12/05/2016 Select Committees

Good afternoon. Thank you for coming to this final session of our inquiry

into the Spending Review and the consequences for Health and Social

Care. Let's start by introducing ourselves. David Williams, director

general of Finance of the NHS group and DH. Simon Stevens, Chief

Executive of NHS England. Jeremy Hunt, said Health Secretary. NHS

improvement. The theme you're exploring is how clear we are about

Health and Social Care and what they need going into the future, where

the current efficiency can is and whether we have a coherent plan to

fill that gap and the consequences of failure. Could I start by

commenting on the 8.4 billion promise in the Spending Review,

which is 7.6 billion, if we look at it in 15-16 prices, and also the

fact it appears to have been redefined as spending on NHS

England, rather than the usual baseline. It appears to us and to

some of the witnesses in this inquiry that it is actually 4.5

billion in new money. Could you perhaps comment on that to start

with, Secretary of State? Of course. Can I thank you for very kindly

moving the date of this hearing. Some of the potential dates would

have been difficult. It was greatly appreciated. The main purpose of the

Spending Review was to help NHS England get cracking on the

five-year forward view, which is the only way, realistically, that we

have a chance of transforming the service, based on fundamental

principles of prevention being better than cure. It is a plan that

Simon Stevens put together, which had widespread support. We were very

much guided by him, as to how much he thought was necessary to get

going on in the form of view. And Simon's particular priority to me,

privately, and then threw me, to the Chancellor, was to front but

settlement, so that the majority of money that was needed would come

early to enable us to make the transformational change that has to

happen. That was the process that happened. I think we ended up in a

place where we are able to do that and I'm sure Simon will be able to

speak to that. Part of that was predicated on there being 8 billion

coming from the Government. Do you recognise the figure is actually 4.5

billion in new money? Well, I recognise that we are talking about

?8 billion that was needed for NHS England to deliver the forward view.

We have had to make some difficult efficiency savings in the rest of

the health budget. I recognise we did not protect the entire health

budget but our determinant as to whether or not this was efficient

was what NHS England felt they needed in order to put in place the

forward view. And yes, they are making some very challenging

efficiency savings in the non-NHS England part of the budget. But I

think it is right that we do so for the simple reason that we are

asking, as you will be asking us later, we are asking NHS providers

inside the NHS budget to make very challenging efficiency assumptions.

I think it is reasonable we should ask other parts of the health budget

to make savings. Of course that then has a knock-on consequence for being

able to deliver a forward view, such as cuts to public of England and

health education England and the capital budget. Could you perhaps

set out where you see now the efficiency gap to be? Do we still

projected at 22 billion or has it changed as a result of some of these

Spending Review settlements? Could you comment on the capital budget

changes, the shifts from capital to revenue? Yes. First of all, I accept

we had to make challenging decisions along capital budgets. What I would

say about the other savings to the DH budget that's it outside the NHS

mandate, is that just as NHS providers and just as the efficiency

savings in the 22 billion, we are looking for savings that will not

impact on patient care, there will in fact improve patient care, by

rethinking service design and the way we spend every pound goes into

the NHS. Exactly the same approach has been taken, in terms of

efficiency savings in the non-NHS England part of the budget. We are

looking for smarter efficiencies, not any that impact on patient care.

With respect to the make-up of the total sum of the 22 billion, I think

Simon Stevens has published figures today that he might elaborate on.

That would be helpful to know, where you see the efficiency gap to be.

Perhaps you could update us on your thoughts? Actually. Thank you. The

so-called 30 billion gap that would open up by 2020 was based on the

assumption that demand continued to grow at its historic rate, adjusting

for an ageing population and other variables and if you compare that

with other factors where you had no extra money and efficiency, that

left us this gap by 2020. It is worth noting that most of the gap is

not money that must be saved, it is rates of spending growth or demand

that we want to try to put 18 in the car of, but which that increases. We

refreshed the modelling in the Spending Review and the basis on

which we did that is in the figures be provided to the committee and are

publishing this afternoon. And that's confirms that in the zone of

22 billion, more or less, was the right amount to be thinking about.

How does that breakdown? About 6.7 billion will be delivered

nationally. Through a range of measures that the NHS, the

Department of Health, wider Government, will be able to take,

and that leaves 14.9 billion to secure locally. Of that, when

billions we already have in hand. So, that leaves just under 14

billion. Of which 8.6 billion will come from the 2% efficiency and the

rest from service change and the process is now under way through

local planning processes, the sustainability and transformation

plans being developed in 44 geographical footprints across the

country. In a nutshell, although 22 billion is the number everyone

focuses on, in fact, it is under 9 billion that is to come from

conventional provider efficiencies and it is under 50 billion that is

to come from the local health service, as against the National

action we are taking. Can you say more about how it will be achieved

and whether it is achievable? Yes. The 2% provider efficiencies

represents change in what has happened over the last years, where

cost has grown faster than provider income. I think the evidence you

have fully health foundation suggests that productivity had

decreased for reasons we know about and can discuss. We need to do 180

degrees are mad. That is also central and essential to being able

to put the health service on the treachery we needed to be on for the

next four years. Monitor of NHS improvement has produced a detailed

working as to why a efficiency requirement is stretching, but not

unreasonable, to think about for providers over the next five years.

That was published in February. We show that this afternoon. Above ands

that, locally, in 44 different geographies, local authorities,

CCGs, provider trusts, the community sector, are coming together and

saying, we can see where they need to get to by 2020. What was on the

big changes that frankly we're known about for a while haven't actually,

we tend to kick the can down the road and now we have to confront

those and make those choices. And they will let us know by summer

break, end of June, early July, what they think that means for their own

health care system. And when we have that, we can then have an aggregated

national at what these figures are for the efficiency programme. Did

the Department stay within its spending control limits, authorised

by Parliament in 15-16? We're currently at the point where the

final end your positions from both commissioners and providers are

being created and consolidated, so it is too early for me to give a

definitive outturn for health as a whole. That will come out when we

publish our annual report in accounts and we plan to do that this

side of the summer break, in July. There is concern that NHS

improvement have said that wants me to pursue all possible and

legitimate savings that can be made from reviewing balance sheet is. Is

that just clever accounting that will make us break even? It is not

intended to be just clever accounting. As you will know, from

the 2014-15 accounts, the outturn at group level is quite tightly

managed. And we are making every effort this year as well to deliver

within the sums delivered by Parliament. Has been concern about

the transfer of capital budgets to revenue budgets. What consequence

will not have for a future finance? Well, for 15-16, topped estimates

earlier this year, we have transferred around just under 1

billion of capital spend into revenue. Some of that will be as a

result of better estimation of the requirements of individual projects.

Some is as a result of natural slippage. In capital intensive

projects. And some is as a result of management action to convert

spending in the spending review period, where it will need to be

prioritised against other budgets for health. Clearly, there are many

new models of care, which will rely on capital spending. How concerned

are you that this will be achievable? Some of it is capital

and some of it is revenue. On the capital point, as David says, yes,

prospectively, capital has been converted into revenue to support

the front loaded nature of the settlement, which we were clear we

needed and that we have got. Looking out over the next five years, we

will have a clearer sense of what's the reasonable capital required are,

in order to deliver the kind of change programmes that the local

sustainability and transformation groups come up with by the summer.

One thing they are looking at is what would it take to lubricate

change in my county, my geography, my part of the city? And then we

will have some tough prioritisation to make. But we will be able to

exemplify what the case would be for a good capital investment in some of

those geographies. Will you be able to set out what

needs to be done? Two things, one is the backlog,

which the trusts report on anyway. The other is where there is an

opportunity to invest in a new facility or a new way of delivering

care, what is the kind of improvement or saving on the back of

that? We have two different types of capital requirement going on in the

NHS now. One is dealing with the fact that some facilities are old

and will at some point need replacing, sooner rather than later.

Another set of issues is that we can see in some places, if you could

invest in a new way of delivering services, you could save on running

costs. We want to distil both types of proposition and see what that

looks like for the NHS as a whole. RE confident the capital budget will

work? I cannot answer that question until

we see the answers to the questions I described.

