Nick Herbert highlights local NHS deficits in Commons debate

Arundel & South Downs MP Nick Herbert has called on the Government to recognise the damaging impact that NHS deficits are having on healthcare in West Sussex.

Speaking in an Opposition Day Debate on NHS Finance on Tuesday (15 November), Mr Herbert said: "All four acute trusts serving my constituents in Arundel & South Downs are in deficit.

"The Brighton and Sussex University Hospitals Trust has a deficit of £7.5 million, and that will double by April.  The Royal West Sussex Trust serving the south-west of my constituency has a cumulative deficit of £20 million, and rising.  The Surrey and Sussex Healthcare Trust has a deficit of £29 million, while the Worthing and Southlands Hospitals Trust has a deficit of £5 million, which is forecast to rise to £13 million by March."

Mr Herbert went on to highlight the damaging consequences of these deficits for local people: "In St Richard's, one rehabilitation ward is to be shut, with the consequences that patients are being transferred to Arundel community hospital.  That hospital is being told that it can treat fewer local patients than would otherwise be the case."

Mr Herbert countered Government arguments that hospitals were running up huge deficits due to their inefficiency by stating that St Richard's Hospital in Chichester "is one of the most efficient in the country.  It is among the top 15 per cent of NHS trusts nationally, and has two of the three possible stars in the Healthcare Commission ratings."

He said that hospitals are being forced to run up deficits as funding is eaten up by rising costs and internal inflationary pressures: "Higher spending has simply fuelled higher costs."  He warned of a future funding crisis, with future spending commitments, including PFI schemes and the primary care contract, amounting to £10 billion a year of additional costs in five years' time:  "These will be funded from within the existing NHS budgets, at a time when the increase in spending will be slowing down".

Mr Herbert added that "The national problems are exacerbated in West Sussex, where our population is rising, and relatively elderly, and the NHS funding formula discriminates against the south-east."  He concluded: "I hope that the Secretary of State and her fellow Ministers recognise that the hospitals in my area face serious problems that must be answered."

Ends

 

Notes for editors

1. The full text of Mr Herbert's speech in the House of Commons on 15 November 2005 is below.

Nick Herbert (Arundel and South Downs) (Con)

The Secretary of State gave the clear impression that the deficits described by other Opposition Members do not matter. She said that they affected only a small minority of trusts, but all four acute trusts serving my constituents in Arundel and South Downs are in deficit. The Brighton and Sussex University Hospitals Trust has a deficit of £7.5 million, and that will double by April. The Royal West Sussex Trust serving the south-west of my constituency has a cumulative deficit of £20 million, and rising. The Surrey and Sussex Healthcare Trust has been referred to already and has a deficit of £29 million, while the Worthing and Southlands Hospitals Trust has a deficit of £5 million, which is forecast to rise to £13 million by March. That represents a total deficit of more than £60 million, and rising, in the acute trusts in West Sussex alone-hardly a chimera.

That deficit affects the trusts' creditors; it is not merely a paper deficit. Ministers will know that many of the trusts are unable to meet their bills, and that means that creditors, including those in the private sector, are being made to wait for payment.

The Secretary of State said that a recovery plan was in place. What does that plan entail in West Sussex? In Worthing and Southlands, it means that two wards will be shut. In St Richard's hospital, one rehabilitation ward is to be shut, with the consequence that patients are being transferred to Arundel community hospital. That hospital is being told that it can treat fewer local patients than would otherwise be the case.

In 1932, people in Arundel supported the building of the hospital by public subscription. The bricks were paid for by everyone contributing sixpence each to the building fund. Local people have contributed every year to ensure their community hospital's preservation, and they feel very aggrieved that, in effect, it will be taken away from them.

In the Brighton and Sussex University Hospitals Trust, major trauma services have been transferred from the Princess Royal hospital in Haywards Heath to the Royal Sussex hospital in Brighton. Again, that is strongly against the wishes of people in the local community.

The Secretary of State gave the game away when she said, on the "Today" programme in June, that some parts of the NHS were "not particularly efficient". She said that

"individual hospital departments, if they are not able to . . . balance their books . . . will find themselves replaced".

Is it not clear, therefore, that the recovery plan really amounts to a closure plan? However, when the Secretary of State says that trusts are not being efficient enough, that is to ignore that the St. Richard's hospital serving my constituency is one of the most efficient in the country. It is among the top 15 per cent of NHS trusts nationally, and has accumulated two of the three possible stars in the Healthcare Commission ratings, yet the Government say that it is not efficient. The truth is its efficiency is being penalised by the deficit that it should not be running up.

The Secretary of State said that deficits were rising in spite of higher resources, but the point is that, in effect, those resources are not available. The King's Fund has pointed out that 73 per cent. of spending increases are being absorbed in cost pressures. Professor Nick Bosanquet of Imperial College has said the same-that 70 per cent. of annual spending rises are being absorbed by inflation.

The Government have fuelled inflationary pressures in the NHS, and made it less possible for trusts to meet their bills. That is not merely due to an increase in existing salary costs as a result of Agenda for Change and the new consultant contract: it is because the future spending commitments taken on by the Government are not properly accounted for. They include the PFI schemes, the new primary care contract that is being introduced, and the fact that more staff will be taken on.

Professor Bosanquet has estimated that, in five years, the additional costs will amount to £10 billion a year. That will be funded from within the existing NHS budgets, at a time when the increase in spending will be slowing down. By then, our health funding will be nearing French levels. It will account for 10 or 11 per cent. of gross domestic product, but the NHS will face a French-style financial crisis.

Hospital managers have no control over those costs, which in effect are being imposed on them. In a national system, they have no way to vary the costs, and the possibility that they might be able to has been taken away. The right hon. Member for Darlington (Mr. Milburn) proposed that in the introduction of foundation hospitals, but that innovation never saw the light of day.

There will, of course, be less in the way of resources for health care if the money being put in is not matched by output. The Treasury's initial measure of NHS productivity showed that it fell by a staggering 15 to 20 per cent. between 1997 and 2003. The Office for National Statistics was told to recalculate the measure, but even its revised figures show that productivity has been falling by as much as 1 per cent. a year since 1997.

Falling productivity means that the NHS needs more resources just to stand still. One reason for that fall in productivity is that there has been an increase in non-productive activity. For example, the latest ONS figures, published last month, show that the number of managers in the NHS in England is increasing three times as fast as the number of clinical staff, doctors and nurses.

The problem is not that more money has not been put in, but that the money has been put in ahead of reform and consequently dissipated. Higher spending has simply fuelled higher costs. The national problems are exacerbated in West Sussex, where our population is rising, and relatively elderly. As Opposition Members have pointed out, the NHS funding formula discriminates against the south-east.

I hope that the Secretary of State and her fellow Ministers recognise that the hospitals in my area face serious problems that must be answered.

Ed Barker