................................................................................ ON THE RECORD STEPHEN DORRELL INTERVIEW RECORDED FROM TRANSMISSION BBC-1 DATE: 2.2.97
................................................................................ JOHN HUMPHRYS: Mr Dorrell, a central plank of your platform, your election platform, is that the NHS is safe in your hands. Now you're going to have difficulty persuading people to believe that aren't you, indeed you already are having difficulties persuading them to believe that, and the reason for that is that all the experts, all the commentators, all the observers agree that there must be at least three per cent more over and above inflation paid into the NHS by the Government every year. Now that has happened in the past, it isn't happening now, it isn't going to happen in the future, therefore people are right are they not to be a little doubtful about your claim? STEPHEN DORRELL: Well, I don't accept the figure of three per cent relentlessly every year as the inevitable amount that has to go into the Health Service. HUMPHRYS: That's what's happened ever since the NHS began. DORRELL: Having said that I do point out that since 1979 that does actually happen to be precisely the figure that has been the average increase in real terms year by year that this government has provided to the Health Service, ... HUMPHRYS: Since 1948 in fact - you can go back to that if you like. DORRELL: And when we look into the future the Conservative Party is committed to real terms growth of the Health budget year by year for the five years of the next parliament. That's something that I've challenged my Labour opposite number, the Prime Minister has challenged Mr Blair to give an equivalent pledge. They've refused to do it. Labour won't give the pledge to real growth of Health spending, that is the pledge that the Conservatives have given. HUMPHRYS: And of course I am talking in real terms when I talk about three per cent, when you talk about three per cent, let's be clear, we are talking about the same thing - three per cent over and above inflation. DORRELL: Yes. HUMPHRYS: Well, let's look at what is actually going to happen now, over the coming years, 1996/97 nought-point-six per cent, that's far less that what is needed so they say - '97 to '98 nought-point-eight per cent, 1998/99, a cut - now I know there are special reasons for that because some of the duties that are being carried in the NHS will be carried out Department of the Evironment, so there is a reason for that. Nonetheless a very small increase, and 1999 to 2000 nought-point-one per cent now that is
nowhere approaching the three per cent that it is agreed by virtually everybody is needed to keep the NHS doing what it's doing at the moment pretty much. DORRELL: As I've already said, I don't accept that every year, that the circumstances every year are the same. That is not the case, and that is why over the eighteen years this government has been in office we've had some years when the Health budget has gone up by very much more than the figures you are quoting, and some years when the figures have gone up by less, but every single year since 1979 there has been real growth in the Health budget. We're committed to real growth during the next parliament. As regards the next financial year, the one where we announced the budget in November, I announced in November an increase of one-point-six billion pounds, that is almost exactly three per cent real growth over and above inflation in the money available to the Health Service for patient care. Now what is also happening the Health Service next year, is that we're planning a continued growth of the private financing of the capital budget of the Health Service, and it's by providing that kind of public/private partnership that we're able to make the tax payers pound go further and treat more patients. Three per cent real terms growth in the current budget of the Health Service is actually exactly what the Government has provided next year. HUMPHRYS: Except that you're not now comparing like with like, you're not comparing the three per cent that I gave you which was three per cent over the entire Health Department budget, the entire NHS budget, with the same figure. You're comparing it with a figure specifically for front line patient care, very praiseworthy of course, but nonetheless it isn't the same amount of money, and that's very important. DORRELL: I plead guilty to the charge that what I'm focussing on is front line patient care. What I've delivered for next year, what the Government is delivering next year is real terms growth of three per cent in the money available as you correctly described it for front line patient care. HUMPHRYS: Will you do the rest of the NHS then? DORRELL: Well no, what we're also doing is reforming the capital budget of the Health Service. Throughout fifty years of history one of the things the Health Service has less reason to be proud of than other things is its failure to modernise the hospitals and the capital stock, the kit available for health care as quickly as it needed to be modernised, and that's why this government has introduced for the first time the principles of the private finance initiave, public/private partnership so that private capital can be made available to the Health Service to modernise the buildings in which free NHS care is provided. That's - I think it's dead right to focus the taxpayers' pound on front line patient services and look for other ways, better and more efficient ways, of modernising the buildings in which NHS clinicians work. HUMPHRYS: Well, let's deal with the first of those points first, and I know the figures can be a bit tedious after a while, but nonetheless I repeat that you're not comparing like with like. You're using a few mirrors here aren't you because you're talking, you're saying that this one-point-six billion pounds adds