Arbuthnott Report (NHS Resources)
Good morning. Our first item of business is a statement by Susan Deacon on the Arbuthnott resource allocation. There will be questions at the end of the statement, so there should be no interventions during it.
I am pleased to have the opportunity to make what I believe is a very important announcement. I realise that we are competing with a number of other important events around the country, but I am grateful for the interest that many members have shown in the issue.
My statement sets out the Executive's plans for the implementation of "Fair Shares for All", the national review of resource allocation for the national health service in Scotland, which is perhaps better known as the Arbuthnott report. On 7 September the final report was published and copies were circulated to all MSPs, so I hope that members will have had the opportunity to consider it.
The Executive is committed to working to improve the lives of the Scottish people—in short, to making a difference. At the heart of our agenda is a determination to improve health, tackle deprivation, promote social justice and improve public services. Yesterday, Jack McConnell demonstrated how the Executive's resources as a whole were being used to achieve those aims. Today, I will set out how we will put record health spending to work to deliver on them.
We have embarked on a major programme of NHS modernisation, which is based on investment and reform. A crucial part of our programme for the NHS is to ensure that resources go where they are most needed.
The Conservative Governments of the 1980s and 1990s refused to acknowledge the link between poverty and ill health. Their legacy to the NHS and the health of the Scottish people was a widening of the gap between the rich and the poor and increasing inequalities in health. Since 1997, the Labour Government and now the Labour-Liberal Democrat devolved Administration have started to turn that position around. We recognise the link between poverty and ill health and are acting on that recognition. We have abolished the Tory internal market in the NHS. We are putting the NHS together again and building a new partnership with staff and patients. Furthermore, we are backing those commitments with record resources. We know that there is a long way to go to undo the damage of the Tory years, but we have made an important start.
We believe that all the people of Scotland should have access to high-quality modern health services, that access should be equitable and that services should meet local needs. We recognise that poor living conditions, deprivation and living remotely all have an impact on the design, delivery and cost of health care provision. We are determined to ensure that resources are allocated fairly to meet those needs. That is why we want a fairer and better way of distributing the NHS's huge budget in line with need and why the Arbuthnott report is so important.
The formula that is used to allocate NHS resources across Scotland's 15 health boards—the Scottish health authority revenue equalisation formula, or SHARE formula—has been in place since 1977. As that formula is based primarily on population and death rates, it takes only limited account of needs that are reflected in deprivation and remoteness. When he was health minister in the UK Government, Sam Galbraith recognised that the formula needed to be revised. In December 1997 he set up the review group that was chaired by Professor Sir John Arbuthnott.
The first report of that group was published in July 1999. It was widely recognised as innovative and groundbreaking. Extensive consultation and discussion took place following the publication of the first report and I am grateful to all those who contributed to that consultation process—especially the Health and Community Care Committee.
The expert group considered carefully the points that were raised during the consultation and revised its work accordingly. Two weeks ago, Sir John Arbuthnott's final report was published. I was delighted by the positive response that it received. His committee's recommendations are an enormous improvement on the SHARE formula. It is a tribute to the hard and thorough work of Sir John and his team that the report has been so widely praised both in and outwith Scotland. I would like to record my appreciation to the group for its work and I am sure that other members will join me in doing so.
I have on many occasions indicated to the chamber, to the Health and Community Care Committee and more widely my desire to proceed with early implementation of a revised funding formula. Today I am pleased to be able to set out how and when we will do that.
The Arbuthnott recommendations cover three major groups of activity in the NHS in Scotland. Hospital and community services and general practitioner prescribing currently make up the bulk of the budgets that are allocated to health boards each year. The report recommends that the shares of the resources that go to different health boards must change to reflect better the health boards' relative needs. In particular, a larger share of resources needs to go to areas such as greater Glasgow that suffer from high levels of deprivation, and areas such as the Highlands that must meet additional costs because of their remoteness.
My aim is to implement the recommendations as quickly as is practicable. At the same time, I will fulfil the commitment that I gave last year—and which I have repeated—that every health board will continue to receive real-terms growth in its budget every year for the lifetime of this Administration. It is my aim that all health boards reach their Arbuthnott share within five or six years.
