Oxfordshire Area Health Authority

– in the House of Commons at 11:41 pm on 7 May 1981.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Photo of Mr Thomas Benyon Mr Thomas Benyon , Abingdon 11:44, 7 May 1981

I welcome this opportunity to speak on the shortfall of funding for the Oxfordshire area health authority. I am pleased to be able to raise an Adjournment debate in the presence of my hon. Friend the Under-Secretary for Health and Social Security, who I understand is just starting his second half century of replies to Adjournment debates. I wish him as much luck in defending his wicket in his second half century as he has had in his first.

We on this side of the House understand the importance of combating inflation and fighting against waste in all forms of public expenditure. I fully understand the economic climate in which we live. I am especially concerned that the fight against waste should take place in areas where there is expenditure surplus to the requirements of the services on which our community depends. I am concerned that in Oxfordshire there is Little waste to hack away, and that any further reductions will fall on the fabric of the service which is so important to Oxfordshire and my constituency.

I am also aware that the Government have given a pledge that, despite what other savings are made, the standards of the National Health Service will not drop, and that the standards of health care will remain. That pledge is on record. My right hon. Friend the Secretary of State for Social Services has said many times in the Chamber that the promise made at the time of election will be honoured.

I am aware that unless the money spent on the National Health Service grows by 2 per cent. a year to cover the additional numbers of people who need care from the NHS the service will go into decline. The reasons for that are obvious. The standards of health are steadily on the increase and people grow older. The barriers of scientific research are explored by our doctors and scientists, preventive medicine gets better and thus the health of our people, thank God, continually improves. Consequently, unless our National Health Service grows, the standard of health will go into decline.

I am fully aware that since May 1979 1,000 doctors and 8,000 nurses have been employed and there are 100,000 fewer people on our waiting lists. The Government are to be commended.

Oxfordshire used to have one of the best health services in the country. I emphasise "used to". It benefits from having a teaching hospital which has attracted some of the best doctors. Local interests have been well served by maintaining the cottage hospitals and developing them into community hospitals. There are many good health centres. Acute psychiatric services, linked to the teaching centres, are also good.

Unfortunately, there are long-standing deficiencies in mental handicap services for the elderly mentally infirm. Plans to improve those services are well advanced as a result of co-operation between the area health authority and the community health council, following extensive public consultation. But what was good is deteriorating. Plans for improvements of services for the mentally handicapped and elderly mentally infirm are but a pipe-dream. The Oxfordshire area health authority, which has suffered years of financial restraints, starts this financial year with an actual reduction in revenue. It is believed to be the only health authority to do so.

I emphasise the serious position in which the authority finds itself. I said earlier that in order to maintain services all areas must spend at least 2 per cent. more, but not only has the Oxfordshire authority to find savings from areas of waste but there is no allowance for growth in its budget from the regional authority. The reductions are falling most sorely on Oxfordshire and on my constituents.

I received a letter on 23 April from the Regius professor of medicine at Oxford, Professor Henry Harris, outlining the plight of the clinical training and teaching schools in the county. He said: The position is this. The clinical facilities for teaching the 85 clinical students whom we already take at Oxford are inadequate. The essential problem is the shortage of acute medical and surgical beds which form the centre of the clinical medical curriculum. This shortage is generated partly by fewer such beds being available in the new John Radcliffe Hospital than were at our disposal at the old Radcliffe Infirmary and partly by the fact that many of these beds are occupied by geriatric patients who are unsuitable for teaching purposes. The hope of the clinical teachers was that funds would become available to alleviate these acute difficulties in the near future, but, as things look at present, quite the contrary appears imminent.It is the agreed aim of the Medical School to admit 100 clinical students, but, despite considerable pressure from the University, we have not, due to lack of clinical facilities, so far been able to do this. At a recent visit of the Medical Subcommittee of the University Grants Committee assurances were given by the Regional Officers which induced the Medical Subcommittee to press the Clinical School to admit 100 at the next admission, and, in the light of the Regions's assurances, the Clinical School provisionally agreed. However, in its current proposals for the allocation of funds, the Region has not committed any significant part of its growth money to the Oxford Area, so that the clinical teachers see themselves faced with the prospect of admitting 100 students with facilities inadequate for 85, and with no obvious hope of immediate relief. The position is extremely serious and is viewed with the greatest concern by the Clinical Board.University funds are, as you no doubt know, under severe pressure. A number of clinical posts supported by the University are at present frozen and more still will be frozen in the coming year. It is not clear to us how we can cope with the intake of 100 students in the present circumstances unless there is some change in the Region's policy or unless some funds can be made available from another source to alleviate the crisis. It may be useful if I discuss later from where those other funds might come.