On productivity, we want to increase productivity if we are going to do

efficiency savings. Is there not a risk that, I did very capital,

because the evidence seems to suggest you have a higher capital,

would get better productivity, do we need to improve it?

It is interesting. In some cases, yes, you can see people on multiple

sides in old facilities with heavy running costs as a consequence. The

Lincolnshire trust for example, where Lincoln County and others,

they clearly need capital, as do other places. Some could run a more

efficient show. On the other hand, you have places saying the reason

why costs are higher is because you have a shiny new hospital and it

costs more because new hospitals cost more than old hospitals in the

NHS, so you have to pass through these arguments forensically.

I will come back and talk about the gap, but to put that aside, talking

about the total settlement, could you talk about how you are confident

that a sufficient to not only maintain and improve the services as

they are, but also do some of the things which are more recent

ambitions, including helping with mental health?

So we set out five criteria that we wanted to think about where the

settlement would be workable for the NHS, and one was that the pacing of

the new things had to correspond to the profile of the money available

to fund them. For a number of these, whereas there are things that... If

money were no object, we would love to do some things but we will have

to face ourselves over three, four, five years. A number of the headline

directives, including mental health and primary care, they are looking

at 2020. And a lot of the improvement will have to occur at

the back end and not the front end of that period. If you take the

specific issues of mental health, what we said to the independent task

force was, come up with your best buy list that is affordable and

deliverable. Given all the other pressures that will be on the NHS

budget. That is what they have done. The package of spending in 2020...

The cast will not be something with an abstract, sort of theological

debate about parity as an aspiration and ambition that is, it will also

be tangibly, our women with severe mental health problems at the time

of pregnancy, at the moment 40,000 people or so in that situation. Of

the 40,000, only 10,000 get care so do we help the other 30,000? Of the

people with severe mental illness who are not getting their health

needs, are we getting that I tended to? The extra 10%, who need talking

therapy, will we get those? Those building blocks are scheduled over

the course of five years and we will have our feet held to the fire by

the chief executive of the mental health task force, and Clare

Murdoch, the chief executive of one of the mental health providers, to

help drive the implementation. That will involve some shift of

budget into mental health. We also heard a recent, welcome announcement

of an increase of ?2.4 billion for primary. Where will the money come

from? How will that be allocated? Word has it come from and go to?

It comes from the overall funding increase available to the NHS over

the next five years. Obviously, our total on NHS England spending will

grow from 100 billion to 19 in cash terms of that period.

To come back to the question of the ambition efficiency ambition, and

where that will come from. Could you give some insight? You said 6.7

billion will come nationally. Give me some insight.

This'll be a combination of various things, some of which will defer to

Jeremy, and wait until the Queen's Speech in terms of income recovery.

Some of which are efficiencies in the payments the NHS makes to

third-party Private providers. Some of which is controlling the rate of

increase in our national pay bill. Some of which is reducing the

running costs of the Department of Health and its arms, legs and

bodies. For the hospitals amount, which I

think was 8.6 billion, with a 2% tariff.

Yes. Could you explain, given the track

record in recent years, being able to achieve the efficiency of 4% and

struggling to do so, what makes you confident they will be able to

achieve it this time? The fact is that there are two ways

of thinking about this, and one is to say, because we struggled over

the past few years, and it has been a struggle, the alternative... The

alternative is that precisely because there is that efficiency

opportunities still available to us, now is the time to take it, and I

think though our backs are against the wall, which they are, we ought

to focus forensically on some of the available efficiencies. Not just the

clever stuff but actually some of the things available right now. We

heard from witnesses earlier in the enquiry, discussing there has been a

bit in staffing costs and we will have two develop on that in 2016-17.

Costs have gone up from ?2.5 billion a year in 2013-14 to ?3.7 billion in

2015-16. NHS improvements... And Bob will want to come into this. NHS

improvements has set trusts individual targets to wind that cost

growth back. Just before Bob, I think this is the

$6 million question about cost reduction. What will be different

this time? It also relates to the earlier question about productivity,

because the two are inextricably linked. The things which are

different, first of all, we have now got the programme of efficiencies

for NHS providers, and there is lots more work to do. There are some very

encouraging things, for example, as of this year, for the first time, 92

trusts are sharing full data about the 100 products they purchased. It

is completely transparent. Who is spending what? And one provider

spent ?40,000 on the day they started using that system... They

would have spent ?40,000 more than one of the other hospitals, and that

money was saved. That is happening in a real way. Not just in a top-

down way, but a programme agreed on a local level, in terms of the kind

of efficiencies they would make. In terms of the question about staff

productivity, we do believe that we are starting to turn the tide on the

exploding agency Bill. I think it was understandable, but with the

hindsight over the period I was secretary, we can see why it

exploded. The big issue was staffing, and everyone wanted to

make sure the awards were safely start as quickly as possible for

patient safety reasons. -- wards. The consequence was the agency Bill.

The latest figures suggest that the agency Bill is beginning to level

out. We saved ?290 million since October compared to the trajectory

of agency spent at that time. Two thirds of trusts say they are making

results as a result of that. Nursing agency costs are 10% lower than they

were. We start to see improvement... That will have the most direct

numerical impact on staff productivity figures. But the

third... Sorry, the other thing... Briefly, I think it is important

that the change we have to see now is that we need NHS trusts to take a

strategic approach to cost reduction, and not a hand to mouth

approach. What has happened in the past is that budgets, and decisions

are taken in terms of what will save money in the next 12 months. What

can we afford in the next 12 months? One of the things that Sam Stevens

has agreed, is that towards the end of this year we will start a process

of giving people 3- year budgets, so they start to know how much business

they will get, if you like, over a much longer time period. That will

start people making smart decisions which improve patient care rather

than impact on patient care. That is the important word about strategic

reduction, things which benefit patients. The final thing which we

have not touched on, because you were talking about capital

budgets... Within the capital budgets allocated in the spending

review, there is a ?4 billion investment in IT, which we have been

very careful to protect, going forward. This is because a lot of

staff productivity issues revolve around things like how much time

nurses are filling out forms when someone is admitted or discharged

from hospital. My concern is that hospitals have a disincentive to

invest in smart IT programmes which will save staff time, because they

do not see the payback for 2-3 years. What we're trying to do is

have strategic long-term approaches. Can I pick up on one point? You said

that the programme was really motoring on, but is it motoring on

everywhere? As you know, I think as well as me,

things do not tend to happen in a uniform way across the NHS, which is

a huge organisation. I think the truth is there will be places where

it is progressing better, and places where it is not progressing as well.

We will see that, because of the new inspection regime... Totally

unacceptable variations on quality, managed across the system. What are

we doing to help that? NHS improvement was set up, not simply

to be a merger of monitor and the other one but two represent a

changing culture of the NHS when we give more productive and proactive

support organisations trying to improve things like efficiency.

We are putting together a programme to help trusts that are struggling

to permit the efficiency programmes. Abhi on target to meet the

efficiency is projected by Lord Carter? I think the... I cannot

answer that question today because we are collecting monthly data as of

the start of this year. Trust by trust. It will enable us to track

progress in meeting those Carter objectives, and there is a time

delay on the data you collect. Inevitably there is a six week lag.

That is something I hope we can provide information to the committee

on, but I suppose on the big picture, which is the biggest single

block of efficiency saving that we need this year, the reduction in

agency spend, read the objective is to get it back down to the level of

a couple of years ago, which would be reducing it from around 3.7

billion challenge 2.5 billion, and we are on track to do that in terms

of the current trajectories, so I think there is some grounds for

moderate encouragement. Thank you. So there is encouragement that, for

instance, that the Carter plan is going well, but that will only go

some of the way. Just to slightly revert to my question, where there

is a track record of hospitals overspending, what steps are being

taken to ensure that even with the programmes in place that this does

not happen again and what is going to make it's different this time

round? So that we do not see this continuing situation of so much NHS

funding being sucked into hospitals and not going to other parts of the

system like primary carers. I would like to bring bobbin because that is

something NHS improvement are very focused on. Three things. And I am

sure Simon will agree with me here. A much better start point of

understanding between commissioners and providers about plans for the

year. And we are going through that progress and finalising that now.