I am pleased to announce that £12 million extra will be allocated to health boards in this financial year to kick-start the process of implementation. Some £6 million of that money will be distributed to every health board in line with its fair share according to the Arbuthnott report. The other £6 million will be distributed to the health boards that the Arbuthnott report says need a larger share than they have.
Furthermore—as Jack McConnell announced yesterday—next year £400 million more cash will be available for health spending in Scotland than was available this year. As a result, I can also announce that in the general hospital and community health and prescribing allocations for next year, every health board will receive at least a 5.5 per cent cash increase—more than twice the rate of inflation. On average, health boards will receive 6.5 per cent more. Health boards that, based on the Arbuthnott review, need a larger share will get significantly more. For example, Greater Glasgow Health Board will receive 7.7 per cent, which will give it a hospital and community health and prescribing budget of £846 million. Those increases are in addition to the £12 million extra for this year that I have just announced. Details of the allocations to each health board are being issued today and a copy will be placed in the Scottish Parliament information centre.
Let me make it clear that health boards will decide the details of how to spend the money—that is their job. However, in doing so, they will rightly be expected to deliver on local and national priorities such as tackling waiting, reducing health inequalities and improving the experience of being a patient.
As I set out to Parliament in July's debate on NHS modernisation, we are developing a national strategic framework for the NHS in Scotland that will reflect the people's priorities and will ensure that record NHS investment is translated into record improvements for patients. Our Scottish health plan will be published in November and will include revised arrangements for governance and performance management in the NHS in Scotland. That will mean that the NHS will know what is expected of it and that it will be held to account for its actions and decisions, not only on inputs but—crucially—on results.
The Arbuthnott report recommended that we should take more time to implement its recommendations on general medical services. I accept that recommendation. It is particularly important to get that right because primary care is the key to developing services that are focused on patients and, in particular, to delivering better and more joined-up care for older people. I will announce more on that in a few weeks. I will discuss with the NHS how best to implement fully that part of the report's recommendations.
Those recommendations must also be put into effect to complement our ambitious programme of development of primary care services across Scotland, which will ensure that everyone has access to the GP and primary care services that they need. Meanwhile, I propose to start by skewing the increases of the part of the general medical services allocation that covers GPs' premises and information technology equipment to ensure that the health boards that need a larger share of that money will begin to move in the right direction.
It is vital that the new funding formula remains up to date and able to take account of additional information as it becomes available. On the other hand, it would be disruptive to make major changes to the formula too frequently. In line with the recommendation of Sir John Arbuthnott's group, I intend, therefore, to keep the formula under review and we will undertake a major updating of the data that underpin the formula every five years or so.
Finally, I will say something about the rest of the health budget. The allocations that I am announcing today are a big part of the health budget. The sum that is covered by the formula-based allocation represents more than £4.4 billion of a total cash health budget for next year of £5.8 billion. I am determined that that entire budget will be used to best effect to meet the health needs of the Scottish people. The Scottish health plan that I will publish later this year will give clear direction on how health and health-related services will develop. It will show how we will assess and manage performance and how the unprecedented resources that we are investing will be translated into real benefits for the people of Scotland.
I believe that, by beginning today the implementation of the Arbuthnott review—by putting in place a better, fairer funding formula that is linked to need—we are laying one of the foundation stones for the NHS in Scotland in the 21st century. It is a distinctive Scottish solution that will meet distinctive Scottish needs. I am sure that Parliament will welcome it.
Many members want to ask questions, but I remind everyone that we are about to embark on a health debate in which, again, many members wish to speak. Let us have short, sharp questions and exchanges this morning.
I thank the minister for her statement and welcome today's announcement. At long last, after 20 years of Government inaction, we have an acknowledgement of the undoubted link between poverty and poor health. With the Arbuthnott formula, a start has been made on addressing that situation.
However, does the minister accept that it is but a small step? Will she confirm that the funding that will be redistributed amounts to only 1.2 per cent of the health service budget? Given the small amount that is involved, what impact does the minister think will be made on addressing deprivation and ill health, particularly as the gap between rich and poor continues to widen? Given that, by its nature, redistribution means that there are losers as well as winners, what systems will she put in place to ensure that there is no detrimental effect on health service delivery in areas from which funding has been diverted?