up to three per cent, which is roughly comparable with what you have been spending in the past, and of course it isn't because in the past when they've taken that three per cent figure, they've taken it over the whole of NHS, and therefore it is a much higher figure proportionately allowing for inflation and all the rest of it, then this one-point-six billion. So it isn't a true three per cent at all. DORRELL: But in the past the Health Service has been refused - successive governments have refused to allow the Health Service access to private capital. HUMPHRYS: We'll come on to that in a minute, but I.. DORRELL: It's absolutely central to this argument. HUMPHRYS: No, it isn't. DORRELL: With great respect it is essential to this argument, because it's by bringing private capital in to modernise the Health Service, that instead of every pound spent by the Health Service both capital and current having to come from the taxpayer we've now got a position where the taxpayer pays for health care delivered to patients, but the private sector comes in alongside in order to modernise the buildings in which taxpayers' pounds are spent. HUMPHRYS: Well, let's look at that then in a bit more detail, and then we'll come back to that one-point-six billion, but let's look at that private capital for a moment. You're suggesting in effect that there is such a thing as a free lunch here, but let me point out that if a private company or a consortium of companies, banks, building companies and whatever build a hospital, they're not doing it for the good of the nation's health or because they're altruists, they're doing it because they want to make a profit on that enterprise, so you are going to have to pay we, the taxpayers are going to have to pay the bills for that, so what you're doing in a sense is mortgaging the future, and suggesting to us that this is in some way free money. It isn't anything of the sort. DORRELL: No, of course it isn't free money, but there's a rather simple and obvious flaw in your argument if I may say so, which is the assumption that if the taxpayer borrows money to invest in hospitals that's free. Now when you lend money to the government in gilts... HUMPHRYS: But at least it's honest, we know where it's going to. DORRELL: Well, it's honest in both cases if I may say so. The position is that the money used to build a hospital costs the taxpayer, costs it either through.....because the Government has to pay the interest rates on gilts on the money that it borrows, or it costs it because the private sector provides the money... HUMPHRYS: And it shows up here in this red book, in the Treasury's financial statement..... DORRELL: Just before we leave the point let's just accept ..... HUMPHRYS: I'm not leaving the point - this is the point. DORRELL: You are suggesting that I'm introducing an extra cost into the public finances by bringing in private finance into the Health Service. HUMPHRYS: You're clouding the figures. DORRELL: I'm not clouding the figures. What I'm seeking to do is to clarify them. The position is that whether a hospital is built by the private sector or by the public sector the capital that goes into that hospital costs money. What I'm seeking to do is to use the taxpayer pounds to buy patient care and to provide a partnership with the private sector so we've got more money available, not less, more money available to the Health Service to modernise the buildings in which care is provided. HUMPHRYS: But you see, this is-this is where the fallacy comes in: more money available. You don't have more money available. Instead of, as it were, borrowing it from us - the taxpayer - saying to us, the taxpayer: look, we want you to build a new hospital and you'll pay for it out of your taxes over the coming years, you're saying: we've got more money now because these private industrialists, or banks - or whoever they are - are going to build these things for us. They're not going to do anything of the sort! They're going, in effect, to lend us money and charge us for it. And,
when you look at what your own people say about the private financing, and the effect it's going to have on Health Service costs: let me quote to you from Andrew Neil, Head of the PF Unit in the National Health Service. Several trusts - hospital trusts - cannot afford the annual payments... head to when these PFI things become a reality. The funding gap for some schemes is four million pounds a year for the lifetime of the contract. So, they've got to pay for it. We've got to pay for it ultimately. It ought therefore to be in their
book. DORRELL: But you and I have to pay for it if we're going to continue to have tax-funded health care. HUMPHRYS: Of course, we do. DORRELL: Whether it's provided by the public or the private sector. The position-the difference between the traditional means of financing hospital building and the private finance means that we are introducing is this - and it's a fundamental difference: traditionally, the Health Service, a Health Service capital project always had to pass three tests. It had to be affordable, it had to be good value and then it had to wait for a ration of capital coming from the Treasury. Now, we've abolished that last test. Still it has to be affordable - of course it does. It has to be good value? Of course it does. But now we can- are in a world where if a hospital project is both affordable and good value, then, the Trust is free to find a private sector partner to build that hospital. HUMPHRYS: Have they got the extra money to pay for it? DORRELL: It doesn't have to wait for the ration of public capital- HUMPHRYS: Of course not. Absolutely. DORRELL: That's what's trapped-that's what trapped the Health Service for fifty years in hospitals that are out of date and without adequate modern kit. HUMPHRYS: Yes, but you're arguing-But, what has trapped them in the past and traps them still is the cash to pay for it and