Mike O'Brien (Minister of State (Health Services), Department of Health; North Warwickshire, Labour)

I shall, but I was just going to go on to the hon. Gentleman's precise point, so I shall happily give way in a moment.

The hon. Gentleman's point was about the formula, and the independent Advisory Committee on Resource Allocation is made up of GPs, NHS management and academics. It developed the fair funding formula to determine each PCT's share of resources, and the new funding formula has been used for the 2009-10 and 2010-11 allocations. It takes account of the new information and builds upon and improves the previous formula so that it continues to meet the objectives of equal access for equal need and the reduction of health inequalities. The review leading to ACRA's recommendations was comprehensive and led to important changes.

When a new funding formula is introduced, the distance between a PCT's target allocation and its actual allocation will change. Its actual allocation may move from being over-target to under-target or vice versa; it all depends on the relative need of the PCT's population, as determined by the new formula. A change in target allocation does not mean that a PCT loses out—far from it; the new formula affects a PCT's funding target and not, initially, the money that it actually receives. We are committed to moving PCTs closer to a fairer share over time.

I know that the hon. Gentleman feels that his local PCT should have been moved more quickly towards its target, and that is a fair point. However, there must always be a need to balance continuity and stability in NHS funding. If a PCT is under-target, it will benefit from higher growth than others. The amount that local PCTs, such as his, receive will increase at a higher rate than it will for those that are in the opposing position and being paid over-target.

What matters is not the distance from target but the levels of increased actual funding. I know that there is a historical issue as a result of the very issues that the hon. Gentleman raised, but to rectify any alleged underfunding would effectively mean reopening all the previous allocation rounds, and we are not in a position to do that. We must recognise that we are where we are and have to have a fair and reasonable funding formula for the areas to which it applies. Furthermore, we must not in any way undermine the stability of NHS funding and long-term planning, either in areas such as his, which benefit from the new criteria, or in areas that do not receive the increase that, up to now, they had expected.

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