My Lords, the latest forecast of income and expenditure for health authorities and NHS trusts is a deficit of £197 million.
My Lords, is not the Minister being unduly reticent in his reply? Some of the forecasts that have been made have been of a deficit this year of £400 million with an accumulated deficit of over £1 billion, with worse to come next year. Is it not time, rather than denying the extent of the deficit or preventing it being published by finance officers of the NHS, for the Secretary of State to accept that the NHS is severely under-funded and that he should do his best to secure greater funding in the Comprehensive Spending Review next year?
My Lords, the figure I have given is the best forecast we have. I believe the noble Lord is referring to the accumulated deficit of £1 billion talked about by the Healthcare Financial Management Association. I am glad to say that it is indulging in realms of fantasy. The House will well know that, in relation to resources for the NHS, through the Comprehensive Spending Review we have put in a large amount of additional growth money--4.9 per cent increase in real terms this year. Through that we are enabled to provide real improvements to the National Health Service. Thirty-seven new hospitals are either being built or are in the process of being built. There is much greater access to services. The NHS is undergoing a fundamental modernisation programme which we are funding.
My Lords, London has a number of trusts which are facing financial pressures. We are working closely with them to ensure that they take the action that is necessary. In relation to alternative systems of funding, I am not persuaded by the arguments. The system that has been in place since 1948 has served the NHS well. We have the most cost-effective healthcare system in the world. We have shown, by the additional resources that we have invested in the service, that we can sustain the NHS, make it fit for the future and have one of the best and most modern health services in the world.
My Lords, is it not the case that the much publicised new money that the Government announced for the NHS will be largely swallowed up over the coming two years by cost pressures that cannot be avoided? Will the Minister confirm, for example, that additional pension contributions alone are set to absorb an extra £650 million over that period? That is on top of the huge costs arising from new legislation such as the EU working time directive.
My Lords, there are elements which come into the budgets of the health service every year; for example, pensions, pay, the working time directive or indeed the rising cost of generic drugs. That is part of the life of the National Health Service. With a three-year Comprehensive Spending Review, it is not always possible to estimate exactly potential increases in budget. However, within the resources that we have made available, I am confident that we have the capacity both to meet those unexpected pressures and to introduce significant improvements in services.
My Lords, the noble Countess is certainly right to refer to important and, I think, worrying trends in relation to clinical negligence awards. Within the deficit figure that I mentioned there is certainly provision for the potential future cost of litigation which has been started. The latest figures that I have show that in the 1997-98 summarised accounts for the NHS costs charged to expenditure for clinical negligence amounted to £144 million.
This is a matter of great concern. We have to be very careful in terms of avoiding defensive medicine. We also believe that the more effective clinical governance that we are introducing and the development of evidence-based medicine, will, over time, enable us to tackle these issues.
My Lords, we are very concerned to ensure that older people being cared for in the NHS receive a first-class quality service. My honourable friend, Mr John Hutton, has made it clear that the Commission for Health Improvement will, as a priority, focus on services for older people in its first inspection round. We are establishing a national service framework on services for older people which will start work next year. It will focus on the very issues raised by the noble Lord.