Select Committee on Health Minutes of Evidence

Examination of Witnesses (Questions 60-79)



  60. But they might vote for something which NHS managers do not like.
  (Mr Milburn) They may well do that. Well is that not a risk in the public service? The thing is that I am accountable, I come here or I go to Parliament. People working in the public service, particularly people who are leading the public services locally, have to be accountable too. In the end what I think about this is that what is so interesting about the models you look at elsewhere in Europe is that at precisely the same time in 1948 when we were creating a nationalised industry in the UK, elsewhere centre-left governments, left-wing governments favoured community ownership rather than state ownership. That is what happened. People care deeply in the local community about their local asset, the local hospital, the local service. Maybe it is just time that we allowed local voices in the local community to have a greater say.

John Austin

  61. You are preaching to some old "co-operators" over here and young ones.
  (Mr Milburn) What is interesting about this is that organisations as diverse as the Co-operative Movement on the one side, who are broadly on the left, and the Institute of Directors, who are probably broadly on the right, are interested in this idea.

  62. It depends where the control is.
  (Mr Milburn) Absolutely.

  63. If you do take foundation hospitals outside the bureaucracy of the capital control system, it could mean that they would be free from a requirement to go down the PFI route.
  (Mr Milburn) I suppose it would be for them to determine.
  (Mr Douglas) It would be for them.

Julia Drown

  64. The idea behind a foundation hospital seems to be that freedom allows good hospitals to do better, but freedom allows bad hospitals to do worse. Where is the evidence for that?
  (Mr Milburn) Elsewhere in Europe.

  65. Which particular country?
  (Mr Milburn) Spain, Sweden, Denmark.

  66. So the worst hospitals went worse.
  (Mr Milburn) Yes. The best hospitals went better.

  67. And the worst hospitals went worse with freedoms?
  (Mr Milburn) I do not know.

  68. Where is the evidence that the worst hospitals go worse if they are given the same freedoms?
  (Mr Milburn) You can probably see within the arrangements we have that where there is a problem in a NHS hospital under existing circumstances some get better but some do not. Some are consistently bad.

  69. And is it the ones which are given the freedoms which get worse?
  (Mr Milburn) They do not have freedoms.

  70. So where is the evidence that bad hospitals do worse if they are given the same freedoms which make the best hospitals do better?
  (Mr Milburn) To turn it round slightly, what I have to think about, back to the issue of accountability, is that my accountability has to be for the overall performance of the system. Where I feel comfortable in the overall performance of the system is in those parts of it which are doing well.

  71. At any particular moment in time?
  (Mr Milburn) Measured over time because we do, we measure over time. For the first time, that is what we are doing. We never had the means to do that and we are doing it now. That is what I find slightly odd about the argument that somehow or other this is a free-for-all or whatever, because it is not. What you are doing is measuring performance over time. This year when we do the star ratings next month you will, the public will, everybody will be able to compare like with like. They will be able to look at a hospital as it was last year and a hospital as it is this year. The early evidence suggests that from the star ratings last year, where we zero star rated the ones which were really bad and which were consistently poor performers, a very small minority had consistently had problems and where we brought in outside help—in your formulation less freedom—performances improved. I went to Medway which was a hospital —

  72. I do not need the example of Medway.
  (Mr Milburn) You were asking for examples a moment ago.

  73. You did not give Medway more freedoms, did you? I want to know the evidence where more freedoms produced a worse performance.
  (Mr Milburn) I can give you evidence for where more intervention has produced better performance.

  74. That is not what I asked for. Your solution for poor performing trusts is to change the management in terms of franchising.
  (Mr Milburn) I think there are gradations of response. This is why you need to be quite specific and sophisticated about it really. Overall performance in the NHS. You have a group of organisations which are doing really, really well and my response to that, based on evidence which I have seen elsewhere, is that they should be liberated and allowed to get on with it. You have a group of organisations which sits somewhere in the middle, which is probably the majority—I do not know what the numbers are but 60 to 70 per cent.

  75. They are not being given freedoms either.
  (Mr Milburn) You have to give them some freedoms actually. You probably have to give the two-stars something, which is the way we categorise these things. For example, we are thinking about how big an access to money, what the conditions are, what strings are attached to their bids for money, what the monitoring for them might look like as distinct from the monitoring for a one-star or a zero-star. In the case of a zero-star we have applied quite acute and specific judgements. Not every zero star trust went through the franchising process. Some did and some did not. We applied a judgement. The ones where we actually thought the existing management have the capability of turning it round or, for example since we published the star rating it is on the up, then nothing happened. With some, that is right, we franchised the management.

  76. Picking up the specifics of pay, John was talking about the two trusts next to each other, one of whom, if it is a foundation hospital, could have more flexibility, more over what you are discussing than other hospitals would do. If you recognise, as you seem to, that trusts sometimes need to have the flexibility to recruit people, do you recognise that if you give any extra flexibility to a foundation hospital which has another near by, you are necessarily giving them an additional lever to bring in staff which necessarily prejudices the ability of the non-foundation trust to recruit?
  (Mr Milburn) No, I do not really accept that. A foundation trust, just like an NHS foundation trust, just like any other NHS trust, will have a pot of money which will have to earn and increasingly under the regime we are planning, certainly for elective surgery —

  77. If it is a benefit for one it has to be a disbenefit for the next, does it not?
  (Mr Milburn) They will have to determine how to use their limited pot of cash. They will always have a limited pot of cash, just like any organisation. If, for example, they decide in trust A to spend more on childcare than in trust B, then presumably in trust A they have less money to spend on something else.

  78. That would be a freedom to all; all trusts have that freedom already.
  (Mr Milburn) Yes; absolutely.

  79. If you are giving any benefit to foundation hospitals, it is necessarily going to be a disbenefit to non-foundation hospitals.
  (Mr Milburn) It depends how they spend their money. They may decide that the best thing to do is to spend their money on more equipment.


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