Health and Care Services

Stephen Dorrell Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Mr Stephen Dorrell (Charnwood) (Con)]

It is one of the more endearing characteristics of the House of Commons that although the motion before us and those that follow it involve £517 billion of public expenditure, it falls to a Back Bencher to make the case on behalf of the absent Financial Secretary. It is obviously a minor detail that the House of Commons should be asked to approve £517 billion of public expenditure. Also, I suspect that all parties in the House are on a one-line Whip on this minor matter.

Having made that observation on the slight absurdity of parliamentary process, I will begin by saying a word about the approach to public expenditure and health policy that the Health Committee, which I have the honour to chair, has adopted since the beginning of this Parliament. We have our differences within the Committee; it would be absurd to pretend otherwise. We were elected from different party platforms and have different views about how health care can best be delivered in our society. However, from the beginning of this Parliament, we have taken the view that there is not much point in using the Select Committee as the platform for elaborating those differences, because there are many other platforms where they may be amplified. We have sought consciously to explore areas of common ground in the delivery of health and social care, and to establish where there can be cross-party agreement.

The easy way to achieve that objective would be to avoid all the difficult political questions. We have consciously not done that—we have dealt with the difficult questions. We have talked about commissioning in the context of the Health and Social Care Act 2012. We had a hearing this morning on the developments in the Care Quality Commission. We have not sought to avoid difficult territory, but when we are in it, we look for areas of common ground. That means that we are not grandstanding on health policy, but seeking to develop a coherent or, given what I will go on to say, integrated view of how health care ought to develop on a cross-party basis.

Against that background, it is significant that we have had a consistent and serious view since the beginning of this Parliament on the questions that are raised for those who work in the health and care sector by the pressures on public expenditure that exist in this Parliament and, I believe, will exist for the foreseeable future. It is not a coincidence that the first substantive report that we issued in this Parliament was on public expenditure. In that report, the Committee coined the phrase “the Nicholson challenge”, which has passed into common parlance, to refer to the challenge faced by the health and care system to deliver quality care against the background of rising demand and, roughly speaking, flat real-terms budgets.

That challenge was articulated first not by the Select Committee or the coalition Government but by Sir David Nicholson, a distinguished public servant, in his capacity as chief executive of the national health service in May 2009. It was endorsed by the previous Government. The Committee has sought to explore the success of the coalition Government in meeting that challenge and to bring to the surface some of the choices and challenges that are implicit in the phrase “the Nicholson challenge”. Incidentally, we know that the challenge lives beyond Sir David Nicholson.

Let us be clear what we are talking about. Since May 2009, the core issue has been that resources are growing extremely slowly, if at all, while demand continues to rise. One does not need a degree in mathematics to know that if demand for health and care services rises, as it has in this and every other country for the last 50 years, by roughly 4% per annum and there is no new money coming into the system, the only way in which demand can be met is by increasing the efficiency with which the resources are used by an equivalent percentage each year. In other words, the Nicholson challenge is how to deliver health and care to the required standard—I will come back to that point—4% more efficiently year on year.

I emphasise that it is not my view, nor the Committee’s view, that there are no political choices to be made about the level of resources that are committed to health and care. It falls to the Government of the day to make those choices every year when resources are voted on, as we are doing this afternoon on the estimate of £105 billion. That represents a political choice. However, members of the Committee read the newspapers, understand the laws of arithmetic and understand the broader political environment in which we live. We hear it when the Leader of the Opposition says that an incoming Labour Government would have to live with the spending plans of the current Government, at least for their first year in office. That is, to put it mildly, an exercise in expectation management by the Leader of the Opposition.

It is against that background that the Committee recommends in paragraph 16 of the report on health and social care:

“In our view it would be unwise for the NHS to rely on any significant net increase in annual funding in 2015-16 and beyond. Given trends in cost and demand pressures, the only way to sustain or improve present service levels in the NHS will be to continue the disciplines of the Nicholson Challenge after 2015, focusing on a transformation of care through genuine and sustained service integration.”

That is an example of a recommendation that was reached on a cross-party basis. We are not signing up to decisions about funding, but saying that the health and care system faces a huge challenge to deliver more integrated services if it is to meet the quality and economic standards that are likely in any political scenario.

