The modified formula will be used as the basis of allocations to the new health authorities in 1996–97. Implementation will be gradual in order to safeguard continuity and stability of funding.
The Secretary of State will be aware that the York university report commissioned by the Government and published in October showed conclusively that inner-city areas such as mine do not receive an adequate share of health service resources. In the light of that information, is the right hon. Gentleman satisfied with the fact that it has taken so long to introduce the new formula, and is he as alarmed as I am by the fact that, this year, for the first time, 24 per cent. of the resources allocated to health authorities are being distributed without reference to deprivation criteria? What initiatives can he announce to the House to ensure that people living in areas such as mine receive a fair deal in the allocation of health service resources?
The hon. Gentleman asked what initiatives we have to ensure the fair allocation of resources throughout the health service. I entirely agree that fair allocation of resources is an important priority; that is why the York university work was done, at the Government's request, to ensure that the weighted capitation formula represented a fair way of distributing resources to purchaser health authorities. As for the hon. Gentleman's question about the 24 per cent., the York university work covered roughly 76 per cent. of health care—in-patient and day-patient care—but did not cover the assessment of need for community and other services. That element of health service care not covered by the York university work accounts for 24 per cent. of total resources. That is why that element is not covered by the formula.
Does my right hon. Friend agree that in areas such as my constituency of Colchester, North there has historically been a lack of funds because of the unfair distribution of resources? I welcome the new formulae. Does my right hon. Friend also agree that waiting lists in places such as north-east Essex reflect the problem of unequal funding rather than a lack of efficiency in hospitals?
My hon. Friend is right to say that the allocation of resources to his constituents needs updating. That is why we have changed the formula, and why the new formula will be used to distribute resources in future. [Interruption.] The right hon. Member for Sedgefield (Mr. Blair) has returned to us, and it would be wrong of me to let this moment pass without welcoming him back from his travels. Moses went to Mount Sinai and the right hon. Gentleman has been to Hayman Island. It is right for the whole House to welcome him on his return.
The Secretary of State paid a fulsome tribute to the York university researchers who did the work on which his new NHS funding formula is based, but he did not answer the question asked by my hon. Friend the Member for Newham, North-East (Mr. Timms).Why has the Department entirely removed the needs weighting for the community health services part of the funding formula? When will the Government start increasing funding for underfunded health authorities in inner cities and in the north so that everybody in the country will get an equal and fair share of NHS funding?
The answer is that the formula does not apply to the 24 per cent. to which the hon. Gentleman referred because it is not designed to apply to it. He asked when the process of change is to start, but the answer is that it has already started. This year, the regional health authority allocation to district health authorities is informed by the new formula, and we will ensure that future distributions are also informed by the formula.