it paid off last year by cutting services?

§ Lord Hunt of Kings Heath
My Lords, no. The £1 billion, to which the noble Lord refers constantly, is, as I have said on many occasions, a gross over-estimate. The fact is that the accumulated deficit to which he refers is not a debt payable on demand. It is a product of good accounting practice that requires the NHS to recognise future liabilities. Much of that liability arises in relation to potential clinical negligence liability.
As regards the position this year, the injection of the first £600 million of extra resources will ensure that we have financial stability, meet identified pressures and develop services for the public.

§ Baroness Gardner of Parkes
My Lords, can the Minister tell us how many individual trusts and health authorities are in deficit?

§ Lord Hunt of Kings Heath
My Lords, the position with regard to individual organisations for the past financial year will not be clear until the autumn when we have their accounts fully to order. I understand that at the end of the last financial year, the deficit is estimated to be approximately £200 million. But we need to put that in perspective. The amount of additional resources that we are putting into the health service this year is £1.424 billion.

§ Lord Clark of Kempston
My Lords, does the Minister agree that, if the debts remain, presumably those trusts are paying interest on them? That decreases the amount of money available for health services. If there is a debt it is surely good accounting practice that some plan should be evolved in order to eliminate that debt and the liability for interest?

§ Lord Hunt of Kings Heath
My Lords, I thought that I had made it clear that the accumulated debt to which the noble Lord, Lord Clement-Jones, refers is not a debt payable on demand but an understanding that we have to recognise potential future liabilities such as clinical negligence.

§ Lord Swinfen
My Lords, what is the position when no allowance is made for future payments which might have to be made? What is the actual financial position of the National Health Service?

§ Lord Hunt of Kings Heath
My Lords, the financial position of the NHS is healthy due to the resources that we have put into the health service as a result of the last Budget. In terms of the announcement made in the Budget for the financial years 2001–02 to 2004–05, the additional resources amount to 6.3 per cent real term growth. At the end of that four-year period, that will allow the health service to have grown by an additional one third in real terms. That surely is the point. That is the recognition which the Government have demonstrated in their additional finances for the health service.

§ The Countess of Mar
My Lords, is the Minister saying that it is a paper debt rather than a real debt? If that is so, what is the National Health Service doing to make doctors safer and so reduce prospective claims for clinical negligence?

§ Lord Hunt of Kings Heath
My Lords, the noble Countess is right to refer to the worrying rise in clinical negligence liabilities. This has to be tackled in a number of ways: by the strengthening of clinical governance, as we have done; and the combined effect of the establishment of the Commission for Health Improvement and the National Institute for Clinical Excellence which will help to drive up standards.
I refer also to the new statutory duty of quality on the chief executives of NHS trusts which ensures that the chief executives and the boards have responsibility 422 not just for management and financial issues, but for the overall quality of service within an individual NHS organisation.

§ Lord Crickhowell
My Lords, does the financial information that the Minister gave us apply to England, or to the health service in England, Scotland and Wales? We had an Answer yesterday indicating that the noble Lord was not responsible for Wales. We should be able to ask questions concerning the health service as a whole and to be clear on whether the answers represent only part or the whole of the United Kingdom.

§ Lord Hunt of Kings Heath
My Lords, the answers I have given today relate to England because that is my responsibility.

§ Earl Howe
My Lords, the Minister was unable to give a precise answer to my noble friend Lady Gardner. Has the noble Lord figures for the previous financial year?
Is the noble Lord aware that the Answer he gave to the noble Lord, Lord Clement-Jones, will baffle many people. Has the Minister read, as I have, interviews with doctors from numerous PCGs around the country all telling the same story: that a large part of the £600 million which the Secretary of State said would tackle waiting lists, winter pressures and prevent bed blocking has been swallowed up by paying off hospital debts? How does he explain those statements?

§ Lord Hunt of Kings Heath
My Lords, that is not the case. Some of that £600 million has been used to fund the provision of care which might have been financed from running up debts because of the pressures on the health service. However, the additional resource has enabled agreement at local level as to how those services are to be provided. It has also enabled us to meet identified pressures for the winter and to develop many of our services.
I think that noble Lords are being somewhat churlish in relation to the issue when one considers the extraordinary amount of additional resources that this Government are putting into the National Health Service.