[Andrew George (St Ives) (LD)]

I thank my right hon. Friend for the way in which he is introducing this subject. He will acknowledge that the Nicholson challenge and the need for year-on-year efficiency gains of 4% were originally proposed under the last Labour Government. There is therefore continuity from the previous Government, through the coalition and on to any subsequent Government. Does he agree that the result of the efficiency gains must not be that NHS rank and file staff are subjected to lower regional pay and conditions, as was proposed in one region of the country?

[Mr Dorrell]

I will come on to the impact on pay later. My hon. Friend is right that the challenge antedates the election of this Government and that it increasingly looks beyond this Parliament, as did last week’s public expenditure announcements. There are specific challenges implicit in the Nicholson challenge for the coalition and for the Opposition. To my colleagues in the Conservative party, who sometimes ask why we have a ring fence around the national health service, I simply say, “Understand what you are asking.” We are already strapping ourselves to the mast indefinitely into the future of meeting a rise in demand of 4% per annum without substantial growth in real resources. Looking back, we see that the national health service has delivered a 1% efficiency gain trend rate over its first 60 years, and the national average for the rest of the economy is 2%. We are expecting the health and care system to deliver a 4% efficiency gain. To anyone believing that we are likely to be able to meet demand for health and care to acceptable standards against a background of reduced resources—in other words, more than a 4% efficiency gain year on year—I say, “Do the maths.” That is the challenge to the Conservative party.

[Richard Fuller (Bedford) (Con)]

Will my right hon. Friend give way?

[Mr Dorrell]

Will my hon. Friend forgive me if I complete the challenge so as to be even-handed, as the Chair of a cross-party Committee should be?

Some Labour Members may wish to look for ways to avoid the difficult questions posed by the Nicholson challenge, but we need to remember that if we were to try to meet demand without addressing any of the efficiency questions—to take it to the other extreme—we would need £5 billion a year of new money over and above keeping up with inflation. That is more than 1p on income tax year on year, or 6p on income tax in the lifetime of a Parliament, to meet demand in the health service, unless we address the Nicholson challenge.

The conclusion that the Committee puts to the House is that the Nicholson challenge is unavoidable. Anybody who takes any serious interest in health and care has to address it. Nobody seriously believes that any Government will put up income tax by 6p in the pound in the life of one Parliament simply to fund health and care, and nobody in my party seriously thinks that we can avoid meeting demand for health and care. If we cannot avoid meeting that demand, we have to deliver a 4% efficiency gain out of the service merely to allow it to live within the current real resource available to it. That is the Nicholson challenge, and it is why the Committee—from a cross-party standpoint—has said, from the beginning of this Parliament, that it is the most important challenge facing the health and care system.

[Richard Fuller]

I wish to challenge my right hon. Friend on the 4% efficiency requirement that is, essentially, the 4% increase in demand that we expect. I am a big believer that history is a good guide to the future, and I understand the changes in demography that will push that challenge. How much of the demand comes from a quantum increase in demand and how much from a price increase for the inputs into the health budget?

[Mr Dorrell]

I do not wish to detain the House for the whole of the time available for this debate, but my hon. Friend raises an important question about how that demand is made up. The interesting thing about the drivers of demand—rising expectations, the cost and availability of modern medicine and the implications of an increasingly elderly population—which each new Front-Bench spokesman reveals as a newly discovered truth, is that they were first discovered by Rab Butler when he became Chancellor of the Exchequer in 1951. He set up a commission to ask whether the health service was an insupportable burden. The conclusion reached then, and by every successive Government since, in this and in similar processes in other countries, is that demand can be met, but it requires a serious analysis of the nature of the demand and how resources are used effectively to deliver it.

There is a danger in discussing health and care as if they were purely an economic question, especially for those of us who have been employed in the Treasury—like you, Madam Deputy Speaker, and me. There is a danger of sounding like a Treasury Minister and implying that the economic questions are the only issues in this regard. I need only offer names to the House to demonstrate that economics is not the only issue here—Winterbourne View, Mid Staffordshire and Morecambe Bay. Our system faces huge challenges, not just to do with economics but in respect of the quality of service that is delivered on a daily basis. Put simply, it is not enough just to go on delivering the service as it is now because, too often, it fails. Implicit in the Nicholson challenge is the requirement to face profound quality challenges, as they exist in the system, at the same time as squaring the financial circle I have been describing. In some quarters, it is suggested that that is a counsel of despair—that the circle is unsquareable.

