Examination of Witnesses (Questions 200
- 219)
Thursday 30 October 2003
DR JOHN
REID MP, SIR
NIGEL CRISP
AND MR
RICHARD DOUGLAS
Q200 Dr Taylor: Secretary of State,
can I turn to the independent sector treatment centres. We were
told by your officials that for a period they would be prevented
from recruiting staff from the NHS.
Dr Reid: Yes.
Q201 Dr Taylor: Could we have some
more detail on that because you have already said that capacity
is limited and the reason for using these is because of limited
capacity. I am sure there are places where NHS consultants are
restricted from working as much as they would like to because
of a shortage of theatres, a shortage of beds and a shortage of
staff. Certainly at home I will have some NHS consultants who
want to work in the privately based part of our diagnostic and
treatment centres, so could you explain what the limitations to
the recruitment of NHS staff are, give us a little detail about
them and where the other staff will be coming from?
Dr Reid: I will try and do that,Chairman.
First of all, the idea is to reduce waiting lists, waiting times
and to do it by bringing in additional capacity and, therefore,
output. That is the idea behind this. To some extent that will
be completely new capacity, therefore completely new employers,
completely new employees, completely new facilities. To some extent
it will be relieving stress and strain on an over-stressed NHS
at the moment. We will bring in 250,000 operations and I would
guess that around half of that would be completely new capacity
in operations in the first wave and the other half of it would
be a shift of operations and activity from the NHS, not necessarily
staff, which then frees up those NHS facilities that are either
over-taxed at the moment to do their job better or to do other
things, including operations, accident and emergency, and so on.
The whole purpose is to add capacity, although I accept it may
not be 100% new additional capacity because of that transfer.
Secondly, that principle applies to staff as well and therefore
in the contracts that we have done we have prohibited the poaching
of staff from the National Health Service. This does not mean,
and I hope the Committee has been led to believe, there will never
be any NHS staff who operate in treatment centres, there will
be and may be if there is agreement between the local National
Health Service itself and the new authorities bringing in additional
capacity for treatment centres. For instance if there are operations
that cannot be carried out quickly because of physical constraints
in existing NHS premises and with agreement of all parties the
local National Health Service says, "we would like to carry
out some of these operations in the new treatment centre and we
would therefore like some of the staff to follow on" that
would be permissible because it is not poaching, it will be done
by common agreement and secondly all of the staffs' conditions,
terms and pensions will be as though they are operating in an
NHS theatre. That is the general picture. To what extent might
this occur? In the first wave we are probably going to have in
the order of 80 treatment centres, in round figures it will be
80, maybe 81 or 82, depending how the negotiations go. Of those,
and I have discussed this with others outside this room, I would
like to see the majority inside the NHS itself full stop. For
the vast majority of staff there will obviously be no difference
at all, they will stay. Of the others I would guess out of the
80 less than half would be in the independent sector and of those
perhaps eight or nine, about ten% of the total would involve what
you would call a significant transfer of staff physically, significant
being above 25%, something of that nature because of the constraints
on the NHS. I stress they will remain employees of the National
Health Service, they have full wages and conditions of the National
Health Service and it will be by local agreement. That is as full
as I can give you, does that answer your question?
Q202 Dr Taylor: Yes, partly. Where
will the other staff come from?
Dr Reid: The other staff will
be recruited by the treatment centres themselves, that is partly
why we are paying a premium. In some cases we are paying a premium
above the tariff because we want them to be set up speedily, we
want them to bring in extra capacity, we want in some cases state
of the art technology. For instance I was in the north of England
recently and there was a group of eye surgeons who in Germany
only want top quality for the private sector. They started off
doing 1,800 cataracts for the good people of Derbyshire and we
have reduced the waiting lists up there from about 18 months to
about four months. My view is quite simple, I do not know a millionaire
that would wait four months to have a cataract operation so why
should those people who do not have the money wait for it. I hope
to reduce that to weeks. That capacity is obviously in addition
to anything that is home grown. That would be their task to find
either through recruiting here or by bringing in suitably qualified
staff from outside to add to the capacity we have. I am being
honest with you, it will not be 100% extra capacity because some
of it will be transferred but it will be significant additional
capacity on top of all of the increases we have already put into
the National Health Service in terms of buildings, equipment,
nurses, doctors and finance, all of which you are familiar with.