I wish to discuss first the revenue allocation formula in the area. I understand that allocation of revenue by population served, modified to take account of age structure and general states of health, is the right principle. we are all agreed on that, but it is a principle which must be applied by people who know what they are doing. It must be applied sensitively and it must meet the frequent undertakings that the Health Serice would not be cut. The population of Oxfordshire has to wait at least two years for the appropriate credit while elsewhere the' Department makes adjustments to the formula with little apparent recognition of the validity of what it is doing.

Oxfordshire has suffered a reduction in revenue while four regions have received more than 10 per cent. additional revenue between 1977–78 and 1981–82. Some London regions which, on a strict application of the formula, would have had no increase in revenue have been protected. There is some sensitivity, but it is arbitrarily applied or at least no explanation can be obtained of the thought processes involved and Oxfordshire's revenue has been cut despite every expectation that that would not happen.

The health authority has been asked to cut management costs. It has done so every year since 1976. It has met all the targets set for it by the Government. It has reduced management costs to 4½ per cent. of total expenditure. That is about the lowest percentage in the country, in spite of a considerable extra management burden that is carried by a teaching area.

During the past year it has been possible to reduce the standard working week for all nurses from 40 hours to 37½ hours. All health authorities had to increase the numbers of nursing staff as a result, but in Oxfordshire the equivalent of 153 more nurses was needed. Between February 1980 and February 1981 the total increase in numbers of staff employed in Oxfordshire's health services was 134. If it were not for the well-deserved shorter working week for nurses, the number of staff providing Oxfordshire's health services would have decreased, despite its being the fastest growing region in Britain. The staff of all other authorities in the Oxford region increased by over 400 employees. That pattern was common throughout the country except for Oxfordshire. Even regional health authorities, which themselves provide no clinical services, increased their number of employees, Oxford regional health authority being no exception.

"Care in Action", which the Secretary of State published a couple of months ago, identified priority groups and services. The elderly, the mentally ill, and the mentally and physically handicapped are the groups for which the Secretary of State expects authorities to develop services further according to local assessment of need.

A modest programme costing £300,000, had been planned, following extensive consultation, to house mentally handicapped patients better, increase places for old people and provide more community psychiatric nursing services. The plan was as modest as were the revenue resource assumptions given by Government.

The Secretary of State also seeks further development of maternity services, services for newly born and premature babies, of primary care services and services for young children. A modest programme, costing £400,000, had been planned to increase numbers of midwives, provide three more special care baby unit places, open a few more community hospital beds and increase screening services for children. The plan had been agreed. Again the plan was as modest as the revenue resource assumptions.

As these resource assumptions have not been realised, it is almost certain that the plans will not be either. Worse still, some existing services, once known for their excellence, are beginning to deteriorate. More and more intensive use of beds in acute hospitals has been practised in Oxfordshire in the attempt to satisfy all demands within limited resources.

Bed occupancy throughput of the Oxford hospitals is one of the highest in the country and durations of stay amongst the shortest. To a point this makes for the most efficient and effective use of very expensive beds. Too early discharge because of pressure on beds can reduce effectiveness. That is what is happening now. That point has been reached and more acute beds are needed to treat and care for acutely ill people without undue stress and strain. There is no prospect of more beds being provided, not with less money available to pay for staff to run them.

