NHS Funding

– in the House of Commons at 12:31 pm on 9th February 2005.

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Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health 12:31 pm, 9th February 2005

With permission Mr. Speaker, I should like to make a statement about allocations to primary care trusts in the national health service in England.

I am today allocating revenue resources to England's 303 PCTs for the financial years 2006–07 and 2007–08. PCTs have already been informed of their allocation for 2005–06, so they will now be able to plan for the medium term, knowing with certainty their allocation up to March 2008. I have written to all hon. Members with details of the allocations to the PCTs that serve their constituencies.

This Government believe in the NHS. We believe in its founding principle that there should be equity of access, free at the point of need, for everyone. Furthermore, we believe that the NHS can be reformed and transformed as well as improved, so that health care can be delivered to the standards of, and in a way expected by, today's public. That is why in 2002 the Government outlined our plans for an unparalleled increase in expenditure in the NHS over the five years from 2003–04 to 2007–08.

Today, I can tell the House that I am allocating more resources to the NHS front-line services than have ever been allocated before—£64 billion in 2006–07 and £70 billion in 2007–08. That contrasts with £45 billion only four years ago. That means that PCT allocations will grow in 2006–07 by no less than 9.2 per cent., and in 2007–08 by 9.4 per cent. On average, PCTs will have, compounded, 19.5 per cent. more resources in 2007–08 than in 2005–06. The increases between 2003–04 and 2007–08 represent a faster growth in resource allocation than ever before in the history of our NHS.

The distribution of those resources has had regard to four main principles under this Labour Government. The first is that the increase will allow the NHS to take significant strides in improving access to health services for everyone throughout the country. Secondly, places with greater need will receive an even greater allocation of resources. Thirdly, for the first time, this allocation will allow significant resources to be used for the prevention of ill health and for health improvement. Finally, there will be a floor to the allocation to each primary care trust today. No primary care trust will receive an increase in funding over the two years of less than 16.8 per cent. Not one primary care trust in England will receive less than a 16.8 per cent. increase over the two years.

For the five years between 2002–03 and 2007–08, allocations to primary care trusts will increase by more than 56 per cent. In terms of real people, by 2007–08, £1,388 will be allocated per head, compared with £907 in 2002–03—an increase of 53 per cent. in allocated resources for every single man, woman and child in England. We have done more than just increase our investment; we have made the distribution of resources more fair than ever before.

A key factor in distributing funding fairly is the count of the number of people served by each primary care trust. Since the last allocation round, the population data based on the 2001 census has been revised, so we now have a more accurate population count. In addition, the allocations that I am announcing today include projected increases in populations. That means that we are properly taking account of the challenges faced in areas of rapidly increasing populations.

If allocations are to be fair, they must also be based on need. Following advice from the independent Advisory Committee on Resource Allocation, I am making some improvements to the formula to provide the same access to health care where there is the same need, and to support the reduction in health inequalities. I have also changed the way in which funding for primary medical services is distributed to make that fairer. For the first time, the majority of funding for GP services will be allocated according to the relative need for primary care services. The formula that we are using reflects the most up-to-date and best measures of differences in need for those services. The House will be glad to hear—many hon. Members have made representations to me—that I have also tackled the unfairness inherent in some areas being significantly under target in terms of the previous resource allocation.

Following the introduction of the new formula in 2002, we realised that, despite progress, some areas were still not receiving their fair share of funding. At that time, some areas were more than 22 per cent. below their fair share. We made some progress in reducing that unfairness in the previous allocation round, but despite that, in 2005–06 some primary care trusts are more than 5 per cent. or 10 per cent., and in one case more than 15 per cent., beneath their fair share. Such a disparity is unfair and unacceptable, so I have decided in the 2006–07 and 2007–08 allocations to accelerate progress towards a fair-share distribution. To reach that outcome, primary care trusts at the greatest distance beneath their fair share will receive more than those who were already receiving their fair share or more.

With the allocations that I am announcing today, based on need and fairness, by 2007–08, no primary care trust in England will be 15, 10 or even 5 per cent. below target. Indeed, I am able to tell the House that under today's allocation no primary care trust will be more than 3.5 per cent. away from their optimum fair share of the allocation. That is as substantial a move as I can make commensurate with the stability of the whole system.

Our general approach, therefore, has been to balance a significant and substantial increase in resources for every area, and for the PCTs of every Member throughout the House, with an even greater improvement in funding where there is greater need. No primary care trust in England—north, south, east or west—will receive an average increase of less than 8.1 per cent. Over the two years, that is an average increase of 19.5 per cent. for every one in England. That will ensure that all parts of the country will receive sufficient funding to see considerable further improvements in their health services.