What we are putting into the NHS is pretty massive.
Q203 Dr Taylor: If an NHS consultant
is working in an independent sector treatment centre does the
new consultant contract control what he or she would be paid?
Dr Reid: If it is an NHS consultant
who has accepted that contract the answer is yes. As you know
we have got a consultant—others may wish to go on to that—contract,
I will not go into the details until somebody wants to raise it
specifically, I think it is an advance forward and it gets the
balance right between the individuality of the consultant and
the corporate needs of the National Health Service. If somebody
goes, I will stand corrected by my officials, and says "yes,
I want that contract", and over the years of course all new
doctors will automatically go on to the contract but there will
be a choice for those who are not, as it were, junior doctors
at the moment, those who go in to it, those who go into the independent
treatment centres to work, yes, they will stay on that and indeed
the rest of the staff will as well. We will go through agenda
for change, the same thing will apply, it will be exactly if you
are employed by the National Health Service in a National Health
Service hospital.
Q204 Dr Taylor: Right. I think the
new contract suggests that consultants will be paid at time and
one third for working at weekends and out of hours. If they were
working in a private DTC would they be paid that same rate for
the out of hours work?
Dr Reid: Yes.
Dr Taylor: In other words there is control.
Q205 Dr Naysmith: Welcome, Secretary
of State, I hope this is the first of many happy visits to this
Committee.
Dr Reid: I am not finished yet!
Mr Burns: The precedent is not very good.
Q206 Dr Naysmith: Do not worry about
them. The fact that many National Health Service consultants supplement
their income by working in the private sector sometimes gives
raise to the kind of anecdotal evidence, and it is only anecdotal,
that National Health Service patients are treated privately sometimes
under the concordat by the same consultant who they could be consulting
under the National Health Service. It could be argued the concordat
could give consultants perverse incentives to lengthen the waiting
lists and prioritise their private work over the National Health
Service work. Given the many new opportunities we have just been
talking about in DTCs, the independent sector and treatment centres
are you confident that the new consultant contract does enough
to protect the interests of the National Health Service? It is
against the background where the first contract specified the
rigid hours that had to be worked and second one had some control
but they disappear in the final version. Are you confident what
we have now will enable the NHS to protect its interests?
Dr Reid: I am, Mr Naysmith. Indeed
I would not have signed that contract at any price nor would the
consultants. Let me just give you a history of what happened,
the consultants' representatives said, "we have six areas
here which we think can be easily resolved and the Secretary of
State would be unreasonable if he did not talk to us about it".
I said "fine". We sat down and I think it is fair to
say that I compromised in their direction in five of those areas,
appeals, the relationship between corporate governors and their
independence, and so on. The area where I made it plain from the
beginning I would compromise with them, but not if it meant a
deterioration in the hours given to National Health Service patients,
was on the hours itself. We therefore reached an agreement on
those hours where I am satisfied that after the second round of
negotiations the National Health Service patient has done well.
We now have a more clearly defined amount of controlled time,
of face time between consultants and NHS patients. Everyone now
does seven and a half episodes, which is something like 30 hours,
of face time within the 40 compared to the previous face time
which was significantly less than that 30 hours. Secondly, over
that everyone who signs up to the contract will do the first four
hours beyond 40 should they wish to do private practice, which
will be given to NHS patients. That is a significant advance from
where we were in terms of the hours and it is right that consultants
be compensated for that, they are highly skilled people, they
are highly valuable, two thirds of them do not get money from
private practice. That is the first thing. The second thing is
that when you have people of integrity, professionalism and skill
it is necessary to make sure that you get the balance right between
their clinical integrity and corporate governance. This has always
been a problem, it defeated a resolution effectively in my days
under Barbara Castle. Notwithstanding some of the editorials I
believe that we have achieved a major step in that direction and
we can work together on that. The whole of the NHS, 1.3 million
people, right through to consultants are engaged in that process.
The third and final thing is this, I hear people occasionally
say that there is an observable contradiction for the minority
of consultants between the reduction of waiting lists and the
temptations of the private sector as some people would see it.
