Select Committee on Health Memoranda

MEMORANDUM

Memorandum by the Department of Health

1.3  Winter Pressures

Could the Department give a list of the allocations made to alleviate winter pressures in 1998-99, and an indication of funds likely to be so allocated in 1999-2000 and when they will be allocated?

1998-99

  1.  As part of the waiting list initiative £65 million was made available to the NHS in England in July 1998 to improve "whole systems" working and support the drive on waiting lists. Funds were targeted on primary and community care and mental health. They were aimed primarily at preventing or reducing the need for hospital admissions and supporting more timely discharge of patients through rehabilitation and recuperation schemes.

  2.  A further £250 million was made available for the NHS in winter 1998-99, of which £209 million was for the NHS in England. The bulk of this (£159 million) was allocated to health authorities through Regional Offices in November on a pro rata basis in line with 1998-99 Health Authority general allocations. The remaining £50 million was held back as required to provide a national contingency fund to deal with particular local pressure points during the winter.

  3.  The purpose of the additional £159 million was to:

—  help health authorities, working closely with social services, to manage emergency admissions and maximise bed availability. In particular they were asked to consider making use of s28a funding for joint NHS/SSD schemes building on the successful experience of winter 1997-98 as well as to agree with partner agencies contingency plans for coping with unexpected fluctuation in demand.

  4.  In January £44 million from the National Contingency Fund was made available for immediate use to Health Authorities, working closely with social services. The funds were released for additional beds, nurses and schemes to address particular pressure points in the system. This followed the sharp surge in emergency pressure over the New Year period.

1999-2000

  5. and 6.  The Government allocated additional monies to cover winter pressures in 1997-98 and 1998-99 as contingency measures to supplement the resources which had been set by the previous Government. There is no intention to provide future additional annual allocations for winter pressures. As a result of the CSR settlement, Health Authorities will be in a position to use their increased general allocations to plan more effectively to meet the health and social care needs of their populations including the provision of services throughout the winter months.

  7.  Table 1.3.1 provides details of how Winter Pressures Money and Winter Pressure Contingency Money was allocated to HAs.

