Policy Achievements (Hansard, 24 May 1984)

§ Mr. Fowler

On health matters we have supported a National Health Service which is now treating more patients a year than ever before. This objective has been achieved by providing increased resources; taking steps to increase efficiency; and developing a more modern Health Service better fitted to care for the sick and responsive to changing demands.

2. The increased level of service provided is shown by the facts that, between 1978 and 1982:

— half a million more inpatient and day cases were treated;
— over 1¾ million extra outpatient and emergency cases were treated;
— 465,000 more people were visited at home by district nurses and health visitors;
— there were 840,000 more attendances at clinics for the under-fives;
— the number of coronary artery bypass grafts increased by 90 per cent.;
—total hip replacements increased by 30 per cent.; and
— a 66 per cent. increase in patients receiving treatment for end-stage renal failure (including a 23 per cent. increease in kidney transplants).

3. This increase in performance has been supported by record spending on the Health Service. Total spending has increased from £6½ billion in 1978–79 to over £13½ billion in 1984–85. This represents an increase against inflation of more than 18 per cent. and has allowed real growth in NHS resources of about 8 per cent.—more than enough to meet the growth in demand resulting from the increasing numbers of elderly people. Capital spending has been increased following a cut of one third under the previous Administration. As a result, 142 major new health building schemes are being designed or are under construction in England alone; and health authorities are planning developments worth over £1,100 million.

Against the background of this financial support, we are seeking to achieve better value for money spent in the Health Service. A key first step was to simplify the formal structure o the health service by abolishing area health authorities and the legislation currently before the House to establish independent family practitioner committees accountable to me. Many other changes are in train to achieve clearer accountability and better management within the Health Service. These include:

— annual accountability reviews by Ministers of the performance of regional health authorities so that objectives can be set and their achievement monitored. The review process has now been extended to districts and is also to be applied at unit level;
— nine Rayner-style scrutinies on particular aspects of Health Service activity. The scrutinies have shown scope for considerable savings by better management and more effective use of resources;
— the development of performance indicators to enable health authorities to compare their services with those provided by other authorities;
— a major review of NHS information requirements and systems;
—a report on the disposal of underused and surplus land and buildings following which health authorities are to re-examine their property holdings to free resources for patient care;
— the establishment of the supply council to get better value from the procurement activities of the Health Service;
—competitive tendering for hospital support services to test their cost-effectiveness;
—better arrangements for the planning and control of manpower so that the overall level of staff employed in the Health Service has levelled out. None the less, by September 1983 there were 6,500 more doctors and dentists and over 45,000 more nurses and midwives than in September 1978.

4. In addition, the management inquiry, under Mr. Roy Griffiths, has recommended, inter alia, the development of the general management function within the Health Service. I shall be announcing shortly the means by which this is to be achieved I have already established within my Department a health services supervisory board and a NHS management board is being set up to focus the Department's responsibilities in relation to the Health Service. A chairman for the management board is being recruited by open competition and the selection of a personnel director, also from outside the Civil Service, will begin shortly.

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5. The improvements in management and efficiency we have set in hand are directed at enabling a better quality of service for patients. Apart from developments in acute services mentioned above, progress has been made towards the development of the priority services identified in "Care in Action":

— a 51 per cent. real increase in joint finance between 1978–79 and 1984–85 to support a shift to providing care for people in their own communities;
— legislation to make joint finance funds available for educational and housing projects;
— Government funding for projects to move long-stay patients out of hospitals and provide homely accommodation for mentally handicapped children in the community;
— a 35 per cent. real increase in the value of DHSS grants to voluntary bodies and new central initiatives involving the voluntary sector such as the successful "Opportunities for Volunteering Scheme";
— the first major legislative reform in the field of mental health since 1959, including the setting up of a new Mental Health Act Commission;
— the establishment of the Rampton hospital review board;
— the establishment of three experimental NHS nursing homes and measures to improve standards in residential homes for elderly people;
— an initiative to promote fresh voluntary projects for under-fives.

In addition to these achievements, we have seen a reduction of over 25 per cent. in perinatal mortality between 1979 and 1982; reductions in cigarette smoking; the development of intermediate treatment for young people in trouble; central funds to improve primary care in inner cities; central grants for projects to tackle drug abuse; new campaigns on rubella immunisation and transplant donor cards; and measures to combat glue sniffing and alcohol misuse.