At the same time as providing a 19.5 per cent. average and an 8.1 per cent. a year minimum, the funding formula rightly moves more funding to where it is most needed. I have already identified 88 primary care trusts as those that need the most urgent action. Since those are the most needy areas, they will receive a higher level of funding than other areas. By 2007–08, the funding per person in a spearhead primary care trust will be £1,552, compared with a national average of £1,388.

I can also tell the House, however, that by 2007–08, as a result of the fairer distribution, the 5 per cent. most needy areas and those facing the greatest need for funding, in both the north and the south of the country, will receive an average of £1,710 per person. The 5 per cent. most well-off areas with less need for funding will receive an average of around £1,190. That means that I am putting additional funding where it is needed to reduce health inequalities. That should help to ensure that by 2010 there will be a 10 per cent. reduction in health inequalities, as measured by infant mortality and life expectancy at birth. We will also see further reductions in killer diseases. We have already reduced premature deaths from heart-related disease and from cancer by 27 per cent. and 12 per cent. respectively in the past six years. By 2010, there will be a fall of at least 40 per cent., from 1997 figures, in death rates from heart disease and stroke, and a 20 per cent. fall in death rates from cancer.

We also want to improve the experience throughout the NHS for all patients. By the end of 2008, for their planned hospital care, as a result of these allocations, all patients will be able to choose between a range of providers, including NHS foundation trusts and NHS and independent sector treatment centres. And because the investment announced today will be matched by the reform in working practices undertaken by staff, patients will be admitted for treatment in England within a maximum of 18 weeks from their first appointment with their GP to the door of the operating theatre, with no hidden waits. Having halved waiting times, we will halve them again and halve them once more for patients in England.

In addition, we can move away from treating illness and towards preventing it and encouraging health improvement. These resources will also allow us to make progress on prevention towards the original vision of the NHS as a true health service, rather than just a sickness service. Today's allocations include public health funding of £211 million in 2006–07 and £342 million in 2007–08 to help make that happen. All areas will receive their share of this funding, but again, a higher proportion will go to the most deprived areas, including the spearhead PCTs.

Of course, this is not all the funding available to deliver the health improvement agenda, but it is a significant proportion of it. It is being allocated directly to front-line PCTs to allow them to implement key initiatives such as improved school health and improved sexual health services. For example, we are providing funding so that by 2010, every PCT in England will be resourced to have at least one full-time, year-round qualified school nurse working with each cluster or group of primary schools and related secondary schools. And not before time.

Our public services must respond to what the public want by giving quality care at the public's convenience. Under this Government, the NHS's founding principles will remain firmly in place and will be enhanced by today's investment, thus giving equal access free at the point of need. But the way in which the services are organised is being transformed, giving patients a more convenient, personalised and responsive service within a system that is not only fair to all, but personal to each of us. That is a key aim for today's NHS.

The biggest ever investment in our national health service, the fairest ever distribution of resources and a massive programme of continued reform by staff will together give the increased capacity and diversity of provision that will offer patients faster access to better quality health services than ever before, all free at the point of need under a Labour Government. All those improvements are opposed by the Conservatives, who plan to divert money away from the NHS and to introduce for the first time into NHS commissioning charges for operations. Let the people make the comparison between the two offers and let them make their choice. I commend the statement to the House.

Photo of Andrew Lansley Andrew Lansley Shadow Secretary of State for Health

I am of course grateful to the Secretary of State for advance sight—a typically generous 30 minutes—of the statement. It consisted of 25 paragraphs but he could have said it in one, because in fact, there is no extra money when compared with known planned NHS expenditure through to 2007–08. This is simply an attempt by the Secretary of State to divide the cake differently and—surprise, surprise—there is an election coming, so we are to have "spearhead" primary care trusts. [Interruption.] I wonder whether those trusts are located in the Labour-held seats that the Government are worried about.

One pity—[Interruption.]

Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Chair, Speaker's Committee on the Electoral Commission

Order. I have said it before and I will say it again: Members who shout are damaging only themselves, because I shall simply say that the Minister has delivered his statement and that the Opposition have responded. Those Members who want to ask supplementaries had better be quiet. I will be watching.

Photo of Andrew Lansley Andrew Lansley Shadow Secretary of State for Health

Thank you, Mr. Speaker. One of the pities is that we did not get an opportunity to see the text of the statement, which includes sub-headings that the Secretary of State did not read out, until he had finished delivering it, because the sub-heading before paragraph 18 contains an important truth:

"What the funding will deliver—inequalities".

Yes; inequalities between different parts of the country. To defend Labour-held seats, the Secretary of State will take away money from primary care trusts that are running deficits today in order to promise jam tomorrow for his spearhead primary care trusts.

