Health Authorities (Deficits)

– in the House of Commons at 8:39 pm on 16th October 1996.

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

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South 8:55 pm, 16th October 1996

I regret to have to introduce to the House in this Adjournment debate the subject of health authority deficits. I regret it for a number of reasons, but particularly because deficits should not exist and the debate should not be necessary. However, happily, we have some time in which we can examine the matter thoroughly. It is unusual for a Member who expects to get in perhaps a 15-minute speech to have the opportunity to speak for longer. We never know what may happen in this uncertain parliamentary life. This is the last debate of this Session. What next Session holds, who may know? Constitutionally, any Government could collapse on the Queen's Speech, which we shall have in a week's time, or on any subsequent Division. So this may be. as people sometimes think, the last opportunity. It certainly may be mine, for reasons that everyone knows. So if I go into a little detail and am pretty harsh in what I have to say, when I have said it, people will understand why. There should not be deficits.

I find it a little difficult to welcome the Under-Secretary of State for Health, who will answer the debate tonight. I am glad that he is here because he has answered some of my questions. The best comment that I can make is one that is often used, and I go along with it. One hates the sin and, in this case, respects the sinner, although for reasons which the Minister will know, but we need not go into now, my respect for him is a little less than it might have been 20 years ago.

The health service is still our prime public service. I think that it is the only one which still has the word "service" in its title, whereas agencies for this, that and the other constantly change their names. The health service is something we all cherish. Even the former right hon. Member for Grantham, now Baroness Thatcher, cherished it and assured us that it was in safe hands. It is now in the hands of the right hon. Member for Loughborough (Mr. Dorrell). I am afraid, however, that there is plenty of evidence to show that it is not safe. Indeed, I believe that there is enough evidence to show that, in practice, the health service is held in contempt—I use that word in its technical sense—as are those who wish to use it.

We should remember that the health service is one of care. It is a public service, and I hope it is not seen as too much of a party matter. Some of us on the Opposition Benches, and perhaps hon. Members on the Conservative Benches as well, believe that care is not a commodity. Care can only be genuinely given. That makes the health service a very particular service as against any other service. The way in which Ministers handle the health service and the deficit proves that, alas, it is held in contempt by the Government.

The destruction of the public services is instanced by the deficits of the health authorities. I wish to draw a distinction between that failing and those in politics who quite legitimately wish to narrow the ambit of the state—one can think of previous well-known Members of the House who wished to minimise the degree to which the state was involved in our community affairs. There is a temptation, however, to use that policy to justify anything that undermines even a public service which exists as a skeleton one. The Public Accounts Committee will be aware of examples of such behaviour.

Mr. Gladstone approved of the state and of certain services being run by it, but they must be run properly, openly, effectively and efficiently. That is not happening with our health service. What is worse, when hon. Members wish to find out what is going on in order to warn people about it and try to get to the root of the problem, alas, as I will prove tonight, they are faced with obstruction and obfuscation. Worse than that, Members are held in contempt by the Government, as are those whom we represent. That is happening because of the Government's efforts to camouflage what is going on.

We in east London have a particular need of the health service. The East London and the City health authority extends through three of the most needy boroughs of the country. It also contains St. Bartholomew's hospital—just about—but I do not know for how much longer. Four or five hospitals in east London are closing. We have had three Adjournment debates in the House on the difficulties encountered in east London, which arise because of the needs of the people who live there, their occupations. their housing and their history. The majority of the electorate of my hon. Friend the Member for Newham, North-East (Mr. Timms) has an overseas background. There are also many with similar backgrounds in the other two electorates in the borough.

Today on the radio we heard the great news of a £300 million investment in the London hospital, which is in part of our East London and the City health authority. Of course, Bart's will disappear, but such is the reliance on the private finance initiative that the £300 million of capital, perhaps a bit more, will mean a new medical complex on the site of the London hospital.