I am pleased that Kay Ullrich welcomes the Arbuthnott report and our decision to implement it. I am also pleased that she has joined me in acknowledging the link between poverty and ill health. I am always pleased to find areas of common ground where we can move forward together. It is a pity, however, that there was a grudging tone in some of her other comments. Nevertheless, I am pleased to answer the questions that Kay Ullrich raised.
There is no question that anybody will lose out as a consequence of the changes. As I made clear in my statement—which is backed up by the specific figures for funding next year that I announced today—every health board in Scotland is getting real-terms growth. Every health board area will experience one of the biggest increases in spend in many a long year. The Arbuthnott review looks at shifts in shares and relative needs across the country. That can only be a good and fair thing.
Kay Ullrich makes an important point when she asks how we can ensure that the additional resources and the changes that are being made to the funding formula translate into action on the ground to meet need effectively and to tackle poverty and deprivation. Using the range of measures that the Executive is taking, we are proceeding to ensure that that happens. That is particularly so in the work that we are doing with the NHS: increasing the emphasis on addressing and reducing health inequalities; ensuring that health boards work to tackle social exclusion; and ensuring that health boards and NHS bodies work in partnership with other organisations to address particularly the needs of poorer communities.
In the health debate that follows this statement, we will hear more about some of the work that is going on throughout the country. However, I assure the chamber that, in all our work during the lifetime of this Administration—including the work that is put into the health plan that will be published in November—we will seek to ensure that we get better at addressing the needs of all Scotland. That will be not only at national level, but at local level—it will happen particularly in rural areas and in our most deprived communities. That is an important step in the right direction.
I also welcome today's statement, but it is unfortunate that the minister did not have the courtesy and good will to bring the final report before the Health and Community Care Committee. Across the parties, the committee's members have recognised the problems that are mentioned in the Arbuthnott report and have worked well together in taking the work forward.
I have two questions. First, given the pressure on health boards and trusts to reduce waiting lists and times, to prepare for winter pressures, to alleviate bed blocking, to alleviate financial deficits and to make efficiency savings, how can the minister be sure that the funds that will be reallocated will tackle poverty and deprivation?
Secondly—I refer to the table on page 55 of the final Arbuthnott report—given that the Highlands is a net beneficiary of the Arbuthnott recommendations, what impact will the 7.7 per cent reduction in the share of cash-limited and non-cash-limited general medical services have, particularly on the potential number of general practitioners?
As I indicated in my statement, I am pleased that the Health and Community Care Committee played a full part in the discussion on the Arbuthnott report. I invited the committee to take part in the initial consultation exercise. The fact that the work has taken two and a bit years to develop—during which time a wide range of organisations and individuals and the Health and Community Care Committee contributed to the process—shows how much involvement and consultation there has been. The final report of the Arbuthnott review was published two weeks ago. What is being announced today is how the Executive will take that forward—that is the right and proper way to proceed.
Mary Scanlon talked about the pressure on health boards to reduce waiting lists and times and the pressure to prepare for winter. I do not think that what we are doing is about putting pressure on anybody. It is about ensuring that the health service does the job that it exists to do. It is about ensuring that the health service delivers on the priorities that patients have identified, such as waiting for a shorter time at every stage of their journey through the system and being sure that the health service is prepared when winter hits.
We have put our money where our mouth is by putting record investment into the national health service. At national level, we have developed and driven a wide range of measures for effective planning and co-ordination. It is now down to the NHS locally to ensure that that money is put to work for the good of people throughout Scotland. That includes the Highlands, which will reap the benefits of a fairer share of resources as a consequence of the review. There is no question that the increased resources will translate into the reductions that Mary Scanlon suggests. Decisions on local service provision will continue to be taken locally, but within the context of the record spend that is available locally.
I welcome the review. The debate that we will have later this morning will show clearly the need for the review and for a move away from the SHARE formula that has been in place for 20 years. I also welcome the minister's comments on the substantial real-terms growth behind the review. I echo her thanks to Sir John Arbuthnott and his review team for their substantial, detailed and complex work.
I also welcome the minister's recognition of the substantial work that was carried out by my colleagues on the Health and Community Care Committee on a complex report—I thank them for that.
