§ Mr. Woodasked the Secretary of State for Social Services how he proposes to distribute resources to health authorities in 1986–87; and if he will make a statement.
§ Mr. FowlerCurrent spending on the hospital and community health services in England will increase by £650 million to nearly £10.3 billion in 1986–87, an increase of 6.7 per cent., or 2.2 per cent. more than forecast inflation. I am today informing regional health authorities how this extra cash is to be shared out.
I am continuing the policy of redistributing resources between different parts of the country. Those regions which have historically received less than their fair share of resources or which have rapidly growing populations will receive the largest increases, ranging up to 8 per cent.
In addition, all regions will retain the benefits of their growing cost improvement programmes. These are planned to amount to £150 million in the current year. and we expect to see further increases in 1986–87. The Thames regions, with their higher unit costs, have delivered higher levels of cost improvement than elsewhere in the country and I expect them to continue to do so.
The capital allocations to regions will be 4.5 per cent. higher overall than this year, and will be distributed mainly under the RAWP process. Regions will be able to supplement this cash by the proceeds of sales of surplus land and property, which they will be able to retain. Receipts are already running at £50 million a year and we expect them to rise very substantially. Taken together, the cash increase and increased receipts from sales will enable health authorities to carry through major programmes of investment in hospitals and community services.
Regions' revenue increases and capital allocations under RAWP are shown in the table.
The decisions on 1986–87 allocations reaffirm our commitment to distributing resources more fairly across the country. Substantial progress has been made since the arrangements recommended by the resource allocation working party (RAWP) were introduced in 1977, and next year all but the two North Thames regions will be within 4 per cent. of their target share of resources. As regions move closer to their targets it becomes increasingly important that the targets are themselves a reasonably accurate measure of need. I have therefore asked the NHS management board to review the operation of the formula, in particular the way in which relative needs in different parts of the country are measured, taking account of such factors as the patterns of illness across the country, and the special problems of the inner cities.
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Health Authority Resource Distribution 1986–87 Regional Health Authority Revenue Increase Per cent. Capital RAWP Share £ million Northern 6.7 36.8 Yorkshire 6.8 49.5 Trent 7.7 55.1 East Anglian 7.7 22.1 North West Thames 5.7 37.0 North East Thames 5.7 43.0 South East Thames 5.8 43.6 South West Thames 5.8 33.7 Wessex 7.7 46.6 Oxford 7.3 25.1 South Western 7.0 45.5 West Midlands 8.0 76.5 Mersey 6.0 28.5 North Western 6.4 62.3 TOTAL 6.7 605.3 Notes:
1. The total capital allocation to regional health authorities in 1986–87 is £683 million, including dental hospital re-equipment; inner cities bias; strategic shifts; 35 per cent, teaching hospital support; and the health authority central fund.
2. Cash figures are subject to Parliamentary approval of the Department's estimates.