Sir George Speaks Out on Andover Hospital
2 Nov 2005
This is the text of a speech Sir George made in the House of Commons on Andover Hospital. (see below)

"I was very disappointed with the Minister's reply; I don't think she understands the depth of feeling on this issue."

Sir George Young (North-West Hampshire) (Con): I congratulate my hon. Friend the Member for Beverley and Holderness (Mr. Stuart) on his choice of subject and the way in which he delivered his speech. What he said touched a chord in many of us. The fact that so many hon. Members are present listening to the debate and hoping to take part shows how important a subject it is. I am delighted that my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), the shadow Secretary of State, is here.
I want to be fair to the Government at the beginning of my remarks, as it is not clear to me from the debate that anyone else will be. They have put resources into the NHS, and I welcome that. There have also been improvements in the quality of the care received by our constituents. Indeed, I shall shortly be opening a new nursing home on the site of Andover hospital, jointly funded by the NHS trust and Hampshire county council. We can debate elsewhere whether the improvement in care has been commensurate with the increase in cash. We can also debate whether the increase has been fairly spread throughout England. I shall mention that in a moment.
In addition to being fair, I want to be realistic. I recognise the case for change in the buildings that the NHS uses. Patterns of treatment change, lengths of stay reduce and medical science advances and becomes more specialised. Critical mass is needed for a district general hospital; there cannot be one in every town. New guidelines on safety indicate what operations can take place where. Old buildings are, of course, expensive to run, and more care can be provided at home. Therefore, the NHS needs to be responsive to the changes.
Against that background, my local trust produced a consultation document on the future of my local community hospital in Andover. That should have been an opportunity to discuss how the extra cash that is going into the NHS might be used to expand and to improve the services in a fast-growing town. Andover War Memorial hospital, as the name implies, was built by public subscription after the first world war when Andover was a fraction of its present size. It is a much loved institution with dedicated staff, but parts of the building are now seriously substandard. It provides a portfolio of services—minor injuries, maternity, out-patients, therapy and diagnostics—but for anything more serious one has to go to Winchester. Some 67,000 people look to Andover for hospital services, and that number is about to go up.

The people of Andover and I would like the consultation exercise to result in the provision of a wider range of high-quality services in a modern building, reducing the need to travel to Winchester. I echo the point that was made by the hon. Member for Kingston and Surbiton (Mr. Davey). The problem with dependency on Winchester is that there is no direct train service, the bus service is infrequent and the journey lengthy, and there is nowhere to park. As Andover overtakes Winchester in population size, we see the review as an opportunity to move the centre of gravity of NHS service provision closer to the population that it serves.
We are not after a new district general hospital. we just seek improved and rebalanced terms of trade. However, there is deep concern in the town that we will not get that. People suspect that the consultation exercise is driven as much by the need to save money as by the need to improve care. The document says:
"we need to make . . .changes to ensure it remains . . . affordable".
As a result, there is a lively and broad-based campaign to fight for the hospital, led by Derek Robinson. The local paper, the Andover Advertiser—I mention it in the hope that it will mention me—has given extensive coverage to the debate. Public meetings have been packed.
There is reason for that concern. The annual report of my primary care trust, which arrived yesterday, says that to balance the books in the current year, it has to save over £11 million. Last year, it ended up owing £17.5 million while being owed £4.5 million. The financial position of what is called the health economy in Hampshire is deeply serious. The fear is that there will be no resources to modernise Andover hospital and that, in order to cut costs, more services will migrate to Winchester. At the heart of the issue is the formula for distributing the cash. I hope that the Minister will say that she is able to review that formula. Hampshire gets about 80 per cent. of the England average, and with that we cannot provide the quality of care to which people are entitled. Therefore, we have financial recovery plan following financial recovery plan. We have now been told to rub out the deficit in the current year. In Andover, we are ambitious but realistic. We want a fair outcome from the consultation exercise, as my hon. Friend the Member for Beverley and Holderness does from his.
I want to end by raising a key issue that is not unique to Andover, and which could affect every constituency with a community hospital that needs renovation. I refer to a policy that is wholly indefensible, and which the Minister can and should change today. Part of the site of Andover hospital is to be sold. I have no philosophical difficulty with that if all the new services that we need can be provided on a smaller footprint, and the capital receipts from the disposal can fund them. The land is to be sold in two years' time for £1.5 million—the estimated best price in the open market. However, that is less than the book value, which district valuers have assessed at £4.2 million. I do not know how they arrived at that figure; I should have thought that a building providing health services at nil cost had a negative value.
At this point in the dialogue, an uninvited guest arrives, namely the Treasury. The Treasury has spotted the gap between the open market value and the book value and has demanded what it is pleased to call an estate impairment charge. It is not even prepared to wait until 2007 to get its pound of flesh. Over £500,000 is being added to this year's deficit for the alleged injury being done to the NHS estate.
That is Treasury theology taken to an absurd degree. That tax on disposal is a major disincentive to rationalisation and is going to lead to a reduction in services in the current year. I have pursued the matter twice with Ministers, and their replies are straight from "Yes Minister":
"Impairment charges to the revenue account are in many respects analogous to depreciation charges and . . . measure the consumption by an entity of its economic resources."
They continue:
"A fall in value does not represent any error or over-estimation of the initial valuation, but rather the difference in economic value between a productive asset employed in delivering healthcare and one in which its value is merely the potential to realise sale proceeds."
The Government have recognised that that is nonsense, because they have set up a separate fund to compensate the trusts that have to pay the charge. Sadly, the Treasury has got at that fund, too, and it meets only part of the cost, leaving a £500,000 shortfall this year in Andover.
Let us sweep away this nonsense. If land and buildings are surplus, they should be sold at best value, but let us not accentuate a bad problem by allowing that absurd theology to add to the burdens of heavily indebted trusts. If nothing else happens this morning, let the Minister at least recognise that absurdity.

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Copyright Sir George Young Bt. 2015