If that is the case, and I think we all recognise that the biggest
driver of people going into private health care in this country
is waiting times, then the fact is that we are reducing waiting
times on all fronts. Last year we had almost 21,000 people waiting
more than a year for an operation, this month we have 30, we have
gone from 20,000 down to 30 people and there is a commensurate
fall at nine months and at six months. I think over the next few
years it is that more than anything else, it is not any given
individual group of people who will be supporting private insurance,
it is the fall in the waiting times that will reduce the demand
for private health care. Let me just make this final point because
it is important to make it, the right of people in this country
to buy private health care is undiminished. I have no desire to
prohibit that at all, it is there but what I do not want is individuals
in this country where we took a collective decision 60 years ago
that they would not be placed in this position, to be placed in
a position where they think they have to buy the relief of pain
by going outside the health care provided by the National Health
Service because of the length of time they are having to wait
to have an operation.
Q207 Mr Burns: That is what was happening
with 300,000 self funders.
Dr Reid: Over the next few years
I am going to make sure that that impetus and that drive towards
the necessity to buy early relief from your pain through operations
is reduced year on year, that is precisely what I intend to do.
Mr Burns: That is a very laudable aim.
Dr Naysmith: That is very commendable.
Q208 Chairman: Let us have one person
at a time. Dr Reid respond to that point that Simon Burns put
to you.
Dr Reid: I will do. As the premiums
have gone we are talking about 3% of people who buy their own
health care.
Q209 Mr Burns: Self funders, not
people who have private health insurance, those people who have
used their savings to buy operations to relieve the pain because
they cannot stand the waiting list time they were given.
Dr Reid: Mr Burns I am 100% on
your side.
Q210 Mr Burns: We agree.
Dr Reid: They should have never
been placed in that position. I hope on the converse side of that
you will give entire support to the Government putting in the
capacity and the money to reduce those waiting times so they are
never again placed in that position as they have been after 20
years of under investment in the Health Service.
Q211 Dr Naysmith: You are quite happy
that the BMA website says that the majority of consultants who
currently do private work are already in excess of any requirement
that is necessary for getting their work from the National Health
Service and they do not need to do any more work. That is what
the BMA website says.
Dr Reid: Yes. The BMA did say
that all consultants work about 47 hours a week. Fine, that should
not be a problem then, that is precisely why I kept saying to
them, "it is not a problem, you should give your first four
hours to us if you are already working it". Secondly, the
BMA would say every hour contracted within the 40 they are working
for patients and at the moment the 20 hours, or thereabouts, where
they are not actually required to have face time with patients
within that 40 they are all working very hard studying in NHS
hospitals the background to the patients who they are going to
treat on the NHS in NHS hospitals, fine. There should not be a
problem with them guaranteeing the 30 hours face time. None of
us have a problem, the BMA are happy, the consultants are happy,
I am very happy and the patients will be even happier. It is right
they should be rewarded as with other staff in the NHS because
over the next few years we want them to have a good income from
the National Health Service because if we improve, as Mr Fox said
in his conference, if I succeed in improving the National Health
Service in the way I want to there could well be a fall in demand
for the private sector and everyone will then be happy.
Q212 Dr Naysmith: If we can move
on to another staffing matter that arose a couple of weeks ago
when we had the civil servants here, the question of suspended
doctors. We talked about a report which suggested that at any
one time there could be up to 100 suspended, costing quite a lot
of money to the National Health Service. We have had supplementary
information that for doctors suspended over six months, and they
only keep statistics for doctors suspended more than six months,
the average length of suspension is 18.8 months. That seems like
an awfully long time to remain suspended and not contributing,
what is the Department doing to encourage trusts to resolve the
decisions over doctors' suspensions more speedily?
