It is my sad duty tonight to raise the matter of the closure of a hospital in my constituency. The hospital is known as St. Olave's hospital. It is in the heart of my constituency and I was its chairman for 14 years, from 1950 until 1964.
It was previously an old infirmary, and when the National Health Service came into being I was appointed by Aneurin Bevan as the chairman. I pay tribute to those who were colleagues of mine at that time. They worked very hard. We had reasonable funds and we rehabilitatated that hospital to the credit of the constituency. Down those years it has become for me a personal matter and one that I hope the House will understand.
It has faithfully served the local people and has been a progressive hospital. It readily recognised that the needs of Guy's hospital—one of the great teaching hospitals of London—were paramount and opened its doors to Guy's. It was very unusual for a general hospital to do that. We opened our doors to Guy's and its people came in to St. Olave's. Its students were able to gather there all the great teaching materials of that day and age. For years we had a happy relationship with Guy's hospital.
St. Olave's also did another unique thing. It opened its doors to mentally ill patients. It was the first general hospital in the country that agreed to open its doors to receive psychiatric patients. We were asked to do it because it was pointed out at that time that those types of patients would not go to what was called "Bexley"—it was known as the asylum—but would come to a hospital like St. Olave's because it was a general hospital.
I remember very well that we had a discussion on what we should call the hospital. It was suggested, after argument, that it should be called a psychiatry unit. I said "Don't do that, because I can't spell psychiatry' ". It is the silliest word I ever heard anyway. My colleagues then said that we should call it a mental health hospital, but I said that that would defeat the objective.
So we settled on the title of "day hospital" and for a considerable time mental patients were admitted and a brilliant job was done. I hope that I have made it sufficiently clear that this is not a parochial, insignificant hospital which does not cater for the wider aspects of medicine. We have co-operated with a teaching hospital and with psychiatrists. We did even more. Out of our own budget—I well remember that it caused great hardship—we also opened what is known as the New Cross hospital. The hospital has a history. I hope that it has a future.
Others took my place in 1964 and did an equally good job. They did a magnificent job. In 1975 the present Secretary of State for Industry presided over the reorganisation of the Health Service. It was a tragedy. That was said at the time and it has been confirmed. Until the reorganisation, hospitals such as St. Olave's stood on their own two feet and had their own budgets. Teaching hospitals had their own budgets separately, because their demands were different.
I hope that I do not sound too bigheaded, but I was not only chairman of the hospital management committee, I was a member of the board of governors at Guy's hospital and a member of the regional hospital board. I saw the events all the way down the line. I saw the heartaches, the problems and financial troubles of the teaching hospitals, which are different from those at St. Olave's.
When the right hon. Member for Down, South (Mr. Powell) became Minister of Health, he set up a committee under Professor Guillebaud to investigate the entire financing of the hospital board. That was before the right hon. Member for Leeds, North-East (Sir K. Joseph) starting mucking about. Guillebaud said that the financing of the hospital service was a credit to the nation. I gave evidence to his committee. He said that he found it incredible that, under the sub-heads, we had been able to control finance almost to shillings and pence. However, that was not enough for the right hon. Member for Leeds, North-East. He could not leave well alone. He changed the whole structure. He introduced an area health authority—and that is the key to the trouble. The area health authority embraced Guy's, Kings, St. Thomas' and Lewisham, all of which are great teaching hospitals. St. Olave's was submerged in that group. Surprise. surprise—funds became uncontrollable.
This Government came into power in May and they found that there was vast overspending. We knew that when we were in Government. The overspending totalled about £5 million. The Government said that the health authority must make some economies. I understand that the authority was not anxious to do that, so it was sacked. In its place commissioners were appointed—Sir Frank Hartley and his colleagues—whose terms of reference were to make economies. In my district, the Guy's district, they were asked to find savings of about £1½million. They accepted the terms of reference. I am not here to attack Sir Frank. It would be callous to take advantage of the privilege of the House. I have told him to his face what I think. It was wrong to accept such terms of reference.
