NHS: Clinical Commissioning Groups — Question

– in the House of Lords at 3:13 pm on 27th November 2013.

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Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords 3:13 pm, 27th November 2013

To ask Her Majesty’s Government what discussions they have had with NHS England regarding proposals to change the funding allocation formula to Clinical Commissioning Groups.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and refer noble Lords to my health interests in the register.

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, the Government have been discussing health funding, including progress on the fundamental review of allocations, at regular accountability meetings with NHS England. This NHS England-led review began in December 2012. The independent Advisory Committee on Resource Allocation, ACRA, is providing advice on changes to the formula. NHS England will consider ACRA’s recommendations. Initial views should be available to inform 2014-15 allocations.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, my understanding of the formula is that it would move resources from areas where people have worse health outcomes to areas where they have better health outcomes. The noble Earl has said that he and his ministerial colleagues are in discussion with NHS England. Can he confirm that this is a decision for NHS England? If that is so, what is the nature of the discussion that has taken place between Ministers and NHS England? Is it being left to NHS England to decide?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, very definitely yes. It is precisely to avoid any perception of political interference that we made NHS England responsible for the allocation of resources to clinical commissioning groups. However, we were very specific in the mandate, as the noble Lord will recall, that the principle on which NHS England has to operate is equal access for equal need, with particular attention being paid to health inequalities while not destabilising the NHS. Those are the things we discuss in our regular meetings with NHS England but the actual nature of the formula that it will decide in its board meeting next month is entirely up to it.

Photo of Lord Patel Lord Patel Crossbench

My Lords, we know that the single most significant factor associated with poor health outcomes is deprivation, particularly for diseases such as chronic lung diseases, cardiovascular diseases and cancers—and, even more importantly, for chronic diseases in children. Would it not be wrong therefore if the tariff did not include the deprivation in the population when setting it for the community?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, the CCG target formula recommended by ACRA this time a year ago was rejected by NHS England for the very reasons that the noble Lord cites: because it did not include an adjustment for deprivation and health inequalities. At a recent Health Select Committee hearing, Paul Baumann, the chief finance officer of NHS England, indicated that the proposed new formula would have an adjustment for a health economy’s unmet need—in other words, an adjustment for deprivation where low life expectancy suggests that people are not accessing health services.

Photo of Baroness Manzoor Baroness Manzoor Liberal Democrat

My Lords, can my noble friend the Minister clarify that responsibility for the development of primary care is to be shared between CCGs and NHS England area teams, particularly as CCGs now control two-thirds of the NHS budget?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, at present primary care is commissioned by NHS England and has three broad ingredients: primary medical care, primary pharmaceutical services and primary dental services. However, we are looking at ways of making the whole process of primary care commissioning more creative. That could well involve a joint process by NHS England and clinical commissioning groups.

Photo of Lord Campbell-Savours Lord Campbell-Savours Labour

In light of what the Minister said before, are we being assured therefore that age and gender will not be given priority over gross health inequalities and needs in areas of social deprivation, such as in the north of England? If that is not the case, surely the principles on which the National Health Service was created are being undermined.

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, age is and has always been, in the formula, the primary driver of an individual’s need for health services. The very young and elderly, whose populations are not evenly distributed throughout the country, tend to make more use of health services than the rest of the population. Having said that, the formula contains elements relating to unavoidable differences in the costs of providing services due to location alone—that is, the market forces factor—and a number of other measures of adjustment. As I say, we are assured by NHS England that deprivation will feature in the formula that is published for next year.

Photo of Baroness Masham of Ilton Baroness Masham of Ilton Crossbench

My Lords, is the noble Earl aware that in Yorkshire, many of the hospitals which are PFI are very seriously in debt? Is there not a rumour that the poorer north will have its money taken to the richer south?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

It was for very much that reason that NHS England decided last year not to interfere with the formula but to give a 2.3% real-terms uplift to all CCGs. The last thing we want to do is to take money away from areas where health outcomes are the worst.

Photo of Baroness Quin Baroness Quin Labour

My Lords, does the Minister accept that in the north-east of England huge concern has been expressed about the initial proposals? This has been widely and repeatedly trailed in the press in the north-east. While I welcome what the Minister said about tackling health inequalities, can he give us an assurance that the most vulnerable communities and the most vulnerable people will not lose out as a result of this consultation?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

There are two elements to consider here. One is the target allocation, which is what NHS England is currently working on, and the other is the actual allocation—the money given to individual areas. The task for NHS England will be to decide how quickly or slowly to move from current allocations to the target. The key will be not to destabilise any NHS area in that process.

Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

I do not think the noble Earl answered my noble friend Lord Hunt’s Question about the discussions that have taken place between the Government and NHS England on this topic. Will he tell us what steer the Government have given on these matters?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

We give no steer. As I said to the noble Lord, Lord Hunt, the principles on which NHS England should operate are clearly of concern to Ministers—namely, equal access for equal need, the need to take account of health inequalities in an area, and not destabilising the NHS. We also believe that NHS England should be transparent in whatever it does. Those are legitimate concerns for Ministers, but we do not seek to steer NHS England in any particular direction.

Photo of Baroness Hussein-Ece Baroness Hussein-Ece Liberal Democrat

Will the Minister reassure me that child and adolescent mental health services will be given sufficient weight in these discussions?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, ACRA has recommended that CCG mental health services allocations should be set using the same overall approach as that for other hospital and community health services. That means that a large part of the allocation is linked to the diagnoses reported for people registered with each GP. That makes the formula very sensitive to need. It has the potential to improve the way we allocate resources for mental health services, in particular.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Shadow Spokesperson (Health), Shadow Deputy Leader of the House of Lords

My Lords, will the noble Earl arrange for NHS England to meet interested parliamentarians before it takes its decision at the meeting next month?

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health

My Lords, I will certainly feed that request back to NHS England.