The Committee disagrees, which is why the report states, at paragraph 30:

“At a time when steadily rising demand for health and care services needs to be met within very modest real terms funding increases for the NHS and even tighter resource constraints on social care, the Committee remains convinced that the breadth and quality of services will only be maintained and improved through the full integration of commissioning activity across health and social care.”

In other words, it is the Committee’s cross-party view that it is the integration—the reimagining of what health and care need to look like—that is the answer to the questions posed both by the Nicholson challenge and the quality challenges implicit in the names that I mentioned. It is important to be clear why that is the Committee’s view.

Efficiency, as implicit in the context of the Nicholson challenge, is not just about buying a bit more cleverly or holding down costs. It is about understanding what the demand is that we are trying to meet and putting in place the structures—incidentally, I do not mean the management structures—for the delivery of care that are likely to be able to meet the demands placed on them, not over the last 50 years but over the next 20. It is reimagining and driving a process of change through the health and care system that is the only realistic challenge to the financial and quality challenges that I have articulated.

[Dr Phillip Lee (Bracknell) (Con)]

Talking of efficiency, is my right hon. Friend as shocked as I am to hear that the Department of Health spent almost £74,000 on outside consultancy to prepare for just one Public Accounts Committee hearing? If that is the case, the Department might want to lead from the front on efficiency.

[Mr Dorrell]

I am sure that my hon. Friend will forgive me if, faced with an estimate of £103 billion, I do not go through every £70,000 of expenditure. However, he has made his point.

This is where I believe the Committee has held the Government to account, although not always comfortably for the Government of the day. There is no solution to the Nicholson challenge purely through adjusting the numbers—to use a non-emotive phrase. It has been reported to the Committee that in the first two years of the Nicholson challenge, 73% of the efficiencies that have so far been delivered are attributable as follows: 16% to pay freezes, which is the point made by my hon. Friend the Member for St Ives (Andrew George)—yes, holding down wages does reduce the cost of delivery and is, in the short term, a form of economic efficiency, but it is not a long-term solution to the Nicholson challenge—and, most implausibly, 45% to just changing the tariff between the commissioner and the provider. That is not an efficiency; that is an internal transfer, a bookkeeping entry, accounting, make believe. Another 12% over the two years is put down as “other”, which is an old accounting technique for concealing not very much, usually.

[John Pugh (Southport) (LD)]

Was the right hon. Gentleman able to establish exactly how much was saved through smarter and better procurement?

[Mr Dorrell]

That is not listed, and so is probably among “other” and is not very much towards £5 billion. The 4% efficiency gain translates to £5 billion of recorded savings. The two biggest items are £2.5 billion through tariff efficiency and £850 million through pay freezes. We have not yet made much progress towards the process of reimagining care which, from a Committee standpoint, we regard as so important.

I do not propose to detain the House by going through the detail of what reimagined care needs to look like, but the headlines are clear and becoming increasingly familiar. It is complete nonsense for us to imagine that community health and care can be provided efficiently to a high quality if we retain the distinction between primary health care, community health care and social care. Primary care is divorced from community health care purely as a result of a political fix by Nye Bevan and the British Medical Association in 1947. I was not born in 1947—indeed, not many Members were born in 1947. How much longer do we have to live with the structural absurdity that was not even a plan in 1947? It does not look like much of a plan now. Reimagining high-quality efficient care to enable people to live longer, healthier and fuller lives and avoid going to hospital unnecessarily is the core challenge that the Committee believes needs to be put at the door of policy makers in the Department of Health and in NHS England.

I will conclude by picking out two key recommendations from the Committee’s report, and I am pleased to be able to say that one has been picked up by the Opposition. I am pleased to endorse their policy of developing the role of the health and wellbeing boards—created by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), the former Secretary of State for Health—as the agencies best placed to develop genuine reimagination at local level of what fully integrated, joined-up health and social care should look like. It is often described as the Burnham plan. I am happy to endorse it, because the Select Committee wrote it first and we did it building on the institution created by the coalition through the Health and Social Care Act 2012. I strongly endorse the development of the health and wellbeing boards, and so, I believe, do my colleagues on the Committee.