I am, however, sorry to have formally to lodge a sour note on behalf of all the members of that committee. It would have been useful to the committee—as the only other members of the Scottish Parliament who are in the midst of on-going work on the Arbuthnott report—to have prior sight of the final report, rather than to have received it on the same day as other members. We were asked to comment on the report because we have been—and are still—involved in work on it.
However, I welcome the substantial document. I am pleased that every five years there will be a major updating of the data that underpin the formula, because gaps in the data were pointed out.
Can we have a question at some point?
What is planned for the update? How will that fit into the on-going budgeting procedure? Will there be a technical report that will show health boards and others how the shares of the budget have been arrived at?
I shall address Margaret Smith's comments on the Health and Community Care Committee first. Like her, I do not think that something that is as positive and generally welcomed as my announcement should have a sour note attached to it. I stress the full part that the Health and Community Care Committee played in the review—its contribution is reflected in the final report. Sir John and his group have acknowledged many of the points that the committee raised. The established procedure—that there ought to be simultaneous notification of reports—was followed and the convener of the Health and Community Care Committee was given a copy of the final report a day before other members. However, I am always willing to explore ways in which we can improve and develop the procedure. We will continue to do so.
On giving technical advice and information to health boards, I stress that a great deal of constructive discussion has taken place with health boards during the review and consultation. Several health boards want to examine the way in which the review has been carried out, to determine whether lessons can be learned about how they allocate resources to meet local needs. That work will be taken forward.
Although earlier I waved in the air the short summary of the final report, members will be aware that there is a full report that sets out in detail—both globally and health board by health board—how decisions on shares have been reached. Dialogue continues with local health boards, which will provide a further explanation of where resources are required.
I am pleased that Margaret Smith welcomed the announcement. We aim to strike a balance. We must ensure that we create stability and certainty while we enable the health service to plan effectively by making future funding arrangements known and—given that we will be using a new, innovative and groundbreaking formula—we must continue to be willing to learn, to review and to update as necessary. The measures that I set out in my statement strike that balance effectively.
I can call only a small proportion of members who want to ask questions, so I shall give priority to those who are not seeking to speak in the later debate.
I also welcome the minister's announcement. She said that the measures that have been announced should tackle inequalities. Can she confirm that the funding should be used to expand health care services in rural communities?
It is significant that we have taken a major step forward nationally in recognising that the needs of rural and remote communities are different. That is reflected in the way that shares have been drawn up, so that an area such as the Highlands has a share of resources that reflects the fact that it is often more difficult, complicated and expensive to deliver health care to small rural communities throughout sparsely populated areas.
It is, of course, for local health boards and trusts to consider how to put those resources to practical use. I am pleased that nationally, we are driving forward a co-ordinated approach throughout Scotland through the remote and rural areas initiative, in which best practice is shared between remote and rural areas. We are exploring the ways in which telemedicine can be employed effectively to ensure equity and improve access to health care throughout Scotland.
I hope that the combination of additional Government investment, additional co-ordination, sharing of best practice throughout the country and—I hope—additional effort and work on the part of local health boards and trusts to meet the needs of local communities will provide demonstrable results for patients in rural Scotland.
On a point of order. The statement and the report are important. The report is complex and members of the Health and Community Care Committee have spent a considerable time examining it. It will, I hope, become policy very quickly. Given those facts, I ask for more time to ask questions. The debate that follows this is important, but members who have studied the report for hours in committee and know its technical details should be permitted to ask questions regardless of whether they will speak in the debate.
That is at my discretion. The problem is that many members want to speak in the health debate, but if the statement runs beyond 10.00 am, some will be unable to. I am in the hands of the chamber—I may let the statement overrun a little. It will help to have shorter questions.
In Grampian there is a perception that the poverty indicators that underpin the funding distribution formula in the Arbuthnott report discriminate against the region because it is perceived to be wealthy. However, there are as many pockets of poverty in Grampian as there are elsewhere and the demands on the NHS are just as great. Does the minister accept that the indicators discriminate against Grampian and that it will not get its fair share under the new formula?
I disagree with Richard Lochhead's assertion. The essence of the exercise is to put in place a fair and transparent arrangement for allocating shares of resources. Richard Lochhead used the word "perception". Allocations in the formula are based not on perceptions but on hard data, robust methodology and statistical analysis. I refer members to either the full report or the summary—they both contain analyses of how the formula and the indicators have been applied to health board areas. Members will be able to see that that has been done fairly.