My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) had been given details of the great bid submitted by the contractor who won, but he only heard about the winner on the radio today. Such is the extent of the separation that a representative of the public now experiences. In this case, my right hon. Friend has been a distinguished Member of the House since 1964 and he has served in three or four Governments. Such was the treatment given to him concerning what is just about, although hardly recognisable as such, a public service.

In the press release that the managers of the new Royal London trust issued, they made it plain that the income to pay for the £300 million and the running of the hospital would come mainly from the revenue funders, the East London and the City health authority. That authority gets money from the Government and it then contracts with all sorts of providers, including the Royal London trust, for the provision of health services.

Let us start with the money that the Government do, or do not, give. There is a difficulty concerning the capitation formula that is used by the three boroughs of Hackney, Tower Hamlets and Newham in east London. I learnt to my surprise only this weekend that although a capitation formula and weighting are applied according to the nature of the population in terms of their need for acute hospital services, and although we have the Jarman index for general practitioners, there is no overall index, as yet—although it may be coming along—for GP services. They are the front line of the health service, however, and we were reminded of that just yesterday by the Secretary of State for Health. I leave to your imagination, Mr. Deputy Speaker, the deprivation that goes on at the front line. There is rationing all down the line because of the "provider and purchaser" arrangement: it cascades. The new guise of the London hospital, following the closure of other hospitals, will not do a great deal to improve the position. We have, in effect, rationing from the top down.

Even with the same resources, it would be possible to say to each unit, "That's your lot; work out your own priorities internally." But difficulties are involved in a system of contraction and competition. The actual amount of money involved is determined by the health service, right at the top; if there is more need, and the providers are having to push out more services, and the money is not there, that is it. That is what happened in the case of the East London and the City health authority: the division of the cake has been unjust on a national basis, and the authority is now in deficit.

Pressure has been placed on borough local services in particular—the social services that, as we know from recent unhappy examples, are "end on" to those of the health service. I hope that I can use the term "social services". We in Newham have a particular problem. Our standard spending assessment formula, which is a very controversial matter, is defective. I cannot go into the arithmetic deeply, but it means that we cannot always spend on education and social services what the Government allege that they give us. It does not work. I believe that the same is happening all over the country. Local government has its own financial problems.

Now I come to the actual figures, which are contained in a rather obscure set of documents—they were made public, yes—relating to the East London and the City health authority. I refer to the board agenda for 22 July, which has been set out and has, I think, been noticed by the community health councils.

The document to which I refer tells us that details of the Financial framework for 1996/97–2001/02 … are summarised below. Those details show a recurrent deficit of £13 million for the current year, rising to £43 million in 1999–2000. In other words, even if the authority continued to provide what is currently an insufficient delivery, that would be the amount of debt that it would be accumulating. I know that that is a book total, but it may help if I quote from the footnote, which states: This forecast does not take account of as yet unquantified costs associated with existing service strategies e.g. Primary Care Development, Mental Health strategy. In addition, if any element of a deficit for a year is addressed using brokerage, the repayment of that brokerage will increase the deficit to be met in the following year. In other words, there will be a cascade of debt.

It is possible that that debt could be met only by borrowing. That is generally the probability. It will see a business through a bad patch, but we are not talking about a business; we are talking about a service. I understand that at the moment—perhaps it is only temporary—district health authorities that have a little bit at the end of the year can make arrangements with each other allowing those that are in surplus, if there are any now, to balance the position with those that are in deficit. I will not say

that the system has worked reasonably well, but I understand that authorities have struggled along—up to now.

I do not believe, however, that deficits such as those shown in the health authority's report can sustain such a solution in the future, and that is the subject of the first question that I shall put to the Minister. I cannot see such deficits being allowed as they are now. That is problem No. 1.

I do not think that those figures were very well known, and I was shocked when I read them in July. I thought, "Crikey; if that is happening in east London, what is the national picture?" I therefore did what most Members of Parliament would do—I tabled a question. It was answered on 22 July—happily for the debate today, by the Minister present tonight.