Sir Frank and his commissioners have never seen my hospital. I hope that I may be forgiven for calling it my hospital. They know nothing about it. However, they took advice from the district management team, which said that there was only one way to make economies of £1½ million, and that was to close a hospital The hospital to be shut down, it was said, for reasons best known to them, was St. Olave's hospital. The decision was made to close St. Olave's. I can only say that, when the news broke, we could not believe it. This is a 230-bed hospital. The community health council had continued the magnificent work that had gone on. Every ward had been upgraded. Every bed was a credit to any hospital. There were a first-class operating theatre and first-class kitchens and X-ray facilities. There were a happy staff and good co-operation with Guy's. The psychiatric patients were well cared for. Every bed was occupied. And they decided to close it. To find £1½ million, there had to be a closure, it was said.
It was said that it was to be a temporary closure. I could not believe that this was a serious move. I have met the Secretary of State and Sir Frank Hartley on two occasions. I have been received with courtesy. I have argued the case. What in heaven's name is meant by the word "temporary"? When is this hospital to be reopened? What indication is there that it will be reopened? It was decided to close St. Olave's hospital to save approximately £640,000 by 31 March. That figure is phoney. I challenge it. It is a lie. It was put forward on the basis of "Shut that down, and that is what you will save". But things do not work like that. The stair at that hospital will have to work somewhere else, at Guy's or New Cross.
It will cost £150,000 a year to maintain the empty hospital. What about that? I am talking to a representative of a Government who believe in monetarism. We had better have some economic common sense and not just emotion. Can anyone justify the closing of a hospital in first-class condition when there is a crying need for the type of care it provides and when the annual cost of keeping it closed is £150,000? Perhaps some of those involved in this decision, including the commissioners and the Secretary of State and some of his colleagues, should be psychiatric patients. I cannot believe that anyone could be so crazy as to talk in this way.
Let us see what has happened as a result of this move. Patients have been taken from St. Olave's and have been crowded—there is no other word for it—into Guy's. The psychiatric patients have been put above the surgical block. There is grave concern there. What have they done with the old people? The geriatrics have been put into New Cross hospital and they have had to find money to rehabilitate wards there. Yet at St. Olave's the wards are empty—and every ward there has been upgraded. Now who is barmy? Who is stark raving mad on the economic argument?
Is the Minister intending to repeat the argument about the saving of £640,000? That is wrong. We all know that those figures were based on certain assumptions which have not been realised. The problem arose when a wider area was created. I have stated publicly that I do not support the area health authority concept. It was too big. I have always wanted a much smaller unit, something like we had before, when matters could be controlled at district level. To blame St. Olave's for the blunder of a previous Minister in creating a wider distribution of control, which makes financial control impossible, is crazy.
The argument based on the resource allocation working party formula is false. A hospital such as Guy's, which is one of the greatest teaching hospitals in the world, does not receive patients merely from its own district. As a former member of the board of governors, I know that it specialises in the treatment of liver complaints and heart complaints and does such surgical work as transplants. It does not refuse to accept patients because they come from outside the district. It accepts patients from Kent, Surrey, Essex, or wherever. The formula which has been applied ignores the fact that the vast majority of patients treated at such a hospital do not come from the immediate district.
This is a very sad story. St. Olave's has a large number of geriatric patients. Many of my constituents are advanced in years. St. Olave's has done a magnificent job for such people. It constructed another ward at a cost of about £40,000 for geriatric patients who are mentally ill. Yet the ward has not been opened, because of the commissioners' decision that the hospital had to close. It is a scandal.
It is hard to persuade the press to take up stories like this. A picket line has been on duty for 24 hours a day. It has been an extraordinary picket line in that it has been picketing to keep the patients in and has been letting supplies through. It is one occasion in relation to a picket line when the press cannot sneer at the trade unions. This hospital is being penalised and the interests of the patients are being subordinated to the desire to make cuts.
I do not want to make any party political points. I understand the argument about the £5½ million. I am not saying that the commissioners are evil or that the Secretary of State is a bad man. I am simply pleading for economic sense. This hospital is brilliantly equipped. We must talk about what job it should do. Do not let the Minister start arguing with me from a brief supplied by people who are almost as ignorant as the commissioners—they have not been down there. Let not the Minister try to justify the closure to people who know what it is all about. The Minister should say that, although these proposals were made, the Government will now make it possible for the hospital to carry on with its good work and that all the issues can be discussed. I am willing to play my part.