The overall level of allocations to PCTs reflects the increase in NHS budgets, and to that extent no new money has been announced today. The NHS needs the assurance that under a Conservative Government or a Labour Government substantial increases in NHS budgets are planned. My right hon. Friends and I have committed ourselves to an increase of £34 billion by 2009–10 compared with the levels that we would inherit in the next financial year. We have made that commitment because we support the NHS and its values, which include the provision of comprehensive, quality heath care for all on the basis of need, not on the basis of ability to pay. We value the work done by NHS staff, and we intend to give them not only the resources, but the support and freedoms to ensure that they deliver the highest standards of care for patients.

A key point is not only to promise, but to deliver high quality care for the 17.5 million people who live with long-term conditions. That will require substantial investment in primary care services, and as we set out to the House in our debate on 11 November, family doctor services are at the heart of that delivery. The Secretary of State said nothing about opportunities to develop family doctor services. Genuine reform is required to back up the development of standards with resources and to give general practitioners the power to commission services and to support patients' right to choose. At the same time, we should ensure value for money by cutting bureaucracy, which currently consumes many resources that should be in the front line.

The Secretary of State's statement fails the test of reform. Over the next three years, for example, scheduled care in hospitals should increasingly be determined by patient choice, and GPs should exercise choice on behalf of patients, with money following the patient. Why does it make sense for that funding to form part of the PCTs' unified allocation in 2007–08? If GPs cannot manage the budget, they should not be expected to hold it, and if they have the power to commission services on behalf of their patients, they should receive their budgets directly.

Through the development of the general medical services contract, we have learned that GPs have populations with long-term conditions, like the asthma and diabetes registers. Should we not progressively move money from the general demographic assumptions that underpin the Secretary of State's proposal to specific factors determining GP budgets? The Secretary of State discussed assumptions about need rather than actual need.

The Secretary of State discussed cancer services, but the lack of progress in commissioning cancer services, which has been illustrated within the past fortnight by the Public Accounts Committee and Doctors for Reform, demonstrates that PCTs are not necessarily delivering progress on cancer services. A combination of clinical networks, GP commissioning and patient choice should deliver services more effectively. Those budgets also do not need to be routed through PCTs. The Secretary of State has failed to set out how NHS funding flows will be reformed. Instead, we have seen an old-fashioned exercise in dividing up the cake.

I have a number of specific questions for the Secretary of State. The previous intention was to move to target allocations by 2010. Is that still the Government's intention? In this financial year, the combined distance from target of PCTs is £1.1 billion. How much does the Secretary of State propose to reduce that total figure by in 2006–07? How much will PCTs that are currently above target be expected to contribute? The Secretary of State implied that there is no ceiling, and therefore every other PCT must contribute to the floors. Will he tell us the percentage contribution towards floors from other PCTs?

Last week, we heard that the Government are not incorporating 2001 census data in the local government finance settlement until 2006–7, but the Department of Health proposes to do so in the next financial year. Why are the Government taking one view on local government and another on health?

As the Secretary of State will know, many areas have fast-growing populations. The removal of type 2 funding for general practice left a serious gap that the Department had to plug. The Secretary of State did not refer explicitly to the growth area adjustment, which is contained in the new formula. Will there be an ability to fund the costs of infrastructure not only in the growth areas designated by the Deputy Prime Minister, but wherever large increases in population occur; and will the money arrive in time to match the population growth? In Milton Keynes, the infrastructure has been insufficient to deal with the increases in population experienced up to now, and the PCT is running a projected £6 million deficit.

The Secretary of State did not discuss the market forces factor, which continues to fail accurately to reflect NHS costs of provision in all areas. Has the Secretary of State considered moving from a general labour market approach to one based on benchmarked costs of efficient providers once the doctors' contracts and the "Agenda for Change" have been fully introduced? The Secretary of State should understand that promises of jam tomorrow are all talk, if at the same time NHS trusts are running deficits and the money that the trusts need is being eaten up in bureaucracy.

The administrative costs of strategic health authorities are more than £600 million, and of PCTs, more than £700 million. By cutting bureaucracy in both, we can get sufficient money through to the front line to meet the £1.1 billion distance from target of PCTs today. Putting resources and accountability into the front line is essential if Government-imposed cost pressures are not to mean continuing deficits.

Since the new year, one third of SHAs have published their forecasts for the end of this financial year based on figures from the end of December. The total forecast deficit from just nine SHAs is £227 million: all 10 PCTs in Hampshire and the Isle of Wight are forecasting deficits; North East London SHA has a £22 million deficit in the year to date; Thames Valley SHA has a £41 million deficit; and Surrey and Sussex SHA is forecasting a £33 million deficit, half of which results from the working time directive, new contracts and the "Agenda for Change".

