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Orders of the Day
WAYS AND MEANS
Order read for resuming debate on Question [28 November].
The Secretary of State for Health (Mr. Stephen Dorrell):
The year 1996 will be an important milestone for the national health service. It will be the 20th anniversary of the last occasion on which a Government presented spending plans that delivered a sharp, real-terms reduction in the national health service budget. I am pleased to tell the House that this year I do not need to make a similar announcement. Indeed, we are able to continue the real-terms growth of the NHS that has gone on in every year since that announcement in 1976 for the year 1977-78.
Last week, I was able to set out plans for the continued growth of the health service. First, I was able to report that, overall, real-terms growth in patient care in the NHS next year will be 1.6 per cent. In real pounds, after correcting for inflation, that is £500 million of growth in patient care--£1.3 billion of cash growth for patient care as a result of the Budget that my right hon. and learned Friend the Chancellor announced last week. That is a substantial continued investment, and it allows us to develop a number of different and important priorities within the health service.
First, it allows us to provide for the continued and fast real-terms growth of primary care in the NHS. Within that total of 1.6 per cent. real-terms growth, I am allocating 3.9 per cent. real-terms growth to support the continued development of family health services, and particularly the family doctor service and GP-provided health care. That is building on a substantial record of success within the health service that was built up over a long time, and particularly reinforced over the past few years by the fundholding scheme. We still look forward to hearing from the hon. Member for Peckham (Ms Harman) whether Labour supports that scheme.
The continued development of family health services is an important element of this year's Budget settlement for the NHS. The second important element is continued real-terms growth of services that are secured by health authorities.
The average real-terms growth of health authority budgets next year will be 1.1 per cent. Virtually every health authority gets 0.5 per cent. real-terms growth, the rest being directed at those health authorities in which funding is below target, measured on the weighted capitation formula. The Government have repeatedly reasserted their commitment to bringing all health authorities into line on that weighted capitation formula, and I am pleased to say that the allocations to health authorities which I announced on Thursday reflect considerable progress towards that objective.
That is good news for the people of South Essex, who will see a 4.2 per cent. growth in real terms in their health authority spending next year, and for the people of North Essex, who will see a 3.5 per cent. real-terms growth in expenditure. In Bedfordshire, the figure is 3.2 per cent., and Oxfordshire, East Sussex, West Kent and Bromley will all receive more than 2.5 per cent. real-terms growth in their health authority expenditure next year as a result of the Government's commitment to equitable funding within the NHS, as demonstrated by our commitment to the weighted capitation formula. Those two priorities have been safeguarded within this year's settlement.
The third priority is our commitment to continue to develop the future of the health service, through investment both in training and in research. I have been able to allocate a total of £68 million of new money to develop the education and training commitment of the NHS. We are investing in the most precious resource of all within the NHS--the skilled and professional work force who deliver health care.
Ms Angela Eagle (Wallasey):
Will the Secretary of State say a little about the 17 per cent. cut in capital investment for the NHS? Some of us are extremely worried that the private finance initiative will not fill that gap, and that we may face a quite severe problem with capital investment in the future.
Mr. Dorrell:
If the hon. Lady will contain herself and be patient, I shall certainly come to the private finance initiative and its role in the future of the NHS, and I shall be reflecting upon the sharp change in position that the hon. Member for Peckham (Ms Harman) has undertaken in the past week. It appears that the hon. Member for Wallasey (Ms Eagle) has not quite caught up with her hon. Friend's change of position, and I can understand that.
Mr. Simon Hughes (Southwark and Bermondsey):
If I am called to speak later, I shall challenge some of the Secretary of State's macro-economic figures on spend. According to a press release from the right hon. Gentleman's Department, the net increase in Government spending next year is 0.6 per cent, not 1.6 per cent. Thereafter, the figures are 0.1 per cent. for the two subsequent years. The Government's manifesto commitment to real-terms increases every year is just being achieved in the two years following the coming year, but only by 0.1 per cent. in each of those years.