Part of the question was: To ask the Secretary of State for Health"— because he is responsible— if he will list for each district health authority for each of the financial years 1996–97 and 1997–98 and subsequent years for which figures can be given or estimated (a) the recurrent deficit". I asked for some other figures, but I shall leave those out. The Minister present tonight replied: The information requested is based on estimates subject to revision. Of course they are subject to revision. That is what an estimate is. I believe the Minister has had experience of business. We all know that, do we not? It is a substitute for an answer. And here comes the plucker: It is not suitable for publication."—[Official Report, 22 July 1996: Vol. 282, c. 122] When I read that sentence, I nearly broke the window. There we have a Minister of the Crown, sitting in this House now, replying to an hon. Member asking about a matter of public finance of importance to everyone, and he says that it is not suitable for publication.

What did I do? When we get into trouble or believe that there has been sharp practice—as you know, Mr. Deputy Speaker, some of us may be prone to it—we raise a point of order. The morning after I received the answer printed in Hansard, I raised a point of order and put everything on the record. I asked Madam Speaker: What are the appropriate means by which I can draw that matter to the attention of others? If the practice is more widespread, perhaps my raising this point of order will encourage other hon. Members who have received similar answers to take similar action. The price of liberty is eternal vigilance, and if we do not obtain facts that allow us to find out what the Government are doing on our behalf, it is covered up, is it not?

The reply from Madam Speaker was: It is my understanding that the Select Committee on Public Service is currently inquiring into ministerial accountability. The hon. Member might help that Committee in its inquiries if he were to put the matter to it."—[0fficial Report, 24 July 1996; Vol. 282, c. 263.] In fact, that Committee reported the next day, and in its recommendations, it made a specific point about Ministers not answering questions, not because they did not know the answers, but because the answers would embarrass the Government.

The Public Service Committee had therefore already reported but, by enormous coincidence, the same day, 24 July, as the very last business before the House dispersed for the summer recess—understandably, not many people were about—we debated the report of the new Standards and Privileges Committee. It is called "The Code of Conduct for Members of Parliament", HC 604 of the present Session. I quote from page 10 of that report—a paragraph labelled "Openness". It says: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands. I challenge the Minister to tell us what public interest clearly demands reticence in that answer. What possibly can there be? It is not about defence, foreign affairs or Ulster or Northern Ireland—in which case, even if it had been unnecessary, a phrase would probably have got away with it. I cannot imagine the reason.

The Minister had given an unforgivable answer, a point of order had been raised and there had been a flouting of a code of conduct that the Government have espoused—at least the Leader of the House had said that they did. He is a very respected Member, perhaps more respected than some other Cabinet members I could name. That was the assurance that he gave.

If the Government are contemptuous of the House and its Members, the public are not only justified in being contemptuous of Ministers but might be contemptuous of the House because they do not believe that the House has power. I believe that that factor was touched upon in an earlier debate today.

Because of my good fortune, I can raise another factor relating to that answer—one that affects the quality of public service. The answer of 22 July must have been written indirectly on the instructions, or with the connivance, of Ministers. We all know what happens—it happens in all our offices. Certain routine matters arise and we give instructions on the way that they should be tackled. It is a code of conduct for those who assist us in our work. That happens in private offices. It cascades all the way down through Departments. A Minister may say that he wants something tackled this way or that way; he says to take a certain line on one issue and a different line on another. If there is a difficulty, he will have a look at the matter and say what he thinks. How is it that such an answer as I received got through a private office in a Department of state? The only reason can be that, over the years—perhaps it is an inheritance—there has been a decline in the standard of public accountability and service.

