Health and Social Care Bill

Part of the debate – in the House of Lords at 9:15 pm on 15 March 2001.

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Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Parliamentary Under-Secretary, Department of Health, Parliamentary Under-Secretary (Department of Health) 9:15, 15 March 2001

I shall do my best to respond and perhaps try to show how the system will work. I shall be happy to follow up with more detailed information if members of the Committee would like me to write to them. I understand that matters relating to NHS finance are not easily understood, even by those of us who have struggled to understand them for a number of years.

We are making a genuine effort to devolve authority down to the level of the health authority. The record of the Medical Practices Committee, however hard it tries, shows that a central, bureaucratic approach does not work. My experience is that efforts made to determine numbers of doctors have always failed in the past because they have never fully connected with the needs of the health service. Our approach in decentralising decisions down to the health authority level, combined with the work force framework at national level that I have outlined, is the best way to proceed.

Secondly, I accept the challenge in relation to fairness and transparency. That is why we referred the issue of the formula to ACRA. The recommendations that it makes in due course will be made available to Ministers. The formulas that are decided will be in the public domain, especially the targets that are set and the distance from targets for each health authority.

My third substantive point is that these changes are occurring in the context of both more resources and more general practitioners. That is the only way in which changes to the formulas will work effectively. We can look back at RAWP--the Resource Allocation Working Party--son of RAWP and grandson of RAWP and we know that if we try to introduce formula changes at a time when resources are squeezed, it becomes difficult to get any substantial movement. The conditions in which we are introducing the changes are absolutely right.

There will be a single funding formula that will set a target or fair share for each health authority and primary care trust, covering GMS non-cash-limited expenditure, as well as a unified allocation. When the Government allocate extra resources for unified allocations in the future, our pace of change policy will apply to those new targets.

So those who are spending less than their fair share on GMS non-cash-limited services will be given a larger increase for their other services. If they are spending more than their fair share, they may get a smaller increase. But that will be done--this is important--by a process of levelling up so that no area will have its existing level of resources reduced. I want to stress this: GMS non-cash-limited spend will remain non-cash-limited. GPs will continue to enjoy the right to remuneration that they currently hold.

Perhaps I may give one example. For the purpose of illustration, suppose a health authority is 3 per cent under target on its unified allocation and 10 per cent under its new GMS non-cash-limited target, if we combine those it might show the health authority to be 4 per cent below its combined target. In line with the pace of change policy, it will probably receive higher growth in its unified allocation than it would under the current system. It is then very much a matter for each health authority to decide what strategy to take forward. But in the end that is the best way of dealing with two different problems; first, the distribution of GPs; and, secondly, the way the allocation of funds works at the moment. We could have a situation where Part II funding is out of kilter with the unified funding which is based on a fair shares approach.