David Amess

Conservative Party | Southend West

NHS Deficits

Mr. David Amess (Southend, West) (Con): I was very interested in the various points made by the right hon. Member for Rother Valley (Mr. Barron), and I know that, as the Chairman of the Health Committee, he will ensure that it scrutinises carefully how the NHS is managed and the money is spent.
Although the hon. Member for Wyre Forest (Dr. Taylor) says that he is non-party political, I agreed with every word of his speech on this occasion. The NHS faces one of its biggest overspends since 1948. Many trusts and PCTs are now faced with stark options—to meet the Government's targets and create large deficits or adopt cost cutting and contractions to come in on budget.
I am fortunate enough to represent a constituency with a PCT that has managed to break even every year since its inception, and a hospital trust that has been able to carry forward large surpluses in the present financial year. However, I appreciate that I am in a minority of Members in that respect, and I have listened carefully to what others have said about local deficits. I feel for them, and their attempts to address the issue.
The NHS has to live within its means and the long-term solutions are, as always, to maximise productivity and ensure that extra spending brings worthwhile returns. However, it is not just for NHS managers to address those issues. As several of my hon. Friends have already said, the Government have a responsibility to ensure that their target-setting agenda does not force health organisations into debt, and that bureaucratic changes, such as the transition to payment by results, do not increase the financial uncertainties faced by many trusts and authorities.
Why is the national health service in financial difficulty? There are various reasons, and I do not for one moment blame the Government for all of them. The Government have done good things, but I challenge them on others—for instance, the difficulties due to the extra costs of increasing staff, the tough targets, the culture of transparency, hospital rebuilding programmes and payment by results.
I am sure that the Minister of State, the right hon. Member for Liverpool, Wavertree (Jane Kennedy), who will respond to the debate, is enjoying every minute of it so I do not ask her to respond now to the matter that I am about to raise, but perhaps she could write to me. In 2004, Southend Hospital NHS Trust applied for foundation trust status on the basis that it would be able to remain part of the NHS, working under NHS traditions, providing treatment free at the point of delivery, and would also be able to involve more local people, hospital staff and volunteers in service delivery, but with greater freedom in the funding of health care. However, the application was turned down and, as the trust reported on 27 February, Southend hospital's hope of being licensed as an NHS foundation trust on 1 April 2006 received yet another disappointing setback.
Like five other hospital trusts that were set to gain approval from the regulatory body, Monitor, Southend was told that there were a number of "underlying errors" in the new payment by results tariff issued by the Department of Health. That really depressed the staff. The chief executive of Southend hospital, David Brackenbury, described the unwelcome news as
"frustrating for everyone who has been involved in the extensive preparations necessary to become established as an NHS Foundation Trust . . . Furthermore, this delay in receiving the tariff will cause us considerable problems in setting our budgets".
I could say much more, but I am sure that the Minister has got the message, and I would be grateful if she would write to me.
Why do some hospitals manage to come in on budget while others fall into serious debt? Some hospitals and PCTs are managed better than others—I will not say much better. However, some suffer from much larger systemic problems, such as being in an area with a large number of hospitals, resulting in too many bureaucrats and too much administration and duplication of diagnostic facilities.
Southend does not suffer those systemic difficulties, as it is a small unitary authority that collaborates well with other PCTs in Essex. I am delighted to tell the Minister that for the third year running, Southend Hospital NHS Trust has achieved the top, three-star, status—a significant achievement. Furthermore, it succeeded in meeting both its financial and waiting time targets, so the Minister will understand my point about the disappointment caused by the statement about the hospital's foundation trust application. The hospital's achievements are solely down to the hard-working staff, who have risen to the extra challenges presented by the Government's target-setting agenda, while managing to balance the books.
 
As several Members have said, changing the structure of PCTs has caused some disquiet; it has certainly done so in Essex. Is the reorganisation of PCTs about cost saving or improved service delivery? The Government have identified efficiency savings of 15 per cent. Had cost savings not formed part of the criteria, organisations could have had considerable flexibility to tailor reconfigurations closely to local need. Linking the reforms to cost savings at a time when many PCTs are already managing deficits means that many SHAs will have no option but to reduce the number of PCTs. Such a reduction in the number of organisations would release £250 million of NHS money, but in some PCTs the push to save costs has overridden other considerations, such as maintaining local engagement. I hope that that is not what the Government intended.
The Secretary of State announced last week that she is willing to accept full responsibility for the financial circumstances in which the NHS finds itself, and she has pledged to go ahead with market-based reforms and be judged on their success. That has been accompanied by the news that hundreds of jobs are likely to be axed—we have already heard about the announcement by the University Hospital of North Staffordshire NHS Trust that 1,000 jobs are to be cut from its 7,000-strong work force. The Secretary of State accepts that there will be more turbulence, more disquiet and more criticism, but believes that measures to improve efficiency could be made without jeopardising patient care. However, the departure of Sir Nigel Crisp smacks of his being fingered as the fall guy for the problems. The Minister of State should say more about that.
The hon. Member for Wyre Forest (Dr. Taylor) talked about proposals to ease the cash crisis by cutting the number of emergency hospital admissions for chronic illnesses, but I wonder whether that is a sensible move. The Royal College of Nursing has acknowledged that many people with chronic conditions could be treated in the community rather than admitted to emergency units, but points out that that would require extra funding to pay for the nurses, which would still take resources, so it is not necessarily the cheaper alternative that the Government are seeking. The Government should reconsider that idea very carefully.