Photo of Stephen Timms Stephen Timms , Newham North East

I am following with great interest the important points that my hon. Friend is making. He mentioned unsatisfactory answers from the Department of Health. Did he notice an answer that the Minister gave me this week? I asked about the amount of private capital that had been committed so far to health service schemes and to the private finance initiative. I was told that the information was not being collected. Does my hon. Friend agree that vital information that is necessary to evaluate the Government's performance in managing the health service, and that we need to safeguard the interests of our constituents in terms of the viability of services, is not being provided by the Government?

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. I do not think that the PFI has much to do with health authority deficits, which is the subject of this Adjournment debate.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

With great respect, Mr. Deputy Speaker, I explained about the PFI as it relates to the Royal London hospital. If there is a repayment of capital to those who are supplying the capital, whether the City or whatever, that money must be paid via the district health authority. The Government must pay sufficient money—

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. I do not need a lecture from the hon. Gentleman on the workings of either the PFI or the health service. The context in which the matter was raised by the hon. Member for Newham, North-East (Mr. Timms) was not relevant.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

On a point of order, Mr. Deputy Speaker. As you know, I always bow to your ruling. However, may I remind you that this is a debate on the Adjournment of the House and therefore any grievance or matter related to the subject is in order, as I understand it? Please correct me if I am wrong.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

It is indeed a debate, for the hon. Gentleman, on the Adjournment, so he has a degree of width. The intervention was not appropriate.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Further to that point of order, Mr. Deputy Speaker. When I raised the matter with Madam Speaker, I pointed out that answers often state that information is not kept centrally. All sorts of excuses are given, the latest being "not suitable", which I believe to be a contempt of Parliament. We have had a succession of unsatisfactory and wrong answers which should never have been given. The answer about which I have been speaking went over the edge and, as I shall claim later, is a contempt of the House.

Following that answer, the House was in recess for three months. How were the people in east London to cope with the already difficult conditions in their health services, in the borough council and in the hospitals, some of which were closing? All those problems are found throughout the country, even in leafy Hillingdon. I thought that the best thing to do would be to write a short letter to the Minister. However, upon reflection I decided to write to the Secretary of State because he is head of the Department and he is responsible. I have previous knowledge of the right hon. Gentleman. We spent a great deal of time in the House yesterday talking about the health service and I thought that he might be able to help.

I should read out some of the letter, which is dated 31 July. It states: You will probably be aware that there is widespread concern about deficits now being incurred by Health Authorities nationwide. There is particular concern in East London in general and Newham in particular. since there is evidence suggesting that not only do national capitation formulae not reflect the real needs of East London. but that the resources thereby made available to the East London and The City Health Authority (ELCHA) are not being equitably reflected in the contracts with the two provider Trusts serving Newham.As the future cumulative deficit of ELCHA has been published, I assumed that comparable figures would be available nationwide, and thus put down a Written Question to you, for Answer on 22nd July. It was replied to by John Horam, and stated that the figures I requested were 'not suitable for publication'. The letter then goes on to mention how I had raised a point of order with Madam Speaker, and then referred to the publication by the Public Service Committee of "Ministerial Accountability and Responsibility". I concluded the letter by stating: In the light of all these circumstances would you please:

  1. 1. Provide Answers by letter to the Questions as tabled;
  2. 2. Explain why the information was then considered 'not suitable for publication';
  3. 3. Explain why deficits, both at District and national level, are being incurred by DHAs, even when needs are not being met, and how this can be done within their accounting system when local authorities and other public bodies are unable to incur such deficits."
That letter seemed to me to be very reasonable—reasonably couched and, I hope, businesslike. I thought that I would receive a reply from the Secretary of State, but I received no reply in August and no reply in early September. My office received a holding letter from the Secretary of State's office on 21 August, and my office sent a reply to it on 17 September. There had been telephone calls between the offices—the "official layer"—but, still, I received no reply.

