Hospital Closures (Gwynedd)

Clause 50 – in the House of Commons at 7:31 pm on 14th June 1988.

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

Photo of Mr Allan Roberts Mr Allan Roberts , Bootle

On a point of order, Madam Deputy Speaker. The Government Whip has just moved the motion for the Adjournment of the House, but we still have business on the Order Paper.

After the debate on the Housing Bill, there should have been a debate on air pollution from large combustion plants on a motion to take note of European Community documents Nos. 11642/83 and 5124/85. If the Government do not want to move the "take note" motion, would it be in order for me to move it so that we can debate the Government's record on acid rain, taking account of the important fact that the meeting of EC Ministers to consider the instruction from the House takes place tomorrow?

Why have the Government not moved the motion? Why are they stopping debate on acid rain? They do not want to debate housing and now they do not want to debate EC documents on an important subject. Is it in order for the Opposition to move the motion? There is plenty of time—it is only 7.31 pm

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

I draw the House's attention to the fact that the motion for the Adjournment of the House has been moved. The "take note" motion is in the hands of the Government. It is not for the Opposition to move it.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

On a point of order, Madam Deputy Speaker. I do not wish to take up the time available to the hon. Member for Caernarfon (Mr. Wigley)—

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

I hope that the hon. Gentleman will not.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Alas, the motion for the Adjournment has already been moved. The "take note" motion has been recommended to the House by the Scrutiny Committee because, as my hon. Friend the Member for Bootle (Mr. Roberts) said, the matter is to be debated in Brussels tomorrow. There is every expectation, to judge from the Government's explanatory memorandum, that they want to make progress. The motion says that the Government should negotiate on the directive to provide for a substantial but cost-effective reduction in emissions from large combustion plants. There is therefore every expectation that the Government will reach a compromise and make an agreement tomorrow before the matter has been debated in the House. There is no reason why the matter should not be debated tonight. In that respect, the Government are deliberately and wantonly not allowing the House to discuss the issue before the Brussels meeting tomorrow. My point of order is whether the Leader of the House can tell us whether, if any agreement is reached, it will be subject to parliamentary reserve because there has been no debate tonight.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

I understand that that is no longer a matter for the Chair.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

On a point of order, Madam Deputy Speaker. Can I seek your guidance about the Leader of the House's tactic in apparently threatening to withdraw Short money unless the Housing Bill is delivered? Apart from being a modern version of piracy, it may be a breach of privilege. Could you confirm that, on a written submission, Mr. Speaker would consider the matter and decide whether it is a breach of privilege? In view of the public collapse of the organisation of the Tory Whips Office and the Leader of the House using his position to threaten an established procedure—providing money for the Opposition parties—could you convey to Mr. Speaker our concern and ask for an examination of the matter? I hope that the Leader of the House does not try to threaten Mr. Speaker as well.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party

Further to the point of order, Madam Deputy Speaker. Will you confirm that Short money was introduced by the 1974–75 Labour Government to assist the Opposition of the day, the main body of which was the Tory party? Will you also confirm that at no time did Labour Members threaten or bully the Tory Opposition, which you will recall, Madam Deputy Speaker used various tactics almost every week when the Labour Government did not have a majority?

Will you also confirm that the Short money has not yet been debated by the House in this Session and that it affects other minority parties, so it is outrageous for the Leader of the House to knock on the Shadow Cabinet's door asking for the deputy leader of the Labour party to come out, and then issue threats about withdrawing Short money because the Government lost control of business in the House? This has been a great parliamentary day for the Labour party in particular, and we shall not allow the Leader of the House to spoil it in any way.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

All I can do in response to the hon. Members for Bradford, South (Mr. Cryer) and for Bolsover (Mr. Skinner) is to repeat what I said earlier—that this matter will be referred at the earliest opportunity, and I mean the earliest opportunity, to Mr. Speaker.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

I hope that the hon. Gentleman understands that he is taking time out of the Adjournment debate.