Table 1.3.1

WINTER PRESSURES AND WINTER PRESSURE CONTINGENCY

Health Authority	Winter Pressures	Winter Pressure Contingency
Avon HA	2,984	884
Barking & Havering HA	1,321	550
Barnet HA	1,080	110
Barnsley HA	764	432
Bedfordshire HA	1,558	477
Berkshire HA	2,157	350
Bexley & Greenwich HA	1,547	207
Birmingham HA	3,515	1,690
Bradford HA	1,592	49
Brent & Harrow HA	1,661	580
Bromley HA	936	110
Buckinghamshire HA	1,832	380
Bury & Rochdale HA	1,277	200
Calderdale & Kirklees HA	1,896	620
Cambridge & Huntingdon HA	1,183	418
Camden & Islington HA	1,749	315
Cornwall & Isles of Scilly	1,580	467
County Durham FHSA	2,076	150
Coventry HA	991	258
Croydon HA	1,061	129
Doncaster HA	964	387
Dorset HA	2,275	672
Dudley HA	934	245
Ealing H'smith & Hounslow	2,498	809
E & N Hertfordshire HA	1,427	391
East Kent HA	2,009	469
East Lancashire HA	1,758	372
East London & The City HA	2,548	734
East Norfolk HA	1,878	578
East Riding HA	1,818	243
East Surrey HA	1,271	308
E Sussex, B'ton & Hove HA	2,587	572
Enfield & Haringey HA	1,727	834
Gateshead & S Tyneside HA	1,303	50
Gloucestershire HA	1,685	498
Herefordshire HA	501	270
Hillingdon HA	821	50
Isle of Wight HA	472	118
Kensington C'sea W'minstr	1,474	331
Kingston & Richmond HA	1,087	263
Lambeth, S'wark & L'sham	3,073	1,107
Leeds HA	2,361	200
Leicestershire HA	2,632	739
Lincolnshire HA	1,935	432
Liverpool HA	1,763	735
Manchester HA	1,738	323
Merton Sutton & W'w'th HA	2,239	46
Morecambe Bay HA	1,054	340
Newcastle & N Tyneside	1,728	670
North & East Devon HA	1,537	454
North & Mid Hampshire HA	1,497	270
North Cheshire HA	1,054	200
North Cumbria HA	1,005	50
North Derbyshire HA	1,166	324
North Essex HA	2,572	623
North Nottinghamshire HA	1,214	376
North Staffordshire HA	1,540	722
North West Anglia HA	1,250	337
North West Lancashire HA	1,628	341
North Yorkshire HA	2,213	187
Northamptonshire HA	1,755	570
Northumberland HA	984	41
Nottingham HA	1,991	519
Oxfordshire HA	1,629	970
Portsmouth & SE Hants HA	1,672	534
Redbridge & W'm Forest HA	1,606	1,025
Rotherham HA	833	403
Salford & Trafford HA	1,557	226
Sandwell HA	1,016	630
Sefton HA	1,013	100
Sheffield HA	1,883	458
Shropshire HA	1,238	415
Solihull HA	582	302
Somerset HA	1,465	433
South & West Devon HA	1,950	576
South Cheshire HA	2,034	96
South Derbyshire HA	1,711	384
South Essex HA	2,105	915
South Humber HA	1,011	346
South Lancashire HA	961	112
South Staffordshire HA	1,663	600
Southampton & SW Hants HA	1,636	1,000
St Helen's & Knowsley HA	1,127	210
Stockport HA	876	90
Suffolk HA	1,951	566
Sunderland HA	1,026	29
Tees HA	1,869	311
Wakefield HA	1,057	0
Walsall HA	835	550
Warwickshire HA	1,517	480
West Hertfordshire HA	1,632	395
West Kent HA	2,824	662
West Pennine HA	1,567	337
West Surrey HA	1,906	450
West Sussex HA	2,376	547
Wigan & Bolton HA	1,897	578
Wiltshire HA	1,747	516
Wirral HA	1,137	1,740
Wolverhampton HA	820	346
Worcestershire HA	1,547	300
	159,000	43,808

1.4  Special Allocations

Could the Department list any other special allocations and likely allocations in 1999-2000 not covered above, and indicate any likely allocations in 2000-01?

  1.  At this time there are no plans to award any other special allocations in either 1999-2000 or 2000-01.

1.5  "Change Programme"

Could the Department identify the sums allocated to the many "change programmes" started by this government, for example PCGs? What are the additional costs to the NHS of having the Commission for Health Improvement and other inspectors and regulators? What is the expected "regulatory burden"? Could the Department give an estimate of expected costs and benefits of IT investment?

  1.  The Government is committed to investing substantial additional resources to the NHS and PSS to support the modernisation and reform programme. Over the next three years the NHS will receive the biggest cash injection in its history providing the means to deliver change. This includes £5 billion from the NHS Modernisation Fund which is being ring-fenced and targeted to deliver improvements in services. Details of how resources from the fund have been allocated to policy programmes are set out in the response to Question 1.2.

PCGs

  2.  In 1998-99 we allocated £31 million to Health Authorities to assist with the setting up of Primary Care Groups (PCGs). This was funded from savings released by the cancellation of the 8th wave of General Practitioner Fundholding (GPFH). It was allocated in two tranches:

—  £22 million in May 1998, allocated on a weighted basis, to take account, in particular, of the distribution of GP fundholding practices locally. After discussion with national representative groups the allocation assumed that GP fundholders would generally be able and willing to release to their Health Authority a proportion of their practice fund management resources to assist the transition to PCGs. The allocation was also skewed by the incorporation of funding to support the 40 GP Commissioning Group Pilots. These pilots were based on similar principles to PCGs and many have evolved into PCGs, resulting in 32 PCGs based on Commissioning Pilot's boundaries or those of their localities.

—  £9 million in November 1998, allocated on the basis of £15,000 per PCG with a population of less than 75,000, and £20,000 per PCG whose population was 75,000 or greater.

  3.  These allocations were funded from monies previously earmarked to support fundholding. Savings were achieved by postponing the eighth wave of preparatory fundholders and from a review of the level of management allowance for existing fundholders being funded from existing resources.