In my area, Norfolk, Suffolk and Cambridgeshire SHA has forecast a £56 million deficit. That deficit includes PCTs such as my local one, South Cambridgeshire PCT, which is currently 8 per cent. above target. It is forecasting deficits and is above target, but in the Secretary of State's fantasy world it has more money than it needs. Across the country, PCTs are running deficits, demonstrating that the formula is way out by comparison with actual need.

The Secretary of State is promising money tomorrow while the NHS has deficits today. We could clear the deficit if the billions eaten up in bureaucracy got through to the front line. The Department of Health is imposing costs on the NHS with no idea of the effects. The statement does not deliver reform or urgently needed value for money, which it will be for us to do.

I have one final point for the Secretary of State, but Labour Members, and particularly Manchester Labour Members, may be interested. The Greater Manchester SHA board papers state:

"the year to date financial position for the Trust sector continues to worsen".

They also state:

"although trusts and PCTs are forecasting deficits, the SHA continues at this stage to report to the Department that overall financial balance will be delivered" for Greater Manchester. The Secretary of State does not know what is going on, and it is about time that he moved aside for a Government who do.

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

I have waited a long time to hear with what ingenuity someone could turn a 10 per cent. expenditure increase into a bad news story. Today we have heard an attempt at that. I have to tell the hon. Gentleman that it is not Labour that is out of touch either with addressing people's needs or with improving the national health service; I fear that it is the Conservatives.

I shall deal with some of the points that the hon. Gentleman raised. As usual, there was a dig at vast administrative costs, bureaucracy and waste. There is always a sting in the tail, with an attack on the staff of the NHS—but Labour will defend them. I shall give a couple of figures. In fact, PCT management costs are 1.5 per cent. of total expenditure. The costs of senior managers in the NHS, who number about 38,000 out of 1.3 million staff, are between 3 and 5 per cent., which is about a quarter of the management costs in private health care and about one fifth of the administrative costs in the American health care system, so is it not time that we praised the NHS for its efficiency?

The hon. Gentleman raised the issue of deficits, as he has done before. I have two things to say to him on deficits. The first is that they are forecasts: every year for the past few years there has been a forecast deficit in the NHS, but in fact over the past four years the NHS has been in financial balance at the end of the year.

The hon. Gentleman wants to talk about forecast deficits, but I can tell him that the problem occurs when there are actual deficits. The last time there was a significant actual deficit—£500 million, twice the size of those forecast deficits, in a budget half the current size—was in the last year of a Conservative Government. In other words, the actual deficit then was three times higher than the forecast deficit the hon. Gentleman is worrying about now.

The hon. Gentleman asked me if we would reconsider the market forces factor. We keep it under review, but as he knows, the market forces factor was identified by the resource allocation working party as far back as 1976, so it is not new. Its development is overseen by the Advisory Committee on Resource Allocation, and it is the result of many years of analysis by academics. The population figures from the 2001 census that we are using are, first, more accurate and, secondly, adjusted to pay some degree of attention to forward projections. There are four areas, including that of my hon. Friend Dr. Starkey and the Thames gateway area, and they will be glad to know that we are taking account of that projected need. I was asked whether deprivation would be taken into account. The answer is that the projections take account of actual as well as assumed need. I could go on at length about that but I do not think that we need to take up more time, because for the past five years we have taken independent advice on the matter.

I finish on this point: the hon. Gentleman started off by challenging the methodology for, and thus the legitimacy of, the allocations. Does that mean that he intends to revisit them? Is he going to tell Members that these huge increases may be taken away from them? If so, he should say that today, because that will be another reason for people to be extremely careful about even considering voting Conservative when the election comes along. The truth is that under the plans of a Conservative Government, £1.2 billion will be removed from that expenditure: £4 million will be taken from every single PCT to subsidise the relatively well-off to jump the queue and go to the private sector if they can afford half the cost of their operation. That is an attack on the founding principle of the NHS, and I am sure that people out there will recognise the difference between investment in the NHS and an Opposition party committed to the virtual destruction of the ethos of the NHS.

Photo of Paul Burstow Paul Burstow Shadow Secretary of State for Health

I thank the Secretary of State for early sight of his statement. As ever with these statements, the devil is in the detail. In broad terms, the Liberal Democrats welcome the allocations announced today and the increased investment that they imply. We see it as our task to continue pressing the Government to make sure that the investment going into the NHS is spent as wisely as possible.

The Secretary of State talked about primary care trust allocations. Can he tell us when he plans to make announcements about central allocations, too? He had a lot to say about improving public health and tackling health inequalities. In earlier proposals, he set out his plans for a partial ban on smoking in public places. If the intention really is to protect people's health, why does the health of customers and workers in pubs not need protection unless they are consuming food? How will that policy close the health gap between the richer and poorer areas of our country, which is, it seems, a Government priority?