6. Apart from the statutory services, we have assisted the development and expansion of the private sector of health care. The compulsory phasing out of pay beds from NHS hospitals has been ended and we are working to encourage closer co-operation between the NHS and private hosptials. About 4.5 million people now choose to cover themselves with private medical insurance, providing a useful supplement to the total sum of health care and relieving pressure on the National Health Service.

7. On social security, we have more than honoured our pledge to maintain the real value of pensions and other long-term benefits. Between November 1978 and November 1983 pensions were raised by 75 per cent. while the retail price index rose by 69 per cent. Pensions are now uprated in line with the actual movement in prices—an improvement on the forecast method which was previously used and which led to inaccuracy and uncertainty. The Christmas bonus for pensioners, which was not paid in 1975 or 1976, has been made permanent through an Act of Parliament. Steps have been taken to help early retirement by providing men over 60 with the long-term rate of supplementary benefit if they are sick, disabled or unemployed.

8. We have fully protected the value of war pensions and war widows' pensions and have maintained the preference over the civilian pensions. War widows' pensions and allowances are no longer taxable. A new mobility allowance for war pensioners has been introduced and higher rates of benefit are paid under the new scheme.

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9. For families, child benefit and one-parent benefit have reached their highest ever value in real terms. The real value of family income supplement has also been increased.

10. Expenditure on cash benefits to the long-term sick and disabled has increased by about 30 per cent. in real terms since 1978–79. Significant improvements in the benefits have been made:

— mobility allowance has been made tax free and increased by 90 per cent. in cash;
— the earnings limit for invalid care allowance has been doubled;
— there has been a real increase in the therapeutic earnings limit for those on incapacity benefit
— the "invalidity trap" has been removed;
— the proposed severe disablement allowance will end the controversial household duties tests and initially bring an extra 20,000 people into benefit for the first time;
— the scope of the industrial injuries and occupational deafness schemes have been extended.

11. The supplementary benefit scheme has been put on a firm legal footing on the basis of published regulations and publicly available guidance of staff. Substantial improvements in benefits have taken place:

— an increase in the amount of savings people on supplementary benefit can have while still drawing, full benefit; and a new disregard for the surrender value of life insurance policies;
— a reduction in the qualifying period for the payment of the long-term scale rate from two years to one;
— increased help in meeting fuel costs, now amounting to nearly £400 million a year, and the automatic payment of heating additions to those aged over 70 and to families with a child under 5;
— equal access for men and women to supplementary benefit;
— a tapered earnings disregard for single parents.

12. The changes listed above, while important in themselves, illustrate the complexity and broad compass of the social security system on which total spending is now some £37 billion a year. In view of this, I have set in hand a substantial examination of the whole system. Four major reviews are now under way. Of these, my inquiry into provision for retirement has already made substantial progress and is beginning to lead to firm proposals for change in one part of its remit, the field of occupational pensions. My ministerial colleagues, my hon. Friends the Member for Brent, North (Dr. Boyson) and for Braintree (Mr. Newton), are now embarking on reviews of benefits for children and young people and of supplementary benefit respectively. In addition, Mr. Jeremy Rowe will be leading a small team to review the housing benefit scheme. The objective of the reviews will be to secure a more effective use of the resources provided through the social security programme to examine the scope for simplifying the schemes in order to increase their comprehensibility for the staff and claimants and to ensure that resources go where they are most needed.

13. Within my own Department, I am also working to achieve greater efficiency. Although there has been a steady increase in work load, the staff at the Department as a whole has been reduced from over 98,000 in 1979 to less than 90,500 in April 1984. This is evidence of greater efficiency and effectiveness particularly in the social security organisation where we have reduced the number of regions from 12 to seven, implemented a programme of devolution of work, reorganised internal audit to increase efficiency, and introduced a system of budgetary control for certain adminstrative expenditure. For the longer term, we have published consultative proposals for 501W a social security operational strategy which will make full use of computerised information at national and local level to improve services for the public. In the Department's headquarters, I have instituted a management accounting system which seeks to clarify organisational objectives and monitor their achievement. At the same time, the headquarters staff of the Department has been reduced by 20 per cent. since 1979.