It is a pleasure to serve under your chairmanship, Mr Hollobone.
I pay tribute to my hon. Friend Helen Hayes for securing the debate. During her time in this place, she has developed a reputation as a real champion for her constituents on a range of issues. This is not the first time that she has raised concerns about the funding crisis affecting our NHS and her constituents. Back in June 2015, she used her first contribution following her maiden speech to raise concerns about the worrying financial situation at King’s College Hospital. That makes a mockery of attempts to pin blame for the current situation on the most recent chair, who started only that month. My hon. Friend showed great foresight and prescience when she warned:
“The deficit is kept from being significantly higher only by a series of creative accounting steps taken in a vain attempt to reduce the number of negative press reports about such disastrous performance.”—[Official Report,
My hon. Friend described her constituents’ experience as a warning sign with respect to the wider issues across the NHS about which we have heard so much in recent weeks. She highlighted that King’s College Hospital provides a wide range of specialties as well as being a trauma centre and a district general hospital for her constituents. She reported that a clinician with 32 years’ experience had said that things have never been tougher. We have heard many NHS professionals make that comment in the past couple of weeks. It was disturbing to hear that the hospital has recently been at more than 100% capacity on a regular basis. Before we entered the winter crisis this month, we knew that bed capacity across a number of trusts was beyond recommended levels. Using meeting rooms for patient care, as we heard, is not a road we should be going down.
My hon. Friend said that four key issues were affecting the current situation at King’s College. The first was the funding allocation since 2010. As we know, an ageing population increases demands on expenses in terms of medication, which means that the NHS really needs a 4% settlement on average, but in the past eight years we have had about 1% a year. She is right that the increases in demand on the NHS have been entirely predictable, and that the challenges set out as a result of austerity have been exacerbated by the cuts to social care we have seen since 2010.
My hon. Friend’s second point, on which I will expand later, was that the trust took on two failing hospitals in 2013. Thirdly, there are competing responsibilities in the trust between emergency treatment funding and elective surgery. She gave the examples of tragedies such as Grenfell and the Westminster terrorist attacks in the past 12 months, which placed additional pressures on the trust but were not recognised by central Government in terms of funding or support. Fourthly—this point applies to the wider NHS—the capital funding allocations have not been there to allow the trust to plan strategically for the future.
We also heard from Dr Poulter, who has considerable experience—he has several hats to put on. He did not blame the individuals running King’s for the current situation. He also highlighted well the multiple issues that arise from an underfunded social care system, and was right that patient care can suffer when trusts are under financial pressure. That is not to say that anyone who works in the NHS is using that as an excuse—that is not where anyone wants to be.
The hon. Gentleman mentioned PFI debt. In a debate on another trust issue, the Minister’s predecessor but two said that the Department was looking at PFI debts in various individual trusts and whether anything could be done to ease the burden on them. I do not know whether that work has been completed. Can the Minister update us on whether the many trusts saddled with PFI debt will get any relief?
We also heard from my right hon. and learned Friend Ms Harman, who made two central points. First, she did not want the situation to turn into a characterisation of a recalcitrant teenager who is overspending. I know a great deal about that from my own family—not because I am a teenager. She also does not want the situation to turn into a blame game. I will return to that later in my remarks.
My right hon. and learned Friend’s second point, which was pertinent, was that we must think about the people who are affected by the situation a little more. She said that when the Prime Minister described the cancelling of operations throughout January as planned, that underplayed the human consequences of such a decision and showed a lack of empathy and compassion for their implications. Cancelled operations can have a psychological impact and, as we heard, they can have financial impacts. People could lose their jobs as a result of delayed operations. She also gave the example of older people losing their social circle while they are awaiting cataract operations.
My right hon. and learned Friend was right to say that we do not want to drift back to a situation where patients spending all night on trolleys in corridors is part of people’s routine NHS experience. We do not want to see any more of that.
My hon. Friend the Member for Dulwich and West Norwood gave some interesting statistics about the amount of money spent on management consultants advising the trust and said that, at some points, £1 million a month was being spent on such advice. I would be interested to hear if the Minister feels that that has delivered value for money for the trust. Has any analysis been done about the savings derived from that advice? That gives us food for thought about whether the money has been best spent—perhaps it could have been better directed to the front line.
My hon. Friend also said that the trust has recently been subject to enhanced regulatory oversight. Does the Minister believe that that regime has delivered particular benefits? She rightly requested assurances from the Minister in terms of funding, patient safety, treatments and capital allocations. We will hopefully hear from the Minister on that.
I join my hon. Friend in paying tribute to all the staff working across the trust who, as the public face of our service through the series “24 Hours in A&E”, make the nation proud of what the NHS can deliver. They are outstanding and committed individuals who go above and beyond the call of duty each day to deliver the best possible care for their patients. Indeed, their dedication is replicated by staff all over the country, and their good will is all that stands between a crisis and a complete collapse.
