Rt Hon Alan Milburn MP
Secretary of State for Health
January 25th, 2000
HEALTH ECONOMY RECOVERY PROGRAMME
NORTH AND MID-HANTS HEALTH AUTHORITY
I am writing to ask you to instruct the North and Mid-Hants Health Authority to cancel their forthcoming consultation programme on the Health Economy Recovery Programme, and to abandon the search for service reductions totalling £10 million pounds. I am doing so in the light of the changed prospects for the NHS Budget, following the statements made by the Prime Minister on the Frost programme on January 16th, and in the House of Commons on January 19th.
There are at the moment two separate exercises involving the NHS in my constituency. The first is the current consultation on the management structure, set out in the document “Future Organisation Arrangements for Services in Andover”, to follow the proposed dissolution of the Andover NHS Trust on March 31st. This consultation is scheduled to end on February 4th. The second is the proposed HERP, advanced notice of which was given in the December edition of “Health Outlook”, published by the Health Authority with the headline “Closing the £10m cash gap.” The Health Authority makes it clear it is looking for economies of £10 million per annum by March 2002. In passing, I note that it says that “In simple terms, for every 10 residents, the health authority is funded for eight – the biggest difference in the country.”
The Chief Executive said at the AGM of the Andover NHS Trust, which I attended on September 30 at Andover Guildhall, that the HERP would have a “serious impact on patient services.” Health Outlook refers obliquely to “reconfiguring acute services” and “to minimising the need for compulsory redundancies.” All these statements sit uneasily with the letter you sent me on Dec 21st, telling me that the resources you have allocated to my Health Authority will help create the “fast, fair and convenient health services that patients expect.”
Each of the two exercises is a difficult one provoking strong reactions in my constituency. I can do no better than let you see last week’s local press on the NHS. I attach the front page of the Andover Advertiser of January 21st, and page 4 of the Basingstoke Gazette of the same date – popular and reputable local newspapers that reflect the views and anxieties of their readers.
The two exercises of course impact on each other. The failure to reach a consensus on the first – who should take over management from the Andover District Community Health Care Trust - is due in part to fears of the consequences of the second. If the robust, successful and efficient local management which has run the service so well is to be abolished, and an as yet undefined successor authority takes over, perhaps as an interim solution, there is an understandable view that local services will be more exposed to reductions. I strongly support that view.
There has been much criticism of the consultation process; Test Valley Borough Council wrote on January 5th to the Chief Executive of North & Mid-Hampshire Health Authority, questioning whether any change (to the management structure) was appropriate at this stage, and expressing unhappiness at the lack of breadth of consultation. Winchester and Central Hampshire Community Health Council has criticised the way the consultation process was managed, in particular who was sent the consultation document. It has asked for a number of assurances and guarantees, if the preferred Option is to go ahead, and has expressed its grave concern at some of the consequences and risks. Many local voluntary organisations such as Age Concern, Andover and District Mencap, Arthritis Care have written to object both about the process and the preferred option. The debate about who takes over from the Trust has not been assisted by the pressure on Andover Primary Care Group – only set up in April last year by the Government – to merge with another PCG; or by the decision to reject the option originally preferred by the PCG and the local authority, namely the establishment of a Directly Managed Unit.
Nonetheless, I believe it may be possible to secure agreement on the management structure, if the threat of the HERP is lifted. It is the inability to make guarantees about future service levels which underlies much of the unhappiness about the transfer of responsibility. There is still no agreement between Winchester and Andover, although this was promised in the Option. Although Winchester and Eastleigh Healthcare Trust will not commit themselves to guarantees, I believe guarantees might be given in terms that reassure the public, which brings me to the second of the two exercises, consultation on, amongst other matters, service reductions.
This consultation is due to start in the Spring. The local NHS Budget for 2000/2001 has been fixed, but we have been told that the economies of £10 million per annum have to be secured by March 2002. This means that the service reductions that emerge from the consultation are likely to start in the year beginning April 2001, though some may start earlier. But it is now clear from the Prime Minister that that is the year in which the uplift in the NHS Budget he announced last week will start. The baseline on which the Health Authority is currently working will have been overtaken by then by the new higher one to be announced this summer, at the conclusion of the second Comprehensive Spending Review. It would be absolutely absurd to spend this summer consulting on service reductions when, at the end of the summer, NHS Budgets will be increased. The exercise will be a complete waste of time, a diversion of management effort and a cause of needless public anxiety.
The Prime Minister said in the House last Wednesday “If the Opposition think that the public will be disappointed, come July and the comprehensive spending review, they will find they are the ones to be disappointed.” (Hansard, Jan 19th Col 838) Your fellow Health Minister from Wales said “We shall ensure that, over five years, there is a 5 per cent real-terms funding growth in the national health service.” (Hansard, Jan 18th Col 744) The Prime Minister confirmed the 5% figure both on Frost and in the House.
Your department will have worked out what this means in terms of an increase in your budget, beginning in April 2001. The Guardian estimates it to be £4.5 billion per year (Page 1, January 22nd) . The population of North & Mid Hampshire is 558,219 out of a national total of 49,347,571 or 1.3%. (It is set to grow, with the population of Andover alone rising by 8,000 over the next five years.) They could therefore expect an uplift of £50 million on April 1st 2001 - five times the figure that the HERP is seeking to reduce the budget by.
I hope this demonstrates the sheer absurdity of the Government pressing ahead with the local HERP. If it abandons it, that in turn can unlock the key to the pressing question about the future of local services.
I want to move the whole debate about health care in my constituency forward; I want confidence in the future management structure; I want certainty about the level of resources. The debate we both want to see is a positive debate about how we invest extra resources into the local health service, not a negative one about how we cut it back.
I and my constituents look forward to a positive response to this letter.