Mr. Dorrell:
The hon. Gentleman reads out the figures correctly, but overlooks the fact that the restructuring of the health budget allows me to deliver more than 1.5 per cent. growth in patient care in the NHS next year on those figures. There will be an increase in the real resources available for patient care next year. Labour's Front-Bench Members have argued--spasmodically, uncertainly, but reasonably consistently--for public-private partnerships to expand the resources available to the health service for the past 12 months. I am delivering that, and I am able to increase the volume of money committed to current patient care within the health service.
Not only are we spending money on expanding today's services: we are also ensuring that we are committing money to support tomorrow's services through the development of education and training programmes, and through the development of the research programme of the health service. When my right hon. Friend the Chief Secretary was doing my job, he quite rightly committed the health service to develop that programme.
It is extraordinary that it took 40 years for a science-based service--as the health service should be-- to appoint its first director of research and development. We now have that function, and we are committing real resources to making certain that we have available to the health service a proper research function to ensure that clinical practice within the NHS reflects the latest understanding of the people operating at the leading edge of clinical services. That is why I am committing an extra £27 million of new money to the research function of the
health service next year--an amount which represents a real-terms growth rate in the commitment to research of nearly 4 per cent.
Mr. Sam Galbraith (Strathkelvin and Bearsden):
The Secretary of State referred to a director of science and research. On a point of information, is that science and research based on clinical, scientific analysis of treatment, or on the management and structure of the national health service?
Mr. Dorrell:
I hope that the hon. Gentleman, as someone who has previously been interested in the health service, would want me to answer to that question,
"Both." That is what it is. Those who are interested in the development of efficient health care within the health service should surely consider every aspect of the functioning of the health service to ensure that the care that is delivered reflects an efficient use of resources within the health service. That is what we have committed resources to doing.
Mr. Simon Hughes:
I do not dissent from what the Secretary of State has said, but I want everyone to be absolutely clear. In the years after next year, the resources that come from the public purse will be increased by 0.1 per cent. The increase in other resources will come entirely from the private sector, which the Secretary of State will deal with. The substantial increase will come from the private sector, not the public purse.
Mr. Dorrell:
I have already answered the hon. Gentleman's question. He reads out numbers which he says are from the press release. If he wants to look for a more learned version of the same numbers, he can look in the Red Book. We are using public money as efficiently as possible to deliver growing services to patients. That is why I am placing stress on the real resource that is available to support the activities of health authorities in different parts of the country.
I have referred so far to the development of primary care, research and development and education and training. The next priority that I want to talk about for a moment is the mental health services of the NHS.
Everyone who follows the health debate knows that mental health services have been a subject of concern both inside the House and outside it for some time. I am able to announce in the context of this year's Budget settlement a real commitment to an improved delivery of mental health services throughout the country.
I believe that there is now a broad measure of agreement about what a modern mental health service should look like. It is often characterised as care in the community. In the sense that it is no longer a model of care that relies solely on the old-fashioned hospitals, that is true. However, it is not true to suggest that a modern mental health service should be based only on community-based provision. There is now broad agreement that it should deliver a spectrum of care, including acute hospital care for those who need acute mental illness services and sheltered accommodation for those whose dependency needs are greater as well as a properly developed range of community services.
That is the spectrum of care that people expect to see in a modern mental health service. People expect, furthermore, to see such a service reinforced by properly developed links between the NHS and social services departments.
The debate about mental health services is less about precisely what the model of care should be, and more about the effectiveness of delivery of that service in different parts of the country. That is why my hon. Friend the Minister for Health wrote to each health authority in August asking them to deliver a quick assessment of their progress in the delivery of that type of mental health service. The replies were due in on 30 November. I inform the House this afternoon that I intend to publish the conclusions of that process early in the new year.
I also draw it to the attention of the House that the Budget carries forward the process that I have described by allowing us in two important respects to provide growing resources for the development of mental health services within the NHS. First, within the central budgets of the health service, I have set aside £10 million which will be available to above-target health authorities to allow them to develop their mental health services. I shall expect any health authority which bids for that money at least to match from its own resources the money that it claims from that central budget. I expect that to deliver at least £20 million of extra resources committed to mental health services within the NHS.
The second element of the programme for the development of mental health services reflects the growth of the resources that I have set aside for the mental illness specific grant for local authorities.
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