Photo of Simon Hughes Simon Hughes Shadow Spokesperson (Education), Shadow Spokesperson (Health)

I do. Further to the point of order, Madam Deputy Speaker. May I make the strongest possible representations about the fact that, with no notice, the Government have withdrawn business which they tabled and which can be taken appropriately only tonight before the important Environment Ministers' meeting in Brussels tomorrow, at which Britain will again be accused of being the dirty man of Europe?

The Environment Select Committee report came out yesterday, but a debate tomorrow will probably be too late. Can I ask that the relevant authorities in the House ensure that the Government do not in future lead the House to believe that it is to have a debate on such an important matter and then suddenly, and at the last minute, withdraw the opportunity?

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Deputy Speaker (Second Deputy Chairman of Ways and Means)

There are senior Ministers on the Treasury Bench, and I am sure that the hon. Gentleman's point has been noted.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon 7:38 pm, 14th June 1988

This must be one of the most long-awaited Adjournment debates for many a year.

The debate is of considerable importance to the communities affected by Gwynedd health authority's closure proposals, which will affect six hospitals—Ysbyly Coffa Madog in Porthmaclog; the cottage hospital, Caernarfon; the Druid hospital, Llangefni; Ysbyty Devvi Sant, Bangor; Groesynyd hospital, Conwy; and certain facilities, including the children's ward, at Llandudno general hospital.

The health authority decided on 25 April to go ahead with its closure proposals, and the debate is particularly well timed as the Secretary of State's period for receiving objections to the closures ended last week.

I am sure that the Under-Secretary of State with responsibility for health in Wales, to whom I am grateful for attending this short debate, will confirm that there has been an enormous mailbag of opposition to the closures. Indeed, the people of Gwynedd regard the ad hoc closure of valuable community health facilities as an act of wanton vandalism by the health authority. They cannot believe that a Government who claim that the Health Service is "safe in their hands" can possibly endorse this retrograde package.

I want to refer to the way in which the closure proposals have been formulated in general and then to deal in particular with the two hospitals in my constituency. The closure proposals were made last year after the health authority had been in some financial difficulty over recent years—indeed, ever since the new district general hospital, Ysbyty Gwynedd, opened in 1984. Because of those cash problems, the Welsh Office put in consultants, Deloitte Haskins and Sells, to report, on a narrowly specified brief, on the authority's financial position, its budgetary control system and how to get the books to balance as quickly a s possible. Nowhere was Deloitte asked to make value judgments in terms of service rendered or health care minimum standards required to be maintained.

Gwynedd health authority has consistently maintained that it has been underfunded by the Welsh Office, in revenue and particularly in capital expenditure. It claims that the Welsh Office had not made available the sums needed for a coherent capital expenditure programme. The capital programme announced by the Welsh Office shows that over the next 15 years Gwynedd will get only £15·8 million, or £68 per capita, compared with Clwyd getting £54·3 million, or £136 per capita—twice the level of Gwynedd—and West Glamorgan getting £65·3 million, or £179 per capita. That is despite the inadequate standard of many buildings in Gwynedd and the fact that Gwynedd's population is projected to increase by 5·6 per cent. from now until 2001, compared with a 1·9 per cent. increase for Wales as a whole.

The Minister must explain why Gwynedd has been starved of capital. Is it because of a shortage of capital in the Welsh Office or because no adequate capital proposals have been submitted by the authority to the Welsh Office?

The Deloitte report, which was published in September 1987, made it clear that there were fundamental causes of the health authority's financial problems. The prime reason given was The cumulative underfunding of wage awards by approximately £2 million". That, of course, was a direct result of Government policy.

The health authority's budgetary control system is supposed to highlight those areas of overspending so that management action can follow, but in 1986–87, when there was a net overspend of £1·5 million, only five of the 32 budget heads had overspending in excess of £100,000 and those five areas alone caused the £1·5 million overspend. Ysbyty Gwynedd itself gave rise to almost £700,000 of overspending.