Given that the latest National Audit Office report found that many GPs were seriously worried about the effects of the Secretary of State's patient choice policy on equity in the NHS, can he tell us what measures will be taken to address the real concerns of practitioners up and down the country? Does he agree that the NHS at local level should have the maximum possible freedom to decide how best to meet the health needs of local people, and that meeting those local health needs rather than hitting politically dictated targets should be the priority?

The Secretary of State said that there would be no more hidden waiting lists, but when will that be? Will he agree to publish, before the election, the hidden waiting times for scans and tests so that people can judge the Government's record for themselves? Will he also confirm that his target is that by 2008 up to 15 per cent. of procedures paid for by the NHS will be undertaken by the private sector? Does that not mean that in future the private sector will no longer simply be adding extra capacity to the NHS but replacing existing quality NHS provision?

What assessment has the Secretary of State made of his targets for PCT budgets? Will he confirm that the guaranteed contract payments for independent treatment centres mean that they will be paid regardless of the work they do, and that that is why 73 per cent. of NHS chief executives say that that does not offer good value for the taxpayer? Will the Secretary of State tell us why he thinks that after eight years of Labour Government, top NHS managers describe his approach as political, prescriptive and bullying?

More people are getting sicker in the NHS because of superbugs. More people are having difficulty in finding dentists on the NHS. More people are struggling to get appointments with GPs when they want them, and more people are waiting on hidden lists for scans and tests. That is the Government's real record, and that is what will count with our constituents.

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

The estimate that up to 15 per cent. might be added to capacity, or might be private operations, is just that—an estimate; it is not a target and it is not being driven. It will depend on patient choice. We are expanding the NHS and diversifying the type of treatment, making it much more efficient. It is free at the point of need, and in addition we are buying in bulk to push the price down and to give the patient the choice of quicker access to services. That is precisely why we have halved waiting times, and why we have taken 340,000 people off the waiting lists that we inherited from the Conservatives. Ultimately, it will be the choice of the individual—[Interruption.] I cannot hear what Mr. Burstow is saying from a sedentary position. If he is asking whether that is a substitute for NHS operations, I can tell him that when the Government came to power NHS operations were below 5 million, and that about 6.5 million operations will be carried out directly through the NHS, so we are not taking anything away. In addition, there will be another 500,000. That is good for patients. For heaven's sake, I wish that for once the Liberals would think of these things from the patient's point of view, rather than always from the producer's or the provider's point of view.

For 60 years, no Government of either party have measured hidden waits, and we do not have the mechanisms to do so at present; but I have pledged that if the Labour Government are re-elected not only will we ensure that the maximum wait is 18 weeks, as opposed to 18 months under the previous Government, but that that will be the time for the whole patient journey. Previously, one third of the journey took up two years, we shall now pledge the time right through from the GP to the door of the operating theatre.

The hon. Gentleman asked about local decision making. At present, 75 per cent. of all money is distributed to PCTs, and they take responsibility for it. He asked about GP front-line engagement. Yes, we need more GP engagement in a range of areas, including the introduction of IT, which is why, recently, I put not only more effort but £95 million into that.

The hon. Gentleman asked about workers in restaurants and pubs. They will be protected to the maximum where smoking is banned completely. No restaurants will allow smoking, but even in the minority of pubs that continue to allow smoking, there will be restrictions around the bar area to protect all workers.

Finally, I thank the hon. Gentleman for what he said when he started: he appreciated the 8.1 and 8.2 per cent. increases in his constituency—£35 million followed by £37 million. He was not in the least bit churlish, and he should not be, because he is getting an 8.1 per cent. increase. To put that in context, the person who was churlish—Mr. Lansley, the Opposition spokesman—is actually getting a bigger increase: 8.2 per cent. I thank the hon. Member for Sutton and Cheam for his charitable and non-churlish response.

Photo of Mr Kevin Hughes Mr Kevin Hughes Labour, Doncaster North

I warmly welcome the statement and wholeheartedly congratulate my right hon. Friend on what he is doing with the fair shares initiative—it shows the clear difference between us and that lot on the Opposition Benches—but do the increases contain any special recognition for areas such as mine that are having difficulties in recruiting GPs?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

Not for the first time, we have extended the integration of the moneys provided for primary care services, including GPs, and I hope that that will help my hon. Friend's constituency. He may wish to know that in his case, the increases are 9.4 per cent. in 2006–07, and 9.3 per cent. in the following year, producing an additional two-year cumulative increase of 19.6 per cent., so his local services will have £21 million more. Those are the figures for the Doncaster, North area, and over in Doncaster, Central, there will be another £25 million—an even bigger compound increase of 19.7 per cent.

