Jacqui Smith MP

Healthy Economies, Healthy People Conference

Last July the Government published a Programme of Action to tackle the persistent and widening health inequalities in our population. For the first time ever we took a detailed look at differences in health which different groups of people and areas in England can expect. We analysed the factors involved. And we drew up a concerted programme of action across Government, its agencies and other public bodies to tackle the underlying and avoidable causes of health inequalities.

As John Reid said when he launched the Programme of Action, often minor changes in the way all sorts of services are provided, taken together, can transform the health of individuals and raise the hope of making today's inequalities a thing of the past.

Joint working between the NHS and the Regional Development Agencies can help make such changes. The spending power of the NHS is considerable. Linking NHS investment with economic development policies, particularly in disadvantaged areas - if properly done - will strengthen local and regional economies, and lead to more prosperous and healthier communities. This in turn will help maintain a strong economy. We cannot let such an opportunity go by.

I am therefore delighted to see people from the health service and from the Regional Development Agencies coming together to look at how this might be done - building on some excellent work already underway.

A stark statistic shows what a difference your place of birth can make. Statistics released this month show average life expectancy at birth for men in Manchester was 71 years, compared, for example, with 79.5 years in Rutland. A woman born in Manchester can expect to live nearly seven years less than if she were born in Kensington and Chelsea. The problem is not, of course, confined to Manchester. There are over 70 local authority areas in the worst twenty per cent for lowest life expectancy. What they share is low levels of income and low levels of employment.

There may be number of factors in play. But it is clear that there is a relationship between economic well-being and health. That is why the Government's regional policy is important. We must build strong regional economies in order to achieve prosperity for all - and to tackle the economic inequality that too often leads to health inequality as well.

The RDAs play a vital role in this work, working with partners. They are the strategic leaders of economic development in their regions. Through their regional economic strategies they are working to build on the strengths of their regions and to correct weaknesses.

RDAs are taking action which impacts across the range of key drivers for regional prosperity.

• Promoting enterprise and innovation.
  
• Encouraging the promotion of transport links and broadband
  
• Taking forward work to build skills and employment.
  
• Helping the development of key business sectors and clusters.
  

Through these activities, RDAs will impact on joblessness, low skills, poor employment prospects and life choices of people in their regions - all shown to be contributors to inequality, social exclusion and ill-health. RDAs are working to raise levels of prosperity - and by doing so acting on the wider determinants of health.

The RDAs will receive funding of £1.8 billion this year, rising to £2 billion in 2005-6. They need to use this both strategically and through tightly focused projects to lever in resources and influence of other partners if they are to deliver change.

Strategically, by setting regional goals and brigading support and resources behind these. Tightly focused, by supporting activities which will further their key purposes. The RDAs cannot - and should not - support every aspect of the Health Inequalities programme. But there are some key areas of common interest.

The NHS itself is a significant driver of economic development. The NHS, like other public sector organisations, buys a huge amount of goods and services. I am pleased that RDAs and the NHS are starting to talk about how NHS contracts can be made as accessible as possible to a wider range of suppliers, particularly to SMEs and social enterprises.

We need to sharpen up our act on procurement. Acting as an intelligent customer, government purchasing can provide a powerful incentive for business to develop new products, processes and services. Public Sector procurement is rightly made on the basis of good value for money, but both purchasers and suppliers recognise that the current system can be improved in the interests of suppliers and customers alike.

By ensuring potential contracts are accessible to all suppliers, including SMEs and social enterprises, the NHS should benefit from increased competition and better value for money. At the same time, the NHS will enhance business activity and competitiveness, leading to greater prosperity and ultimately to better levels of health.

Why consider SMEs and social enterprises?

Small firms represent a powerful engine for economic growth. They can also bring to the market a number of advantages. For example better levels of service, innovative business solutions, flexibility and responsiveness. All these factors can lead to better value for money in the longer term.

The social enterprise sector is small but is already demonstrating it can deliver good quality public services, across a wide range of sectors, while contributing positively to regeneration. In the care field, for example, we need more enterprises willing and able to put the independence and demands of those they care for at the centre of their business planning - a clear area of advantage for the social enterprise sector.

Working with firms who operate locally can bring real benefits to purchasers in terms of better service delivery and lower costs. And indeed particular benefit can be gained from the development of clusters of related businesses and suppliers across regions and sub-regions.

