Memorandum by Mr Peter Dixon (FT25)
HEALTH COMMITTEE ENQUIRY INTO FOUNDATION
TRUSTS
My name is Peter Dixon. I am the Chairman of
University College London Hospitals NHS Trust. Prior to that I
was Chairman of the Enfield & Haringey Health Authority. I
am a Trustee of the NHS Confederation and chair their Partnerships
and Health Policy Committee. I have had considerable experience
in the raising of private finance for registered social landlords.
My comments will follow the headings set out in the Press Notice
issued on 20 November 2002. They are my personal views and do
not reflect an organisational viewpoint.
1. FINANCIAL
IMPLICATIONS
I would welcome the ability of Foundation Trusts
to keep surpluses and proceeds from disposals in order to reinvest
in improved services. Other aspects of the new funds flow system
are difficult to assess at the present time and there are inevitably
risks attaching to a change in status at the same time, as there
will be a completely new way in which procedures are costed and
charged for. As far as the larger university clinical centres
are concerned, there will be a need for levy-based funding streams
to be continued within the new funding regime. Not only do these
pay directly for research and teaching, they also enable these
aspects to be integrated into the provision of service.
It is not clear how the new funding regime and
the concept of money following the patient under Patient Choice
will be consistent with proposals for legally binding contracts
between Primary Care Trusts and Foundation Trusts.
As far as the ability of Foundation Trusts to
borrow is concerned, I believe that their capacity will initially
be quite limited since funders are likely to require predictable
cashflows which will be difficult to guarantee. It will in any
event be necessary for Foundation Trusts to continue to access
capital from central sources if routine capital replacements are
not to be jeopardised. In this context it is worth noting that
the additional capital funding available to all 3-star Trusts
has been both practically useful and a very worthwhile motivator.
2. STAFFING IMPLICATIONS
I welcome the new opportunities present within
Agenda for Change. While there is scope for the recognition of
appropriate regional circumstances, I would not support giving
Foundation Trusts greater freedom over pay and conditions. Shortages
of key staff exist throughout the health community and the risks
of a pay spiral without any additional output are considerable.
In the experience of my organisation, elements other than pay
often play a crucial role in recruitment and retention.
3. GOVERNANCE
AND ACCOUNTABILITY
The present governance proposals present both
practical and accountability issues. For the large university
clinical centres in particular, there could be a potential membership
in excess of a million individuals. This will either give rise
to considerable expense and difficulty in trying to access such
a large body or alternatively, it could lead to the dangers of
entry-ism and particular interest groups being sufficiently well
organised to exercise inappropriate influence over an institution.
Local accountability may also conflict with either regional or
national priorities and indeed the membership body of a Foundation
Trust could very easily take different views from the local Primary
Care Trust. It is not clear that a local membership will necessarily
produce the best priorities for a given community, particularly
since Foundations will all be operating within a wider context.
As regards the university clinical centres, there is also the
question of the research and teaching agendas which feature very
largely in their roles and indeed their service delivery.
Wider accountability arrangements for Foundation
Trusts are potentially confusing. Routine data collection for
the NHS as a whole will presumably have to continue. There will
also be the present accountability to CHAI and to local scrutiny
committees but with the addition of a regulator whose powers have
yet to be defined and whose monitoring role could easily become
onerous and in some cases conflicting.
The NHS has benefited over the last few years
from the work of the Appointments Commission in improving both
governance and local accountability but it appears that that is
not to continue in the new structures. There is also of course
new guidance in the private sector coming from the Higgs Committee
around the role of non-executive directors suggesting that 50%
of the Board should be independent non-executives. While the minimum
requirement for a Foundation Trust is set at one third it is not
apparent how the functional requirements of non executives will
be adequately delivered under a system of appointment via an elected
governing body.
4. IMPACT ON
QUALITY OF
MANAGEMENT AND
QUALITY OF
PATIENT
The better Trusts already have good management
and deliver excellent care in their current status. Benefits may
indeed come from greater freedom from unnecessary bureaucracy
and elements of central control but there will continue to be
a need for collaborative working to deliver the requirements of
the NHS Plan. It is something of a myth that the NHS is currently
run from Whitehall. While there is intervention from time-to-time
which is unnecessary, it is certainly not the case that day-to-day
matters are handled anywhere other than within the Trusts concerned.
As far as the quality of patient care is concerned, if Foundations
are able to access additional funding, then there will no doubt
be the opportunity to develop better services. What is far from
clear at the present time is that additional resource will actually
be available and indeed the issue of allocation of resource between
primary care and the acute sector will continue to be a major
issue.
5. IMPACT ON
THE WIDER
NHS
It has to be recognised that there are already
wide variations between different organisations and that we do
operate a multi-tier service. It is important that we continue
to level up those parts of the NHS which are inadequate but it
is important that it does not hold back the continuing improvement
of the better-performing organisations. Foundation hospitals must
work in the context of their local health community and also be
able to respond appropriately to regional and national priorities.
In this context it will be important that they continue to co-operate
with not just their immediate Primary Care Trusts but also with
other acute providers and with their Strategic Health Authorities.
It is perhaps unfortunate that the emphasis on the institutional
aspect of improving the health service is taking priority over
the need to continue to work on the detail of service delivery.
Anything, which continues to reflect an institutional focus rather
than a patient-focused approach, is unhelpful.
My own suggestion of a way forward would be
to consider an extension of the freedoms already given to 3-star
Trusts. Trusts which reach a higher level of service could indeed
be called Foundation Trusts but would not necessarily need the
complicated governance arrangements currently proposed with all
their potential problems and issues of accountability. They would
have guaranteed access to additional capital and in particular,
some sort of fast track availability of both approvals and funding
for major service developments. The model pioneered by UCLH with
the backing of the London Regional office in the acquisition of
the Heart Hospital in 2001 would be a good one. There would also
need to be considerable expansion of the role of patients, communities
and other stakeholders within a Trust preferably via an appropriate
advisory council which however would not have the ability to disrupt
the mainstream delivery objectives upon which we are here to focus.
| 