Photo of Malcolm Moss Malcolm Moss Shadow Minister, Home Affairs

It would be churlish not to welcome these increases, particularly in my constituency, but does the Secretary of State not accept that if my local PCT, the East Cambridgeshire and Fenland PCT, had received its proper funding allocation—it had a shortfall of £8 million last year alone—it would not now be colluding with the Cambridgeshire and Peterborough mental health trust in closing a 16-bed mental health in-patient unit at Alan Conway Court, Doddington hospital? Perhaps my constituents can take some comfort from the Secretary of State's statement today when he said, "We must give the public what they want."

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

I am grateful to the hon. Gentleman for going so far as to say "thank you" at one point. One of his PCTs is getting the third largest increase in the country.

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

Yes, it may be long overdue, but for 20 years under the Conservative Government, such an increase was never given. The hon. Gentleman is now being given a 31.2 per cent.—[Interruption.] I shall repeat that, lest he miss it: one of his PCTs is getting a 31.2 per cent. increase. He gets up and says, "We should have had this before," but has he forgotten that he actually voted against the increases?

Photo of Ronnie Campbell Ronnie Campbell Labour, Blyth Valley

My right hon. Friend never mentioned dentistry. He will be aware that there is more dentistry in the private sector than in the health service, so can he tell us whether he is encouraging dentists to return to the national health service?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

Yes, indeed, I can. My hon. Friend is kind enough to point out that even the fairly huge aggregate figures that were allocated today do not include the £368 million extra that is being put towards our attempt to cope with the huge challenge of dentistry, particularly the fact that although there are more dentists, few of them want to do NHS work. The Minister of State, Department of Health, my hon. Friend Ms Winterton has been tackling that issue robustly. We do not pretend that it is easy, but I hope that it will be made easier by the fact that in my hon. Friend's area, Northumberland PCT will receive a £69 million increase over two years, which represents increases of 9.1 and 8.9 per cent.—18.8 per cent., when compounded over two years—so there are 69 million reasons why he and his constituents should feel that improvements in the NHS will continue in his area.

Photo of George Young George Young Chair, Standards and Privileges Committee

Like my hon. Friend Mr. Moss, I welcome increased commitment to the NHS from whichever political party it may come. Is the Secretary of State aware that the two PCTs in my constituency are running at a substantial deficit, which is why, in turn, two hospitals were unable to become foundation trusts? Is he concerned about the gap between the rhetoric in Westminster and the reality on the ground in constituencies such as mine, where ill people read of financial recovery plans, ward closures, closed GP lists, fewer NHS dentists and a worse out-of-hours service? Is he not concerned that the increased allocation that he has just announced may simply be used to pay off the accumulated deficits?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

No, I am not concerned about that. I thank the right hon. Gentleman—I thought that I caught a "Thanks" just at the beginning of his remarks—and I am sure that he will welcome the extra £30 million for the Mid Hampshire PCT, which represents a compounded increase of just under 17 per cent. There is also another £34 million for the North Hampshire PCT, which represents a 17.7 per cent. increase. I do not believe that those increases will be spent on the deficit—I have talked about the difference between forecast and actual deficits—but I ask the right hon. Gentleman to contemplate what the local management in his constituency would have to think about if they knew that instead of getting such an increase, they were facing the equivalent of £24 million being taken away to subsidise the Conservative party's policy of the patient's passport, which would go to about 8 per cent. of his local constituents, and the 92 per cent. of people who depend on the NHS would be £24 million worse off, rather than £64 million better off.

Photo of Ms Lorna Fitzsimons Ms Lorna Fitzsimons Labour, Rochdale

I thank my right hon. Friend for this continued investment in the increased health care provision in the health economy in Rochdale. He will know that Rochdale has one of the most profoundly difficult areas in terms of poverty. The new hospital and the recent announcement of £35 million under the LIFT—local improvement finance trust—project represent much needed increased investment. However, in relation to the uplift going to the spearhead areas under the accelerated fair share scheme, are the Government looking at the areas that have been historically underfunded for the past 50 years that did not gold-plate their services but undertook them at cost, and at the effect that that is having on issues such as investment in mental health?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

As for whether we can help to compensate for historical deficits built up by decades of under-investment, even with the huge amount of money that we are investing based on deprivation, need, population growth and projected population growth, it is not possible to compensate everyone for what was effectively underfunding during the years of the Conservative Government. I am sorry that I cannot wave a wand and do that, but we are now giving fair shares. For example, my hon. Friend will find that her constituency is within 0.5 per cent. of the PCT target, because of a 19.6 per cent. increase, resulting in an accumulated £33 million extra over the two years 2006–07 and 2007–08. I hope that that will at least go some way, under this Labour Government, towards tackling the previous underfunding under the Conservative Government—although Conservative Members are apparently criticising this large investment today.