The very focused approach to agency control that the Secretary of State

and Simon set it before. The Carter opportunity, although the

opportunities presented by the Carter review and how we can put

that into some form of programme to take it beyond the 30 or so trusts

that work with Lord Carter in coming up with these areas of work. And a

recognition that this is a programme overtime, this is a programme that

addresses the financial challenge of the service over the period of

five-year review. Thank you. And a final question, which is going to

bring in social care, but only briefly. We have been very much

talking about the NHS, my experience locally in East Kent, mid Kent is

that we see increasing believes chances of care for patients in

hospital who we think don't need to be in and some of them could be

another settings, connecting to the situation of social care budgets

being very tight. We also know that this is a national picture. So to

what extent do these forecasts of how the NHS will manage within the

funding settlement and close the gap take into account the situation with

social care? And is the social care funding and performance transparency

sufficient to make this work with the NHS is that something we need to

change? Maybe Simon can comment on that. I think the first point, to

recognise that it is very tough in social care and they have to make

some very challenging efficiencies, and the second point is that we are

not an island in the NHS, so the idea that perhaps existed in some

parts of the NHS which is that we could operate independently with our

budgets and what happened in the social care system was a problem for

the social care system and not for us, I do not think anyone buys that

anywhere. We are directly affected by what happens in the social care

system and our success is their success, power failure is the

failure, I think that is widely understood. We have made provision

in the spending review to pressure in the social care system

with the introduction of the preset for social care, up to 2%, councils

are able to raise, which could potentially bring in an extra ?2

billion to the system and later in the spending review we are also

increasingly better care fund by 1.5 billion so there is some help there,

but in order to make the system work we will need to go further and find

efficiencies from the integration of the health and social care system.

And we have seen, starting to see I think some really interesting things

happen, particularly in greater Manchester where local authorities

and the local NHS are beginning to work together in ways that have

never happened before. We are going to need to do all of that and it is

going to be vital that we are successful. The have anything to

add? Exactly, I think that, you know, it is unfinished business in

terms of what the future for social care looks like, but practically it

is exactly as the Health Secretary has just said, what people in the

country are now doing is getting together and sing under these

circumstances what are the things that we need to do the link between

health and social care? Sought to link to your example, I was together

last week with the chief executive of your local trusts and with one of

your elected leaders from Kent County Council, talking about how

the county council and the NHS locally would come together in a

more joined up late to try and square the circle. Thank you. I

think Paul is coming in. Thank you, gentlemen. I will be very brief. A

number of issues that I wanted to cover have been addressed. Thank you

for providing some further clarity on the 22 billion savings are

actually coming from, other life think there is still further

evidence to be provided in terms of the figure nationally, but for now I

want to look at the 8.6 billion provider efficiencies of 2%. I just

want to if I may refer to one of my own local health trusts. It is

failing all of its targets at the moment and by the trust own

admissions it is in crisis, with tempers fraying on the wards. The

wards, many of the wards are found to be half the safe staffing level,

and I went on, last week, met a quarter of staff privately and

indeed did is patient safety walkabout last Friday in the

hospital. It is absolutely crystal clear that patient safety is being

compromised, I have absolutely unequivocal about that and indeed

the Health Secretary may well hear more from a later this week on that

same issue. Is it fair, achievable or appropriate to therefore impose

arbitrary 2% savings efficiency on the hospital trust in those

circumstances? And indeed others like it. The only shall I start?

Certainly any information you have about particular concern that your

trust, please share with me and we will take them very seriously. I do

not want to pretend that there aren't real challenges on the front

line. I think, anyway, there is a sort of triple whiny of increasing

demand for NHS services from an ageing population, higher

expectations on what patient safety should be post-mid Staffs, and

financial issues and you take them together at a financial cocktail, it

is more challenging for people on the NHS front line only have ever

known in their lifetimes. I think they are Hiroshi -- I think there

are heroic and wonderful effort is going on across the NHS now to keep

patient safety. I think the answer is that we have increased the NHS

budget significantly, but given those other pressures, it is not

enough to me that we can deliver safe care for patients without

making efficiency savings. The only point I would make, and I appreciate

that this is not always a great comfort for people who are feeling

very stressed because in their day-to-day work, but if you look at

the hospitals which are delivering the safest care across the world, in

England and outside of England, what you find is that they are also

usually the most efficient as the ones with the happiest staff. There

is a mentality for completely understandable reasons, the NHS's

budget has, I don't think, have been cut in its history, certainly not in

any time that I can remember. It has gone up constantly saw as a system

we are not used to having to make these incredibly challenging

efficiency savings, at least he ran until about 2010. It is possible to

reduce cost and improve the quality of care, improve the working

environment for doctors and nurses, all at the same time, and there are

lots and lots of examples. I think the question that would be

legitimately thrown back at me for saying that comment is, yes, but

that takes time and I think the challenge that people fear is do we

have enough time to make these changes? And I recognise that, and

that is why the role of NHS improvement, in giving trusts the

support they need and what is a very challenging period, is absolutely

right. That is why I specifically asked, is an arbitrary 2% savings

efficiency on every trust right -- the right methodology, given that

there are some trust you must take into account CDC reports, surely,

challenges, pressures on those individual trusts. Mid Yorkshire's

hospital trust is the third busiest AMV department in that country so,

clearly, given that we are in Yorkshire and away from London, it

is a significant challenge of it. Yesterday I understand there were

something like, Sully, in the last month there were 937 patients who

missed the fabulous at a time. I think we can all agree that this is

not the sort of patient experience that we seek to deliver, any others.

So is the arbitrary 2% right? I entirely recognise those challenges,

but the only thing I would reassure you is that it was not an arbitrary

2%. When we were having the discussions about the spending

review, in the run-up to the final settlement, we did not ask ourselves

how much do we need them to save, we actually, the efficiency targets

previously were set at 4% and we recognise that this was too high and

we had lots of discussions with representatives from the provider

centre as to what they felt was a fair efficiency ask, given the

pressures they were facing, and the answer came back that 2% felt their

to them and indeed they welcomed it when we announced the spending

review. So that was the context. But that is not to say that it is not

going to be very challenging to deliver it, and I think we have to

play our part in government to help them do it. I think one of the

things that I have learned in my time as Health Secretary is that a

model of the sort of, model of cigarettes from whatever you might

call the kind of extreme advocates of the foundation trust model that

is basically, create the conditions for a hospital trusts to be as

independent as possible and then leave it alone. That is not

sufficient in the current challenges. They do need, even the

best foundation trusts one support and help from NHS improvement, from

NHS England, from the Department of Health. If they are going to make

those challenges. To further beef crisis from EFI can. At what cost

are the 2% efficiency savings on the providers going to be met? -- to

further questions from me, if I can. Does this mean that 75% of the words

in my local quality will be at half the minimum safe staffing levels? --

70% of the warlords in my local hospital will be at half the mound

staffing levels. In do not think so and I say that with some confidence

because of the new CKC inspection scheme that I introduced in the wake

of mid Staffs. It is a very independent and public way of making

sure that standards of safety do not go down. We have a system that I

have absolutely no control over, the chief inspector of hospitals,

legally has the right to form a totally independent review of safety

in our hospitals. And that was not the case before. That independence

means that you should have confidence that there is someone who

knows what they're looking at, knows what is going on in all our trusts

to try and make sure that decisions are not taken away from the

patients. More broadly, in terms of the savings both nationally and

perhaps more locally, how are those savings going to be monitored, and

that what frequency? Because if it is annual, are we going to find out

that at the end of the financial year that we are, sort of several

million down on what was predicted and where would the savings come

from in that environment? One of the things we decided is that

where there are important efficiency savings that need to be met, we need

to monitor those. It clearly does not work to have a system where you

do not see those figures until substantially after. Where there are

things like improvements in rosters, using agency staff, and collecting

data in those areas, we would like to see we are on the right track.

The first thing, I think you had Professor Jim breaks before you,

talking about the efficiency programme he is driving in. The

extraordinary thing is, I was talking to him recently about some

of the improvements he has made two different hospitals within the same

trust. He described how, frankly, even across a county, people trying

to get Orthopaedics right is not consistent even within one trust.

