Department of Health and Social Care

What I do not think is acceptable is the glacial pace of agreeing priorities and approving final budgets for the local systems. In November, our Committee was shocked to hear that, in the past two years, those local systems—ICBs and others—had not had their financial plans approved by the Department until June and May respectively. That is up to three months after the start of the financial year. How can our poor local systems plan efficiently when these final allocations and guidance are so late? If the Department’s own accounts were finalised much sooner, our local systems would be able to have the money allocated in a more timely way, making wastage and inefficient spending less likely.

I welcome the Secretary of State’s prognosis that the NHS is far too big and complicated. There should be a shift towards allowing NHS trusts more control of their own budgets, as clarified in the 2025-26 priorities and operational planning guidance published in January. Moving more funds directly to NHS trusts, ICBs and local systems will improve accountability and give them a level of flexibility about how their funds should be better spent, rather than just focusing on targets and directives. For example, if they were to run a surplus because they had run their operation so well, they could reinvest the money in desperately needed capital projects rather than returning it to Whitehall. That must also go hand in hand with a need to improve productivity. Between 1996 and 2019, the NHS averaged a measly 0.6% a year increase in productivity.

Since the pandemic, productivity has now fallen by 23%. In March 2024, the Conservative Government announced that the NHS would receive £3.4 billion of capital investment for digital improvements between 2025-26 and 2027-28, which begins to address the point that the hon. Member for Stafford mentioned. As part of that investment, NHS England committed to achieving ambitious average productivity improvements of 2% per year through to 2029-30. However, those digital improvements, presaged by that additional £3.4 billion, have not yet been fully actioned.

Without significant productivity gains, the NHS will not substantially reform waiting times and achieve the best value for the large amount of money that we spend on it. On average, there is a 4% real terms increase in our spending each year, when the economy is growing by only 1%, which is unsustainable in the long term. If we go back to 2013, the Health Secretary had set the NHS a challenge of going paperless by 2018. Clearly, as we all know, that has not happened, because the NHS is still using fax machines. In a digital age of AI, that lack of modernisation produces a risk to both patients and employees in the NHS. Investing in better technology would help with the Government’s ambition to shift more care into the community.

Community healthcare can take many forms, from GP surgeries and community hospitals to pharmacies, dentists and social care. I fear that when we talk about the NHS budget, we predominantly focus on hospital care, rather than the care that most of our constituents need every day. Indeed, Lord Darzi’s report, which was commissioned by the Government last year, said that

“the NHS budget is not being spent where it should be—too great a share is being spent in hospitals, too little in the community, and productivity is too low”

This is where I would like to pay tribute to our GPs and all their staff across the country, especially in the North Cotswolds. Our GP surgeries are usually the first point of contact with our NHS, from antenatal services to blood tests and vaccinations. They also offer a number of services that could be termed preventive care.

As a Committee, we questioned NHS officials on their prioritisation of preventing ill health rather than treating it, thus avoiding much more expensive hospital interventions in the future and a much better patient experience. Their reply was that they had little additional headroom to grow preventive services, yet the public health grant used by local authorities to commission preventive measures, such as health visitors and drug and alcohol services, is expected to fall in value next year by £193 million, despite the Government’s commitment to maintaining it in real terms. I cannot stress enough how I believe that we should be paying much more attention to prevention rather than cure; it is just so important.

NHS England said that, rather than moving funds, there should be a focus on the role of GPs and how they can advise their patients. However, according to the Royal College of General Practitioners, although more than 90% of patients’ direct experience of the NHS is through primary care and GP practices, less than 10% of the total budget is currently spent on primary care. I say gently to the Minister that we are getting our priorities wrong there.

As a Committee, we have recommended that the Government clearly define what counts as health prevention spending within the next six months and track that spending annually. ICBs should be given more flexibility in how they spend their money, which might include redirecting services to more community settings that are closer to patients. It might also include redirecting funds to help manage discharges from hospital. According to the House of Commons Library, the latest data shows that last year an average of 12,340 patients a day remained in hospital despite being clinically fit to be discharged. Even though there is a slight decrease of 1.2% from last year, more can be done to ensure that patients who are well enough can leave hospital for the community and be closer to their families. That will require better working between social care and hospitals.