Therefore, I did what I think most hon. Members would have done, and I tabled another parliamentary question, which was due to be answered today. The question is No. 81 on today's Order Paper, and it states: To ask the Secretary of State for Health, when he received the letter dated 31st July from the honourable Member for Newham, South concerning his failure to answer his Written Question requesting information on Health Service deficits, of 22nd July, Official Report; when a substantive reply was sent; and for what reason the figures requested were regarded as being unsuitable for publication. The reply from the Minister was: I will reply to the hon. Member as soon as possible. I read that response about two and a half hours ago. I hope that, in the course of his reply, the Minister will give a full account, because the Minister has been given more time to think out the answer.

Today, there has been much talk in the press and across the country about the House, about what hon. Members can and cannot do and about what Back Benchers allow Whips to tell them to do or not to do. All hon. Members are not being dealt with contemptuously by the Government, although I could not care less about what people think about me or about the contempt that they may hold for me personally. I do care, however, about the 70,000 people whom I represent, and all those whom hon. Members—including the Secretary of State for Health and the Under-Secretary of State for Health—represent.

No Minister who is using public money out of public taxation, however, has the right not to provide reasonable answers to reasonable questions about the use of money for which they are but trustees and stewards. That principle is the basis of public service and the basis of democracy in the House. The failure to provide such answers is one of the reasons why, over past years, there has been increasing contempt not only for government but for the way in which the Government—by various methods, including limited answers to questions and refusals to answer questions—have been in contempt of the House.

Unless the Minister has a very good reply—which he will find very difficult to make—I am minded to consider whether I should refer the entire matter to the new Committee as a contempt of Parliament.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

Order. I assume that the hon. Gentleman has the Minister's permission to speak.

Photo of Stephen Timms Stephen Timms , Newham North East

I was unable to seek the Minister's permission because of the early start of the debate. I hope that I shall nevertheless be allowed to speak briefly.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

I remind the hon. Gentleman that it is his duty and that of all hon. Members to take due note of the House's proceedings and not assume that a debate will take place at a set time.

Photo of Stephen Timms Stephen Timms , Newham North East

I accept your guidance, Mr. Deputy Speaker, and am grateful for this opportunity to participate in the debate.

I reiterate the grave concern felt in east London about the scale of the deficit facing the East London and the City health authority. An exercise is being conducted within the authority to identify savings to bridge the gap in funding. We expect to be told the outcome of the review in the next month or so, but it is clear from what we know already that some draconian measures are being contemplated to bridge the gap that my hon. Friend the Member for Newham, South (Mr. Spearing) described.

My hon. Friend, and my hon. Friend the Member for Newham, North-West (Mr. Banks), have said in previous debates that east London already suffers great deprivation and inadequate funding. That is true in the health service, as elsewhere. We now face making very large cuts to meet the gap in the health authority's budget. As has been said, it is not only in east London that such problems have arisen. I think that the biggest problem is in east London, but problems have arisen in other parts of London and elsewhere.

The report published by the Select Committee on Health just before the summer recess examined the way in which resources are allocated within the national health service, and especially the way in which the element of the funding for community health services is distributed. The Committee recognised, quite rightly, that there should be needs weighting in the way in which that part of health service funding is allocated. There is not, although it was certainly envisaged in the original research done by York university. It was removed from the formula for reasons about which we can only speculate. The Committee pointed out that there should be needs weighting for community health services as there is for all other aspects of the health service. The Committee stated specifically that areas such as east London have suffered most from the lack of needs weighting in the formula.

I know that the Minister intends to deal speedily with the problem of needs weighting for community health service resources, but I hope that he will do so speedily, to offer the residents of east London, and some of the other areas similarly affected by the forthcoming deficit, the prospect of some relief, and so that the draconian measures now being contemplated will not be required.

Photo of John Horam John Horam , Orpington 9:27 pm, 16th October 1996

I genuinely congratulate the hon. Member for Newham, South (Mr. Spearing) on raising this subject on the Adjournment. As he said, he was fortunate in having more time than usual to make his case. In fact, he has raised two subjects: the official subject of the debate, as it were, is health authority funding, which is an extremely important topic, but he has also raised, in parentheses as it were, the provision of information by Governments to the House of Commons. That is in many ways an even more important subject; it is certainly equally important.