Different places are doing different things. Talking to a trust executive

recently, they described how the 12th trusts that comprise the

Greater Manchester arrangement are coming together to finally realise

they have got to share their services and back office services.

This trust and executive said they have known in their heart of hearts

for years but have not got round to it, not least because, for some

trusts, it would put their costs up and they have not figured out the

way of sharing out the gains between them. The reality is, we are not the

most, in aggregate terms, the NHS is efficient, but everywhere you look,

you see improvement possibility, and that is what we have to get at. The

truth is, if we do not, it would have a crowd- out on all the things

we need to do in the National Health Service. Mental health and priority

care... We cannot let the hospital spending be the thing that finds its

own level and everything else gets squeezed. That cannot carry on.

You cannot, most patient safety. I believe arbitrary spending...

The 2% is not arbitrary but was based on various details and reviews

NHS improvement published in February, on average 1.4% rate of

efficiency and they catch up opportunity for those places that

were below that. More importantly, I think it is worth saying that,

although we talk about 2% tariff efficiency is at 16-17, we have

increased prices for inflation for 3.1% on top of that. For the first

time in a while, the tariff is going up in 16-17, not being cut. We have

also put that in with this ?0.8 billion with extra support to

sustainability. Bob and Jim are able to target based on the challenges

facing a particular hospital. Having the conversation with the leadership

of your hospital about what is a reasonable improvement for them, a

reasonable goal for them both financially and with waiting times,

this year they can do that on a tailor-made basis rather than as a

one size fits all across the sector. Thank you. Andrea wants to come in.

I will come in on the same point. I'm an advocate of patient safety. I

think if you put a balanced view, regarding this particular trust,

regarding the 2% of efficiency savings and also the issues they are

dealing with, it is not predominantly about the savings.

There are recruitment issues, as we know. There are issues with taking

on too many agency staff. We also had meetings only a couple of weeks

ago, and the Government was very supportive with that, so we need to

make sure it is balanced. I would like to know... My sister has worked

in the NHS for around 20 years and I have worked with a company that

provided services to the NHS. There is a hell of a lot of problems with

efficiency, as I am sure is only as good as the leadership of their

trust. I personally think this 2%... Yes, how long are we going to give

people without actually... Give trusts and allow them to get away

with not taking control of their cost net spending? I would like to

know what more can be done for those trusts who are not taking their

budgets, what more can be done to penalised those trusts and Pat on

the back the ones who are doing things correctly? What more can be

done? So, two things, up. Firstly, being

really clear about prioritisation and risk associated with

organisation. And financial improvement. Also, supporting it in

two ways, both targeted intervention for skills and capabilities that

perhaps they do not have yet, and need to acquire, and or, arranging

what I call "Bloody sessions". In these, we bring together bigger

ships of organisations -- buddy sessions. We try to bring that

together in a planned and supportive way to provide greater improvements

across the provider overall. To start with yourself, Bob, looking

at the payments system itself... Jim Mackie described it as not fit for

purpose. Do you not think there is an underlying disincentive in the

tariff in that a tariff awards hospital activity we are trained to

get away from? Do not think that, as opposed to just tweaking it, it

requires something more fundamental? The tariff function within the NHS,

working with colleagues in Simon's organisations, to determine changes

which need to be made to mechanisms, to enable the sort of changes we

have articulated and supported. That piece of work needs to go as an

enabler of change, not as a leader of change. We need to balance that

with... And we have started it with some of the things that we did

immediately for 16-70. Calling a halt to are changes, the

consequences of which were not clear to see. -- 16-17. We want to move

the mechanisms. We want to improve them and make them more fit for

purpose across the range of services. The most important thing

is to be clear that we understand the consequences of our changes.

This is such that when they are implemented, they have the desired

effect, rather than effects which... Howdy you plan to do that?

We are working with our commissioning colleagues, because it

is a joint responsibility to make sure we are really clear about, as

we move pricing, and as we move propositions, and we, with evidence,

really understand what that would mean for the organisations, and can

we appropriately building a trajectory of change so that we

don't destabilise it? Don't destabilise it but while we enable

the necessary changes at the speed in which they need to be made to

support the outcomes of the five years.

I wanted to briefly help before Simon speaks. You are right. What we

have to do is move to a system of payments and population health

management, provided by a countable care organisations. It is

interesting that Scotland has gone a different route, which is closer to

that in some ways. Although, Scotland also, as I'm sure you will

acknowledge, has its own problems of resources still being... It is a

huge sector, even when you break down these barriers there is still a

challenge. That is why we have... Is that not where the health service

started, with health authorities area -based, but people recognise we

have to find our way back? Whether you are saying we find our

way back to it or whether we find a way forward to the kind of budgetary

arrangements that we have in the Lancia or other places. There is an

important need for focus on integration and basing budgetary

decisions on prevention rather than cure. Valencia. A 44 sustainability

and transformation areas that NHS England have announced, which are

precisely designed to enable that... Just be very direct, with things

like suspending the tariff in particular areas for particular

arrangements, it is remote on the table. -- it is very much on the

table. That is why we're asking areas to look at three-year budgets

this year. The spending review was only announced in November and we

need to deal with some stability for 16-17, but going forward towards the

end of the parliament, we need to make sure the incentives are right

for the tariff system. You see it moving more towards

population-based, network -based rather than list tariff system?

Absolutely. I agree with that completely but I

think there are nuances here. Having had the privilege to spend time with

you this afternoon, and wondering up the road to spend three hours with

the Public Accounts Committee on the subject of these services. One of

the points they will make is that it could not be moved to more tariff

-based reimbursement or specialised services rather than negotiated

prices where there is an overspend. The move towards a new carrot

system, with give us 2100 price points compared with the ones we

currently have. -- tariff system. There are pushes and pulls. London

is different to Devon. In Devon, for the most part, they use the services

are available in Devon. A population-based controlled total

for Devon is relatively straightforward and indeed that is

what we have facilitated during the course of the past year. That is

part of the evident success regime which will be taken forward this

year and beyond. However, in London, with three teaching hospitals and

lots of cross boundary patients from Kent, Sussex, Surrey, it is much

harder. You can't just have a sealed system for south-east London. First

of all, there are new payment models based on different population

geographies rather than just some national vault to a new status quo.

Secondly, we know that, not just for this country but internationally, as

Bob said, payment reform is either an inhibitor or an enabler but it is

not the clinical change per se. Clinical change, it is whether teams

of staff are working with patients in different ways creating holistic

care. If you just do the financial engineering head of having figured

out what the new team -based care processes need to look like, things

could fall over. We saw that in Cambridgeshire recently, with the

so-called United Care proposition. It had not done the design sitting

underneath it, part of what the whole Vanguard process was supposed

to do. It did not get the efficiency dividends it was supposed to

produce. First, different in some parts of the country, second, you

must think about the underlying care changes, not just the financials.

Coming across a case where it was outreach service consultants going

out into the community, setting up support services to avoid agents

coming in, because that consultant is paid by the trust, eventually,

because it resulted in lower income for their hospital, there is a

negative feeling. We need to get rid of that feeling. Is it not also the

case that the Paris I said in relation to average costs? --

Harris. -- tarrif. No, because costs are not based on

year by year. The opposite issue is that if we do not make these

efficiencies, they get remade into these inflated prices that the

tariff assumes is the efficiency... It is on a like basis.

The final thing is asking, Andrea was asking about what is the

punishment for trusts that don't perform. There are actually finds

and systems therefore people who are not meeting the targets. Is that

actually helpful if you are talking about the trust that is maybe

already on its knees? That is not the approach we are taking this

year. Instead NHS trusts will be an

improvement and as long as they are on course for improvement then they

won't get pinged. That is if they beat in agreement with NHS

improvement. If they don't then they default to the standard system and

that is their choice. I wanted but the impact on CSR and integrated

care. We have already touched on the 2% preset and the Secretary of State

has said that it would raise ?2 billion. For the benefit of the

witnesses, the benefit of the 2% preset would be wiped out by the

National minimum wage. Once this course has been met, will there be

sufficient funding left for those who require social care? First of

all, I think we should recognise that if we want to transform these

social care system, the national living wage is very important

because we need to attract staff into these very important roles, and

the where, there are indeed now, as part of the NL double, people who

are on the minimum wage and I think in many ways very undervalued for

the work that they're doing and so this is going to be one of the big

strategic choices that we make as a society over the next few decades.