For several years the authority's management has been making savings by increasing efficiency in use of staff, equipment and buildings. Savings resulting from these measures have been used towards financing the opening of new hospitals, including the John Radcliffe hospital, or departments and to employ extra patient care staff. But much of this effort has had to go to offset overspendings and under-fundings for price rises and pay increases, the subject of national agreements over which local management has no control. Savings plans are always selected to have the least effect on the quality and quantity of patient care.

In 1980 the medical staff in Oxford reviewed the hospital services in the city and proposed reductions in activity and therefore expenditure and redeployments of effort and finance while maintaining the service to patients despite the financial limitations. Another medical staff committee reviewed supplies expenditure.

Thus to managerial proposals for July 1980 designed to save £400,000 a year have been added savings plans prepared by the medical staff designed to save £1½ million and £200,000 a year respectively. Many savings plans take some time to achieve their full potential and some plans need financial pump-priming before they can be carried out. Savings plans are not without their pitfalls and meet with all manner of opposition and resistance of which the Oxfordshire area health authority has had more than its fair share. Nevertheless, significant savings have been made.

Many immediate problems, and opportunities, are within and closely affect the population of Abingdon. No doubt all parts of the country have anomalies in Health Service provision left over from the last reorganisation but the Vale of White Horse, previously in Berkshire and now in Oxfordshire, has many of them, all relating to priority groups and services.

There is now, as a result of careful public relations exercises, a good understanding of the authority's policy of developing community hospitals in small market towns to replace isolated geriatric hospitals, largely financed by the sale of these redundant properties. At Didcot, in my constituency, the little 16-bed hospital is being developed to a 30-bed one to provide continuing care beds for the local population locally. However, unless additional money is supplied, those beds may not be available for use. Faringdon—another town in my constituency, and the one town in Oxfordshire without a local hospital—is to get one as a result of a very generous donation from a local citizen. However, it may not be possible for Faringdon new hospital to open all its facilities unless further money is forthcoming.

This is only part of the story. Mental handicap services and services for the elderly mentally infirm in the vale are largely provided by Berkshire area health authority which, in the face of its own financial problems, will find it difficult to pay further moneys. Worse, there are very advanced plans in Oxfordshire for major improvement to mental handicap services, aimed at bringing them up to at least regional average cost services. Those plans will have to be reprogrammed over a much longer time scale in the face of cuts in the authority's revenue allocation.

When an authority has spent seven years preparing and implementing savings plans, opening a major teaching hospital with a fraction of the additional revenue needed, and trying against all odds to improve its priority services, it is most unfair that it should be faced with a cut in its revenue and see little prospect of things getting better. Much though co-operation with the private sector is welcomed, and generous as people are in making gifts to improve local services, this must be set against a sound financial base provided by the Government.

Where is the extra £200,000 to come from? Since 1976 the regional health authority has received substantial sums of money to provide regional secure units, which it did not do, nor did it provide plans for so doing. In the first three years, it received £246,000. In 1979, it was revalued, and about £330,000 was received. In 1980–81, it was £445,000, and in 1981–82 it was £480,000. As it has produced no plans to provide regional secure units, apart from one which I understand has now been shelved, I hope that the Minister will bring to bear as much pressure as he can to enable at least £200,000 this year to be given to the area health authority to meet its responsibilities in the area.

Photo of George Young George Young Parliamentary Under-Secretary (Department of Health and Social Security) 11:59, 7 May 1981

My hon. Friend the Member for Abingdon (Mr. Benyon) has, with eloquence and sincerity, raised a matter which is obviously of great importance to his constituents. The issues involved in the allocation of resources to health authorities are very complex—they are not easy to grasp or to explain. My hon. Friend made his case with admirable clarity, and I am grateful to him for allowing me the opportunity to explain, from the Government's point of view, exactly how resources are distributed in the NHS and how their use is monitored.

My hon. Friend raised many issues, and I am sorry that I shall be unable to deal with them all, but I shall write to him about those that I shall not have time to mention. I endorse his kind words about the Government's determination to protect and, where possible, to improve standards within the National Health Service. He said that a 2 per cent. growth was necessary to cope with demographic changes. I am not sure that my Department would accept that figure. The figure I have in mind is nearer 0·7 per cent. However, I shall write to my hon. Friend about the matter.