the fact that some company down the road says: alright, we will build a hospital doesn't change the economics, the true finance of it at all. They still have to pay for it. DORRELL: John, with great respect, you are wrong. HUMPHRYS: What do you mean? They're going to do it for free? DORRELL: You are wrong because you're suggesting that there is no extra cash available to the Health Service from the private finance approach. That is simply not true. What we are doing is-What we're providing here is an arrangement that allows us to focus the taxpayer pounds on treating the patients and where there is an opportunity to modernise the hospital building, to deliver more efficient health care, more up to date health care, then provided the project is affordable and good value, it can go ahead without having to compete for cash in the public sector capital pool. HUMPHRYS: Alright, alright. Alright, we'll-we'll leave that for a moment. Then, let's look at the other aspects of this one point six billion that you're so proud of having won from the Treasury. The truth is, when it comes down to it, it's not going to be one point six billion at all, 'cos one of the things it's going to have to do is pay for the debts - the various hospital trusts have incurred over the past year, because last year's settlement wasn't enough to enable them to do what they wanted to do. So there's a couple of hundred million pounds gone for a start. DORRELL: Well, you say it isn't going to be one point six billion. It is going to be one point six billion.. DORRELL: In real terms, they won't have that to spend, is what I'm saying. DORRELL: Anybody looking at the history of a large public service knows that there is always a degree of flexibility in the financing between individual years. Indeed, under the old rules, we always used to be criticised for artificial rigidity across the end of the year. We've relaxed that in order to give people the incentive to use money efficiently through all twelve months of the year, rather than as used to be the case, wasting money in the last year because, in the last month of the year, because they wouldn't be able to carry it over to the following year. HUMPHRYS: Yeah, but they're not going to have one point six billion pounds to spend in this coming year. That's my point, it's going to be considerably less than that. DORRELL: The money available for the treatment of patients next year, compared with the money available for the treatment of patients this year, has increased by one point six billion pounds. HUMPHRYS: Well, if you ignore the other figure, perhaps. But there's another factor here, isnt't there? And that's inflation.
Now, that figure - one point six billion - was arrived at on the assumption -
and it sounds a lot of money, certainly - on the assumption that inflation is going be somewhere around two per cent - two and a half per cent - something like that. DORRELL: I was going to remain silent, I won't remain silent on that subject because I actually think that, of course we have figures that we use as assumptions, but actually when you're planning a service, I think you have to plan it in cash. And, you don't-You should not tie yourself to specific inflations. HUMPHRYS: But that was broadly the range that you were looking at, when you - when you arrived at those figures, wasn't it? DORRELL: It's-It's those kind of figures are sensible assumptions. But it doesn't alter the fact that the planning of the Health Service next year has to be done in cash- HUMPHRYS: Of course, it does. DORRELL: -and not with deflated numbers. HUMPHRYS: And that is exactly my point because-because what I wanted to bring to your attention now is the fact that you are going to be sitting around in Cabinet next Thursday, having a look at the recommendations of the pay review bodies. Now they've been leaked, the result of those recommentions have been leaked, I don't expect you to confirm them. I know Cabinet Ministers never do that sort of thing, but one of the things they tell us is that nurses, according to these recommendations will get an extre three point four per cent in their pay. And that's just nurses; doctors more and so on. In other words it's going to bust that two to two and a half per cent inflation assumption. You therefore are going to have to go into Cabinet next Thursday and argue very firmly, aren't you, that they are going to have to hold the line with those pay increases? Because otherwise, it's going eat up a huge chunk - another huge chunk - of that one point six billion. DORRELL: But, I'm not going to discuss in detail the review body reports. The Government has them and is considering them and will announce its conclusions on them when a decision has been made. What I will do is to say clearly, first of all it was this Government that set up the Nurses' pay review body; secondly, that we have implemented every report of both the nurses' pay review body and the doctors' and dentists' review bodyand- HUMPHRYS: Well, you've staged them, haven't you? You've staged the increases, so- DORRELL: We have implemented their recommendations. So, we believe that this - our actions - demonstrate that we believe that this is a sensible way to set professional pay levels in the Health Service. But we also clearly have to look at affordability within an individual year of the recommendations that the review body makes. So we have to be good employers, we have to respect the independent recommendations of these review bodies, and we have to look at affordability. And, those are the three standpoints from which we are looking at these review bodies reports now and we shall announce our conclusions when we've made our decisions. HUMPHRYS: And when you say we have to look at affordability, what you mean is that if too much is taken out of that pot, that extra one point six billion to pay nurses for instances - and we all know that salaries account for, what is it, seventy per cent of the total NHS bill? - if a socking great increase - some would say not a socking great increase, but much higher than your assumption - is going to pay those bills, you've got a problem next year. So you're going have to say: Hm! To be tough, haven'tyou? DORRELL: When I talk about affordability, what I mean is affordability to the taxpayer. This is public money. This is taxpayers' money we're spending. It is raised from people involuntarily through taxation and the decisions we have to make are the question: whether the taxpayer can afford, what the taxpayer can afford, given the other interests of being a good employer of professional staff and respecting the