As we know, an urgent question was asked before the Christmas break, and I would like to pick up on a couple of comments made by the then Minister, Mr Dunne. In his initial response, he said:
“There has been a consistent pattern of financial projections by the trust that have not been met during Lord Kerslake’s tenure as chairman.”—[Official Report,
He also said:
“I am happy to look at the circumstances surrounding what happened in 2013, but they are not as relevant to today’s situation as the way the trust’s financial management has deteriorated in recent months.”—[Official Report,
I put on record my appreciation for the constructive and respectful way the former Minister conducted our business. Although we disagreed on many things, we did not do so in a disagreeable manner. However, I must pick up on those comments, because it is a matter of fact that the trust’s financial issues predated Lord Kerslake’s involvement.
The root of the problems facing the trust can be traced back to the collapse of South London Healthcare NHS Trust back in 2013, as my hon. Friend said. I welcome the new Minister to his place, and I hope our exchanges will be equally as courteous. However, I hope that in responding he will correct the record, because there is the disturbing trend that has been referred to of blame being personalised, which encourages a “hire and fire” culture in the health service. At the bottom of it is financial and quality issues at the Princess Royal University Hospital, which were significantly worse than identified during the due diligence process undertaken at the time of transfer, and which led to a much poorer deficit position than forecast in 2014-15. Of course, that was a year before Lord Kerslake took up the role of chair. As a former Minister set out in a Westminster Hall debate in March 2015:
“At the time, South London Healthcare NHS Trust was the most financially challenged in the country…Repeated local attempts to resolve the financial crisis at the trust had failed.”—[Official Report,
The trust’s 2015-16 annual report set out that £56.5 million in efficiencies were delivered during the financial year—a considerable amount—but despite that work a £65.4 million deficit remained. The report states clearly that the final figure was arrived at after taking actions, many of which were one-off in nature.
In 2016-17, the trust delivered savings of £92 million and was forecast to deliver a deficit position of £1.6 million. However, that was dependent on £30 million of funding through the sustainability and transformation fund and an additional £9 million of cover for external funding pressures being provided. Unfortunately, that Government funding did not materialise. The final out-turn was a deficit of about £48 million. The trust’s financial report for that year said again that many of the savings made during that year were of a one-off nature.
I point out at this juncture, as others have done, that despite starting each financial year with an extremely significant underlying deficit, the trust was still expected to deliver annual savings though the tariff, as with all hospitals, at a level that Chris Hopson, the chief executive of NHS Providers, has described as “impossible.” He also said that the amount of savings required
“risks the quality of patient care and places an intolerable burden on staff.”
The Nuffield Trust has pointed out that the savings that have been asked of trusts are
“the equivalent of spending…£750 in real terms on a patient that you would have spent £1000 on in 2010”.
Against that backdrop, is it any wonder that we are where we are now?
It is true to say that the forecast position at King’s has again deteriorated this year, but it is completely false to portray that as a story about one trust or a particular chairman. It should also be pointed out that King’s had cut costs by 8% to 2016-17 and was aiming for a 5.8% reduction in the current financial year. As we have heard, there are issues relating specifically to King’s, dating back to 2013, that have never been fully addressed, not least because the underlying deficit has been consistently understated. The trust, like so many others, is facing pressures from the top to massage the figures with one-off savings and accountancy wheezes. I believe that that short-term, illusory approach is endemic across the NHS. As the head of the National Audit Office, Sir Amyas Morse, told us:
“The NHS in England remains under significant financial pressure which is demonstrated in its accounts. It has again used a range of short term measures to manage its budgetary position but this is not a sustainable answer to the financial problems which it faces.”
He went on to say:
“The Department and its partners need to create and implement a robust, credible and comprehensive plan to move the NHS to a more sustainable financial footing.”
The Health Committee, the Nuffield Trust, the Health Foundation, the King’s Fund and many others have all reported on the one-off measures, including vast transfers of capital funding, that are being used to understate the true level of deficit. Will the Minister rule out using such measures again this year and commit to providing an honest picture of the state of NHS finances?
As the hon. Member for Central Suffolk and North Ipswich said, the trust deficits we are hearing about in this debate are replicated across many parts of the country. By September 2017, 83% of acute trusts were in debt, to the tune of £1.5 billion. Can the Minister tell us how many will be in deficit at the end of this year? How many will, like King’s, fail to meet the deficit level agreed with NHS Improvement, and what will the consequences be for them?
Before the November Budget, NHS leaders exercised their duty of candour to argue publicly for an extra £4 billion in revenue each year for the NHS. That was the minimum they said would be needed to maintain standards. It has been made clear that many of the NHS’s constitutional targets will not be met within the current funding envelope. Can the Minister explain whether, by failing to give the NHS the money it has asked for, the Government have accepted that the rights of patients set out in the NHS constitution have effectively been abandoned?
In conclusion, with King’s as with the rest of the NHS, the Government seek to abdicate responsibility and to blame the systematic failings over which they are presiding on individual parts of the NHS rather than on their own funding decisions. They are desperately seeking to characterise King’s as an outlier rather than what the Nuffield Trust has termed
“the canary down the coal mine”.
The truth is that, like every trust, it is struggling with the longest and most sustained financial squeeze we have ever seen in the history of the NHS, yet the Government are not facing up to their own culpability for the situation. The Secretary of State is behaving like the worst kind of football chairman—the kind who takes no responsibility for their own actions but instead calls for the manager’s head after a spell of poor results, when the underlying problems were there long before that manager started, because there had not been the required investment for many years. That kind of short-term, personalised approach has failed King’s, it is failing our NHS and it has to change.