Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 40 - 59)



Mr Bacon

  40. Mr Crisp, I wanted to ask you about the Report but there are a couple of questions I would like to ask you first. In my area in Norfolk, we have just had the new Norfolk and Norwich Hospital opened, one of the biggest hospitals in the country. Could you tell us, because there are a lot of people in Norfolk who want to know the answer to this question, how could the NHS allow one of the largest hospitals in the country to be built without a road to get to it?
  (Mr Crisp) I am not sure that that is what this Committee meeting is about and certainly I have not briefed myself—

  41. I just wanted to ask you that question first. It seems to me that if you were the Chief Executive of Tesco's and you were building a new supermarket, you would want to be sure that the customers were able to get to your new supermarket.
  (Mr Crisp) I am sure that we can provide you with a perfectly reasonable answer to that through the normal channels but I am not in a position to say today.

  Chairman: Let's get back on the straight and narrow path.

  42. It is a matter of great interest to everybody in Norfolk because nobody understands how it could have happened. I will come on to the Report but, first, do you agree with Stuart Emslie's assessment of the amount of fraud going on in the NHS?
  (Mr Crisp) Once again you are referring to something that is not in front of me, but I think you are referring to a newspaper article reporting comments made by Stuart Emslie at a private seminar about the maximum potential losses that might be happening if all of these things were going wrong. Is that the one you are talking about? His presentation was that if all these things are going wrong, then up to a maximum of whatever the figure was there may be recoverable loss here, not all of which will be recoverable because nobody should have the illusion that any organisation operates without losses.

  43. He is talking about losses of 16 to 20 per cent of the budget, £7 to £10 billion. What I am asking you is do you agree with his estimate?
  (Mr Crisp) His presentation was merely saying this is the sort of potential size, it was not precise, and I therefore do not have anything to agree or disagree with.

  Chairman: Let's stop this now and get back to the Report.

  44. I would like to turn to page 11 of the Report and follow up a question Mr Williams asked about confidentiality clauses and the guidelines which were issued some years after this Committee said it did not like confidentiality clauses, indeed it was strongly opposed to them. It says in the Report, to help you, that the guidance was issued in 1999—HSC1999/198 is the reference on page 11. So I repeat Mr Williams' question, which you did not answer, why did it take five years to issue the guidance?
  (Mr Crisp) Can I ask Mr Foster to reply as he has the details to hand.
  (Mr Foster) We have now had time to check that and, in fact, the guidance that was issued in 1999 replaced previous guidance from 1995 which in turn replaced guidance from 1994, so this was not the first time guidance had been issued but was simply updating prior information. Can I also say on the subject of confidentiality that any employing organisation engaged in potentially serious disciplinary procedures would have to take external advice to protect itself in future. Whilst, as Mr Crisp has said, we all accept that there is no room for gagging clauses, nonetheless there are certain arrangements relating to compromise agreements which are effectively enabling the body which is charged with public funds to limit its liabilities in case of potential future legal action and it is under some circumstances appropriate, therefore, to limit what might be said so that it could not prejudice future legal action. I am trying to draw a distinction between a gagging clause which prevents information which should be in the public domain from being so, and certain other quite tight circumstances where there is potential legal action or where there is potential commercial involvement where it is appropriate to be clear what can and cannot be said in the future.

  45. Is that why it says on page 11: "The NHS Executive agreed with the Committee that as a matter of general principle, confidentiality clauses should play no part in severance arrangements"? Are you talking about the exceptions to that general principle?
  (Mr Foster) I am saying that there are some extremely good evidence-based exceptions.

  46. As a proportion of the total number of severance arrangements, how often would these exceptions crop up?
  (Mr Foster) I would not be in a position to even make a reasonable estimate on that, I am afraid.

  47. How do you know that it is not happening all the time then?
  (Mr Crisp) My understanding is that we have taken the same position as you have on this. I think you have recognised in what you have said—and Mr Williams is nodding—that there are certain very exceptional exceptions but that is very rare and I am not aware of any.