Yet, although the budgetary control system identifies those areas of overspend, the health authority's corrective action to get its budget back into balance has not been aimed at those five areas. Instead, the authority plans to close community hospitals that have not contributed significantly to the net overspend. The absence of management by budgetary control reflects a complete lack of confidence by management in the implications of its own accounting system or in taking decisions on bases other than budgetary performance—on bases contrary to the terms of reference of the Deloitte study.

In fact, the Deloitte report was dramatically scathing in its comments on the health authority's budgetary control system, saying, in paragraph 61, for example: The District's revenue expenditure is based on budgets which are unrealistic". Paragraph 126 states: Budgets are not currently based on activity levels as these are not produced as a part of the operational planning process. That being so, it is hard to understand how the health authority or Deloitte had an adequate basis of financial information on which to take such far-reaching decisions.

Questions must be asked about the competence of both the Welsh Office and of the membership of the authority, in allowing the budgetary control system to continue in a state of complete shambles. The responsibility for the financial performance of the health authority lies either on the shoulders of the authority members or on the desk of the Secretary of State. It certainly does not lie with the people of Gwynedd, who do not elect the authority or have any control over it. Yet it is they who, through a real reduction in health care provision, are being asked to carry the can for the inadequacies of the authority's performance or the insufficiency of resources to sustain services.

The Welsh Office has laid down specific guidelines for the procedure to be followed when closures are proposed. It requires that the consultation document covers, first, the implications for patients, such as travel; secondly, an idea of options with relevant arguments; thirdly, alternative uses for the buildings; fourthly, alternative employment of staff; and fifthly, how the closure fits in with the area's plans.

I contend that Gwynedd health authority has treated those guidelines with a passing disinterest bordering on contempt. In none of the closure proposals is any of the five criteria adequately pursued. If the Minister takes his own guidelines seriously, he must insist that the health authority shows a greater professional integrity in undertaking its consultations.

I draw to the Minister's attention Deloitte's severe criticism of the health authority over its lack of strategic planning for the development of the hospital service, which is relevant to the fifth point that I mentioned. Deloitte commented in paragraph 86 that, in Gwynedd, Planning operates outside the General Management Structure. The report adds in paragraph 91: Initiatives for district services were allowed to develop without any detailed operational planning and without examining the availability of any additional funding. That is borne out by the way in which tens of thousands of pounds were spent by the health authority on upgrading the cottage hospital in Caernarfon during the past two years, making it suitable to provide services for disabled people, then deciding last autumn to close down that hospital and write off most of the spending that has added little to the market value of the building.

Deloitte states in paragraph 98: The Authority has not yet developed a management plan as an element of its overall strategic operational planning process. However, Health Service planning paper 5 requires specifically that closure proposals should cover the relationship between the proposed closure and other developments in the area's plans. That has manifestly not happened in these closure proposals.

I want to raise with the Minister the inadequacy of the health authority's consultation document used as the basis of the proposed closures. There was a common element in each of the closure documents, which were, through no fault of the authority, severely dated and consequently misleading long before the expiry of the consultation period. For example, the health authority forecast in its consultation documents an overspend of £1·3 million in 1987–88. In the authority meeting of 25 April, it was admitted that the actual result was likely to be an underspend of £150,000, and that was achieved without closing the hospitals now threatened.

Secondly, the authority published the consultation document on the assumption that there would be a continuing underfunding of wage awards "on a recurring basis" and that £750,000 had to be found this year to meet that cost. But the Government have announced subsequently that the wage award is being fully funded and consequently the assumption by the health authority is incorrect. Thirdly, the authority assumed, as a justification for its closure proposals, that it would be required by the Welsh Office to transfer each year 0·5 per cent. of its budget to priority services. In fact, since the publication of the consultative document, the Welsh Office has withdrawn that requirement.

In addition, a number of factors quoted by the health authority at its meeting on 25 April were not included in the original consultation documents, such as the assertion that no capital would be available for alternative hospital provision and that the package had to be taken in its entirety, not hospital by hospital. Is such an approach correct or acceptable?