As to whether we value people in the very, very important caring roles

that we are growing, and the ageing population. We have in terms of our

funding for the social care system, we have taken account of the

introduction of the national living wage so it is not something that we

ignored when we're introducing the preset, and indeed the overall

package of support local authorities are going to get in the social care

system is a combination of local government settlements, the new

preset, the better care fund both now and when it increases in the

future and also efficiencies that we will make the health and social care

integration. I don't pretend that it is not as with the NHS a very

challenging cocktail of things that they need to get right, but I do

know that local authorities are interested in talking about

integration in a way that has never happened before and there is a real

enthusiasm both for the NHS and local authorities to do this, and

therefore what we have to do is support them as much as we can. On

the living wage, I have seen first-hand the sort of care that

carers give, and they are worth every penny. We should not

undervalue them. But how concerned are you about the potential of

social care providers withdrawing from the market, and then obviously

having a big impact. What steps are you taking to monitor the situation?

I think that is... It is a very concerning situation at the moment,

I think that there are a number of social care providers who made

public comments about the interest in remaining involved in the market.

I think that there are probably three different currents that are

going on here. The first is that we are expecting higher quality than we

have expected before and we should not apologise for that. At the same

time as we had the problems with mid Staffs we also have a number of very

high profile examples of abuse in care homes, which I think shocked a

lot of people, and we do need to be uncovered my thing about the fact

that we are expecting a higher standard of care for people, -- for

example for people who have dementia. Sometimes people have no

family, no visitors and no capacity to express to anyone else if they

are treated badly. And so these are perhaps the most vulnerable people

you can imagine and so we do need to make sure that we have a system

where we are colonising. So if there are people who are exiting the

market because they do not like the much greater scrutiny over standards

of care than that is the choice, but it is the right thing for us as a

society. At the same time, I would also say that in many parts of the

world, businesses, because many of these organisations are private

businesses, I'm looking at the ageing population has one of the

biggest commercial opportunities because this is an area that all of

us are going to spend much of our money on as time goes on, but on our

own care and that of our loved ones, so it is important not to take the

short-sighted approach as to the opportunities in that market. But

there are some things that are in doubt, which I recognise great

uncertainty at the moment. There is the cross subsidy that happens in

many care homes of public sector trade places with private sector

paid places, or privately paid care home residents. There is the overall

challenges that councils are facing with social care budgets, and I

recognise that this is creating some uncertainty. But I would say that

this is a sign that with the economy going for words, we will be spending

more money both publicly and privately and this is one where

people need to take a long-term view. You have mentioned earlier

that the NHS is not an island and social care is not an island either,

so what assessment has he made of the effects of the social care

funding restraints that you have mentioned, particularly with local

authorities on the operations and finances of the NHS during the

review period? Because one has an impact on the other. The lack of

easily there is a very direct operation, if people I left in

hospital for longer than they should be when the medically fit for

discharge, because of processes necessary to admit them into the

social care system or to another part of the NHS. There is a link to

a handy performance which is itself under a great deal of pressure, that

is another reason why we need is to break down these budget any barriers

between the NHS and the social care system. So I think that is one of

the things that we need to recognise. I think we also need to

recognise as well that the social care system and the NHS, if we are

going to achieve these challenging efficiency savings that we have been

talking about earlier, are both targeting the same set of

individuals. The most voluble clients in the social care system

are going to be in full-time residential care and they will

remain in full-time residential care. People who are most at risk if

councils get these decisions wrong are the people who are living

independently but perhaps need a lot of support and perhaps are quite

vulnerable, the sort of people who might have a full and need help and

those people, if you need to make sure the social care system is

therefore, because otherwise they are going to end up in A

departments, possibly having a protracted length of stay in

hospital. So there is absolutely an impact on the NHS which is why think

we are having a much more serious discussion between the CCG 's and

local authorities and we have had in the past. Have talked about

integration and some of the new models of care for testing this out,

and yet we have also heard that the better care fund has been used to

equalise the preset in different areas. Despite putting money into

the better care fund that also the sustainability and transformation

funds being used to ease the provider deficit. Is there really a

sufficient funding that is going into social care to fund these new

models and the integration? I think the equalising of the preset, this

is something I think is primarily about the increases in the better

care fund, and I think one of the things that you have to recognise

when you introduce a new situation like the preset is that council tax

in somewhere like Surrey is going to be much bigger than the council tax

base in somewhere like Blackpool. And yes the social care needs of

Blackpool are likely to be as big as the social care needs in Surrey, and

so it is fair I think if you are saying that you have the chance to

raise more money from your own council backspace that you reflect

that differential in the better care fund allocations. Is it going to be

enough? I think this is a bit of a recurrent theme this afternoon. I

think the answer is that it is not going to be enough if we do not make

challenging efficiency savings that we all know we need to make. And,

you know, before we beat her chest in despair at the prospect of these

efficiency savings it is worth pointing out that at the start of

the last parliament we have the Nicholson challenge which was about

making around ?20 billion of savings and I believe the any or analysis of

our success in that was that we broadly did manage to make the most

of that 20 billion, so I think the NHS can do these things but we won't

be able to do it by repeating the same tricks. We are able that night

we were able to take certain measures last time and they will

have to do things in at this time. Finally, only forecasting any

financial savings from the integration of health and social

care, including the devolution we are seeing particularly in

Manchester during the CSR period? And if not this period, are you

predicting it is the future? We are, we do believe there are savings, we

are not putting a cash amount to it, except for the fact that across all

of our plans we recognise that we can only make the numbers add up if

we're just a man for services by getting care to people earlier, that

is going to be something that will reduce long-term pressure on the

social care system. The number of people in Premier full-time

residential care but also the NHS, so things like the translation of

general practice, of mental health care, part of the benefit of those

programmes is that you slow people's descent into needing full-time

residential care, which is why what the NHS does can have a big impact.

You have recognised that there is a problem with the funding of social

care and I welcome that and the preset, but as you have already

mentioned the -- different authorities have more council tax

bases, so in my part of the world a 2% preset will apply, even setting

aside the minimum wage which I agree with all the reasons mentioned

already, it goes nowhere near the funding required for social care. I

am really concerned that there is a massive crisis situation, it is

overlapping and going into the hospital system, and it is not just

a mild inconvenience. Patients are really suffering in the because the

discharge rate is so much slower than we would all want to see,

costing misery for the patient and the family, and the backlog into

A I spend time recently seen patients can be admitted, waiting

for it an acute bed, and that acute bed is currently occupied by often

an elderly person, who really wants to go home. And they have been

medically discharged, but the social care package funding for them is

just not there. The worst thing I saw was one lady who actually spent

ten weeks extra in hospital, so I am just concerned to know what other

action you anticipate taking, because this is a crisis situation

that the 2% preset is just not going to touch. I want to be at a great

that the 2% alone will not be enough, it will need to be combined

with imaginative thinking. -- I want to be great. And it will lead to

vision improvement at the local level. I fully accept that people

are working very very hard to try and mitigate those problems. But I

would also say that the variation in the efficiency of the way carers

deliver is much higher than it should be, so if you take the issue

of home visits for example, the issue of whether someone who does

home visits is able to go directly from home to their first visit and

onto the second in the third and fourth, always having to go to base

first, to base at the end of the day, whether they are able to access

a proper electronic health record of the patients or just their own

organisations electronic health records so they are able to see what

the GP records is, that is a very big advantage in terms of the

quality of care that they are able to deliver. I think there are also

the integration that we have NHS committee military service is doing

what district nurses are doing as well, it is really important. I

think the straight answer to your question is that it probably won't

be possible to bridge the gap if we carry on with current working

practices, we do need to rethink how we deliver health and social care in

a more integrated way, what's GPs community care does is hand in glove

with what the social care system is doing and that we have a holistic

approach to information. I want to speak on social care

before a public health. Has your department done an assessment of the

cuts of the last parliament to social care, which were about 33%?