Dr Reid: It is a long time but
that is partly an off-shoot of the way we conduct ourselves in
this country, where we extend rights to people on both sides of
the equation. Yes, we are trying to shorten it and one of the
ways we are trying to shorten it is by getting a standardised
contract. At the moment, as you know, when people have been suspended
or where there is payments made out for people who are required
to go for redundancy it is very largely through locally negotiated
contracts. We have tried to bring in a standardised one that would
expedite these things and reduce it. I have to say that it would
be easy for me to stop there. What I have to say, although it
is probably not going to be popular, we also have to be very careful
not to diminish the time and the money spent on this arbitrarily
because from a patient's point of view if serious allegations
are made against the doctor and we were not intervening to create
a situation where that doctor was removed from practice then there
would be an outcry and therefore suspensions have to take place
unfortunately even though we know in many cases ultimately the
cases are not proven. From the practitioner's point of view, whether
it is a doctor or anybody else once somebody has been suspended
if they are not given due process first of all it would not be
right in terms of their human rights and their industrial rights
and secondly when we have tried arbitrarily to deal with this
matter parts of the Health Service have ended up paying a lot
more than they would have done through the suspension because
people take us to industrial tribunals. From the point of view
of the patient and the employee I do not pretend this is easy
but, yes, we are concerned that a lot of money and a lot of time
has been spent on these suspensions and that is one of the reasons
we are bringing in the standardised contracts.
Q213 Dr Naysmith: As well as the
standardised contract is there any sort of unit, head office or
anywhere where people can get advice? There are anecdotal tales
that sometimes people hang on in suspension for months and months
and nobody seems to be taking any action.
Dr Reid: I do not have personal
involvement in any of the cases but the NCAA, the National Clinical
Assessment Authority, was established in April 2001 by the Department
and it has identified alternatives to suspension, which it tries
through best practice to distribute and disseminate through the
authorities who are dealing with this. That is another way we
are trying to minimise it. The easiest thing would be for me to
say yes we are getting a standard contract, the NCAA are doing
this but I do feel obliged to point out that from the point of
view of the patient and the point of view of the employee if we
try to rush these things we could end up spending more and involving
ourselves in more protracted proceedings than would otherwise
be the case.
Q214 Dr Naysmith: The final point
I want to raise is the question of redundancy costs. At our meeting
a couple of weeks ago we did talk about the outgoing Chief Executive
of North Bristol NHS Trust who received benefits totalling £78,000.
I thank the officials for giving us a note about the background
to that particular case. In a way it is peanuts compared with
some of the redundancy costs that the National Health Service
has amassed over recent years, the abolition of Community Health
Councils 12 million, the abolition of the National Service Executive
regional offices 15 million over 15 years and the replacement
of Health Authorities with Strategic Health Authorities 45 million.
These are National Health Service employment contracts, will the
outgoing chief executives of any trusts which are franchised out
receive any kind of severance payment?
Dr Reid: The broad answer is,
not that it gets us much further forward, it depends on what the
locally negotiated contracts say. I would only make two points
in general about this, the first is that there are very often
significant short-term costs because you have to pay for the minutes
to catch the hours. I genuinely believe that what we are doing
in the National Health Service is essentially to protect it for
the next 40 or 50 years. Secondly, although those costs in absolute
terms certainly appear very big they are relatively small in comparison
with the overall wages bills. Because you have been asking such
forensic and pertinent questions I satisfied myself on this, they
are roughly equivalent to 75 pence in everyone £1,000 that
is being spent in the Health Service. The third thing is that
I think that we ourselves from the centre, that is me and my centre
in the Department of Health have to be prepared if we want to
transform the Health Service to take a lead, a 1.3 million strong
service like the NHS I have already said I do not think can be
run from Whitehall, indeed it should not be. As I said those who
provide the local services should be given the freedom to innovate
and the flexibility to respond to patients' needs. I have therefore
tried to encourage people to do that but I believe that our job
is to focus on strategic issues rather than day-to-day management.
The process of devolving power to the frontline has to start with
us, that is why we have to incur some of these costs, including
in our own Department because I do not believe we can tell others
to act efficiently if I am not prepared to do it as well. We are
not just talking about decentralisation and the costs of rationalising
them and doing it ourselves. I can tell you today that we, the
Department, are now implementing a radical change programme that
will reduce the size of the core department by 1,400, that is
from 3,600 posts to 2,200 posts by October 2004.
Q215 Chairman: These are central
proposals.