I remind the Minister that, in response to a parliamentary question of mine on 18 January, he stated that if a consultation document were found to be faulty, misleading or inadequate in a way that might he prejudicial to proper consultation, it is likely that further consultation would be required."—[Official Report, 18 January 1988; Vol. 125, c. 547.] I put it to the Minister, on the basis of the misleading assumptions that I have just described and because of the authority's failure to draw up consultation documents in line with the requirements of Health Service planning paper 5, that there is now a responsibility on the Welsh Office at the very least to withdraw the present proposals and to seek consultation on the basis of correct information, against the background of a properly discussed strategic plan for hospital services in the county.

The closure of the Ysbyty Madog would leave the town of Porthmadog without a single hospital facility. Against the background of the explosion at the Coake's works in Penrhyndeudraeth yesterday, the implications must be clear. Porthmadog serves as a centre for a tourist area the population of which is increased by tens of thousands in the summer. All the health authority's plans over the past 10 years assumed that there would be a new, modern community hospital in the Porthmadog area and that the Madog would be retained until a new hospital was built. Those plans now seem to have been thrown out of the window in a policy somersault, based on an ad hoc cost-cutting decision rather than on a planned change in health care provision.

The suggested alternative for the Porthmadog people is to use the existing hospital in the village of Penrhyndeudraeth, which is separated from Porthmadog by the Cob built by William Maddocks early last century, which is one of the worst traffic bottlenecks in Wales. Porthmadog is 30 miles from the district general hospital at Bangor.

The local campaign committee has had the advice of a chartered accountant, Mr. Dan Ellis, to examine the claimed savings from closing the hospital—£237,000 a year. He has shown that the figure is not a net saving but rather the gross cost of running the Madog hospital. It makes no allowance for the cost of caring for patients elsewhere; nor is any compensation included for staff having to move to other jobs.

The health authority has acknowledged that if the Madog closes it would result in a substantial loss of service to the people of Eifionydd". Furthermore, some of the patients who use the Madog for respite care—they include some EMI patients—might have to resort to private nursing home or residential home facilities if the Madog were not available. If that were to happen, the Exchequer would probably have to pay £200 a week to keep those people in private homes. The health authority admits that it has not taken that aspect into account, claiming that it is under no obligation to do so. Presumably the Welsh Office cannot pass on its responsibilities quite so easily, and the Treasury might have something to say about that.

There is real doubt whether the authority is legally entitled to sell a building that was erected by public subscription specifically as Porthmadog's memorial to the dead of the first world war.

The decision to close the Madog was taken by eight votes to seven, with the vice-chair of the authority abstaining. That is clearly an inadequate basis for such a far-reaching decision and the Secretary of State certainly should not endorse the closure proposal.

The cottage hospital in Caernarfon is an ideal ground floor building, recently modernised at a cost, according to the authority, of £45,000, although others put it at nearer £80,000. It currently provides 14 vital general practitioner beds and enables many people to recuperate or have short-term or respite care, within their own community. The hospital was adapted last year, in conjunction with the 'all-Wales strategy for mentally handicapped people', to provide dental care for disabled people, for whom doors were widened, and other facilities installed.

It was also planned that the hospital would provide a community physiotherapy service. The alternative open to GPs in Caernarfon is to refer patients to the orthopaedic consultant at Bangor, with a 38-week waiting period. It was planned that the cottage hospital would give an immediate service. Last August, a physiotherapist was appointed to serve there. But, before the appointee could take up the job, the authority decided to close the hospital. That example, together with the capital spending to which I have referred, underlines the collapse of coherent planning of services and resource allocation in Gwynedd.

The closure of the cottage hospital would mean that Caernarfon would have no casualty unit. The closure would mean that Caernarfon people have to go to Bangor for a casualty unit. In fact, the Deloitte report justified the use of the Bangor casualty unit on the basis that the road link to Bangor will be greatly improved with the Port Dinorwic bypass". That road will not be open for two or three years, and, in the meantime, casualty cases would be liable to long traffic delays at Port Dinorwic, which are likely to worsen while the bypass is being built. Incidentally, the use of the cottage casualty unit is currently running 30 per cent. higher than that quoted in the consultation document.