You have said social care and health care needs to be more integrated and

I agree but what I worry about is that, in the last Parliament, it was

seen as a local government, even though there were 33% cuts, a huge

cut. We know that many more elderly people, but also people who are not

the poorest but were not able to receive the care they needed or had

difficulty accessing its... Has your department done an assessment of the

impact of those cuts and has your department done an impact assessment

on the NHS as well? We are conscious of both areas. In

terms of the impact on the NHS, we are conscious of the fact that

dealing with the challenges in AMD departments is not going to have

proper handling done with the social care system. -- A With what

happened as a result of cuts to local government in the last

Parliament, it varies between local authorities. All local authorities

have to find efficiency savings, but you find authorities like Surrey,

which actually increase the funding for social care and increase the

number of people receiving help from the social care system. Councils

like Milton Keynes and Kingston-upon-Hull, also did well in

terms of the support they gave from the social care system. You will

find other less encouraging results from other councils. There is a

learning process that goes on throughout all of this. Both from

the local authority partners, and tackling that issue.

But 33%? We have heard evidence that this has a real impact on the

delivery of care. I agree with you on some of the things you said

previously, and we have to try and get savings, otherwise the budgets

will keep expanding, but what I am saying is that the degree of cuts to

social care in the last Parliament has caused problems that we are

still suffering from. Those cuts were of a nature that a third of the

budget, it goes beyond efficiency savings, for me. Of course there are

always some efficiency savings but...

I do not recognise the 33% figure but I will happily take that away

and look at it. I do, although I was not in this job at the start of the

last Parliament, I do remember that calculation is what made on the

basis of what, a bit like what we were discussing earlier with the

Harris, what was thought to be reasonable efficiency abridgements

to ask for -- Harriss. The wonder visiting the system we have now and

the system we had then. -- tariff. A much higher degree of transparency

and quality of care that has been received. This is a all social care

providers, CDC ratings. We are more conscious of where things happen

much more quickly than they were before. We do believe there are

parts of the country which have withstood the pressure of those cuts

to the budget much better than others. We want to make sure that

lessons are learned. A question on the subject of the cap

on care costs, a couple of months after the election, in the

Conservative Party manifesto, it was promised to come into force on April

of this year. It is now delayed until the end of the parliament. Are

you confident that is something that has been delayed, or has it been put

off entirely? It is absolutely still a Government

policy but the reason we... One of the reasons we decided to delay it

was because the original policy was designed to create an environment

where there would be an insurance market that would develop. So people

who wanted to protect themselves against paying first over ?2000

before you reach the cap, would be able to do that. We saw no signs of

that insurance market developing so we had to rethink it. Our intention

was not that everyone should have to pay ?72,000 for care, our intention

was no one would have to pay anything because everyone would have

insurance style arrangements for that early amount and then

everything above the cap would be paid for by the state. We need to

think about that. The broader point is that I would make is that I think

the long-term funding over the next few decades of our own social care

is something that we need to give thought to as a society. We decided

after the war that it was incredibly important for us to be a society

where the norm was for people to save pensions. We make some

provision or people who are not able to save as much as they perhaps need

to but we need to go through that same process of thinking of people's

social care costs, given we are all living for much longer and the final

few years of our lives are likely to need extensive social care. That

period of delay gives us a chance to have that thinking done.

Can I come back to one of the points you made earlier about the

opportunities in the market for providing... For the providers of

social care? Is that the main issue that it is not financially viable to

do so? In many areas, in oral areas, it is not viable for them to come on

the package of financial vision -- rural, to provide care in peoples

homes in areas. Is that something that concerns you?

It concerns me when people say that but all I was saying is I hope

people will take a strategic view of the marketplace. Not one that is

based purely on some of the short-term adjustments that are

happening. I think there is a longer term change which I think people

welcome, because it is what they would prefer, which is a change

towards supporting people to live at home independently, rather than

automatically moving into residential care.

I agree but the financial package available for carers to go out and

help is not viable. Do you recognise that? It is a frequent complaint I

hear, as a constituency MP. Also, particularly for very vulnerable

groups such as people with dementia who have problems with wondering,

they cannot find anywhere to look after their loved ones under the

financial care that is available. I recognise if we stick with

existing models and don't make imaginative efficiency changes in

the way care is delivered... If we don't integrate better with the

NHS... In other words, if we take the view that we followed the same

model of care that we followed in the past, at the same levels of

efficiency, then it will be extremely challenging. That is why

we have do do, on the NHS site, working on the NHS site, so much in

our interests... We recognise that we want people

looked after at home who can't be looked after at home because,

financially, that care cannot be provided. Is that a scenario you

recognise? The scenario I recognise is that it

will be increasingly difficult if people providing those services and

commissioning those services do so on exactly the same basis that they

have always done. I think this is a measure where we have to be

imaginative in terms of the NHS. What I am not doing is saying that

there are not financial pressures and it is not very challenging, but

I am saying the response to that needs to be looking for imaginative

improvements in the way services are delivered and closely working with

the NHS. Some big evolution deals and part of the country should make

it more possible. There are lots of things. I think the evidence is

there are part of the country that are managing, even despite the

budgetary pressures, to sustain and improve social care services. We

have to learn what we can from them. Can I ask, do you have the current

cost for the delayed discharges to the NHS?

I do not have a current cost. I have a figure in my mind that it is

around 5000 beds on any given day but it is... I am aware of that

pressure on hospitals. So it has not been costed. Bob, do

you have a cost? I do not. I will say... We will give

a response to the committee. One final thing, we often talk about

the savings that could be achieved with integration but some witnesses

to this committee say it does not save money but allows you to

identify unmet needs without the liver and savings. I wonder where

that leaves the assumptions of the five year for review. They have a

figure on what we can actually deliver the smack -- do you have a

figure on what we can actually deliver?

About the nature of the so-called things... It is not that we take the

number of emergency admissions happening today and cut them a

certain number, although some places successfully do that, it is more

that we need to see the rate of increase slow compared to what it

otherwise would have been to reduce the gap in 2020. The early Vanguards

are quite promising in that regard. Emergency admissions growth and the

spread of emergency beds days per people living in an area, you see an

enormous discretion. Opportunity is greater in some parts of the country

than others. The North West and Greater Manchester have some of the

highest in patient bed days per resident population for emergencies,

even just for the age and deprivation of the population. I

think, colleagues, you have seen they are pretty enthusiastically

thinking that a combination of bringing together social care will

help them manage future pressures. Thank you.

I would like to add questions about public health. Mr Stevens, when you

came before the committee in July of last year, you said, I quote, that

for the cuts -- brother cuts to spending of public health would not

be a smart approach. -- further cuts.

Overall it is not helpful which is why the public health programme that

NHS England overseas was protected through the spending review, which

was achieved for immunisation, screening programmes and so on.

There are obviously pressures are showing up in the local authority

part of the public health programme. There are things that Government

nationally can do... To overcome some of those. Changing revelatory

frameworks on things like sheltered obesity.

There are some things challenging but there are some steps that can be

taken without a price tag being attached.

Your statement at the beginning of this session, that prevention is

better than curing, and you mentioned the emphasis on that in

the five-year forward view. We had written evidence and oral evidence

from a number of organisations who are worried about the false economy

that might be at risk of producing, with the 200 million in year

estimate of public health in the last financial year, and those cuts

also announced. Could you give us some more detail on where we are on

that. For example, the local government Association? And I quote,

fear that these cuts would lead to increased rashes on the NHS and

actually that this will move us away from prevention. Can you give us

your assessment? -- increased pressures.

