NHS Funding: the economics of Bedlam

It is daft that the government penalises local hospitals both when theyunderspend and when they overspend.

If you want to give hospital trusts an incentive to use money wisely,allowing them to keep at least some of any underspend and re-invest it inlocal health care would make far more sense.

I make this comment because NHS North West confirmed this week that it has underspent on its predicted 2006/07 budget by £161 million. It is expected that this money will be clawed back by the treasury.

NHS trusts are in a catch 22 situation: overspend and they get fined, underspend and the money gets clawed back. Hence they have little incentive to save money.

To provide good healthcare in Cumbria the government needs to do more than making money available and then clawing it back. Our local health service also needs the right environment in which we can recruit and keep doctors, nurses and other key staff.

This means we have to improve morale among health staff and take, not duck, the decisions which demonstrate that our local hospitals have a future. I hope the recent decision to postpone the "Great debate" on Cumbria's NHS to later in the year is the last time a decision on the future of the West Cumberland and our other local hospitals is put off. We need to demonstrate that plans are in place to provide a positive future for all our local hospitals.