7.  Department of Health (including Personal Social Services)

The Government will rebuild the NHS and improve the delivery of social services by: increasing NHS funding by an average of 4.7 per cent a year, above inflation, for three years, to develop modern, prompt and convenient health care services; modernising the NHS, by improving hospitals and GPs' premises, and by establishing NHS Direct, to give everyone access to a 24 hour telephone nurse advice line; and improving the efficiency of the NHS and social services by some 3 per cent a year; These reforms will, by the end of the Parliament: reduce NHS waiting lists to 100,000 below the level the Government inherited; begin to reduce avoidable illness, disease and injury, which will result in time in lower death rates from heart disease and stroke, cancer, and suicide, and a reduction in health inequalities; improve cooperation between the NHS, social services and other services, which will strengthen the focus on patients' needs, and help to reduce the rate of growth in emergency admissions to an average of 3 per cent a year over the next five years for people over 75; and for children in care, improve the educational achievement, increasing from 25 per cent to at least 50 per cent the proportion of children leaving care at 16 or later with GCSE or GNVQ qualifications.

A new approach to investment in Health

7.1  The Government set out its ten year programme to rebuild the NHS in the White Paper The New NHS and the Green Paper Our Healthier Nation. The Government's vision is of a modernised NHS that is:

• a national service;
• fast and convenient;
• of a uniformly high standard;
• designed around the needs of patients, not of institutions;
• efficient, so that every pound is spent to maximise the care for patients;
• making good use of modern technology and know-how; and
• tackling the causes of ill health as well as treating it.

7.2  The Government is abolishing the destructive, bureaucratic competition of the internal market, and replacing it with a fairer, more collaborative system. It will be based on partnership and driven by performance. All local health bodies will come together to draw up the Health Improvement Programme, working out how best to use their resources to improve the health and well being of people in their area, cutting health inequalities, and increasing the length of people's lives and the number of years they spend free from illness. GPs and nurses, the people closest to patients, will increasingly take the lead in commissioning services.

Spending plans

7.3  The new spending plans for England provide for average real increases of 4.7 per cent, in real terms, over the next three years. In the first year, resources for the NHS rise by 5.7 per cent in real terms, followed by increases of 4.5 per cent and 3.9 per cent in the later years. In addition, savings on bureaucracy are generating £1 billion extra for patient care over the Parliament, and wider value-for-money savings from the CSR will produce about an extra
£1 billion each year.

Table 7.1: Key figures1

1 Figures may not sum due to rounding.
2 This line includes all NHS Spending, plus Department of Health-funded spending on PSS.
3 Total capital investment in the NHS is shown in Table 7.2
4 This shows Department of Health-funded spending on Personal Social Services, which comprises mainly special, specific and capital grants to local authorities, credit approvals and a grant to the Central Council for Education and Training in Social Work.
5 The reduction in 1990-00 reflects the transfer of responsibility for grants for support of asylum seekers, other than unaccompanied children, to the Home Office.

Table 7.2: Health Capital Investment

1 This excludes asset sales. It includes ITresources, which will in practice be a mixture of current and capital expenditure - pending further information we have allocated all IT investment to capital expenditure
2 Includes Departmental Administration capital of £10m, £9m of which is provision for set-up costs of the Food Standards Agency.

7.4  In addition to this direct investment, there will be more funding within the settlement to help develop the quality of primary care infrastructure.

Investing in reform to rebuild the NHS

7.5  The CSR provides the stable funding base needed to deliver the Government's commitment to rebuild the National Health Service. But, in return, the NHS will reform aspects of the way it works, so as to make the best possible use of the funds available, to maximise the improvement in services for patients.

7.6  To ensure that the Government's modernisation programme is taken forward effectively, there will be an NHS Modernisation Fund of £5 billion over three years, which, coupled with other money, will fund new developments, over the Parliament:

• cutting waiting lists. New investment, coupled with reform in working practices, will help deliver the Government's commitment to reduce waiting lists to 100,000 below the level for March 1997;
• modernising hospitals and systems. By making a reality of the Private Finance Initiative, the Government has embarked upon the largest hospital building programme in the history of the Service. The new plans provide a 50 per cent boost for publicly funded capital investment to help modernise hospitals, cutting the number of mixed sex wards and buying new equipment;
• investing in NHS staff. The plans allow for more education and training and continuing professional development to enable staff to make full use of the opportunities in new technology and new treatment patterns;
• ensuring safe and effective mental health care. New funding, linked to a new performance management system will reverse long years of under-investment in mental health services, including setting up more specialist teams based in the community;
• providing better primary care. Investment in primary care will be concentrated in deprived areas to increase the number of staff, develop training, and improve premises. There will be more investment in information technology, so that all GPs and hospitals can be linked up by 2002; and
• improving health promotion. There will be more resources for health promotion, including more community nurses.

7.7  The Government is also determined to improve performance by:

improving quality and effectiveness. The Government is determined to raise the standards of treatment throughout the NHS. The new quality agenda set out in the consultation paper A First Class Service will be delivered through national service frameworks, the new National Institute for Clinical Excellence, and the Commission for Health Improvement; and

• improving efficiency. To improve value for money, and reduce the variations in efficiency across the NHS, the Government is setting a target for value-for-money improvements of some 3 per cent a year. This will generate about an extra £1 billion a year for patient care. There will be further measures to improve the value delivered from spending on medicines. The NHS is setting new targets for asset sales, to help fund future investment. The campaign against fraud will be intensified.
• Pay. Pay settlements will be funded from within the three year spending plans. The additional funds made available are for improving health services. Responsibility in pay will continue to be necessary. Chapter 4 sets out new arrangements for Departmental Ministers to respond to pay review body reports in the context of their service targets.
• A new approach to Social Services spending

7.8  The key principles behind the Government's new approach to social services are to increase independence and dignity for adults who need long-term social services support, including helping people to work where appropriate, and to give children looked after by local authorities the best possible start in life. Social Services have a big part to play in tackling social exclusion, and in following up the conclusions of the Young Children's review (chapter 21). The Government's new approach to social services will be set out shortly in a White Paper.

7.9  The Government is increasing resources by over 3 per cent a year in real terms, on average, (after taking account of the transfer of responsibility for grants for asylum seekers to the Home Office). But in return for the investment, the Government is looking for reforms in a number of areas:

• setting clear objectives for the outcomes and standards it expects social services to achieve;
• expecting social services authorities to make a step improvement in the use they make of those resources: a new set of performance measures, consistent with the Best Value initiative, will enable local managers and elected members to monitor performance and benchmark their services against those of similar authorities, and will enable central government to assess performance against the overall outcomes and standards set; and
• taking steps to make it easier for the NHS and social services to improve the way they work together, to deliver seamless care for the public.

7.10  As well as enabling social services to raise standards generally, the new plans provide funds to address the recommendations of the independent Utting report on improving services for children looked after by local authorities and care leavers.