I agree with the theory, that making a cut in public health provision

leads to people using hospital services more often. Public health

expenditure is something important to actually having an NHS, something

where we have been able to lead the world. If you look over the progress

we have made in public health over the last five years, where we have

had pressure on public finances, we have continued to make progress in

reducing teenage smoking levels to the lowest ever. And teenage

pregnancy is down and drug use is down. We have made some important

progress. We took the decision during the last

parliament that we would devolve significant elements of public

health spending to local authorities, and we did so for a

number of reasons. One of them is that local authorities are very

good, sometimes better than the NHS in procuring services efficiently,

they have more experience in doing that and also there were some

synergies between the work that they do in public health with other works

such as the working schools. -- work in schools. We were asking to talk

about the project which costs an average of 3.9% around the spending

review period. What we are looking for local authorities to do is to

make sure that these are efficiency savings, not the kind of false

economies that you're talking about. What we have in place is a very

robust system of being able to transparently monitor the public

health services delivered local authority by local authority, and

the baseline figures for that suggests that there is in fact a big

variation in cities like Sheffield and Leeds which are of similar

demographics, you see a significant difference in key public health

measures, so there is a lot we can learn. BELL RINGS Sorry. Do you

recognise that imposing in here cuts was difficult, by local authority in

Wolverhampton explained that they have already put out to tender many

of these services. It is not easy at all to affect cuts to public health

budget in that way. I do recognise that this is challenging, but I

would also say that the kind of efficiency, we have just spent some

time in the early part of the session talking about the challenges

of efficiencies that the rest of the NHS are going to have to make so I

do think it is reasonable that the public authorities should also make

efficiency savings. But I want them to be Smart savings, not

short-sighted ones. And you're confident that the .9% per annum

will only be efficiency savings rather than false economies that you

recognise? -- 3.9%. What we tend to get in the situations is variation

in performance, but we have been very encouraged by the commitment to

public health shown by local authorities, there is a huge amount

of enthusiasm about the fact that the American public health budgets

and we need to make sure that where it is going wrong that we bring this

up through health and well-being board as quickly as possible. In the

five years, not only was there an emphasis on prevention but there was

this phrase that there would be a radical upgrading prevention and

public health. How can local authorities deliver that if they are

working on efficiency sees -- working on efficiency savings, with

the 3.9%, how does this go hand-in-hand with the radical

upgrade? These are the pressures you're getting at but the fact is

there are a lot of things that local authorities can do using the power

as the local democratic agency and we think about some of the actions

being taken on obesity, on the licensing and regulatory powers of

local authorities, or the ability to have an impact on school health.

This is not just the conventional NHS approach to providing services,

per se. And I think that if you think of it more broadly, the

conversation we are having an social care, there are really quite

extraordinary things that we are now going to be seen the benefit of from

the health of prisons that have happened over the course of the last

decade. Within the last fortnight we have seen research from Cambridge

that has shown that as a result of improved cardiovascular health we

have now got 210,000 people per year with a dementia diagnosis compared

to 250,000, and we had not had those public and health improvements. That

is 40,000 people per year who are not now as a result of dementia and

meeting services from social care and the NHS and the root cause of

that has been improved eating, smoking less, benefiting from drugs

such as that in this. So the spill-over benefits are much wider

than just the kind of conventional public health services that we tend

to think about. I recognise that not one more question on public health.

The ADF S actually reported in recent months that 40% of local

authorities according to the research where dropping tobacco

cessation services, how does that fit in with the decision -- with

efficiency savings question mark this is like an attack on public

health. It could be but I think you have what Peter Smith said when you

wrote in Salford and interesting things, I was reading the transcript

over the weekend, the active smoking cessation services is one of those

where they thought that they could do a better job on efficiently than

the inherent -- in the inheritance they would be taking an from the way

they had been organised, but there were also some other very big

changes which is happening in smoking cessation as we know, which

is what will be impact of E cigarettes? And Public Health

England have said that they think this is a native I percent risk

reduction so I think it is clear that smoking cessation is not

mission accomplished, we need to get the smoking rate down from 18.5% to

13% in order to deliver on the cancer prevention programme that the

cancer task force has set, but the way that we did it may be a little

different than some of the clinic -based approaches that we have used,

but that again, without being classy about it I think people will look at

our fresh as they potentially will other aspects of locally

commissioned public health programmes including health checks.

That was my last question. What comes to your previous point,

really, which is that deprivation is clearly one of the main areas of

public health inequalities. To what extent is the Department in

discussion with the Department for Communities and Local Government?

Because certainly my own area will -- won any of Wolverhampton and

other areas where the high levels of deprivation, we now that there have

been consistent moves by this government to reduce spending and to

reduce the grant given to those areas that did not have higher

spending per head precisely because they have more needs and more

deprivation. If this continues, what is the assessment for the Department

on the impact of public health inequalities? First of all can I

agree with you on the link between deprivation and risk to public

health? I think that is very well documented and completely fair to

say. Where I perhaps take issue with your analysis is the approach that

the Department is taking to the allocations for public health, so

the problem that we had is that when we separated out the public health

spending from the PCT 's has existed before, we found huge variations in

what had been spent on public health PCT by PCT, that there's absolutely

no listen deprivation levels. They were basically quite random, it was

one local NHS -- it was what the local NHS has chosen to devote

resources to in the particular area. It has been quite a difficult

process of trying to adjust levels of spending in different areas so

they reflect local need rather than just historic levels and spend by

the NHS. So that is I think probably... My question was not

really about that, I should have made that clear. I welcome the move

that public health teams are now in local authorities and we have spoken

evidence from public health teams in different local authorities that

they much prefer being in the local authority setting for a lot of

different reasons. My question is about the broader spending by local

government, not so much the public health part of local authorities,

but overall spending by local authorities in deprived areas, which

is being hit, which is higher than deprived areas and I know that often

the spending per head, obviously it is higher in places like Liverpool

and Birmingham and Wolverhampton precisely because there are higher

levels of deprivation, but the government in the last six years is

moving to the creases in spending their head in these more deprived

areas, and I'm just wondering what the conversations are between the

impact of the spending decisions in DC LTE and your department are,

because obviously there is an impact on public health and health

inequalities. Perhaps it would be helpful if I asked the community

secretary Greg Clark to write to you on that very specific point, because

I know that he would challenge that has been the basis on which

allocations are made. What I would say, in the parallel discussions

that we have had with the Department of Health, over the issue of

deprivation, the way that we have tried to solve that is by making it

an independent process at arms length from the list so it is

decided by the NHS board and ministers don't have a say in that

decision. It is one where we have had to balance the weighting given

to deprivation with the weighting given to a number of other areas

like deprivation, which also is determined by healthy dietary will

understand. It is one where frankly transparency about the level of

funding given to different areas has revealed that there is a variation,

and people are on or off target relatively new to the areas and it

is difficult to really move people closer to target allocations in an

environment where overall spending is protected in real terms. It has

gone up significantly in real terms and we have been able to move people

much closer to the target is a need for demographic weighted amounts.

Thank you. Turning to the issue of NHS workforce planning, and current

challenges, can you explain how the CSR funding will help the NHS might

available resources to the specific workforce requirement? Yes. It is

quite a big topic but the sort of condensed version of it is first of

all I think to acknowledge this has been a problem over decades, the

matching of workforce planning to add and need. Essentially because of

the time delay in training up doctors and nurses means that

training, having more undergraduate medical students today might

actually affect the NHS in practical senses for 5-7 years, so getting the

process right at something that we urgently need to do. We have tried

to strike a better balance in this latest spending review, the number

of doctors in training go up already -- over this period by 11,420, the

number of nurses in training will go up by at 14,000 and the potential

reforms to bursaries which I know are hotly debated in parliament, but

they could lead to a further increasing the number of nurses so I

think it is something that we are constantly looking at the analysis

around to see if we have got it right, to CF we can do it better.

But I think perhaps the best example of how we got it wrong, and I think

in fairness though one could have seen this coming, was that following

mid-Staffs we had a huge demand for nursing staff and the result was

this mushrooming of the agency Bill and that of course is incredibly

wasteful in terms of the NHS budget and that is what we need to try and

avoid. To return to a couple of points, we acknowledge that the

actual use of agency service staff as well as having a detrimental

effect on the morale of the core staff, I have heard this first-hand

by the hospital wards and in A that the staff resent that less

qualified, less experienced staff are actually paid at quite a higher

level than some very experienced senior, particularly in terms of

basic staff. I absolutely agree with that and I think it is completely

poisonous at a ward level if you have a doctor who is being paid

three -- seen ?1000 for one shift in the nursery is being paid ?2200 for

one shift, and it is very unfair if two nurses in the same trust do the

same work but one of them is choosing to have a full-time

contract for three days per week and then work through an agency being

sent to the same hospital for another two days per week and

twisting the salary and another nurse is on a five-day contract and

I think that the strongest critic of this has actually been the chief

inspector of hospitals, because his point about agency staff is that you

don't get the continuity of care. It is not that they are not often very

hard-working individuals but you know once you have 18, you know each

other, and not the patient, then you can be much more confident in

continuity of care. So that is why from April I think, NHS improvement

issued guidelines that asks all trusts not to move towards a system

where no one can actually be paid more working as an agency staff or

as a locum doctor and they would be paid where they working at a

standard NHS full-time contract rates.