  4.  In 1999-2000, HAs have been allocated £135 million towards the costs of running PCGs. A further £16 million has been allocated towards the costs of achieving full closure of the fundholding scheme (plus a further £3 million towards the costs of any redundancies). In 2000-01, the £16 million closure budget will be added to HAs' unified budgets to provide further support for the costs of running PCGs and Primary Care Trusts. This will deliver the £3 per head commitment set out in the White Paper The new NHS.

Commission for Health Improvement

Costs

  5.  In A First Class Service, it was made clear that, initially, the Commission for Health Improvement will be funded centrally. This will allow the Commission time to develop its role and also to demonstrate its effectiveness in helping the NHS to improve quality and tackle clinical service problems. It also means that the costs of the Commission's developmental stage will not be subsidised by individual NHS organisations.

  6.  Subject to Parliamentary approval, the Commission will be established in the latter part of 1999. Part year funding of around £3 million has been allocated to support the establishment and organisational development of the Commission to ensure it is able to make a start on its first full year work programme from 1 April 2000. As a planning assumption, it is estimated that full year costs of the Commission will be around £7 million in 2000-01. This includes costs associated with the work of the Clinical Standards Advisory Group which will be subsumed by the Commission.

  7.  More precise costs depend on a number of organisational and operational factors which are unknown at this stage. The Commission will be a new body with a range of important functions supporting the NHS in the drive for quality.

  8.  Some of the work will involve independent, cyclical, reviews of NHS activity to assure and improve the quality of services and to monitor implementation of National Service Frameworks and the take-up of NICE guidance.

  9.  The Commission will also provide independent expertise to help tackle local service problems. Where, despite efforts, an NHS Trust or Primary Care Trust has been unable to resolve problems, it will be able to invite in the Commission to identify the root causes and the action needed to put these right. It will be for the individual Trust, overseen as appropriate by the Health Authority or NHS Executive Regional Office, to implement the Commission's recommendations. Where there are continuing serious concerns about the quality of services or where there is unacceptable delay in taking action, the Secretary of State may send in the Commission to investigate and develop rapid solutions to address these.

  10.  By its nature, the Commission's investigative work will, to some extent, be demand-led. Therefore, it is difficult to predict, in advance, the scale and cost of individual investigations which will vary according to differing local circumstances.

  11.  In the longer term, the Commission will move towards a system where more of its work is directly funded locally (as for example with the Audit Commission). The Secretary of State will be able to determine the charges made by the Commission for Health Improvement. The Commission will also be placed under a general duty for the effective, efficient and economic discharge of its functions.

Burden on NHS Organisations

  12.  The Commission for Health Improvement is not a regulatory body and cannot impose sanctions on NHS bodies. Implementation of its recommendations will be the responsibility of the organisation concerned with action overseen, as appropriate, by the Health Authority or NHS Executive Regional Office. Where there is failure to act or unreasonable delay, the Secretary of State may direct the NHS body to implement the Commission's recommendations.

  13.  A key task will be to ensure that the assessment and audit activities of the various bodies involved in external review of the NHS are well co-ordinated to secure maximum benefit and to avoid unnecessary overlap and duplication of effort. The need for the Commission to work effectively with the Audit Commission has already been identified—for example, the Commission's systematic service reviews of the implementation of National Service Frameworks and related Audit Commission VFM studies. The Commission will also need to co-ordinate its activities with a range of other bodies, such as the various professional bodies and the Health and Safety Executive, to minimise the associated administrative and financial costs to the NHS.

Costs and Benefits of IT Investment

  14.  The Strategy described in the White Paper "Information for Health" commits the NHS to a strategic path which will deliver:

—  lifelong electronic health records for every person in the country;

—  round-the-clock on-line access to patient records and information about best clinical practice, for all NHS clinicians;

—  genuinely seamless care for patients through GPs, hospitals and community services sharing information across the NHS information highway;

—  fast and convenient public access to information and care through on-line information services and telemedicine;

—  the effective use of NHS resources by providing health planners and managers with the information they need.

