Sir George speaks out on health and social services
4 Dec 2001
Speaking in the debate on funding of health and social services, Sir George asked the Government to look again at work-based insurance schemes; and to include social services as well as the NHS in the debate.

Extract from Hansard follows.

Sir George Young (North-West Hampshire): It is a pleasure to follow the hon. Member for Halton (Derek Twigg). I hope to reply to some of the thoughtful questions that he posed about how we can improve the service for some of his constituents, but he made a mistake towards the end of his speech by polarising the issue between a wholly privatised system and carrying on with the current system, and I hope to say a few words about that in a moment.
The debate was opened with a quality speech from my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), who posed four questions in his normal consensual way. It was sad that, after speaking for 30 minutes, the Chancellor did not give us any answers. Indeed, he seemed to be growing increasingly agitated as time wore on. I hope that the Chief Secretary will answer those four question when he replies to the debate.
Last Tuesday, the Chancellor announced the beginning of a debate on health, and at Prime Minister's questions the next day the Prime Minister also referred to a debate on health. I welcome that and think it important that Government do not foreclose all the options before the debate has got under way. I hope that they will not impugn the motives of those who believe that the time has come for some lateral thinking about how we fund the health service. I am not sure that the Chancellor understands how difficult the position is for the NHS in many constituencies.
I want to make two brief points--one about funding and the other about social services, a close partner of the NHS. On the first, the key question that needs to be addressed is how do we adhere to the principles behind the NHS--free at the point of use and available on the basis of need--while enabling the country and the NHS to perform much better than it does at the moment? I want to develop briefly the analogy with pensions and find out whether the approach that has successfully been adopted can be applied to health.
When the welfare state was founded just after the second world war, broadly the same approach was adopted to pensions and health. On pensions, there was to be a compulsory contributory scheme, leading to a state retirement pension, which was designed to address poverty in old age and reduce dependence on means-tested benefits. It was not to be a funded scheme, but a pay-as-you-go scheme, with today's contributions paying today's pensions. The NHS was born with the same overall philosophy--a state scheme aimed at embracing everyone, designed to address ill health and paid for out of compulsory taxation.
With pensions, the Beveridge vision was never achieved. There was increasing reliance on supplementary benefit, income support and pensioner credits to tackle poverty; and no Government were ever able to get the state retirement pension up to the level that would take people out of poverty. Over time, the emphasis began to switch to private provision, based on the workplace. Although the Opposition can claim much of the credit for what I call that mixed economy in pensions, a key player was actually Barbara Castle--as good a socialist as one could come across--whose pension Bill in the mid-1970s contained the architecture for the scheme that we now have.
Over the years, more emphasis has been placed, by Governments of both parties, on good employers having in place a quality pension scheme that complements, reinforces and works alongside the state retirement scheme--an ideal third way. No one has ever asserted that that is socially divisive. The trade unions support good private pension schemes, and this country's pensions are now on a sound financial footing. We lead Europe in funded pensions, given that most other European Union countries have schemes that will need an increase in taxation or contributions.
The question I pose this evening is whether a comparable model might not be looked at for health, against the background of the pressures on funding and delivery that confront the NHS as a monopoly provider. Should not one encourage employment-based insurance schemes to complement the NHS? They could be called, "NHS at work" if it helps Labour Members. It is indeed the case that many firms have private health insurance schemes, but, typically, they cover only senior employees. I believe we should move towards a system whereby not just all the employees within firms are covered, but their families as well. Such an approach would be welcomed by those who represent the work force. It would be in the interests of employers in improving the quality of care that employees and their families receive. I believe that the NHS should welcome it, as the growth of an independent sector of medicine would relieve it of much of the pressure that confronts it at the moment. I think that the Government should welcome it, as it would increase the percentage spend up to European levels. I do not think that anyone could argue that such an approach was socially divisive; rather, it would be an extension of good employment practice, as has already happened with decent pensions.
There are, of course, cost issues for employers, although the bulk purchase of health cover can bring premiums right down to three rather than four figures a year. It could be phased in and the cost could be reduced by cutting employers' national insurance contributions. I hope that the debate launched by the Government will permit us to explore that option.
My second point is about joined-up government. The debate launched by the Government is about the NHS, but we should not forget its partner, social services. Right hon. and hon. Members may have seen the letter in The Times today by Councillor Sir Jeremy Beecham, chairman of the Local Government Association, in which he says:
"The Chancellor's announcement of £1 billion extra to be invested in the NHS, on top of the current record levels of increase, will be widely welcomed. By an ironical coincidence £1 billion is the sum which local council social services departments are spending on social care over and above the Government's Standard Spending Assessment for social services.
The work of social services departments with the elderly and with children complements mainline government programmes in health, education and in combating child poverty. It is currently under-funded and many councils face the prospect of cuts in this key area of social provision."
Certainly, many of the problems confronting the NHS in my constituency in Hampshire are due in no small part to the underfunding of social services. There is no point in providing more money for the NHS if it cannot be spent, because the revenue support grant is squeezing local authorities and social services. Let me say in passing, as my right hon. Friend the Member for Fylde (Mr. Jack) pointed out, that social services are extensively charged for.
Nine per cent. of all acute beds in the south-east--1,370 beds, or three district general hospitals--are blocked by delayed transfers of care. Some 23 per cent. of those patients are awaiting public funding. In my constituency, 83 beds are blocked in the Winchester and Eastleigh Healthcare NHS Trust.
The Government will say, with some justification, that they have twice in the past 12 months allocated extra sums--cash for change and winter pressure money. Hampshire received £1.9 million last year and £2.4 million in September this year. Of course, that money is welcome, but this simply is not joined-up government. It shows how inadequate the social services standard spending assessments are for local government. This is a one-off sum--local authorities do not how much they will get or when they will get it, but the revenue consequences for social services continue year after year. There is a strategic problem of loss of beds in residential and nursing homes, aggravated by measures introduced by the Government.
Mr. Jim Cunningham (Coventry, South): When the right hon. Gentleman was in government, does he recall the representations that were made about changes to the formula that would have meant extra provision for social services and the fact that his Government refused to make those changes?
Sir George Young: I regard that as a spent conviction. Yes, I remember receiving an unending series of deputations. Any Member of this House with any ingenuity can develop a case showing that his local authority has had a raw deal under the revenue support grant system. I am sure that the hon. Gentleman did not lack ingenuity in making his case, and I hope that he was listened to sympathetically.
Let me return to the strategic problems of social services. There is a net loss of beds in residential and nursing homes, which has a direct impact on the performance of the NHS. The net loss of beds in Hampshire in the past three years has been 62, 277 and 279, with 400 likely this year. So the debate that has been launched must embrace both the NHS and social services.
I hope that the Government's response to the two strategic issues that I have outlined is not to turn their back on the development of a complementary scheme alongside the NHS. I am slightly worried that the Government see a frantic programme of administrative reform of the NHS as an adequate substitute for the more thorough debate that I outlined. The problems are not likely to be put right by a further round of turbulent administrative reform.
The problems that confront the NHS are pay awards and other costs rising faster than the inflation uplift; the formula for distributing funds around the country, which is hopelessly flawed; staff recruitment and retention, which leads to the excessive use of agency staff; and delayed transfers of care, which mean that hospitals have to treat more people than they should. The real debate on the NHS should focus on those problems and the broader issues of funding. There is an appetite outside the House for a proper debate on how we fund the NHS and health in this country. I hope that the Government are listening.

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Copyright Sir George Young Bt. 2015