Joining up budgets and creating single commissioning budgets through the health and wellbeing boards is only part of the answer if that single budget then allows resources to leech away through the local authority system without checks on the limits of the definition of the services that are being secured. That is why our report recommends not just joined-up budgets and the development of the health and wellbeing boards, but an extension of the ring fence, which so many of my colleagues on the Conservative Benches do not like, so that it covers not just NHS spend but social care spend too. We did that because it makes no sense to make the case for a single health and care system, and then imagine that transfer of resource out of the NHS budget into the social care budget as free to be spent anywhere else in the local authority world.

The commitment to a ring fence makes sense only in the context of a single integrated service if it covers the whole of the integrated service. That is why I strongly welcome the announcement made by my right hon. Friend the Secretary of State for Health that increased resources from the NHS budget would be made available to social care, but only—as he made clear to the Committee yesterday—subject to that resource transfer first satisfying NHS England and Ministers, who are ultimately accountable to this House, that it will be used for social care and not for other local authority services.

I have sought to identify what I regard as the key issue facing the health and care system—the Nicholson challenge—and to recognise that it is not just about economics, but about quality. The only way we can respond to those two challenges is by rethinking a set of institutions that grew up for a different world and a different time. I welcome the fact that the Committee’s recommendations and analysis, which have been developed over three years, have been endorsed both by Labour Front Benchers, who have picked up our proposal on health and wellbeing boards, and by the coalition in the announcement my right hon. Friend the Secretary of State made last week about resource transfer, subject to an effective ministerial guarantee of a ring fence. If the Select Committee has done nothing else, it has identified common ground on which those on the Front Benches seem to be gathering.

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[Grahame M. Morris (Easington) (Lab)]

It is always a pleasure to follow the right hon. Member for Charnwood (Mr Dorrell) who chairs the Health Committee with such authority and distinction. He gave a thoughtful and helpful explanation of the Committee’s report, and made some suggestions about integrating commissioning and budgets. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) and the hon. Member for Bosworth (David Tredinnick) also highlighted several issues, and I am proud to serve with them on the Health Committee.

We need to look at the background of what is happening because in many respects, the Government have created a situation in which the NHS is in crisis. I often refer to how we measure satisfaction with the national health service, and one established measure was the public satisfaction survey. We have seen a record fall in public satisfaction with the NHS under this Government.

The hon. Member for Bosworth referred to evidence that the Secretary of State gave yesterday to the Health Committee, in which he cited the cost savings that reorganisation had brought about. However, we must also think about some of the hidden costs of that reorganisation such as clinicians’ time. How many clinicians carrying out a management function in clinical commissioning groups in other providers find that their time is not accounted for properly? What about the opportunity cost in skills and training applied for the benefit of patients if those clinicians are engaged in a management capacity? What about the loss of experience for managers at every level? Some people may have spent a number of years working in the health service and taken an interest in structures, but we seem to be going round in circles. We broke up what we described as large monolithic structures, formed separate mental health trusts and separated community services. It seems that the wheel has now turned full circle and we are realising the benefits of efficiencies of scale and integration.

With the new structure, however, we have lost some management expertise in commissioning, organising and troubleshooting—again, that point was highlighted effectively by the Health Committee. The Secretary of State and his team respond that there has been a cost saving, but in fact the vacuum had to be filled by new structures. Strategic health authorities—an unloved institution—were swept away, but local area teams were created. It is necessary to have a strategic dimension to plan health care, particularly restructurings and reorganisations.

In my view and, I suspect, for many Members across the House, this top-down reorganisation—it was not initiated by people on the ground—has impacted on front-line services and resulted in considerable expense and disruption at a time when the NHS is facing unprecedented pressures due to budgetary constraints and growing demands on the service. We have seen that manifested at the coal face, the fulcrum, in the crisis in accident and emergency departments. Unless we seriously address those issues, there is a risk to the long-term financial stability of the NHS.

Yesterday in Committee I put on the record a rather controversial point about the Government’s claim to be maintaining funding in real terms, despite NHS inflation, which is higher than inflation in the normal economy. As right hon. and hon. Members have said, there are also a number of financial manoeuvrings—I do not know whether that is an accounting term. One concern relates to how the underspend is reallocated or returned to the Treasury, and I suspect that despite assurances from Ministers, we have seen an actual reduction in funding.