  15.  These benefits will be secured by:

—  the clear vision and direction set out in "Information for Health" (IfH);

—  the production of Local Implementation Strategies which will deliver the objectives and benefits of IfH taking due account of local health needs and circumstances;

—  the creation of the Modernisation Fund to augment existing resources allocated to IM&T and to enable the Local Implementation Strategies to be achieved;

—  effective use of the "Performance and Programme Management Framework" to ensure that all the necessary controls are in place and are used.

  16.  The Department firmly believes that the Strategy will impact significantly to improve treatment outcomes for patients. It only has any purpose so long as that is our objective. It is predicted to deliver better, quicker, more efficient and effective information handling processes. It will obviously not be possible to attribute particular clinical improvements to individual projects, though there will be condition-specific strands within the overall Strategy.

  17.  Estimating future costs of a Strategy as ambitious and long-term as this can not be done with enormous precision. The pace of technological developments and other uncertainties and unpredictable factors will inevitably mean that some projects proceed quicker or more slowly than expected at the outset. The key is to ensure that this process is properly controlled, as we are committed that it shall be, through structured management disciplines. Investment will come partly from earmarked sums from the department's Modernisation Fund for specific aspects. Current plans assume this will be in excess of £1 billion over the lifetime of the Strategy, but precise sums for each stage will be confirmed as work progresses. In addition much of the local implementation cost, as in the past, will continue to be borne out of Health Authorities' general allocations.

1.6  Millennium Bug

Could the Department explain how the "Year 2000" issue is likely to cost the NHS in terms of modification or replacement of:

(i)  computer and information technology;

(ii)  medical and scientific equipment;

(iii)  engineering plant and associated systems; and

(iv)  cost of staffing arrangements to cover the interim period.

  1.  The latest available information relating to the estimated costs of the Year 2000 issue in the NHS has been provided by all NHS organisations as at 31 March 1999 and covers the 3 year period April 1999 to March 2002.

  2.  The information collected through NHS monitoring returns does not exactly match the categories requested by the Committee. The first three categories represents a match to those requested but there are difficulties in accurately mapping the remainder. Table 1.6.1 provides details of the costs as collected by the Department.

Table 1.6.1

"YEAR 2000" COSTS

	£m
Information Management & Technology Systems	134.3
Medical Devices	46.3
Estates Systems	34.3
Operational Continuity (including all staff costs)	57.6
General Practice Systems and Devices	35.2
	307.7

  3.  As well as containing staffing costs over the interim period, the Operational Continuity category also includes post-millennium re-commissioning costs, contingency stocks, purchase and maintenance of standby equipment systems and any additional costs associated with assuring continuity of primary care (but not GP systems) services.

  4.  General Practice Systems and Devices includes costs incurred by Health Authorities for computer systems, estates systems and medical devices in GP practices. This is therefore an amalgam of the first three categories.

  5.  The investment in achieving NHS Year 2000 readiness will have a number of important benefits beyond that particular goal. Prior investment appraisal will lead to a better understanding of how these information technology and information systems contribute to the business of healthcare.

  6.  It is not just investment in information technology, but where it is, software and equipment are being reviewed and upgraded to the latest versions, where necessary, leading to greater reliability, more easily maintained systems and improved fitness for purpose, enabling the NHS to do a better job.

  7.  Inventories of equipment have now been completed and will continue to be maintained for other purposes, leading to better control and reduced risk.

  8.  The work has highlighted the need for efficient communications, and the vital importance of being clear on roles and responsibilities. There are now improved contingency arrangements, based on sound risk analysis, and better emergency planning, going across sectors, such as health and social services, and the three emergency services.

  9.  As a result of this Spring Cleaning, the NHS has become leaner and fitter.

1.7  Staffing

Could the Department provide a commentary on any work which is being undertaken, or which will be undertaken, on assessing the impact of policy changes on the future demand for NHS staff?

What work has been done, or will be done, to assess the impact of recent pay awards on the recruitment and retention of health and social services staff?

  1.  In their response to the Health Committee report on future NHS staffing needs the Department acknowledged that current systems of workforce planning in the NHS need improvement, while recognising the difficulties associated with the size and complexity of the NHS, long lead times for professional education and training, and changes in health patterns and healthcare delivery. The Department agreed with the Health Committee's view that a more fundamental review of planning is required and plans to carry out such a review, in full consultation with the range of stakeholders involved, in the course of this financial year. The arrangements for the review, including its remit, membership and timetable will be published shortly.