However, the hon. Gentleman began by referring to yet another subject—the commitment to care in the health service. I shall say a few words about that before dealing with the main subject of the debate.

The NHS continues to deliver more and better health care more speedily and more efficiently than ever before. As the House knows, Government spending in real terms will be a massive 74 per cent. more in this current year than it was in 1978–79. As the House also knows, the Prime Minister, as recently as last Friday, reaffirmed the Government's commitment to ensuring that real terms additional funding is made available to the NHS year on year.

Undoubtedly, the NHS is one of the most efficient health services in the world; efficiency has increased by more than a quarter over the past 17 years. The Government have succeeded in slashing the times patients need to wait to be seen in hospitals. In 1990, 200,000 people were waiting more than 12 months for treatment. That figure is down to 10,000 today, which is a truly massive achievement. When the hon. Gentleman rightly talks about care in the health service, he should realise that this Government and our predecessor Conservative Governments have a great deal to be proud of.

All that has been achieved against a backdrop of steadily increasing demand, as a result of improvements in life expectancy and new and costly drugs and treatments becoming available. That has naturally resulted in a public expectation of more and better-quality services. Those they continue to get, but the pressure on the NHS continually to seek to be ever more efficient is bound to prevail.

As well as putting in additional funding year on year overall, we naturally expect that all health authorities and trusts will seek further to improve their efficiency. That ensures that more moneys released from bureaucratic procedures and ineffective treatments can then be channelled into direct health care provision.

Everyone is already aware that this Government have been very successful in driving down management costs in the NHS now that the reforms are fully in place. The efficiency scrutiny, examining current and future information, will also assist the NHS to achieve this redirection of funds into the provision of health care.

The internal market we have put in place is designed to encourage all such improvements, but it will also inevitably cause some pressure points to emerge in the interim. I have confidence that NHS managers will continue to deal effectively with those as a normal part of their planning and management functions. Nobody ever expected this to be an easy process, but the goal of providing better patient services makes it all well worth while. We therefore do not plan to ease up on the process which has proved successful so far.

I now turn to the release of financial information. For some time now, health authorities' audited accounts information has been made readily available, both locally by publication of accounts and nationally in response to questions in the House. In-year forecast results, which is what the hon. Gentleman was talking about, have also been available from time to time at individual health authority meetings, which inform the local population of the health care delivery plans and the associated financial implications envisaged by the relevant health authorities. In the hon. Gentleman's case, that is the East London and the City health authority.

Health authority plans, including all their financial implications, are regularly discussed with the regional offices of the NHS executive to inform their performance management role. The health strategies appropriate to local circumstances are, however, clearly matters for the health authority. Naturally, health authorities have to take into account changes in the health care needs of the local population, advances in medicine and clinical practice, and contract negotiations with the health care providers. Plans and forecast financial positions are therefore likely to change substantially throughout the year. They have not previously been considered appropriate for central publication, precisely because they can be revised and changed during the year.

We have recently been considering whether it would be possible to release such information without prejudicing local discussions over service delivery and funding, and without giving out information which we were aware would be likely to alter substantially over the coming months, and which might therefore sometimes be misleading. To do so would be potentially harmful to the successful delivery of patient care, by causing undue concern to all those providing and receiving health care in a particular locality.

In the majority of cases, it is possible to make revisions to plans without recourse to drastic changes to service configurations, to which the hon. Member for Newham, North-East (Mr. Timms) referred. In any case, such changes, as he and the hon. Member for Newham, South know, are subject to full consultation.

There remains some risk to the process, particularly if commentators do not allow health authorities to get on with the day-to-day planning and arrangements necessary to purchase appropriate services for their local population. However, having considered all the various aspects, including those raised by the hon. Gentleman, and—as I hope he appreciates: I owe him that courtesy—having listened to his arguments, which were put with great force and clarity, I have now concluded that it will be appropriate to make available centrally the forecast financial position of all health authorities in the country, not merely the one in London that the hon. Gentleman requested.