My hon. Friend's main concern is with the allocation of funds to the Oxfordshire area health authority. But I am sure he will understand if I say that my own emphasis must be on the national picture and on the relationship between that national picture for the NHS and Government policies as a whole. Having devoted some time to this theme, I shall then try to indicate how Oxfordshire fits into this picture.

Allocations to regional health authorities in England are determined in accordance with the methods recommended by the Resource Allocation Working Party, more commonly known as RAWP. Its report was published in 1976. The working party saw as its objective the bringing about of a fairer distribution of resources across the country. I am sure my hon. Friend will agree that that is what we all want. It has been accepted by this Government, as well as the previous one, that there is need to tackle the lack of equality of access to health care, that is, that for the purposed of obtaining health care and treatment one is infinitely better off living within reach of London than, for instance, in the North-West.

A RAWP formula was designed to assess the relative needs of each region for health care resources. It is a complicated formula, based on population, weighted to assess relative health care need. In this way revenue targets are calculated, and when these targets are compared with the current levels of allocation it can be seen that some regions, such as Trent, are significantly deprived while other regions, in particularly the Thames regions, have allocations significantly greater than their target share.

Of course, at any given time some regions are below their target and some are above it—they are referred to as RAWP "gaining" and RAWP "losing" authorities. Attempts to redistribute funds from one to another are inevitably resisted by RAWP losing regions. RAWP recommended that these disparities should be reduced gradually, by making larger increases to the more deprived regions each year. The present Government support that policy, with the emphasis on bringing the more deprived regions up to the level of the better provided regions while allowing some growth to all. The result so far is a gradual but nevertheless significant reduction in disparities between regions.

We come now to the position of Oxford regional helath authority. The region is fairly close to its revenue target under the RAWP formula. In the current financial year its allocation is about 1 per cent. below the target, which has increased with the region's population growth. In the last three years the region has had rates of growth in its allocation slightly below the national average—1·75 per cent. in 1979–80 when the average was 20 per cent., 0·5 per cent. in 1980–81 when the planned rate of growth was only 0·5 per cent., and 1·4 per cent. in 1981–82 as against 1·6 per cent. But, in addition, the Oxford region has for the past four years received a special revenue allocation for the development of services in new towns. That amounts to £784,000 in 1981–82.

The RAWP formula applied to capital allocations takes account of the population in each region, of relative need for health care and of the approximate size and age of the existing capital stock. The population of the Oxford region is relatively younger and healthier than that of most other regions, and the region had a high level of expenditure on hospital construction in the early 1970s.

My hon. Friend is particularly concerned about the allocation of resources to area health authorities. I must make an important point. The Government's job is to allocate funds to regional health authorities. This is self-evident and it is right that if hon. Members have reservations about the way we are doing that job they should challenge us. However, it is entirely the responsibility of regional health authorities to decide how those funds should be spent sub-regionally. It is their job and probably the most important function which they are charged with.

I do not need to labour at this time, the principles which are embodied in the forthcoming restructuring of the NHS. Suffice to say that paramount among these is the maximum delegation of responsibility and decision-taking to those who are close enough to the service, to local circumstances and to the job in hand to make those decisions. That principle is widely accepted and welcomed both inside and outside the NHS.

It is often argued that the better-off regions—or areas, as in the case of Oxfordshire—are pre-empting the funds which rightly belong to the other regions or areas that are below their RAWP targets. Although the Oxford RHA is fairly close to its RAWP target, the same cannot be said of its constituent areas. At the extremes the difference can be large.

In 1980–81, Oxfordshire AHA was 5·04 per cent. above target, whilst Northamptonshire AHA was 3·97 per cent. below target. The aim of the Oxford RHA is to bring all its areas within a 2½ per cent. band above or below target, but the rate of progress towards target is for the RHA to determine, taking into account all the factors which affect the allocation of resources in the region.

The region has been faced with limited growth money in recent years and this has resulted in rather slow progress towards its aim.