  48. It mostly does not happen?
  (Mr Crisp) It does not apply in any of those cases.

  49. Let's pursue this question, forgetting severance for a minute, of confidentiality agreements generally. You have issued guidance, it is still on going on, and yet there are people out there who are not aware that they are not supposed to have confidentiality agreements. You are not interested in renationalising contracts, as you call it, you just hope that they follow the guidance. What mechanisms do you have to ensure that when you issue guidance they do something about following it?
  (Mr Crisp) The answer is that we issue a lot of guidance, as you will be aware, and indeed we are trying to cut down on some of that and issue only that which is absolutely necessary. Every one of these trusts that we are talking about is a big organisation and they should have a competent HR director. If I were a Chief Executive who was not aware of such confidentiality clauses, I would expect to be getting good professional advice, if I was at the point of sacking somebody, through my HR director and through the lawyers. What you will find in each of these cases—and it is either three where there are confidentiality clauses or two where there are confidentiality clauses, I cannot remember—they took legal advice and they took HR advice. That seems to be entirely appropriate, rather than amateur general managers, if I can put it like that, looking at a book of rules, we should be looking to professionals to support us in making these decisions.

  50. This may be a question for Mr Foster because it is about Mr Colin Jones who was sacked in December as the Chief Executive of the Nuffield Orthopaedic Centre NHS Trust. In his NHS career how much money in total has Mr Jones been paid in compensation?
  (Mr Crisp) Once again I think this is a separate question. There was nothing to do with waiting lists involved in that particular case and I do not have the details to hand concerning Mr Jones' case.

  51. But it is directly related to the legal advice given to the relevant trust.
  (Mr Crisp) It may be.

  52. Is it correct that the first payment to Mr Jones when he was sacked as Finance Director of the Oxfordshire Health Authority was declared by the District Auditor to be ultra vires?
  (Mr Crisp) I do not know and, again, this is an issue which can be picked up in the normal way as a question. It is an issue that we will be looking at because it has been drawn to our attention.

  53. He got £150,000 for that which if it were ultra vires they would be able to claw back.
  (Mr Crisp) It depends whether you want to talk about waiting lists or Mr Jones.

  54. You said that this did not involve inappropriate adjustments to waiting lists.
  (Mr Crisp) Exactly.

  Chairman: I think you will have to pursue this elsewhere.[3]

  55. I just say this, Mr Crisp, this individual got £300,000 of taxpayers' money, he got £300,000 for being sacked twice by the organisation of which you are the Chief Executive, and I would be interested to know what you think about it.
  (Mr Crisp) Can I restate what I said at the beginning which is the issues that we are raising—and that may or may not be another one, so let us look at it—are extremely serious and they are extremely serious not just for patients but also because they damage the reputation of the very many, very good, very committed people of high integrity working in the NHS. That is why I am even more serious than you are about making sure we operate to the highest standards. That is why we will have a Management Code of Conduct and that is why we will deal much more rigorously with these issues in the future. One of the things I want to reassure your Committee of is that we have learned the lessons that have been drawn out for us from the NAO Report. Two of these cases are continuing, as you are aware, and we are making sure that we are dealing with those in a way that we have not necessarily dealt with cases in the past.

  56. Could I ask you about the Management Code of Conduct. You said that once it has been issued that people in breach of it, and therefore disciplined and dismissed, cannot be re-employed within the NHS as managers, you were very careful to say that. Are you saying, therefore, that there are plenty of other ways people could be, despite their track record, re-employed in the NHS?
  (Mr Crisp) We are in a position where the NHS employs a huge range of different staff. There are two points here. Firstly, we are going to have to work it through very carefully to make sure we can make it stick for managers because there is an issue here about how long something would need to stay in place, but I do think it is perfectly appropriate that in due course somebody might be re-appointed in a completely different role, and I do not think we should preclude that in future.

  57. The phrase "Management Code of Conduct" sounds like the sort of thing you would expect any employer to have, but why is it that you are just thinking about having one?
  (Mr Crisp) Very few employers actually have a detailed Management Code of Conduct. We have statements about behaviour but when I am talking about Management Code of Conduct, I am talking about something that is mandatory and that we expect people to sign up to, that they will do X, Y and Z and they will not do A, B and C, and that in signing up to that as part of their terms of contract and so on then that is part of the agreement that is made between the employer and the employee. I do not know how widespread that is in other industries. It is certainly an important issue and one which we are—We have drafts.

  58. Is there any reason why you could not have a little contract compliance unit that ensured that the contracts of senior managers complied with your guidelines or code, whatever you want to call them, before they were allowed to be signed by NHS trusts? You are the NHS Chief Executive, could you not make that happen?
  (Mr Crisp) This is one of the issues that we are looking at.

  Mr Bacon: Thank you.

Mr Steinberg

  59. Moving on to a slightly different track from that of my colleague, a different route. The root of the whole problem is long waiting lists, is it not?
  (Mr Crisp) It is part of the root, yes, absolutely.

3   Ref Chairman's closing remark. Ev 22-23, Appendix 1. Back

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