The appropriate figures provided by health authorities will shortly be made available to the hon. Gentleman. They will also be placed in the Library.

I shall say a word about those figures, as I know the hon. Gentleman is interested in them. Let us be clear what they represent. They are monitoring information for management. That is their purpose. They do not represent how things will turn out at the end of the financial year, but are a starting point for management action.

Photo of John Horam John Horam , Orpington

I am glad to see the hon. Gentleman nodding. I am sure that he understands.

No one would expect a perfectly even spread of spending across the year. The figures may be volatile, and they may be revised. However, one would expect management to monitor trends in spending and take action where necessary. That is what good management is about. Good management needs good management information.

The figures that I will provide to the hon. Gentleman will be published along with the audited accounts for the end of the year. That will enable the full financial picture to be available to the public in the spirit of the open government initiative that the present Government have put in place.

I should say a few words about how health authorities monitor and control their expenditure, as I know that it concerns the hon. Gentleman.

Photo of John Horam John Horam , Orpington

No. The hon. Gentleman has not spoken in the debate, and, having already given the hon. Member for Newham, North-East an opportunity to speak, I owe it to the hon. Member for Newham, South to answer his questions fully.

As the hon. Member for Newham, South is already aware, there are a number of health authorities whose monitoring suggests a need for management action during the remainder of the financial year. That does not suggest insurmountable problems. The health authorities concerned work closely with the NHS executive to balance priorities and make the necessary plans. Any corrective action should be designed to ensure the continued delivery of a high standard of health care. The financial options include reductions in working balances and brokerage arrangements with other health authorities.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

I thank the Minister for some explanation, which may or may not stand up. Had he written earlier, the reasons why he considered it unsuitable might have become clear.

However, from what the Minister has said, bearing it in mind that all Government expenditure is to some extent estimated, is he not now admitting that there is greater volatility in financial forward planning in the national health service which cannot be to the advantage of the service or to its users, and that that arises from the structure of purchaser and provider that the Government, in my view wrongly and foolishly, put in place?

Photo of John Horam John Horam , Orpington

No. With respect to the hon. Gentleman, that is not how it arises. Any volatility in the financial position of a health authority during a year essentially arises as it does in any large organisation—through an imbalance between spending and income, which may occur over a short period and be evened out over the year.

At certain times of the year, any private sector business may earn high revenue and have low costs, while at other times the reverse will apply. For example, a Christmas card company would earn a huge amount of revenue at one time of the year, yet over an entire year a Christmas card company would calculate its profit taking into account expenditure and revenue.

Similarly, health authorities experience volatility in their spending, purchases and revenue, so the figures will vary from quarter to quarter. That does not mean that this essential unaudited management information will not be reconciled at the end of the year. I hope that the hon. Gentleman understands that.

I should like to make the simple point to the hon. Member for Newham, North-East that East London and the City health authority is the second highest beneficiary in the country under the existing needs element of the formula, and the third highest overall. As he knows, since he is a connoisseur of these matters, I accept that we are evaluating a proposed interim CHS-needs weighting based on the work of independent consultants, which may of course change the weighting in a way that may be helpful to inner-city areas such as those he represents.

Despite attempts to portray otherwise, the NHS is, as I said at the outset, better funded overall and in a better state than it has ever been. The finances of the NHS are under closer control than ever before, and a far better service is provided for the public, as witnessed by the greatly reduced waiting times and improvements in treatments available.

We have paid great attention to the subject of public accountability for the NHS, and in addition to the accounts information that has already been made available for some time, we will publish forecast information, as I described to the hon. Member for Newham, South. I trust that he agrees with me that we should all encourage responsible use of it to help rather than hinder the process of successful health care delivery to all our constituents.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Ten o'clock.