  2.  The NHS Review Bodies have to take account of recruitment and retention as part of their remit The Review Body for Nursing Staff, Midwives, Health Visitors and Professions Allied to Medicine specifically addressed recruitment and retention issues in nursing this year. They took evidence about the extent of recruitment difficulties, particularly at Grade D. They noted it was a priority to increase the starting rate of pay for newly qualified nurses. As a consequence they recommended the two lowest incremental points be deleted from Grade D pay scales representing an increase of 12 per cent on the current minimum starting salary.

  3.  Pay offers to non-Review Body staff for 1999-2000 have also attempted to address recruitment and retention difficulties in particular areas. An offer has been made to Hospital Pharmacists, which addresses the difficulties faced in recruiting newly qualified pharmacists. They have been offered 3 per cent from 1 April with an additional 2 per cent of the pay bill targeted at junior posts where there will be bigger rises of up to 12 per cent. An offer was made in the Professional Staffs B (PTB) Whitley Council which would give increases of 3 per cent for most PTB staff, and increases of 6.6 per cent for trainee cytology screeners, 7.1 per cent for some Medical Laboratory Scientific Officers (MLSOs) with increases of up to 11.4 per cent for qualified cytology screeners and trainee MLSOs getting up to 26 per cent to deal with serious recruitment and retention problems. In addition the London Weighting Allowance has been increased by 13.5 per cent to address specific problems in London. These offers have not yet been accepted but once the pay round has been completed we plan to undertake a sample survey of trusts to see if the targeted payments redressed the recruitment problem.

  4.  Pay, whilst important, is not the only factor in recruitment and retention and the impact of pay awards needs to be seen in this wider context. For example, employers who demonstrate that they value their staff by offering career progression, continuing professional development, flexible family friendly policies etc have fewer recruitment and retention difficulties.

  5.  The pay awards also sent out a valuable message to current NHS and social services staff, building upon the announcement last summer that money was available within the NHS to fund up to 7,000 more doctors and 1,000 more medical school places and up to 15,000 more nurses and 6,000 extra nurse training places.

  6.  The Department is on track to meet these targets. The Department has just run a £5 million high-profile recruitment campaign aimed at attracting more people into nursing and encouraging qualified nurses and midwives to come back to work in the NHS. Local initiatives are building on the national campaign and are monitoring the number of nurses who return to practice. By 31 March over 53,000 calls had been received by the campaign hotline of which over 5,000 were from qualified nurses asking about returning to nursing. Most of these have been out of nursing for some time and will need refresher training before they resume their nursing career; but at least 650 former nurses had already returned to NHS employment by 30 April. The success of the national and local recruitment in both attracting interest in nursing as a career and in encouraging former nurses to think about resuming their careers is hugely encouraging. The response demonstrates an improving interest in nursing as a career for people of all ages and an increased confidence in the Government's determination to make the NHS a better place to work for all staff.

  7.  Progress towards improved recruitment and retention of NHS professional staff will be measured through the annual NHS workforce censuses. Other measurement tools include the recruitment, retention and vacancies survey undertaken in Spring 1999 by the Government Statistical Service which is currently being analysed and will be published in the summer. The Department has also commissioned a research project to test the public perception of nursing.

  8.  Pay, recruitment and retention for social services staff are not matters for central Government, but are the responsibility of the individual local authorities that employ these staff.

  9.  The Department of Health supported the establishment of the National Training Organisation (NTO) for the social care sector and funds it through the allocation given to the Central Council for Education and Training in Social Work. The NTO is presently reconstructing itself so that it will be led by the various employment interests in social care. One of the tasks of the NTO is to undertake workforce analysis to provide a better understanding of this workforce across the statutory and independent sectors of social care. The NTO will be able to track changes in staffing levels and work with local authority organisations responsible for recruitment, retention and pay to establish the effects on the workforce of various changes in the sector. The Department sees the NTO as playing a key role in establishing the workforce needs of social care and in representing those needs to both employers' bodies and to central Government.

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Prepared 18 October 1999