Although my hon. Friend is concerned about the position of Oxfordshire, many people within the region would argue—and have already done so in the House—that Oxfordshire's movements towards the target have been far too slow. Only a few weeks ago the hon. Member for Kettering (Mr. Homewood), supported by my hon. Friend the Member for Northampton, South (Mr. Morris), expressed particular concern over Northamptonshire's progress towards the RAWP target. Neither of them pulled any punches and they made it clear to the House that in their view this was a direct result of the preferential treatment being meted out to Oxfordshire by the regional health authority. I think that there are other hon. Members within the region who would share the view that the region has been over-sympathetic towards Oxfordshire over the years.

The regional health authority has a very difficult job in tackling these competing views. It has been faced with the problem of trying to move Oxfordshire towards the target without having to make drastic cuts in its existing services. At the same time, it has been faced particularly with the problem of commissioning the John Radcliffe hospital in the city of Oxford. This it has achieved, but not without a great deal of criticism. A level transfer of services—with additional revenue costs of £¾ million—enabled the hospital to open in 1979, but a very large part of the region's growth money was committed towards that in the process.

The use of so much of the region's growth money to benefit one area that was already over-provided in RAWP terms was received less than enthusiastically in other parts of the region. It would, however, be unfair to criticise the RHA for this. The hospital concerned was planned and construction was started before the introduction of the RAWP system, because of a change in the way that revenue consequences were funded. The regional health authority suddenly found that it had to find the necessary revenue to fund the new hospital from within its own normal allocation. The fact that the region was able to do so and has still been able to move its other areas to the position they are in today should not be underestimated as an achievement.

Although my hon. Friend would dispute this vigorously, Oxfordshire AHA has been comparatively over-privileged and always well above target. Despite this, it has consistently failed to live within its budgets and has appeared to some eyes in other areas to have "got away with it".

This combination of circumstances has drawn inevitable complaints from the areas which are under target and feel that they have made real efforts and taken hard decisions in order to live within their means. In their steady attempt to adjust the areas' relative relationships with their targets, the regional health authority has just taken steps this year which appear to Oxfordshire AHA—and to my hon. Friend—to penalise it excessively.

After the allocation of growth money in 1981–82, Northamptonshire is only 0·64 per cent. below its RAWP target and Berkshire and Buckinghamshire are both within the 2½ per cent. band above or below target. I am sure that these three areas still consider Oxfordshire to be in a privileged position. Oxfordshire in 1981–82 is still 4·06 per cent. above target, although I understand that the regional health authority intends that by 1985–86 it will be only 2·3 per cent. above.

My hon. Friend expressed disquiet over the way in which the RHA has planned to allocate its growth money for 1981–82. As I have explained, the allocation of resources to the AHAs is a matter for the RHAs to determine. My hon. Friend can, of course, pursue this matter directly with the Oxford RHA.

The AHA, as my hon. Friend says, feels that its lack of growth money for the current year places an impossible burden on it as it has been asked by the region to find efficiency savings of £324,000. This is part of the £25 million that my right hon. Gentleman undertook to find in 1981–82. The Oxford RHA has been asked to make efficiency savings of £1,184,000, and the Oxfordshire AHA's share of this is £324,000.

The Oxfordshire AHA has tackled the problems of meeting this budget vigorously and positively. It has made tough decisions in an effort to find savings and live within its budget. It finds the prospect of achieving a further £324,000 daunting indeed. I understand that the RHA has given some recognition to the problems facing the areas this year and has agreed to help them by funding £200,000 of the money on a non-recurring basis.

I realise that this will still leave the AHA to find savings of £124,000, but that is considerably less than its original fears. I have already said that it will not be easy for the AHA to find savings through a better use of resources and increased efficiency. That is not to say that it is impossible. I am sure that many other health authorities are finding themselves confronted with an equally daunting task.

My hon. Friend mentioned a number of specific services for the elderly, the severely mentally infirm and the mentally handicapped. I should like to pick up a point that he made about the generosity of the people of Oxfordshire in the voluntary donations that they have made. It is very encouraging for us to see the extent——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes past Twelve o'clock.