independent recommendations of the review body. And, as I said, I'm not going to be drawn further into the conclusions we shall reach beyond saying: those are the principles we shall look to (phon). HUMPHRYS: But, you are going to have to listen, aren't you, to people like Philip Hunt, the Director of the National Association of Health Authority and Trusts, when he says: if it costs that much, if you give them that kind of increase, we're gonna have to find the money from somewhere and that will mean cuts in jobs and services. That's going to have to be at the forefront of your mind. DORRELL: There are, of course, always choices to be made about how you use resources. Am I going to listen to Philip Hunt? Of course, I'm going to listen to Philip Hunt. But, the principles that we have to apply to make this decison are clear and straightforward. We have to be a good employer of our professional staff, we have to respect the review body reports and we have to make a decision that is affordable to the taxpayer. HUMPHRYS: Does it worry you at all that they do keep throwing up increases that tend to bust the budget occasionally? Have you thought of looking at different ways of renumerating (phon) nurses and doctors, looking at different pay structures that would reward special service and particular skills and that kind of thing? DORRELL: Well, of course, we look every year at the total picture of the employment package of our professional staff and that goes into the recommendations that we make in our evidence to the review bodies, that is what any employer ought to do; to look at the position, look at how easy they find it to recruit; to retain, to motivate the staff they have. Look at how the deal that they offer compares with other comparable employers who may be competing for the same kind of people. So, we have to look at that in detail every year - of course, we do - yes. HUMPHRYS: Let's have a look now at the effect of money problems and there are always money problems in the NHS. And, as I say, my contention is there are going to be much more of that in the future on patients. Waiting lists - you're very proud of the fact that waiting lists - well, certainly, people for over a year or longer - have come down dramatically over the past few years. There's no argument about that. But, now they are beginning to creep up. And, I use the word 'creep' because it is not an enormous increase from six thousand to fifteen thousand months, over the past six months or whatever it is. That's a straw in the wind, isn't it? DORRELL: I'm not sure that it's a straw in the wind. What it reflects is the Health Service doing something that I stressed at every Health Service audience that I went to in the summer - seemed to me important. That following the emergency service pressures that we experienced last winter, it was important for us (in my phrase) 'to do first things first'. Where there's an emergency need presented to the Health Service, I think, most people would recognise that that has to be met and if an emergency need, particularly in the middle of winter leads to an extension by week or a fortnight of a waiting time for a non-urgent treatment, then, I think, that most people even the patient on the waiting list will usually accept that that is a fair, a proper, way to use resources. We've seen a dramatic improvement in waiting time performance, we must not go back to the old days, where there were up to a quarter of a million people waiting on waiting lists for more than a year. That figure, as you rightly say, is now down to around fifteen thousand in the last available information. We must not go back to the old days but the Health Service must deal with the emergency, urgent treatments first, if necessary at the expense of the elective patient waiting a week longer. HUMPHRYS: Let's just take a look at those figures, though, in the light of what The Sunday Times reported this morning. It's got hold of a memo' that's been leaked to them from NHS administrator to a big hospital in Liverpool, which says that pressures - which proves that pressure is being applied on hospitals artificially to keep down the waiting list because of the impression it's making. DORRELL: Look, I'm not going to defend every detail of every memo' that's written everywhere in the Health Service but I'd
simply rest, actually, on your admission and your question two or three minutes ago. You said there has been a huge improvement in the Health Service performance in respect of its waiting lists. I'm sure that is true, it's been the experience both of clinicians working in the Health Service, of Managers in the Health Service and of patients in the Health Service. And, it's-there- HUMPHRYS: So, you acccept that they are-there is a bit of fiddling of the figures going on, then? DORRELL: It's - Any set of statistics, that's collected across a nationwide picture - if you look at every single detail of every element of those statistics - you can argue about the detail. HUMPHRYS: Ah, but hang on, we're talking here about specifically fiddling the figures. Look, it says - this memo, for the benefit of people who haven't heard about the memo'. It's to Royal Liverpool Broadgreen University Hospital, NHS