The controls have been put into control out paid agencies also what

agencies pay to their staff. That will take time to work through the

system, and will not be overnight, because we have to think about

patient safety and it is a big change.

I accept what you are saying about long-term planning solutions as

well, that you do not fix things overnight but need to train more

nurses, more doctors, for things going for it. It could be five to

ten years before we have the benefit. Would you accept that the

move for nurses will have a detrimental effect for recruitment

of people who would have been interested in a career in nursing

and are now rethinking that? Some health professionals have given

evidence that at Salford, a nurse was worried about the effect that

would have. We had a debate about this in

Parliament last week. The Government 's strong view, which I accept you

will not subscribe to, is these changes will lead to an increase in

the number of nurses going into training. They are fairer for nurses

going into training and they will allow greater financial support to

nurses who go into training, RBS on a loan basis. I recognise point was

made several times during the debate. -- however on a loan basis.

Nurse trainees are not identical to other undergraduates, particularly

in that you get more mature students going into nursing than in regular

undergraduate degrees. We need to monitor that closely but overall the

lesson of the reforms made to tuition fees at the start of the

last parliament is that this can be a beneficial way of increasing the

number of places, and increasing the number of people from poorer

backgrounds. One other point I would make is that, coupled with these

changes, we are making some very profound and important changes that

open up the nursing market to health care professionals, without them

needing to go through a process of a full-time degree at a university in

order to become a nurse. We are creating a lot of opportunities for

people experienced in health care to move into nursing on an accelerated

basis. One more point. I'm unfortunately

missed the debate last week, but I fail to see the logic that... That

with drawing the bursary will make nursing a more attractive career

option. It will actually decreased numbers, won't it?

There is an issue about equity. Whether we should be paying the

nurse bursaries to people who may actually end up getting a lower

salary than nurses themselves get. If we are going to have a public

subsidy, I think the most beneficial thing is that this subsidy goes into

increasing the number of training places we have. We are confident

that, given the experience from the last Parliament, it will not be

detrimental. At the moment, our system is that I believe it is two

in three of the people who apply for a nursing degree can't actually get

onto it, because we do not have enough nursing training places

available. We wish to do with that, given the current financial

circumstances, this was the only way to deal with it.

Following on from that, you have exercised caution in shifting away

from a Harris system because of the danger of destabilising the system.

Making a sudden change away from nurse bursaries. -- tariff. Is there

a case for a parallel system such as in Bolton at the trust where you

have bursaries creating a longside in places available through the

conventional route? There is clear evidence that the workforce is a

mature student workforce. Is there any concern on your part that there

may be a destabilising effect? I understand the logic of your point

but given the judgment and the difficult judgment we must make,

there is an urgent need to increase the number of nurse training places.

One of the reasons for the agency staff bill that we talked about

extensively earlier in the session is we have not got a big enough

number of nurses coming onto the market.

Did you not have a double system where you increase the number of

courses available with the student loan? That was hugely

oversubscribed, the course in Bolton. To have a dual system we

retain some bursaries for some with a degree for example?

Our policy response to that is to try and find other ways to make sure

we are creating ways for mature people to go into nursing. Some of

the things we have talked about but also to make sure the financial

package is sufficiently attractive to mature students who do not have

that negatively affect... We have to make a judgment and, for me, the

urgent need is to make sure that we have the right amount of supply of

new nurses going into the market. There is this time lag before nurses

actually come out qualified and ready to train others.

Could you set out what the cost would be to the NHS of a standard

system where somebody takes a loan out and pays tuition fees, and the

cost of somebody training through the bursary route? If there is not a

huge extra cost if people are paying tuition fees and taking out a loan,

what would be the problem with introducing that in parallel, to

increase the number of training places for people who cannot afford

the funding during the current bursary system?

Let me get the details you asked for. What I would make in terms of

money is that the agency staff bill has gone up for the NHS from 2.5

billion to 3.7 billion, we think, over the last three years. There is

a huge cost to the NHS of not training the number of nurses we

need. Or policy priority is to make sure...

Indeed, it is just whether or not you could achieve that by other

ends, as well. By introducing this alongside. My point is, was

withdrawing bursaries a cost saving measure? I understand it will save a

considerable amount for the budget but not within this Parliament.

Of course it saves money but, combined with the other measures we

take in terms of the support we are putting in place to the loan system,

and the new ways into nursing we are announcing. We are confident we will

be able to do what we have achieved in other parts of the higher

education sector, which is a package which increases the of people from

disadvantaged backgrounds into nursing, and we want to increase the

number who go into nursing full stop.

Just look at the seven-day services, which was a big manifesto

commitment, both in hospitals and with GPs. I'm sure you have seen

both the on Friday of the paper and the comments of Professor Rothwell

this morning, that suggest we now have a almost two to one ratio of

papers that do not show a weekend effect, as those that do. Do you not

think that the first thing that is required is to actually gather

proper evidence as to whether it exists and what because of it might

be? I think we have that evidence. We

have actually had eight studies in the last six years...

But there are 19 studies that say there is no weekend effect and they

can to be methodologically more details. -- they tend to be.

Let's look at this paper, because the interesting thing about that

study is it does conclude that there is a weekend effect and what they

say... The quote is, hospital staff appear

to apply a more stringent admission threshold at weekends to patients

seeking emergency care in A They are stating that they believe that

we do not offer the same standard of care at weekends as we offer in the

week, because you can be sick with the same illness and the same level,

and you would be admitted on a weekday but not admitted on a

weekend. That is what we want to change. We want to be able to

promise everyone they will get the same high care every day of the

week. Speaking to the authors of the

paper, they found people admitted to get a test who actually had a low

risk, and if it was on a weekend, they would simply be brought back

during routine hours for that test. Whereas, people who were ill and

were admitted, they were admitted. The same numbers, with 12.5 million

who came to 80, but no increased death rate and actually fractionally

fewer deaths at weekends of people admitted at weekends. The main thing

is this lower denominator of admissions. If we expand, and say,

OK, everything every day, is there not the danger that, in actual fact,

we will admit more people, so the ratio will look better, but the

exact same numbers of people will die. We will not have prevented any

death, just have made our mortality rate look better.

We can get into discussions about the differences but I think the most

copper heads of study was the one last September, which was a huge...

-- comprehensive study. It is the same dataset. They

included all the A attendances. And they include in that paper that

there is a weekend effect. They include led conclude that the

standard of care at weekends is different because you have to be

more ill to get a decision to admit you. That is a big reason why we

should have a seven-day NHS because we do not believe there should be a

difference in the criteria for admission at the weekend as in the

week. The broader point I would make with these papers is that there are,

I think, internationally 15 studies that showed there is a weekend

effect, if you include the one we referred to, that makes 16 studies.

We now have evidence across emergency surgery, across cancer,

across a whole range of different illnesses and situations...

Yet, if you look at liver transplants, and bleeds, you do not

find that at all. Really the only way to know a death was avoidable or

the treatment of a patient was sub optimal, is to review the case. So

the people who do these studies would tell you there are different

ways of doing this, but I will make the point that I am not an academic

but the mistake for a Health Secretary is to look at the

overwhelming amount of evidence there is of a weekend effect and

decide to get off the hook by disputing the methodology.

I think it is clear, if you look at the big studies...

The methodology is important. This is numerical that you have different

numbers of people admitted on different days, because there is not

any routine services. You do not have extra deaths in Best paper,

using the same dataset. Therefore, is it is not beholden on the

secretary of state to actually know what the problem is before you spend

volumes actually fixing it. The one you are quoting here, which