Dr Reid: These are central staff,
it represents a 38% reduction which I need to implement in the
central staff of the Department of Health, half of those posts
will not be replaced, we will have to get those dealt with through
efficiency savings, as you are entitled to ask of us and as we
are obliged to do. The other half can be out-sourced to national
bodies. It represents the first, the foremost and the largest
such move, I believe, in Whitehall, and I believe it is appropriate
that our Department as the biggest does that. I want to tell this
Committee before anyone else that this is not the end of the process,
that 38% reduction, because as well as reducing the numbers at
the centre I believe we also need to reduce the numbers of people
working in arm's length bodies. We will be looking harder at all
of the health and social care bodies at a national level employing
up to 20,000 people. The point I am making Dr Naysmith is that
redundancy costs in the short-term may well be a cost but in the
longer term it is minuscule compared to the benefits we can get
not only in cost terms but in terms of the quality of service
that we can deliver. I believe that I have to not only defend
that but I have to from the centre lead by example which is why
I am able to tell you about a 38% reduction at the centre and
my intention is that goes further with the 20,000 people in the
arm's length bodies.
Q216 Chairman: Would it be possible
later in the Committee session to break that figure down into
different specialties areas, for example one of the things I know
John wants to talk about is the social care element. Would you
have the figures as to what proportion of the numbers you have
given would relate to the social work side of your work?
Dr Reid: I will try and do that.
I will ask Sir Nigel at a later stage to try and go through that.
I think we have been round most of the staff, in fact all of the
staff. We have also contacted the arm's length bodies. I thought
this Committee was the appropriate body to first indicate my intentions
in these directions. Some of this is known about in the Department,
some of it goes further and I hope this is something that in the
quest for value for money—provided you are convinced that
we are prioritising correctly—you would support.
Q217 Chairman: Do you have any calculations
on what the costs would be to the Department of the loss of this
number of staff, particularly where you agree severance packages?
Do you have an estimate at this stage?
Sir Nigel Crisp: As the Secretary
of State says we have not yet finished all of the calculations
of that. The first cost, which I think we already gave to the
Committee, was £10 million in the first instance.
Dr Reid: We believe it will not
be more than £10 million, if it is we will write to the Committee
as the calculations develop. That was the figure we gave earlier.
Q218 Dr Naysmith: I wanted to say
something very quickly, I hope you are not going to cut the section
that replies to MPs' letters and that is not the brightest and
best part of your Department cuts?
Dr Reid: We based this completely
on a needs assessment of priorities and purely on that basis we
have increased that particular area that you are asking about.
Can I make one point about the generality of some of these, I
think it is important to recognise that in a lot of the cases
where people are over 50, both in some of the higher executive
positions and else where, a lot of this money is actually pensions,
it is concerned with pensions. Although it looks like a big figure
if we were in the present climate to be saying to people you must
observe people's pension rights then the Committee would perhaps
be criticising us from that point of view.
Q219 John Austin: One thing on redundancies,
the estimate that we got from the Department of the cost of redundancies
through the abolition of CHCs was £12 million, the actual
allocation of money to the new Commission for Public and Patient
Involvement is 35 million, so the amount we spend on redundancy
is one third of that. Apart from the excessive costs of those
redundancies do you not think that it was a mistake to lose the
expertise of those staff who have been working in CHCs by the
method by which the support for patients' forums has been out-sourced
and franchised?
Dr Reid: You say excessive costs
because it is about three times as much we are going to spend
on a combination of central support, which is 35 million on the
Commission for Patient Public Involvement and possibly another
25 or thereabouts on the Patient Advice Liaison Service. You say
you regard that as excessive, I suppose that is a judgment. We
believe that the present system that we are introducing gives
the patients more power and more advice. That is arguable, and
people take a different view, but we believe that it is worth
paying that bit extra in order to achieve that. In terms of the
reservoir of knowledge and expertise that one loses during any
of these transitions, and I have not been involved in that side
of it, but I assume that what could be retained was retained where
it was appropriate for the new structures coming in. I believe
that what we are setting up throughout the country with the Patient
Advice Liaison Service, and I have met a few as I go round, and
indeed some of the patients who deal with them, and the patients
forum and the new ability for people follow to take through foundations—I
know this is a controversial area but the Government is arranging
for foundation trusts—the plethora, the diversity of things
that we are bringing in will give patients more direct control,
power, information and knowledge than they had before.
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