But let us not forget also that, for example, a small business in Cornwall may be able to meet needs in Newcastle. To obtain best value we do need to think carefully about widening the range of potential suppliers. But it remains vital that we judge businesses on what they do rather than whether they are large or small, local or multi-national, or motivated by profit or not.

At the national level we are doing a number of things to open up procurement practice and to help SMEs and social enterprises compete successfully.

The Small Business Service is working with its public sector partners to help small businesses enter the public sector market place. Work includes advice on tendering for contracts, including Government contracts, and guidance for public purchasers, highlighting barriers which stop small businesses competing for government contracts.

On 29 October, Nigel Griffiths launched "Public Procurement: a toolkit for social enterprise". This is the first and only guidance aimed specifically at social enterprise to distil good practice for them in winning public sector business.

I know the RDAs are also working to help the competitiveness of local suppliers.

The North West Development Agency is helping fund the NW Suppliers Bureau, which helps SMEs and other organisations access local NHS contracts and understand NHS purchasing requirements.

The East Midlands Development Agency is helping establish Social Enterprise East Midlands to create an environment in the region where social enterprises can flourish. As part of its core work programme it works with Primary Care Trusts to identify where social enterprises can help deliver health objectives.

There is another issue that is crucial to increasing prosperity - and where partnership working with the NHS and the wider health sector is important. That is innovation. Innovation is one of the key drivers for productivity. It leads to better jobs, and a more prosperous country. Innovative products and services can also help the public sector deliver improvements in service provision and better value for money.

We have some excellent examples of innovation in this country. But we must embed a culture of innovation if we are to prosper.

The Government has put in place a number of incentives to encourage firms to innovate and to encourage commercial exploitation of public sector research. And I am pleased that the NHS and RDAs are also increasingly working together to encourage spin-offs from NHS research and development.

As Health Minister I visited Tunstall - a care technology firm in Yorkshire. They are specialists in home care technology such as community telemedicine. This allows patients' vital signs to be monitored remotely in the home - supporting medical diagnosis and management of their condition. Here is a successful firm, creating wealth and employment. At the same time helping efficient use of NHS resources by freeing up beds. I would like to see our national and regional policies for business support and knowledge transfer result in more such successful firms.

Industry commits vast sums to bioscience research in the UK. Besides our established pharmaceutical companies we have biotechnology companies of various types and companies engaged in tissue engineering, advanced diagnostics and medical imaging. All RDAs are prioritising investment in these medical technologies of the future, but a key driver for such companies will be access to first-class clinical trial facilities.

Last week the Prime Minister announced a review, chaired by Sir John Pattison, head of R&D at the Department of Health, looking at ways of improving NHS clinical research and trials potential. There should be increased scope for partnership working, including at regional level, in this critical area arising out of this work.

And Health Ministers launched the Healthcare Industry Task Force on 27 October, to examine how to make the environment for this important sector more favourable across the UK. One issue for the Task Force is how to reform NHS purchasing of medical equipment to both promote business innovation and improve the economics of healthcare.

Innovation is also about business processes. And I have been interested to hear about NHS Estates' initiative with the construction industry "ProCure21". This aims to bring about improvements in construction procurement and the construction delivery process resulting in health care facilities that meet the needs of staff, patients and visitors. It also aims to make sure there is flexibility in capacity and use of these facilities in the future. Here again is a double pay-off - productivity improvements in construction alongside improvements in health care facilities.

Whatever your region, the NHS will be your largest employer. I also welcome the way the health sector and RDAs are starting to work together on key skills issues.

For example, the East of England Development Agency is tackling identified skills shortages at NVQ2 level in the health and social care sector. And working with NHS partners to promote work force development at the higher professional level.

During a visit yesterday to the South East Development Agency, they talked to me about their work with local health partners to build the skills escalator. Where skills are at a premium in the local economy, there is a clear benefit both to the NHS and to other employers of ensuring that the NHS can grow and develop skills within the organisation.

I welcome the growing partnership between the RDAs and the NHS. You each have distinct roles. But working together on issues of common interest can help each achieve their goals. Effective partnership working is the way in which we will all achieve our objectives - whether to build world-class health services, to tackle health inequalities or to build economic prosperity throughout our regions. Social justice and economic prosperity are two sides of the same coin - this conference and the partnerships it represents are evidence of that in practice. I commend you for your efforts so far and the work that is to come.