I must congratulate the right hon. Member for Bermondsey (Mr. Mellish) on the balanced and responsible way in which he has conducted his campaign on behalf of his constituents to prevent the temporary withdrawal of in-patient services at St. Olave's hospital. Both my right hon. Friend the Secretary of State and my hon. Friend the Minister of State were very impressed by the sincerity and depth of feeling that he displayed at his separate meetings with them on this subject, a feeling that he has displayed again this evening. No one who has heard the right hon. Gentleman speak about this hospital, with which he has been so long associated, could doubt his devotion to the hospital, its staff and its patients. I congratulate him on the time and energy that he has devoted to it.
Throughout his speech the right hon. Gentleman referred to "the closure". As I shall explain later, the hospital is not being closed.
It is appropriate that St. Olave's should be discussed here. I am told that the floor of one of the blocks of St. Olave's which was damaged in the war was salvaged and used in the rebuilding of this Chamber. The right hon. Gentleman may have been standing on a piece of St. Olave's when he so eloquently put the case for keeping the hospital open.
I am sure that it will be helpful to the House if I explain in some detail how the decision to cease in-patient services at St. Olave's came to be taken, even though this means going over some of the ground already covered by the right hon. Gentleman.
When we came into office last May, we found that the Lambeth, Southwark and Lewisham area health authority had overspent on its 1978–79 allocation by over £4 million and that, even though it was not required to refund that sum in the current year, it was heading for another massive overspend in 1979–80.
At the beginning of August my right hon. Friend issued a direction removing from the members of the authority all the powers and functions exercised by them, and shortly afterwards appointed five commissioners to manage the area. The House will realise that these decisions are now the subject of action in the courts and it would not, therefore, be proper for me to discuss them further now.
Having taken the trouble to appoint commissioners with a wide range of experience and with the personal qualities required to discharge the great responsibilities given to them, my right hon. Friend would be very reluctant to interfere in the decisions that they have to take or the way in which they set about conducting the business of the area. It would be wrong in principle and unworkable in practice if Ministers were to insist on reviewing particular decisions in the area when all the measures taken to reduce expenditure need to be interrelated. We certainly could not attempt to plan the area's services from the Elephant and Castle—even though we actually work in its domain.
The commissioners are required to bring the spending of the area under control and to ensure that money which has not been allocated is not spent.
The commissioners have said that they cannot and will not discuss this matter with me and my friends because they are under instructions from the Secretary of State. Now the hon. Gentleman is saying that the Secretary of State will not interfere with the commissioners. It all adds up to nothing being done by anybody. Will somebody please give an instruction?
The right hon. Gentleman has not got it straight. My right hon. Friend has made it clear that the commissioners must manage within the money that has been made available to them. We have gone on to say that how they achieve their targets is up to them and that we will not interfere in their management decisions. I see nothing inconsistent in that approach.
When the commissioners took over the area on 6 August, the total estimated deficit was of the order of £5 million on a total budget of £132 million, and firm and immediate action was required to redress this, particularly as several months of the financial year had already passed.
The commissioners decided to approach the problem on an area basis, requiring each of the four health districts to contribute to the whole. As a first step, they enforced "housekeeping" economies, such as the vigorous review of all vacancies and the use of agency staff; a reduction in overtime levels; an urgent review of existing and proposed bonus schemes; a reduction in catering costs and a review of charges to staff for meals; measures to ensure that all income owing to the commissioners was properly received; a reduction in cleaning and other domestic support services; and a continuation of a freeze on management costs. They also decided that patient activity levels should not exceed those obtaining in 1977–78 and in certain cases should be reduced below that.
Those measures were insufficient to achieve the financial savings required. The commissioners, therefore, decided upon additional economies, including the temporary closure of the in-patient services at St. Olave's hospital. They also decided that there should be a general reduction in district acute services, which will bring provision more into line with the decline in the population of inner London in recent years.
The beds in the Guy's health district allocated for acute specialties are being reduced from 875 to 763 beds—a reduction of 112 beds. No reduction is proposed in the number of beds used for obstetrics. Neither are any reductions proposed in the beds allocated for the elderly, mentally ill, younger chronic sick and children.
As part of this overall reduction in acute beds, the 223 beds located at St. Olave's hospital are to be reduced to 182 and these can be accommodated at Guy's and New Cross hospitals by opening additional wards. The general medi- cine beds are to be transferred to Guy's and New Cross hospitals, the general surgery beds to Guy's hospital, the psycho geriatric beds to New Cross hospital, and the psychiatric beds to Guy's hospital.