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister)

I agree with our Front-Bench spokesman, my hon. Friend Mr. Burstow that these increases are welcome, and far more generous than we ever received in Kingston, or elsewhere in south-west London, under the Conservative Administration. However, does the Secretary of State accept that Kingston is yet again at the bottom of the growth league for spending increases? For example, if Kingston hospital's budget had increased in line with health spending across the country, it would have £10 million more than it now has. He talks about fairness in health spending, but is he taking into account the massive increase in population in areas such as Kingston and the rest of south-west London? When will we get the health funding to match that increase in population?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

I am grateful to the hon. Gentleman for his thanks, but he should have pointed out that his area will still be about 8 per cent. above target. If we compare the need, the population and the projected population of Kingston with those of others, the people there are better off because many others live in areas that are up to 3.5 per cent. beneath target. There is a £120,000 project to upgrade the operating theatre at Surbiton hospital in May to increase capacity, and work has been carried out on the day surgery at Kingston hospital. The hon. Gentleman's area was roughly 11 per cent. above target. It will now be about 8 per cent. above the target for identified need, and as it will get 8.1 per cent. increases in both years, he would be churlish to try to pretend that his constituents are not doing rather well. No doubt while he is complaining about that here, he will claim the credit for it back in his constituency.

Photo of Brian Jenkins Brian Jenkins Labour, Tamworth

I thank my right hon. Friend on behalf of the people of Tamworth for today's excellent settlement of 9.4 per cent. this year and next year. I have no problem with that—apart from one small niggling issue. As he knows, my town is developing and has been accepting increased population numbers for many years. Our population will rise again this year. When he talks about money per head of population, is he talking about this year's population, or the population five years ago? Will he accept representations from me on behalf of my PCT so that we can get the figures right?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

The short answer is that we have updated the projected population figures. I hope that that goes some way towards reassuring my hon. Friend.

Photo of Douglas Hogg Douglas Hogg Conservative, Sleaford and North Hykeham

The Secretary of State will know that NHS dentistry has largely collapsed in Lincolnshire. Does he agree that a sensible way forward would be for the primary care trust to pay a premium to NHS dentists to open in constituencies such as mine, where it is now impossible for a person to register with an NHS practice? If he does not agree with that proposal, what positive suggestions can he make?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

This may astound the right hon. and learned Gentleman, but I do agree with that. We put more than £60 million into the access fund precisely to encourage people to do the sort of thing that he suggested. I have never pretended that we have perfection in the NHS, despite all the progress that we have made. We have a shortage of dentists, radiologists and radiographers, and we could do with more midwives. We have only started our building programme, and we still have long waiting lists, although they are almost 500,000 below their peak. Labour Members welcome any ideas, because we do not approach the matter dogmatically. We have already taken action similar to that suggested by the right hon. and learned Gentleman this year.

Photo of Mr Keith Bradley Mr Keith Bradley Labour, Manchester, Withington

I thank the Secretary of State for yet again recognising the historical inequalities in health care provision in the city of Manchester with a massive 15.5 per cent. increase in allocation for South Manchester, which will enable even better services to be provided in the new Withington community hospital, which opens in April. He is right to point out that the figures are based on the 2001 census projection. Will he confirm that they are now based on the 2001 census figures that had to be revised because of the failure of the Office for National Statistics to count the number of people living in Manchester?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

My hon. Friend has been an avid advocate for his constituents, as have our other Manchester colleagues. Although we cannot offer compensation for mistakes made in the past, the fact that we now use a more accurate and verifiable version of the population figures goes someway towards providing recompense. As he pointed out, there is a 15.5 per cent. increase for South Manchester, which is compounded over the two years at 28.2 per cent. Of course, Central Manchester is receiving 26.4 per cent. There will be an additional £113 million over the next two years for those areas, which I hope will be welcomed by my hon. Friend's constituents and others in Manchester.

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury)

The Secretary of State's statement said that the figures accommodated both current and future projected housing growth. However, if we look at the detailed lists, we see that Southend PCT, in the Thames gateway area, gets the bare minimum, while Castle Point and Rochford PCT gets only a fraction more. May I tell him, without rancour, that given the massive house-building programme envisaged for the Thames gateway by the Deputy Prime Minister, the increases, while welcome, are nowhere near enough to provide—[Hon. Members: "Oh!"] They are not enough to take account of the scale of house building that will be required. May I, in all sincerity, ask the Secretary of State to reconsider?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

When the hon. Gentleman refers to the bare minimum, I take it that he means the 9.1 per cent. and 10.1 per cent. increases that he is getting. It is news to me that that is the bare minimum, especially compared with the amounts handed out in the years of the Conservative Government. I hope that he welcomes the £35 million extra for Castle Point and Rochford PCT and the £17 million for Maldon and South Chelmsford PCT. [Interruption.] I think that there was a nod over there, Mr. Speaker. We have again refined the formula to try to make it fairer. The four areas outlined by the Office of the Deputy Prime Minister are precisely those on which we have been most engaged with the ODPM in trying to ensure that the figures are fair and take account of future development.