Next year Grampian will have a 5.5 per cent budget increase in cash terms, which equates to some £21 million. Grampian Health Board and every other health board will benefit from today's announcement.
I thank the minister for her statement. There is a perception in the more remote rural areas that those areas are threatened with loss of services, but I welcome the minister's commitment on that matter. What monitoring will be put in place to ensure that the funding is used to expand services in communities and what criteria will be used in that monitoring?
As I indicated in the statement, the methods of monitoring and performance management of the NHS in Scotland are under review. There is widespread recognition in the Executive and the NHS that there must be greater clarification of roles and responsibilities throughout the service and of local accountability and how the service will be measured against that. As I said, we intend to make explicit in the Scottish health plan in November the revised arrangements for performance management. That will be the mechanism by which we will ensure that the right balance is struck between national co-ordination, direction and investment and local determination of local needs.
I welcome the additional resources that will be brought to deprived areas by the Arbuthnott recommendations. Does the minister accept that access to high-quality, modern health services requires a new, centrally located south Glasgow hospital to replace the Victorian buildings of the Southern General hospital? Will she guarantee that Greater Glasgow Health Board will be given sufficient resources to fund such a hospital without detriment to other services, not least because of the background of historic underfunding of Glasgow—especially south Glasgow?
I am sure that Robert Brown will join me in welcoming the fact that the GGHB will receive £60.6 million more next year than it will this year. It will be for the GGHB, in the course of its current review of acute services, to consider how best to put those resources to work and how best to ensure that the services provided for the people of Glasgow are genuinely modern and accessible.
I do not want to prejudge the outcome of the current deliberations in Glasgow, which I know that many members, including Robert Brown, have contributed to at a local level. However, if we are to have a health service that meets the needs of the people of Scotland—not only now, but in the future—we must be willing to review and to change. We have to accept that it is not only about investment and money; it is ultimately about quality. It is about ensuring that the highest-quality services are in place and about embracing effectively new technology and modern medicine. We have to provide the right balance between specialised facilities and local access. Those are the issues that the GGHB is grappling with—I wish it well.
I welcome the minister's statement. What assurances can she give that the principles in the Arbuthnott report will be applied in health board areas such as Ayrshire and Arran? East Ayrshire, for example, has been identified as having high levels of poor health for many years.
Again, I am pleased to point out an increase: Ayrshire and Arran will receive a 7.5 per cent increase in its budget next year. Margaret Jamieson has touched on a point that other members have mentioned. Communities and the needs and health of those communities vary greatly in every health board area. We must get the national allocation and the national strategic direction of the NHS right, but I agree that it is important that we translate that into results on the ground. In the priorities and planning guidance to the NHS in Scotland, increasing emphasis has been placed over the past couple of years on reducing health inequalities and on tackling social exclusion. I assure members that we will continue to do that and that that will be reflected in the Scottish health plan that will be published in November. I hope that we will, as a consequence, continue to address needs wherever they arise in Scotland.
I welcome the minister's statement and acknowledge the noble aims of the report. However, the report is good only as long as the equations and statistics that go into it are correct and produce the right results. I have some specific questions for the minister.
Do not ask many, please—just one or two.
The minister talked about performance-related pay for management in health boards, which is a good idea. However—and this question was asked a number of times in the Health and Community Care Committee—does not the minister recognise that the equation that has been used does nothing to reward good practice or best value? The result will be that, in the long term, some health boards may have a disincentive to continue some of their good practice. Does she recognise that general practitioners in rural areas such as Grampian undertake a bigger role in their communities than their urban colleagues? As a result, the equation that is used will have a more severe effect on services in rural areas than the report might have originally intended.
This is a speech.
I did not hear who said that, but this is not a speech.
Will the minister assist members on a technical point? The Arbuthnott report is complicated, so will the minister publish tables that can be compared with the ones in the original short guide, page 17 of which talks about the changes in resources for each health board? That would allow us to see clearly how the Health and Community Care Committee's input affected the final report.
Ben Wallace has raised a number of questions that it will be impossible for me to do justice to in the time available. I am, however, pleased that he regards my intentions as "noble"—that is the first time that I have been described in that way in the chamber and, possibly, the last.