Let me draw the House’s attention once more to the letter sent to the Secretary of State by Andrew Dilnot CBE, chair of the UK Statistics Authority, following representations by my right hon. Friend the Member for Leigh (Andy Burnham). Mr Dilnot wrote that

“we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”

[Mr Dorrell]

rose—

[Grahame M. Morris]

The right hon. Gentleman has risen to the bait and I will happily give way.

[Mr Dorrell]

The hon. Gentleman might like to read the next sentence from the same letter.

[Grahame M. Morris]

I am grateful for that. We have argued for a number of months about the real position, and we have had a number of debates in the House about whether there has been a real-terms increase or a small decrease. I heard the arguments about NHS inflation and so on as recently as yesterday.

[Mr Dorrell]

The next sentence.

[Grahame M. Morris]

I will not read that out because I will come on to the issue in a moment. First I want to talk about integration, so I will press on. Statistics published in Public Spending Statistics in July 2012 show that real expenditure on the NHS fell by 0.02% in 2011-12 and 0.69% in the fiscal year before that. I understand that those are small percentages, but we are dealing with a budget of £105 billion, including the capital element, and I think the public would be concerned because those sums are not insignificant. Those percentages equate to £740 million over two years, and we should think about what that money could buy. In my area, one of the first schemes to be cancelled when the coalition came to power was a new hospital. It was not funded through a private finance initiative but through Department of Health capital resources. That hospital would have cost £464 million, but we are still waiting for it. The figures I mentioned would have built two such hospitals.

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[Andrew Gwynne]

I agree with my hon. Friend. Had she been listening to BBC Radio Manchester this morning, she would have heard me making precisely that point. The situation at Tameside is incredibly frustrating for me and my hon. Friends the Members for Stalybridge and Hyde (Jonathan Reynolds) and for Ashton-under-Lyne (David Heyes). Whenever we meet the chief executive and chair of Tameside hospital—we do so frequently—they always give us excuses as to why Tameside is different from the rest of Greater Manchester because of the industrial legacy and poor health outcomes in the borough, but one could make exactly the same arguments for Salford: there is no reason why one part of Greater Manchester should have an excellent hospital while another has one with long-term problems.

Following that slight indulgence, I want to turn to the report and focus on four key areas. First, the right hon. Member for Charnwood made some pertinent points about the Nicholson challenge. To be fair, in previous reports the Health Committee has taken the consistent view that the Nicholson challenge can be achieved only by making fundamental changes to the way in which care is delivered. It makes that argument in this report too. It states:

“Too often…the measures used to respond to the Nicholson Challenge represent short-term fixes rather than long-term service transformation.”

The Select Committee is right about that.

If we are to sustain the breadth and quality of health and care services, we need a fully integrated approach to commissioning—something that the right hon. Member for Charnwood and others have spoken about powerfully. The Opposition agree with that. I hope that the right hon. Gentleman will agree that we have put forward bold proposals for a genuinely integrated NHS and social care system that brings physical health, mental health and social care into a single service to meet all our care needs.

We know that that approach works. In Torbay, integrated health and care teams have virtually eliminated delayed discharges. Partnerships for older people have helped older people to stay living independently in their own homes and have delayed the need for hospital care—something that my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) rightly referred to. Where physical and mental health professionals have worked closely together, they have shown that a real difference can be made.

An integrated, whole-person approach is the best way to deliver better health and care in an era when money remains tight. As the Committee’s report notes,

“the care system should treat people not conditions.”

The right hon. Member for Charnwood was right to point out that developing the role of health and wellbeing boards is the best way to plan such integrated care. He reaffirmed that he is “happy to endorse” the Burnham plan. We were happy to hear that. He is right that there is an issue with single commissioning budgets without checks on local government. As somebody who has a background in local government, I think that he is right about the need to extend the ring fence to social care spending. Unless those budgets are protected, there will be a temptation to siphon off the money that is needed to provide the integration that we all want to see.

[Mr Dorrell]

I do not want to detain the House, but will the hon. Gentleman confirm that the Opposition support the proposals set out by the Chancellor last week that will provide exactly that principle?

