Below is the text of the speech made by Ray Whitney, the then Parliamentary Under-Secretary of State for Health and Social Security, in the House of Commons on 4 February 1986.
I am very grateful for the opportunity to respond to this Adjournment debate. It is well known to the House that my hon. Friend the Member for Banbury (Mr. Baldry) takes a very close interest in all the affairs of his constituency but particularly in the medical cover that is provided for his constituents—appropriate indeed for the son of a medical family.
I am grateful to my hon. Friend for placing his entirely fair points in the context of the increasing and expanding medical care that is being provided by this Government. I do not wish to enter into a statistical knock-about, but it cannot be said too often that significantly and steadily, in real terms, this Government have increased the proportion of resources that are devoted to the National Health Service both nationally and regionally, including the Oxfordshire district and the Horton general hospital.
The real terms increase in expenditure since 1979 will be over 20 per cent. this year. My right hon. Friend the Secretary of State for Social Services has announced that during the next three years we shall continue to give the same degree of priority to the NHS. Expenditure in Great Britain on the NHS is set to rise by nearly £2·8 billion to well over £20 billion in 1988–89. That represents a real terms increase in each year.
I shall now refer briefly to the Oxford region. I represent an Oxfordshire constituency and therefore take a particular interest in the region. It reinforces my ministerial responsibilities. My hon. Friend referred to the resource allocation working party. Pressures continue upon the Oxford region. They spring largely from its rapid growth in population. The pressures on the Oxford region have been taken into account in the allocations. For example, the allocation to the region in 1986–87 represents an increase of 7·3 per cent. over 1985–86. That compares with increases in other regions that range from 5·7 per cent. to 8 per cent.
This is a slightly lower allocation, in cash terms, than that which the region had hoped for or expected, but an increase of 7·3 per cent. is significant when there are heavy pressures upon expenditure generally. That allocation will put the region back on the course from which it was deflected. It will move towards its target of receiving a fair share of resources and it will correct the drift away from that target which has been a feature of recent years. The region, we estimate, is now within 2 per cent. of its target. The planning guidelines which we are now issuing to the regions, predict growth for Oxford of 1·7 per cent. in 1987–88 and 1·8 per cent. in 1988–89, and are designed to continue this process. I therefore submit that Oxford is feeling the benefit of the change in the RAWP formula in 1985–86 from past population figures to population projections for the year of allocation, a change specifically aimed to reflect more fully the needs of regions with rapidly growing populations. Coming from the region, as I have said, I well recognise that factor.
My hon. Friend referred to the impact of RAWP formula. The regional health authority has put a paper on RAWP to Ministers, and it will have an opportunity to put to Ministers its arguments on this issue in a regional review which will be chaired by my right hon. Friend the Minister for Health. We have also asked the National Health Service management board to undertake a review of the RAWP formula, keeping the guidelines which aim at a general equalisation of health provision throughout the country. While the terms of reference of the review have not yet been finalised, the objective is to ensure that the RAWP formula is applied with common sense and sensitivity. This will provide an opportunity for the region to put to the department its particular concerns about the application of the RAWP formula to the Oxford region.
I therefore hope that my hon. Friend recognises in the application of these figures that substantial funds are available. I hope that they have been applied flexibly, recognising the changing pressures in the regions, and specifically in the Oxford region and district.
I deal now with other points which my hon. Friend made about the general pressures on the health authority to meet the pay awards. That is recognised, and it must inevitably be part of any arrangements of the funding of the Health Service. We have provided increases which are above the rate of inflation. It is important to understand that the cost improvement programmes are making available additional funds to authorities which go back into the kitty to cover not only the pay awards but improvement in the services. Resources released in this way through increased efficiency and cost improvements added something like 1·5 per cent. nationally to the money available for services and pay awards. Authorities are expected to improve on that next year. Oxfordshire has a cost improvement programme in 1986–87 of 1·8 per cent. In fact, in 1985 authorities have been able both to fund the 1985 pay awards and to develop services.
Health authorities cannot expect, any more than employers in other industries and services, to be insulated from uncertainties about the level of pay settlements. It would be wholly unrealistic to expect the taxpayer to pick up whatever costs arise. We have no plans to increase health authorities’ cash limits to fund pay awards. As we have made clear, there is an inevitable trade-off between expenditure on pay and on services, and the precise balance will vary from year to year. I hope that my hon. Friend will accept that that is the way that we must conduct our services.
The difficulty is that district health authorities and others fix their budgets at the beginning of the year in anticipation of a pay award and halfway through the year they find themselves with percentage increases that they did not and could not have anticipated, because of review body decisions.
No one pretends that it is an easy problem. The pay awards must be contained within the steadily increasing percentage of the national wealth that is devoted to health. I hope that with cost improvements authorities will accept that and find sufficient flexibility. The awards are phased and that helps health authorities solve the problem which, I accept, is difficult.
It may not be possible for me to cover all the points mentioned by my hon. Friend. Nationally, there has been an increase of about 50,000 nurses and midwives. My hon. Friend said that the shortening of their working week is a factor in that. We have significantly—perhaps not as much as we should have wished—increased the rates of nurses’ pay in real terms. That produces pressures.
I understand that there are problems at the Horton hospital in Banbury and with the Oxfordshire health authority. The authority has set a review committee to work. I am not sure whether it has reported, but when it does we shall consider how the health authority can cope. It is a problem that must be solved locally, because the national picture shows a steady increase in the number of people employed in nursing since we took office.
My hon. Friend mentioned those elderly people who would be better off in a nursing home. He referred to the level of supplementary benefit. From November, the allowance for an elderly person in a private nursing home was increased to £170 per week. That is subject to examination and review. Management consultants are studying the level and its feasibility. We have set in train studies on the assessment of old people to ensure that the service is being provided for those who genuinely need it. At £170 per week, the provision is not ungenerous.
As a Minister with responsibility for social security I had the privilege of going around the country looking at nursing and residential care homes. It struck me as entirely possible to provide a good level of care in nursing homes with such funding. I hope that will continue to be the case.
It is regrettable if facilities are not used. Because of the way in which we run our Health Service, many decisions at local level must be taken by the district health authority. My hon. Friend was kind enough to accept that the resources made available to the Oxfordshire health authority and the Horton hospital were not ungenerous. The Oxfordshire health authority has gained substantially and expenditure on Oxford district between 1978–79 and 1984–85 has more than doubled, representing an increase of 13 per cent. above inflation.
During the past six years £2·1 million has been spent on capital developments at the Horton hospital, and in 1983 four new operating theatres were completed. Next year a new phase will begin which will provide 100 beds for elderly people and a new day hospital at a cost of £5·2 million. There are plans to replace the accident and emergency unit. The upgrading scheme will be assisted by local fund-raising, which, as my hon. Friend says, demonstrates the support for the hospital.
This is a good story. I understand the problems, but with the support that the health authority is receiving at national level, I hope that it can cope with them.