A number of the questions that Ben Wallace asks are addressed in the full report. If we study the report carefully and look back over the first report as well as the report of the Health and Community Care Committee, it is clear where points have been taken on board. For example, the Health and Community Care Committee rightly and powerfully made the point that there needed to be greater simplification and transparency in the formula so that it could be seen to be fair and be understood more readily. That is a difficult balance to strike, because the report employs a fairly complex statistical methodology. However, the final report has met that challenge much more effectively than did the first report.
It is important to recognise what the Arbuthnott review is and is not. It is a significant and groundbreaking move towards fairer funding allocation for the NHS in Scotland. It does not—and should not—address the wider aspects of how resources are used, how the service is performance-managed, how to get best value and how to reward better performance. Those elements are dealt with using other tools, including some that I have mentioned today and some to which Ben Wallace referred. It is important to consider Arbuthnott in the round.
As I indicated briefly in my statement, alongside the Arbuthnott review, I am determined to ensure that we continue to work with the medical profession and the NHS to ensure that everyone in Scotland has access to GP services and other primary care services. Sadly, in parts of Scotland—in some rural areas and some of our most deprived communities—that is still not the case. In some areas we are developing salaried service to fill those gaps. I want to explore how we can continue to do that effectively in the years ahead.
I, too, welcome the minister's noble statement. Does she agree that such a statement would not have been made had Scotland remained under the heel of a Tory Government in Westminster?
Now we have clear evidence of the massive impact of the misuse of drugs on disadvantaged communities. Hospital admissions for drug misuse in those areas are many times higher than they are in better-off areas. Did the Arbuthnott group take such evidence into consideration in reaching its conclusions? If not, is there any way that such evidence could be factored in before the five-year review to which the minister referred?
The short answer to John McAllion's question is yes, that was considered in the course of the Arbuthnott review. The Scottish Advisory Committee on Drug Misuse is considering how that work can be progressed more effectively.
I draw members' attention to part of the financial statement that was made by Jack McConnell, which indicated a substantial additional investment across the Executive into drugs treatment and rehabilitation. The NHS will play its full part in that. In stark contrast to previous Conservative Governments, we are tackling the root causes of ill health—notably poverty and deprivation—not only through health policy, but in all our work. Our measures to tackle drug misuse, which is most prevalent in our deprived communities, are a central plank of that work.
I want to pick up on two answers that the minister did not give. On the question of winners and losers in the reallocation, is she aware that although she expressed displeasure at Kay Ullrich's use of that phrase, it was Donald Dewar who used the term at First Minister's questions? Perhaps the minister should take that up with him.
The minister did not answer Kay Ullrich's substantive question. Will the minister confirm that the reallocation amounts to only 1.2 per cent of the overall health allocation? If not, will the minister tell us the exact figure?
We need to hear more from the minister on what she wants to do at local level—her answers to Margaret Jamieson and Mary Scanlon were not full enough. It is not good enough to say that that is a matter for health boards and that the Executive washes its hands of all responsibility. If we are to see effective change, I want to hear from the minister what mechanisms for monitoring are in place and what the Executive will do to ensure that those changes are pushed through.
I have addressed Duncan Hamilton's last point in some detail this morning. I have set out clearly the work that has been done and the work that is in train to review and revise the performance management, accountability and governance framework within which the NHS in Scotland operates. If Duncan Hamilton has any doubt about that, I ask him to read the Official Report of my statement and answers to questions today, and that of my comments in the NHS modernisation debate on 6 July. He might also care to read my responses to many questions that have been put during the past year. I repeat that the Scottish health plan that will be published in November is the point at which matters will be set out in full. A great deal of work has gone on, and is going on, in that area.
I am concerned, and not for the first time, that Duncan Hamilton focuses on semantics, but not on the substance of what is being done. It is a fact that no health board area will lose as a result of the combined effects of the implementation of a fairer funding formula and record additional growth in the NHS. In the interests of time, I will say no more on that, but simply refer members to the numbers in the report and those in the allocations that I have set out today and in Jack McConnell's statement yesterday—they speak for themselves.
I apologise to those whom I have not called, but Patricia Ferguson and I looked carefully this morning at the large number of members who want to speak in the debate and we agreed that we should not allow the statement to run on too long. I have already done that.