[Andrew Gwynne]

I will come on to the Chancellor’s proposals. We do have concerns because there is an immediate care crisis that needs to be tackled now. There are also wider issues. My hon. Friend the Member for Worsley and Eccles South rightly raised the concern of local government that it will not have the funds to implement the new requirements in the Care Bill. We need reassurances about that.

My second point is about the cost of the Government’s reorganisation, about which my hon. Friends the Members for Easington (Grahame M. Morris) and for Birmingham, Selly Oak spoke eloquently. In the update from the Government last autumn, the overall cost was up by 33% or £400 million, making a total of £1.6 billion so far. What is that money being spent on? A full £1 billion has been spent on redundancy packages for managers, 1,300 of whom have received six-figure pay-offs and 173 of whom have received pay-offs of more than £200,000, all while the number of nursing posts has been cut by more than 4,000—six-figure pay-outs for managers; P45s for nurses.

The really unfortunate thing is that the reorganisation has diverted money and attention away from the front line. The Committee’s report notes that the reorganisation has

“had an impact on the NHS budget”.

I do not want to get into that debate. I will leave it to the UK Statistics Authority, which confirmed that spending on the NHS was lower in real terms in 2011-12 than in 2009-10, albeit marginally. We have seen reductions in NHS spending. Mental health spending has been cut in real terms for two years running, cancer spending has fallen in real terms and social care budgets have been slashed.

Let me now turn to the funding crisis in social care. The Library’s analysis, which is borne out by the Local Government Association’s statistics, shows that Government funding reductions have forced local authorities to reduce their adult social care budgets by £2.7 billion over the last three years. They have had to slash services and increase charges in order to balance their books, leaving thousands of vulnerable older and disabled people facing a daily struggle to get the care and support they desperately need.

That is why what the Chancellor announced last week in the spending review is at best a sticking plaster, or if I am feeling generous, a plaster cast. Sadly, it will not solve the financial pressures on councils, break the flow of funds into the acute sector or address the fundamental problem of two systems operating to conflicting rules.

To be fair, the Government have started talking Labour’s language of integration—the right hon. Member for Charnwood would say that it is the Select Committee’s language—but as the Committee notes, the only way to achieve what we want to see is by making fundamental system changes, which brings me to my final point, which is the Department of Health underspend.

I note that the Committee has raised concerns about the operation of the Department of Health policy on underspends and budget exchange. The small print of this year’s Budget revealed that the Department of Health is expected to underspend against its 2012-13 expenditure limit by £2.2 billion. That would be the biggest underspend of any Department in this financial year. Page 70 of the Budget document appears to show that none of this has been carried forward to be used in subsequent financial years as part of the Budget exchange programme. Perhaps the Minister could explain why—at a time when the NHS is facing its biggest financial challenge, when 4,000 nursing posts have been lost and when there is a crisis in A and E—they have decided to hand the full £2.2 billion back to the Treasury. Can the Minister also confirm that this means the underspend for 2012-13 would be 2% higher than the 1.5% figure that his Department says is consistent with “prudent financial management”?

We think that people will struggle to understand why this money has not been spent on the NHS. That is why we proposed that the Treasury exceptionally allows a £1.2 billion “end-year flexibility” carry-forward of around half of this year’s under-spend. We would ring-fence this money for social care budgets this year and next, to tackle the immediate crisis, with £600 million allocated for 2013-14 and a further £600 million allocated for 2014-15. With that extra investment, we could relieve the pressure on A and E and help to tackle the scandal of care services being withdrawn from older people who need them, enabling more people to stay healthy and independent in their own homes, and help families being squeezed by rising charges for care.

I thank the right hon. Member for Charnwood and members of the Committee—and other hon. Members on both sides of the House—for the sterling and thorough work that they have done and the powerful arguments they have made, especially on integration. They are right to highlight those issues, because it is the only way in which the NHS and care services will be able to make the necessary step changes to meet the challenges of an ageing society within the financial constraints we face. It is just as important that we get it right in terms of outcomes for patients, because the care services they receive will be greatly strengthened and improved through integration.