If the hon. Gentleman is really worried about deficits, he should worry about the £24 million that would be taken from the two primary care trusts that I cited to subsidise his party's policy of the patient's passport. I hope that he is being honest enough to tell his constituents that that £24 million would be taken away from the money that the PCTs already have. Additionally, NHS Direct would be closed down, as would the primary care trusts, as far as I can see from the James report. All the work done by primary care trusts would thus have to be done by the hon. Gentleman's local general practitioners, but they would receive no extra money. Has he told his GPs that?

Photo of Liam Byrne Liam Byrne Labour, Birmingham, Hodge Hill

My right hon. Friend knows from first-hand experience how badly we need new money in Washwood Heath and Hodge Hill. He also knows from first-hand experience the specific needs of the Kashmiri community in Birmingham, and I put on record our thanks for the time that he and his team have made available to hear our arguments for new money. Can he tell the people in east Birmingham what the settlement will mean for us? Can he tell us what it will mean for our campaign for two new health centres and more cash for front-line doctors? Will he tell the House what the consequences might be for constituents such as mine if the cash did not arrive?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

If the cash did not arrive—fantasy though it may seem, let us consider the prospect of a Conservative Government—my hon. Friend's constituents would be millions of pounds worse off. They would have no access to NHS Direct and his local GPs would have the burden of all the commissioning of health care without any extra remuneration. Thankfully, that prospect is diminishing almost by the day, if we look at the opinion polls, so perhaps we can turn to the good news, which is that there is £69 million extra for my hon. Friend's constituents, or an increase of 22.3 per cent. over two years. That money will go to an area that badly needed it, because it was 6 per cent. beneath the assessed need expressed in the target. I would have liked to bring the figure on to target, but that was not possible. The area will be 3.5 per cent. beneath target, however, so I hope that that goes some way towards recompensing the efforts that my hon. Friend and his constituents have made to meet me and convince me of the need in their area.

Photo of Mr Adrian Flook Mr Adrian Flook Conservative, Taunton

Many surgeries in my constituency operate from cramped and outdated buildings. Does the allocation that the Secretary of State announced today include money to help GPs expand and improve their premises? If it does not, when will they receive such funding?

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

We are making £1 billion available for that. The hon. Gentleman will know that the LIFT scheme is now in full swing after a slow start, although I would have liked it to move quicker. The Minister of State, Department of Health, my right hon. Friend Mr. Hutton, is overseeing the refurbishment occurring throughout the country, and I think that some 2,000 to 3,000 premises are being refurbished. The hon. Gentleman can tell all who are interested in their local health care, quite apart from the GPs who are integrally involved in it, that there will be an 11 per cent. increase in the first year and a 13 per cent. increase in the second year, which is compounded at 20.3 per cent. There will be £23 million extra, so although the area will be in roughly the same position in relation to the target, it will be substantially better off for resources. I hope that the hon. Gentleman will be explaining to his constituents that the extra money is coming as a benefit of the Labour Government.

Photo of Jeff Ennis Jeff Ennis Labour, Barnsley East and Mexborough

May I remind my right hon. Friend that my constituency has the highest level of disability of any constituency? More than one in three households contain at least one disabled person, which is quite clearly a legacy of the former mining industry. I thank my right hon. Friend for today's announcement and the improved funding situation for health provision in Barnsley. I remind him that historically, under the previous Government, Barnsley was the worst funded health authority in the whole Trent region, despite having some of the highest levels of health problems not just in the Trent region but in the UK as a whole.

Photo of John Reid John Reid Secretary of State, Department of Health, The Secretary of State for Health

Yes, indeed; and I can tell my hon. Friend that Barnsley, for instance, is now closer to target than it was previously. It is just 3.5 per cent. beneath, and a £61 million increase is going in over the two years; that is a 21 per cent. increase for Barnsley. I hope that that will assist in an area where there has been terrible deprivation. I know that there are a series of one-stop primary care centres, which have improved health care in my hon. Friend's area, and there are other developments. For instance, I think that some additional GPs have come into the area recently.

We must never forget that although we have spent a lot of time today talking about the allocation of moneys, which is what this is about, at the end of the day this is about improving patient care, and there is no doubt in my mind that all the signs on the ground now are showing that, month by month, we are getting much better patient care. This morning I was in Newham, where five years ago there was one consultant in accident and emergency; there are now five. Where there were 50 nurses there are now 80. Where they were waiting 10 months for a scan only two years ago, now they are waiting less than a week. That is where this money is going—it is going to the patients, and that is as it should be.

Several Hon. Members: