Lord Bingham of Cornhill: My Lords, with the leave of the House, before the reports from the Appellate Committees are considered, I should like to make a Statement on Recommendation 59 of the Royal Commission on the Reform of the House of Lords. That recommendation is that:
I should tell the House that my noble and learned friends have considered this recommendation and have agreed on the terms of a Statement to give effect to it. I will now read the Statement which has been agreed by all the Lords of Appeal in Ordinary: General Principles
"The Lords of Appeal in Ordinary will continue to be guided by these broad principles. They stress that it is impossible to frame rules which cover every eventuality. In the end it must be for the judgment of each individual Lord of Appeal to decide how to conduct himself in any particular situation. Eligibility
"In deciding who is eligible to sit on an appeal, the Lords of Appeal agree to be guided by the same principles as apply to all judges. These principles were restated by the Court of Appeal in the case of Locabail (UK) Ltd v. Bayfield Properties Ltd and others and four other actions [2000 1 All E.R. 65 (CA)]."
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, it is not the case that the additional resources provided are being used to clear past deficits. The new resources will help the NHS achieve financial stability and provide additional services as part of the Government's agenda to develop the NHS.
Lord Clement-Jones: My Lords, I thank the Minister for that reply. In light of the fact that we expect shortly a new national plan for the NHS, it is vital to be clear about the state of NHS finances. It is estimated that the current accumulated deficit of the NHS is between £500 million and £1 billion. If, as the Minister states, the deficit is not being paid off by the new resources, how is it being paid off? Was it paid off last year by cutting services?
Lord Hunt of Kings Heath: My Lords, no. The £1 billion, to which the noble Lord refers constantly, is, as I have said on many occasions, a gross over-estimate. The fact is that the accumulated deficit to which he refers is not a debt payable on demand. It is a product of good accounting practice that requires the NHS to recognise future liabilities. Much of that liability arises in relation to potential clinical negligence liability.
As regards the position this year, the injection of the first £600 million of extra resources will ensure that we have financial stability, meet identified pressures and develop services for the public.
Lord Hunt of Kings Heath: My Lords, the position with regard to individual organisations for the past financial year will not be clear until the autumn when we have their accounts fully to order. I understand that at the end of the last financial year, the deficit is estimated to be approximately £200 million. But we need to put that in perspective. The amount of additional resources that we are putting into the health service this year is £1.424 billion.
Lord Clark of Kempston: My Lords, does the Minister agree that, if the debts remain, presumably those trusts are paying interest on them? That decreases the amount of money available for health services. If there is a debt it is surely good accounting practice that some plan should be evolved in order to eliminate that debt and the liability for interest?
Lord Hunt of Kings Heath: My Lords, I thought that I had made it clear that the accumulated debt to which the noble Lord, Lord Clement-Jones, refers is not a debt payable on demand but an understanding that we have to recognise potential future liabilities such as clinical negligence.
Lord Hunt of Kings Heath: My Lords, the financial position of the NHS is healthy due to the resources that we have put into the health service as a result of the last Budget. In terms of the announcement made in the Budget for the financial years 2001-02 to 2004-05, the additional resources amount to 6.3 per cent real term growth. At the end of that four-year period, that will allow the health service to have grown by an additional one third in real terms. That surely is the point. That is the recognition which the Government have demonstrated in their additional finances for the health service.
The Countess of Mar: My Lords, is the Minister saying that it is a paper debt rather than a real debt? If that is so, what is the National Health Service doing to make doctors safer and so reduce prospective claims for clinical negligence?
Lord Hunt of Kings Heath: My Lords, the noble Countess is right to refer to the worrying rise in clinical negligence liabilities. This has to be tackled in a number of ways: by the strengthening of clinical governance, as we have done; and the combined effect of the establishment of the Commission for Health Improvement and the National Institute for Clinical Excellence which will help to drive up standards.
Lord Crickhowell: My Lords, does the financial information that the Minister gave us apply to England, or to the health service in England, Scotland and Wales? We had an Answer yesterday indicating that the noble Lord was not responsible for Wales. We should be able to ask questions concerning the health service as a whole and to be clear on whether the answers represent only part or the whole of the United Kingdom.
Is the noble Lord aware that the Answer he gave to the noble Lord, Lord Clement-Jones, will baffle many people. Has the Minister read, as I have, interviews with doctors from numerous PCGs around the country all telling the same story: that a large part of the £600 million which the Secretary of State said would tackle waiting lists, winter pressures and prevent bed blocking has been swallowed up by paying off hospital debts? How does he explain those statements?
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