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[Dr Poulter]

The hon. Gentleman is absolutely right to highlight the fact that health tourism presents challenges. We need to look at them, which is why we have launched a consultation on exactly how to do so. We should recognise that we hugely value the fact—it is very beneficial to the British economy—that students come here from overseas to train and, sometimes, to work. Part of ensuring that they do so in a responsible manner and do not short-change British taxpayers and British patients means making provision for their health care needs, if necessary, and ensuring that the NHS does not pick up the tab. That is something we have opened a consultation on. It will report back later this year, and I am happy to discuss the matter further with the hon. Gentleman away from this debate.

In opening the debate, my right hon. Friend the Member for Charnwood was absolutely right to ask how we would deliver greater productivity in the NHS and to say that pay plays a part. Improving procurement, driving greater productivity and, crucially, service reconfiguration all play their parts too. It is worth highlighting the fact that the NHS needs to become more efficient at how it manages its estates, with £3.1 billion or so spent on NHS estates annually. There is much that can be done to improve the energy efficiency of those estates, which is why the Government launched a £50 million fund to support that work. A lot also needs to be done to reduce the £2.4 billion temporary staffing bill. That is something we will be talking about when we launch a paper later in the summer. There also needs to be greater focus on good leadership at board level—something we have touched on before—and engaging clinical leaders in helping to drive productivity and improvements in patient care.

It is also worth outlining the role of tariffs, which were touched on in the Committee’s report and in today’s debate, in driving more joined-up care. It is true that tariff change in itself is not good enough to drive improvements in patient care. Tariff change must drive service change and transformation at the same time, driving the more integrated care model that we all believe in. When my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) was Secretary of State, he initiated a review of the tariff system and looked specifically at best practice tariffs. We are now seeing the emergence of tariff change in a way that not only reduces costs, but drives service transformation. In the case of fragile hip fractures, day case procedures—such as cholecystectomies and similar procedures—and major trauma, we are seeing service change and transformation being driven by improved tariffs, which often cut across primary and secondary care.

If we are to deliver an NHS that is fit for the future, both financially and in human terms, that will be down to major service transformation and moving towards a system that provides integrated health and care. That is why last week my right hon. Friend the Chancellor outlined in his statement a £3.8 billion fund that will be shared between the NHS and local authorities to deliver integrated services more efficiently for older people and disabled people, ensuring that health and social care work together to improve outcomes for local people. Importantly, the Health Committee’s calls for health and wellbeing boards to play a vital role in overseeing the fund is something that we envisage becoming a reality.

In conclusion, we know that there are big challenges to the NHS in driving up productivity, and we know that we have already met some of them by cutting out, through our reforms, £1.5 billion of bureaucracy in the NHS—money much better spent on patient care. Crucially, in the years ahead, we will focus on the service transformation that is required to deliver a more integrated health service, continuing to develop those best practice tariffs that drive integration and bring together health and social care. It is not just about finances, because it is also about good care, which is why it is important to deliver the integrated system that patients deserve.

[Mr Dorrell]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Did you want to come back, Mr Dorrell? We are up against time with the next debate.

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[Mr Dorrell]

I am not pressing; I was led to believe that it is the convention to respond. I believe I have two minutes.

[Mr Deputy Speaker]

One minute, I am sure you have.

[Mr Dorrell]

I will seek to compress the one point that I wanted to make into one minute.

I stressed the importance of the role we have sought to play in the Select Committee in developing a cross-party view of the challenges facing the health and care system. That is not the same as saying that they are not political. A cross-party view has been demonstrated by people with different constituency interests and different ideas about how, in precise detail, that shared view about the future of health and care needs to be delivered. The challenge for both the Opposition and Government Front-Bench teams is to do what their predecessors—in my time as a Minister and stretching back before me—did not do, which is to turn the rhetoric about transformational change in health and care into a reality.

What we have sought to do in the Select Committee is to sketch out the ground and indeed some of the methods by which we believe that can be done. We welcome the fact that the Labour party has picked up our views on health and wellbeing boards, and we welcome the fact that the Chancellor of the Exchequer has picked up our views about a ring fence for social care spending. There is hope for the future that a Select Committee can sketch out common cross-party ground in an area of public policy that is necessarily as political—with a small “p”—as health and social care.

Question deferred (Standing Order No. 54(4)).

department for transport