House of Commons Health Committee Public Expenditure on Health and Personal Social Services 2005 Memorandum received from the Department of Health containing Replies to a Written Questionnaire from the Committee Oral and written evidence Ordered by The House of Commons to be printed 6 December 2005 HC 736 Published on 5 May 2006 by authority of the House of Commons London: The Stationery Office Limited £27.00 The Health Committee The Health Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department of Health and its associated bodies. Current membership Rt Hon Kevin Barron MP (Labour, Rother Valley) (Chairman) Mr David Amess MP (Conservative, Southend West) Charlotte Atkins MP (Labour, Staffordshire Moorlands) Mr Paul Burstow MP (Liberal Democrat, Sutton & Cheam) Mr Ronnie Campbell MP (Labour, Blyth Valley) Jim Dowd MP (Labour, Lewisham West) Anne Milton MP (Conservative, Guildford) Mike Penning MP (Conservative, Hemel Hempstead) Dr Howard Stoate MP (Labour, Dartford) Dr Doug Naysmith MP (Labour, Bristol North West) Dr Richard Taylor MP (Independent, Wyre Forest) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/healthcom Committee staff The current staff of the Committee are Dr David Harrison (Clerk), Eliot Wilson (Second Clerk), Christine Kirkpatrick (Committee Specialist), Ralph Coulbeck (Committee Specialist), Duma Langton (Committee Assistant) and Julie Storey (Secretary). Contacts All correspondence should be addressed to the Clerk of the Health Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6182. The Committee’s email address is [email protected]. Witnesses Thursday 1 December 2005 Page Sir Nigel Crisp, Permanent Secretary and NHS Chief Executive, Mr John Bacon, Group Director of Health and Social Care Services Delivery, Mr Richard Douglas, Director of Finance and Mr Andrew Foster, Director of Workforce, Department of Health Ev 1 Tuesday 6 December 2005 Rt Hon Patricia Hewitt, a Member of the House, Secretary of State for Health, Sir Nigel Crisp, Permanent Secretary and NHS Chief Executive and Mr Richard Douglas, Director of Finance, Department of Health Ev 34 List of written evidence Page 1 Public Expenditure Questionnaire 2005 Ev 54 2 Supplementary memorandum from the Department of Health Ev 313 3178271PAG Page Type [SO] 27-04-06 16:17:42 Pag Table: COENEW PPSysB Unit: 1PAG Health Committee: Evidence Ev 1 Oral evidence Takenbefore the Health Committee onThursday 1 December 2005 Members present: Mr Kevin Barron, in the Chair Mr David Amess Dr Doug Naysmith Charlotte Atkins Mike Penning Mr Paul Burstow Dr Howard Stoate Mr Ronnie Campbell Dr Richard Taylor Anne Milton Witnesses: Sir Nigel Crisp, Permanent Secretary and NHS Chief Executive, Mr John Bacon, Group Director of Health and Social Care Services Delivery, Mr Richard Douglas, Director of Finance, and Mr Andrew Foster, Director of Workforce, Department of Health, gave evidence. Q1 Chairman: Good morning. I apologise that we cancer, coronary heart disease, and you are seeing are a few minutes late starting. Could, I, Sir Nigel, waiting lists falling very, very fast indeed. That is the just ask you to introduce yourself and your biggest challenge and 50% went on that. Then 20% colleagues. went on training and capital, so investment for the Sir Nigel Crisp: Certainly. I am Nigel Crisp. I am the future. Then big increases in doctors; number of Chief Executive of the NHSat the Department of doctors in training up 60%, number of nurses in Health. On my right is Mr Douglas, who is the training up 34% and so on, so big investment for the Director of Finance. On my left is Mr Bacon, who is future, and indeed, if you look at any of our major Director of Delivery, and finally Andrew Foster, hospitals you will see a building going up in the car who is Director of Human Resources. park at the moment in terms of significant capital. Then on top of that, about 30% went on pay for existing staV, and that is about recruitment and Q2Chairman: Thank you very much indeed for retention, making sure that we have the staV we need coming along and helping us with this first evidence for the future, and indeed, also, as part of that—and session of our inquiry into the public expenditure that is partly how we have attracted other staV,of question. I wonder if I could just start the course—also bringing improvements and changes in proceedings by asking you a question about NHS staV roles and diVerent ways of working and so on, spending, which has doubled since 1977. What has and finally a