My Lords, we are on the last lap. I thank the noble Lord, Lord Turnberg, for telling us about the enlightened approach of Salford Royal Hospital. It has obviously made great progress since I worked in Manchester and it was known as the “No Hope Hospital”.
It is no coincidence that the London Olympics highlighted the NHS in its very creative opening ceremony. We are all very proud of it, particularly the staff, but it would be stating the obvious to say that it has numerous problems. At a time when it faces unprecedented increases in demand, the NHS has been given its most challenging funding envelope ever. The future of the health service is in jeopardy unless we do something radical. As the noble Lord, Lord Rea, said, it cannot get out of this hole by itself.
That is why my right honourable friend and former Health Minister Norman Lamb introduced a Private Member’s Bill in another place a week ago. He called for the establishment of an independent commission to examine the future of the NHS and social care system, to take evidence and to report its conclusions to Parliament. I pay tribute to those on the Conservative Benches who have called for something similar, but I think that a royal commission may take too long and that something quicker is required.
Norman Lamb was supported by two former Secretaries of State for Health, Members from all parties and the chief executives of more than 40 organisations in the sector. I join with his call today in this debate, along with many of your Lordships. When you get agreement from so many from all sides of health and social care, it is clear that you are reflecting a real need. The purpose of the commission would be to consult widely to find solutions to the massive challenges that face the health and care services, and to establish a sustainable—a crucial word—new settlement which takes into account present and future demands.
In order to calculate future demand, we need no crystal ball—we have a lot of evidence to help us. We know that since the Second World War demand has gone up by about 4% every year. For example, thanks to successful new diagnostics, treatments, drugs and surgical procedures, half of people diagnosed with cancer now survive the disease for 10 years or more compared with only a quarter 40 years ago. Other chronic conditions are also now managed better than ever. We should celebrate all this while being realistic about what it means.
We have heard about the predicted gap of £30 billion in NHS funding by 2020 unless something is done. The Government have committed to providing only £8 billion of this and expect the NHS to find the other £22 billion through efficiencies and new models of care. However, experts involved in the process are unconvinced that this can be done.
The King’s Fund’s Quarterly Monitoring Report, published in October 2015, included a survey of NHS finance directors’ views on their ability to achieve 2% to 3% productivity gains per year, which would be needed to achieve that saving. The vast majority were sceptical to say the least. Eighty-four per cent of NHS trust finance directors and 88% of CCG finance leads felt that there was a “high” or “very high” risk of failing to achieve the target. Here are a few respondent comments:
“I feel strongly that the low-hanging fruit has been taken. The modus operandi needs to change fundamentally”.
“When plans are not credible then it is impossible to enthuse people”.
“Increased national pressures/tying of hands … make it difficult to achieve big savings”.
“The £22 billion challenge requires productivity gains significantly over what has been achieved over the past few years”.
“Unless there is a national debate about what the NHS can provide then there is no way that the NHS can deliver within the financial envelope”.
“unachievable and, frankly, bloody stupid”.
That is what he said, my Lords.
Given that the recently announced increases in funding will be swallowed up mostly by paying for the £2.2 billion of deficits in NHS and foundation trusts, increases in payments to pension funds, apprenticeship levies and the new minimum wage, it is pretty clear that this extra money will do nothing to address future increases in demand. Meanwhile, social care funding has been cut in real terms and faces a funding gap of £6 billion by 2020 according to the Health Foundation, but this does not take into account the effect of the new minimum wage in a sector where so many workers are on the minimum wage. The LGA estimates that this will add a further £1 billion to the gap. Now Ministers have decided to stop the £1 billion payment-for-performance element of the better care fund and, instead, have mandated local targets for the reduction of delayed transfers of care. So the Government give with one hand and take away with the other.
Did the Chancellor provide the answer to these problems in the autumn spending review? I think not. The new provision for councils to raise a 2% social care precept would provide only an extra £1.7 billion by 2020 if every single council did it. In poor areas the ability to raise significant extra funds in this way is in inverse proportion to the need—not a very clever solution.
The increase in the better care fund will not come until 2019. Sadly, this will mean that the better-off will be able to pay for good care and the poor will get either no care at all or a substandard package—the best their poor stretched local authority can manage—adding further to our appalling health inequalities. The inevitable pressure that these cuts to social care will put on the NHS is obvious and has been clearly outlined by Simon Stevens, the head of NHS England. So current and projected NHS funding does not allow the service any chance of fulfilling the mandate, mentioned by the noble Lord, Lord Lansley, put upon it for the next five years by the Government themselves. Beyond 2020, it will just get worse if nothing is done, and our precious NHS will no longer be the envy of the world. Mention of the mandate reminds me to endorse the call of my noble friend Lady Tyler and the noble Lord, Lord Bradley, on mental health. We need to find new answers.
All Governments pledge themselves to protect the NHS, yet our spending as a proportion of GDP is low, as we have heard, compared to that of other developed countries. According to the Office for Budget Responsibility, it will decline further by 2020. The position of social care is even more dramatic.
What is the point of growing our economy if we do not spend the money on the things that most of the population would like it spent on—and what they vote for? Given what we know about rising demand, it makes no sense at all. The consequences of the Government’s failure to address this are very serious and completely contrary to what they say they want according to the latest mandate. Standards will not rise, new technologies will be unaffordable and services will not be able to address our health inequalities—an absolutely top priority in my book.
The silly thing is that nobody really believes in the ability of the system to fill the gap through efficient savings and new models of working, desirable though they may be. Money is so tight at the moment that many parts of the system are struggling with crisis management, let alone improvements. To make things worse, there are numerous financial disincentives. For example, where is the incentive for acute hospitals to work with local services to keep patients out of hospital when they rely on the payments for activity when they come in?
The social care system is living on borrowed time. Eligibility criteria are getting tighter every day. Will the Government face this crisis head-on, take politics out of it and support my right honourable friend’s call for a commission to bring together all the evidence, the brains and the expertise available?
I think it boils down to five simple questions. How much should we be spending as a country and how should it be raised? How can we spend it better and have all services reach the standard of the best? How can we end the artificial divide and conflicting incentives between health and social care? How can we minimise future demand by avoiding preventable diseases? How can we reduce health inequalities? It is time for a new Beveridge commission.