The original proposal was that the general surgery beds at St. Olave's would be transferred to Guy's and New Cross hospitals, but the operating theatres at New Cross are in need of repair, and all the general surgery beds will now, initially, go to Guy's. To facilitate this, the 24 geriatric assessment beds at Guy's will be transferred to New Cross hospital. I hope that that is now entirely clear to the right hon. Gentleman.
There is a firm commitment on the part of the local district management team to re-establish the geriatric beds at Guy's as quickly as possible. It is hoped that the operating theatres will be renovated in time for this to be achieved early in the new year.
Out-patient services will continue at St. Olave's. The staff residential accommodation is also to be retained in use. The hospital is not, therefore, being closed.
There are three psychiatric day hospital units at St. Olave's. Of these, one was opened in the late 1960s and is now taking about 50 patients from the community. This will continue at St. Olave's. The second unit, which opened in 1973, is more in-patient-oriented and is to be transferred, together with the inpatient unit, to Guy's hospital. The remaining unit—a psycho geriatric day centre, which was recently completed—cannot yet be opened because of shortage of funds.
May I at this stage comment on the physical state of the hospital, to which the right hon. Gentleman referred? He mentioned that a considerable amount of money had been spent on the building, and we accept that. In 1971 there was major upgrading at a cost of about£200,000 and this was followed by further upgrading of wards in 1973. The sum of £20,000 was spent on the kitchens in 1977, though I should say that to carry out the full recommendations of the environmental health inspector another £100,000 might well be needed. In 1978–79, £40,000 was spent on the psycho-geriatric day centre which I have already mentioned. However, I am told that the boilerhouse has only a very limited life and will need replacing soon at a cost of approximately £200,000-£300,000. So although, as the right hon. Member has said, the fabric is in reasonable condition and in recent years upgrading work has been carried out, the hospital will soon require further major investment.
I turn now to the current situation at the hospital. I understand that by the weekend there will be only about 40 patients left in the hospital, of whom 30 will be psycho geriatric cases. The district management team wishes to move these patients to their new locations and considers that because of the difficulties in splitting staff between sites it is essential for the welfare of the patients that these moves take place. I am sure that the right hon. Member will use his influence with those who are picketing the hospital to allow the patients to be moved with the minimum of upheaval and fuss. It would be wrong for psycho geriatric patients to be used as pawns in an attempt to frustrate decisions which have been properly taken and keep the patients in that hospital. Furthermore, any delay in achieving savings through the measures already decided can only lead to further cuts having to be made later in the year.
I understand that the district management team met staff representatives this evening and that the staff representatives have agreed to withdraw their pickets, but I am not sure whether this agreement necessarily affects the other pickets who are not members of the hospital staff. I very much hope that all picketing will cease shortly.
Finally, I know that there is great concern about future allocations to the area. At present there is little that can be said about this. A great deal of work is in progress on planning future health services in London. As is set out in the consultative paper "Patients First" published earlier this week, reports are soon to be published on a wide range of developments and the University of London's working group chaired by Lord Flowers is expected to report in February. There are also two reports, which need careful consideration, specifically about the allocation of resources, to which the right hon Gentleman referred. The first, which has been issued, concerns the allo- cation of resources between areas within the four Thames regions. The second, which is still in preparation, will include a review of the elements in the national formula to provide for the special needs of teaching hospitals. Until these reports have been fully digested, it is impossible to predict what the right future level of resources should be for this area. There can, however, be little doubt that, as a study of the profile on acute hospital services in London, recently published, makes clear, this area at present has far more acute beds than would seem appropriate for its population, and major long-term changes in the pattern of services are unavoidable.
It is important to emphasise that the changes now taking place at St. Olave's—the transfer of in-patient services—are essentially a short-term measure. The commissioners recognise that St. Olave's hospital is a valuable asset for the NHS and they will be considering as soon as possible what the future use of the hospital should be. It is not envisaged that St. Olave's should remain closed for any longer than is necessary. It may well have to care for a different type of patient in the future, but it is clear that the hospital should be given a viable and useful role in the longer-term plans for the district—
—once the present financial difficulties have been resolved. The commissioners have undertaken to consider the future use as soon as is practicable and have agreed that the district management team should now set up, as part of its planning machinery for the development of health services in the district, a St. Olave's committee. This committee is to examine possibilities for the future use of the hospital, and representatives of the community health council and staff interests will be invited to serve on it.
I hope that the right hon. Gentleman will accept that progress is being made and that his debate tonight has been worth while.