§ Mr. Meacherasked the Secretary of State for Social Services what has been the percentage cumulative growth of National Health Service expenditure each year since 1979 (a) in retail price index terms, (b) in terms of National Health Service pay and prices and (c) after taking account of the annually growing demand for health services; if he will give actual expenditure figures each year both in current and constant price terms in accordance with each of these three criteria; and if he will state the level of planned expenditure savings each year, both in current and constant price terms, together with the evidence on which these expenditure savings claims are based.
§ Mr. Hayhoe[pursuant to his reply, 6 February 1986, c. 217]: The tables following provide the information for 206W which the hon. Member asked at (a) and (b) but it is not appropriate to measure NHS expenditure by reference to movements in the retail price index; the appropriate measure of inflationary pressures in the economy as a whole is the GDP deflator.
Percentage cumulative growth of National Health Service Expenditure since 1979–80 in retail price terms in terms of National Health Service Pay and Prices 1980–81 +12.2 +2.5 1981–82 +12.8 +5.3 1982–83 +14.9 +7.0 1983–84 +16.2 +7.9 1984–85 +18.5 +8.9
Expenditure in the National Health Service £ Million Cash expenditure* in retail price terms (1984–85) in terms of National Health Service pay and prices (1984–85) 1979–80 7,630 11,651 12,678 1980–81 9,954 13,070 12,999 1981–82 11,162 13,138 13,356 1982–83 12,177 13,383 13,569 1983–84 12,887 13,544 13,683 1984–85 13,805 13,805 13,805 1985–86 14,607 † † * Expenditure figures adjusted to reflect classification changes following the establishment of the NHS Management Board and the changed status of Family Practitioner Committees.
† Not yet calculable.
Part (c) of the question cannot readily be answered on comparable basis. Expenditure on family practitioner services has been increased on line with demand. As for hospital and community health services, it is estimated that between 1979–80 and 1985–86 demand has risen by 4 per cent. as a result of demographic changes. These services have also accommodated the effects of medical advance. They have done so by improved efficiency, a factor which with authorities' growing cost improvement programmes is playing an increasing part also in developing services and remedying existing deficiencies. Such improvements are not, as the question implies, expenditure savings, since more clinical activities are enabled to be financed from a given level of resources. The following table presents the estimated efficiency savings and planned cost improvements that have been achieved since 1981–82. 207W
Health and Community Health Services Cost Improvements £ Million Cash equivalent in terms of Retail Price Index (1984–85) in terms of HCHS pay and prices (1984–85) 1981–82 15 18 18 1982–83 25 27 28 1983–84 42 44 44 1984–85 107 107 107 1985–86 150 * * * Not yet calculable.
The figures for 1981–82 and 1982–83 are taken from regional health authorities' reports on cash savings achieved. In 1983–84 all RHAs were expected to achieve efficiency savings of some 0.5 per cent., but my Department did not call for detailed reports of achievement. From 1984–85 it has been the practice that RHAs agree cost improvement programmes before the year begins and report on their achievement. The totals planned for 1984–85 were delivered and those for 1985–86 are on course.