Trust, and it talks about judicious elimination of some patients from the official figures. DORRELL: Yeah - and that's- I know it does and that's precisely why - when you asked me about it - I said I'm not going to defend every detail of every.. HUMPHRYS: So, you would condemn this memo' and you don't want them to do that kind of thing in future? DORRELL: I-I do not want Managers to fiddle figures. I do want effective management of the waiting time that patients experience in the Health Service and that is what we have delivered in the dramatic reduction that you were good enough to acknowledge. HUMPHRYS: So, you would condenm whoever sent that memo' and tell them: don't do it again, we want the true picture to emerge, without any feeling... DORRELL: I've no idea what they meant by judicious elimination. What I want- HUMPHRYS: Bit sinister, though, innit? DORRELL: What I want is effective management, so that patients wait for an acceptable time on a waiting list. HUMPHRYS: We are going to have to get used to higher waiting lists again though, aren't we? The BMA is deeply worried about this, amongst others DORRELL: Well, as you-Let me put your own words back to you. You said there's been a dramatic improvement. HUMPHRYS: Well, that's only incontestable. I mean, the figures are there. DORRELL: It is 'incontestable' - I'm grateful to you. That's it's incontestable. HUMPHRYS: And, everybody acknowledges that there has been a problem. But, that doesn't tell us that it is going to stay like that. I went on to say the figures are - two things: 1) there's been a certain amount of fiddling going on and 2) - by your own admission - and 2) they are starting to creep up again. DORRELL: Yeah. HUMPHRYS: Now, what we're not concerned with here, what has happened in the past - we've acknowledged that - what we're concerned about now is what is going to happen in the future. DORRELL: Yes and what I was going to do was to remind you of your word creep up again, I acknowledge they have crept up, they've crept up from a low of I think it was seven thousand to a low of fifteen thousand, that's an increase of seven thousand. We've seen a figure that used to be one quarter of a million, so my focus hasn't changed, my focus is that we must deliver an acceptable service to patients in the waiting list, that is to say that everybody should have the total assurance that if they are on a waiting list they will be treated within eighteen months as a maximum, actually for the overwhelming majority it is twelve months as a maximum and for the great majority it is very much less than that. HUMPHRYS: Jim Johnson, Chairman of the BMA's Consultants Committee, wards and intensive care beds are lying idle, staff are being dissipated, waiting lists are rising because absolute priority is to limit, is to admit emergencies, now that is terribly worrying.....in some areas he says has been completely stopped because people don't have any more money to purchase, now this is a consultant who is a chairman of a very important committee in the BMA. DORRELL: Jim Johnson himself would say that the first priority of the Health Service, of course, is to deal with emergency cases and who would argue with that. HUMPHRYS: It's a bit more than that. DORRELL: Of course it does but the first priority, priorities are putting a series of different objectives in order, that's what it means and the first priority of course is to deal with emergencies and it's quite true that elective surgery in a number of hospitals was cancelled in the first two weeks of this year when we had very high incidents of flu and we had a very cold spell, that placed enormous pressure on the emergency services. Actually, the picture over the last couple of weeks since it has been a bit warmer and the flu incidence has been falling is that elective surgery is starting to move again. HUMPHRYS: Let's have a look at the perception of the NHS though because this is what's going to worry now as we come up to the Election, you must have been concerned about that survey in the Nursing Times which show that seventy eight per cent of nurses say there are staff shortages, two thirds of them think patients are being put at risk - now that is the reality from their point of view and these are people who work in the NHS without at axe to grind. DORRELL: They are also self selected people responding to a survey. HUMPHRYS: Well, come on, we are talking about a very large number of people here. DORRELL: We are talking about a survey where..which was carried out by a magazine where people replied if they felt they had a point to make, now what.... HUMPHRYS: .......entirely legitimate... DORRELL: What of course I recognise that when there is concern in the Health Service about the quality of service we are delivering we need to respond to that, but if you go and talk both to the great majority of clinicians in the Health Service and to the overwhelming majority of the patients in the Health Service, what they will recognise is that although there is a service under pressure and occasionally the service fails, the experience of the overwhelming majority of patients of the NHS is that they received better health care today than they've ever received before. HUMPHRYS: Final quick thought about the future then, long term people believe that no government can provide enough cash to meet all the needs are we all eventually going to have some kind, have to have some kind of private insurance. DORRELL: No I don't understand the logic of that argument, you see, that is to make our system more like systems on the Continent of Europe or in the United States and if you go down that road actually you can see clearly from those countries what the results are, the result is that you deliver the same health outcome but you pay more for it, it doesn't see to me an obvious way to go. HUMPHRYS: Stephen Dorrell, thank you very much indeed. DORRELL: Thank you. ...ooOoo...