The consultation document is also gravely misleading in its assessment of patient activity levels. It quotes the figure for 1986 as 67 per cent. for a 10-bed facility. It is outrageous that such figures should have been used. The fact is that 1986 was the year i n which much building work was being undertaken at the hospital, and the beds were not all available for periods of time. Now the hospital has 14 beds and the bed occupancy for the first quarter of 1988 was 83 per cent. not the 67 per cent. on which the consultation document was based. That compares with a Welsh average of 79 per cent.

An 83 per cent. utilisation of 14 beds is a very different story from a 67 per cent. use of 10 beds. The cost per in-patient day quoted as £81 would reduce to £66 on that basis. Furthermore, the hospital is now running with a lower staff complement, with a saving of £27,000 a sear. It now has 13·6 whole-time equivalent nursing staff, compared with the 16 quoted in the closure document. That brings the cost down to £58 per in-patient, which is not far from the Welsh average of £50.

The savings claimed in the consultation document amount to £260,000. However, that is also shown as the total running cost of the hospital. In other words, the authority assumes that the entire current running costs can be saved by closing the cottage hospital. That is absolute nonsense. The authority claims that there will be alternative arrangements for dental services, special needs, the orthodontic clinic service and for speech therapy. It also admits that greater pressure will be put on other hospitals, community health services and hospital day care facilities. Those alternatives will all cost something, and the savings are likely to be appreciably less than those claimed.

Furthermore, as no staff are to be made redundant, the salaries will still have to be paid. The savings will only arise when the cottage hospital staff are redeployed to replace staff who retire. Even then, there will be relocation and disturbance costs.

One GP at Caernarfon has estimated that as many as 20 elderly people currently receiving respite care at the cottage hospital may be forced into other institutional care, almost certainly into private sector nursing or residential homes. Overwhelmingly, those people will be paid for by social security, and that cost alone could wipe out the bulk of the savings.

At the meeting of the health authority on 25 April, one member, Mr. Alun Jones, proposed that the decisions on the Madog and cottage hospitals should be postponed because the case was far from clear-cut. However, the general manager insisted that the package should be looked at in its entirety—a stipulation that I challenged earlier. The vote to close the cottage hospital was by 10 votes to six, showing a deep division within the authority. I urge the Minister, for all the reasons I have outlined, to reject the closure proposal and to seek a strategy for hospital services at Caernarfon that will enhance rather than diminish health care in the region.

I have referred specifically to the position of the cottage hospital in Caernarfon and the Madog memorial hospital, because they are in my constituency. I know that my hon. Friend the hon. Member for Ynys Môn (Mr. Jones) feels equally strongly about the lack of coherent planning over the closure of the Druid hospital at Llangefni and has led a deputation to see the Minister on the matter. He urges the retention of the Druid until an acceptable alternative new hospital is open and functioning at Llangefni.

None of us wants to argue that every building and facility run by Gwynedd health authority must remain inviolate for ever. We argue that there is an overwhelming case for taking those decisions as a part of a long-term strategy and not as a short-term expedient. Such a strategy may well need a capital investment programme at a significantly higher level than that currently available to the authority. If we are to have a system of modern community hospitals in Gwynedd for the 21st century, we shall almost certainly need new buildings and new facilities.

Until such projects are properly planned and scheduled, we have to maintain the existing facilities unless there is an overwhelming reason to do otherwise. That means running what we have in the most efficient manner possible and closing hospitals only when new and better facilities are on stream. To do otherwise is to accept an actual reduction in health care for our communities. That is not acceptable to the people of Gwynedd and neither should it be to a Government who claim that the Health Service is safe in their hands.

Photo of Mr Ian Grist Mr Ian Grist , Cardiff Central 7:55 pm, 14th June 1988

The hon. Member for Caernarfon (Mr. Wigley) and my right hon. Friend the Secretary of State for Wales have exchanged several letters in recent months on the subject of Gwynedd health authority's proposals for the future of hospital services in its district. My right hon. Friend and I have also met the hon. Gentleman to hear his views at first hand. We have explained the procedures under which district health authorities can brine about chances in hospital service provision and the way in which the arrangements for public consultation are designed to take account of views expressed on the health authority's proposals.