balancing figure of about 5%. the extra funding bought, and has it been spent wisely? Sir Nigel Crisp: If I start with the first bit, about what Q3 Chairman: A massive amount, as you rightly say, it has bought, if you look at the total new spend, in terms of increase. How do we know we are getting almost 50% of it—the figure you have at the moment value for money for this increase? is 48%—is on new activity, new staV, new drugs. So, Sir Nigel Crisp: There are three ways, I think, of for example, within that, if I take the staV first, we looking at value for money. The first one is just the have increased the number of staV in the NHSby eYciency of the operation. What I think is 190,000 in this period, of direct hands-on patient interesting there is to look at things like length of carers, so people directly working with staV. In that stay in hospital and delayed discharges, getting I include those important groups who are often people out of hospital. Length of stay, for example, forgotten, like nursing auxiliaries, care assistants in the last year went down half a day; we are getting and so on, who are in direct support of doctors and people through the system more quickly. Delayed nurses. So a very big increase in staV, a very big discharges are now a third of what they were in 2000, increase in activity throughout the NHS. We tend to so we are actually, thanks to excellent work in social think in terms of hospitals very often, half a million care, may I say, as well as the Health Service, making more operations a year than there used to be, but sure that we have got those down, and we do a lot of actually, if I look at primary care, I see much more benchmarking against world best practice to make activity in primary care, the new mental health sure that the way we are delivering services fits. So community teams and so on. We could talk about all part of value for money, the real test is how this that activity. On drugs, for example, we now have compares with world best practice. Secondly, on 2.5 million people a year receiving one class of drugs overheads, we have kept a very tight control on called statins, and the total amount of drugs being overheads, so, for example, management costs have prescribed at the moment, keeping people out of fallen from 5% to 4% in this period, so 4p in every hospital, for example, went up 25 million in the last pound is spent on management whereas five years year. So huge numbers there, and the result from ago it was 5p in every pound, but we have also done that is that you are seeing death rates falling on things like introduce a new shared venture with 3178272001 Page Type [E] 27-04-06 16:17:42 Pag Table: COENEW PPSysB Unit: 1PAG Ev 2 Health Committee: Evidence 1 December 2005 Sir Nigel Crisp, Mr John Bacon, Mr Richard Douglas and Mr Andrew Foster Xansa of sharing back oYce functions, so tackling treatment on grounds of cost and fast-tracking the overheads. Thirdly, the other big area is reducing appraisal process. That eVectively brings forward a costs through procurement. For example, at the cost from future years that would have been built moment, better purchasing of drugs and other things into our projections for NICE appraisals. What we is saving us about £700 million a year. All of those are looking at with PCTs as part of the planning things are about driving value for money as well as process for next year is to what extent we can quality in the system. reprioritise other areas to ensure that we can fund them, but generally our approach is, as soon as we Q4 Chairman: Per capita spending is quite diVerent get a new commitment, to find a source of funds around the UK. Scotland is about £200 more per for it. annum per capita than England, and Wales is somewhere in the middle. Does that show in better Q7 Chairman: All the speculation is that in three health care in Scotland? years’ time we are going to be looking at NHS Sir Nigel Crisp: I am afraid I would have to do a expenditure a little bit closer to that of GNP. Under complete analysis, but you will actually look at those circumstances, does it not give you any things in England and you will see a number of concern, the current situation, being able to sustain things where I suspect we are further ahead than these types of add-ons, as it were? Scotland, in terms of things like waiting lists and so Sir Nigel Crisp: Perhaps I can pick up the first bit of on, but I think there are a number of diVerent that and pass it on to the Director of Finance.