On 26 October I spoke in the House of Commons on the National Health Service complete with interventions from other members.
It is always a pleasure to follow the hon. Member for Central Suffolk and North Ipswich (Dr Poulter). I do not want to impugn his integrity, or to suggest that what he wants for the NHS is not exactly what I want. The issue is how we do that. Unfortunately, some unhelpful remarks were made in the run-up to the general election. At the least, they were disingenuous; at worst they were duplicitous. This debate is about trust, and there are serious questions about whether we can trust the Government with our NHS.
My right hon. Friend the Member for Leigh (Andy Burnham) has argued that pre-election pledges have been broken, and I want to speak specifically about how that relates to NHS funding. The first broken promise came within months of the general election. We have heard about the posters that we all saw as we went round our constituencies, showing a congenial right hon. Member for Witney (Mr Cameron), now the Prime Minister, promising to “cut the deficit, not the NHS”.
Last October’s spending review seemed to support that position, with a 1.3% increase in NHS resource spending and real-terms growth of what seemed to be 0.4%. The Secretary of State, who is just returning to his place, was unable to answer my question on that. I want to talk abut management costs, because the Department is focusing on that spending. It is important to be clear about management costs in the NHS budget. In 1999, they were less than 3%; in 2010, they were just over 3%. Independent research has shown that, if anything, the NHS is under-managed rather than over-managed. [ Interruption. ] I can certainly provide evidence for hon. Members.
Dr Coffey: Will the hon. Lady give way?
Debbie Abrahams: No, I am sorry; I am not going to give way.
We should compare our health care management costs with those in the United States, where they run at over 20%. We need to be very careful about what we are talking about.
Mr Steve Brine (Winchester) (Con) rose —
Debbie Abrahams: I am not going to give way—I am sorry.
In this year’s Budget, the Office for Budget Responsibility’s higher inflation forecast meant that NHS spending is now falling in real terms. House of Commons Library calculations show that it will fall by about 1% in real terms over the next four years—a loss in spending power of more than £1 billion by 2015. In the light of the recent inflation figures—[ Interruption . ] To help hon. Members out, last year’s figure was 5.6% based on the retail prices index. As inflation is at a three-year high, the loss in spending power is likely to be even greater. To keep his election promise, the Prime Minister would have to spend at least £1 billion more than he is doing.
This month’s King’s Fund report on NHS performance shows the effects of these financial pressures on the NHS, with the majority of finance directors saying that they are very or fairly pessimistic about the financial future of their local health economy. The Health and Social Care Bill, which is being debated in the other place, very conveniently sets out ways to help struggling foundation trusts. First, they can borrow money from the City to invest. Secondly, because foundation trusts will have to repay the money they have borrowed by treating more NHS patients and more private patients, they have been helped by the abolition of the cap on private patients’ income. However, as my right hon. Friend the Member for Leigh said, by raising income in this way they become economic enterprises and open themselves up to part B of EU competition law, so that they have to compete for every tender with private sector companies such as Capita, United Health, and so on. Incidentally, seven trusts, including in the Secretary of State’s constituency, have already said that they will be increasing the private bed cap. There is a private hospital in the Cambridgeshire University hospitals foundation trust area. Finally, when—not if—a foundation trust still ends up in financial meltdown, the Bill’s new failure regime means that they will be able to sell off NHS publicly-owned assets to private equity companies. There are direct parallels with Southern Cross.
The impact of that is already being felt in patient care. In addition to what is said by constituents attending my and many of my hon. Friends’ surgeries, the King’s Fund report showed that the proportion of patients waiting more than 18 weeks for treatment has increased nationally. Over a quarter of NHS trusts admitted fewer than 90% of their patients within 18 weeks. In my constituency, Pennine acute hospitals trust is able to treat only 70% of patients within its 18-week targets. That is more than double the number of trusts failing to meet the 18-week target in 2010.
I am afraid, however, that an increase in waiting lists is what the Government want; it is one of the intended consequences of the Bill. This increase in demand is feeding the growing private health care and insurance market. We know from the US that as people on low incomes will be less likely to be able to afford these products, there will be a direct impact on the inequalities that the Secretary of State says that he wants to reduce.
Barbara Keeley: My hon. Friend is concerned about health inequalities. Is she is worried as I am about changing the weighting of health inequalities in allocations of funding? In Salford, our experience is that that can push GP practices in deprived areas into the red in their indicative budgets, so they will be cutting down referrals and reconsidering treatments—another way of denigrating and cutting the benefits of services to patients.
Debbie Abrahams: My hon. Friend is absolutely right. I will come to that in a minute.
In fact, that is broken promise No. 2. Last week in Health questions, I asked the Secretary of State why, in December last year, he made a political decision, against the advice of the Advisory Committee on Resource Allocation to maintain the health inequalities component of PCTs’ funding allocation at 15%, and instead reduced it to 10%. He replied that he had made no decision against the advice of that Committee. However, it is quite clear from last September’s letter to him from the chair of the Committee that that is exactly what he did:
“I would like to draw your attention to ACRA’s position in relation to the health inequalities adjustment. We recommend that the current form of the adjustment is retained”.
The “current form of the adjustment” was 15%, and the Secretary of State made a political decision to reduce that. He should be apologising to the House for misleading us in his response to my question. The effect of that reduction is to shift funding from poor health areas to good health areas. The Secretary of State owes an apology to the people in those areas, as well.
I turn to broken promise No. 3. Although the move of public health to local authorities is welcome in principle, the timing could not be worse. Already, we are seeing plans that jeopardise the public health function as they move into local authorities besieged with cuts. As Labour has consistently argued, our health and social care system needs to balance the treatment and care of people who are poorly with creating supportive environments that enable all our citizens to live as healthily as possible for as long as possible—focusing upstream on stopping people falling in rather than on pulling them out further downstream, to use a familiar metaphor. That is absolutely key, but unfortunately the current approach means that it is not going to happen. For example, public health budgets, said to be ring-fenced, are not being ring-fenced. The shadow budgets that were being provided to public health departments for 2012 were supposed to increase from 3.7% to just over 4%, but further analysis showed that that increase was due to merging the public health and drug action team budgets, and not to any new moneys. There was, in effect, no real increase in public health funding.
I anticipate a future broken promise in relation to what the Secretary of State has said about privatisation: I think it will be a case of “Watch this space.”
The full debate is available on the parliamentary website here.