However, I would have welcomed the chance to expand on this theme tonight and also to explain why, although I welcome the submission of views on the proposals, it would be inappropriate for me to make any substantive comments at this stage or, sadly, to reply to the trenchant points made, or rather repeated, by the hon. Gentleman.

The proposals have been drawn up in the light of the authority's financial problems, which it drew to the attention of Welsh Office at the beginning of last year. After discussion with the authority's chairman and senior officers, it was decided to bring in management consultants at the Welsh Office's expense to investigate the authority's financial position.

The consultants concluded that the authority's problems had their roots in 1984–85, with a developing trend of overspending on budgets in following years. The authority had managed to contain its overspending by taking advantage of non-recurrent savings—including slippage on capital schemes—and in 1986–87 by substantially increasing its creditor balances. By 1987–88, however, the position had become untenable.

The consultants attributed the authority's position to: the cumulative under-funding of pay awards; an increase in activity levels, particularly in high-cost specialties at Ysbyty Gwynedd; the failure to make recurrent savings to finance the 0·5 per cent. transfer of funds to priority groups; and the effects of incremental drift on pay. None of the factors identified as underlying the authority's financial position is unique to Gwynedd. Other authorities, less favourably resourced than Gwynedd, have managed to contain their spending in the face of similar pressures.

The consultants also concluded that insufficient management action had been taken to control activity and spending levels. Later in their report, they were critical of the authority's systems of planning, budgeting and financial control. It is vital that, as part of its programme to restore financial balance, the authority takes vigorous action to improve its arrangements for planning, budgeting and financial control.

The authority remained within its cash limit last year partly as a result of the non-recurrent supplementary funding that all authorities shared, and partly because of loan support from the Welsh Office in recognition of its cash difficulties. Provisionally it seems that the authority may have overspent in income and expenditure terms last year by some £210,000, although this will be established when the authority has submitted its annual accounts. It is apparent therefore that the authority still has underlying recurrent financial problems.

Those problems are the more serious when set against the background that the authority is shown, by both the capital and revenue formulae used to assess the relative funding position of Welsh health authorities, to be one of the best resourced in Wales. The growth in recurrent revenue resources—not including the funding of the review bodies' pay awards in 1988–89—which have been made available to the authority in the period 1978–79 to 1988–89 is some £17·5 million, or more than 43 per cent. after adjusting for actual and expected inflation. That is the second highest rate of growth of any authority in Wales, and compares favourably with the Welsh average of 36 per cent.

In the light of those figures, I cannot say that I am satisfied with the level of financial management shown by the authority. That was one of the reasons for calling in the management consultants. The consultants' recommendations bear out that decision. I expect to see a considerable improvement in the quality of financial management in Gwynedd this year, and I shall be keeping a very close watch on developments. In particular, I expect much tighter control to be exercised over budgets than has been the case in the past.

I have spent a little time on the financial position of Gwynedd health authority, but I make no apology for that, as it is central to our discussions today.

The hon. Member for Caernarfon will understand that I cannot comment on the health authority's proposals, but it may be helpful if I end by saying that my right hon. Friend the Secretary of State has received several hundred letters of objection to the proposals. There is no set time scale for consideration of the proposals and the objections that they have attracted, but this will be done as quickly as is consistent with full and careful consideration of all the issues raised. Once a conclusion has been reached, a letter setting out my right hon. Friend's decisions and the reasons for them will be sent o the health authority and to the hon. Gentleman.

The hon. Member for Caernarfon has expressed concern about aspects of the consultation procedure carried out by Gwynedd health authority. I assure him that the points that he has made today, together with those that he made earlier in writing and in meetings with rue and my right hon. Friend the Secretary of State, will be fully and carefully considered, as will those submitted by all other interested parties, before any decision is taken.

Question put and agreed to.

Adjourned accordingly at one minute past Eight o'clock.