Examination of Witnesses (Questions 280-299)
TUESDAY 11 FEBRUARY 2003
DAME PAULINE
GREEN, PETER
HUNT, CLIFF
MILLS, MR
MARK SESNAN,
MS FIONA
CAMPBELL AND
MR DONALD
ROY
Chairman
280. I do not know who will want to answer this,
but I am still mystified as to why we have got a hugely painful
process here of abolishing Mr Roy and his colleagues, re-inventing
local authority scrutiny, setting up a commission for patient/public
involvement, patients forums, and now we start talking about co-operation
and mutuality. Why were we not talking about this a little earlier
when we were looking at this and other ideas? Where did it all
arise from? Why has this suddenly come on to the scene at this
late stage when it perhaps ought to have been floated earlier? (Mr
Roy) Perhaps I could answer, or I will try anyway. I can remember,
wearing yet another hat, being in a meeting addressed by the current
Secretary of State just across Parliament Square on 15 January
2002 where he suddenly mentioned foundation trusts almost as an
after-thought and in fact as an idea which I think he had actually
said had come from some of the large three-star trusts and at
that stage he was only interested, he only committed himself to
actually having a look at. Now, I think more generally what has
happened is that there has been a debate quite properly about
what form the patient and public involvement should take place.
Some of us did think that around about May or June of last year
a reasonably sensible compromise had been reached which could
form the basis of a system which would deliver the kind of level
of patient /public involvement which would be satisfactory, arguably
better than under reformed CHCs, perhaps not quite as good as
reformed CHCs out in Wales, but that is not a debate that is worth
pursuing. We are now in a rather odd situation where not only
has this come up, but also various statements which have been
made in the last fortnight do in fact throw into question how
much of the May/June settlement is actually now going to be implemented
and how much it is up for grabs. That, I think, does create real
difficulties in looking at the way forward. If I could talk about
governance arrangements, I was scribbling fairly furiously. First
of all, I do not know whether the boards of foundation trusts
will meet in public. I have been told that they will not be covered
by the 1960 access to public bodies legislation and that it would
in fact require special amendments to any legislation setting
them up to have that kind of right, so that level of public engagement
we now have, and I go to a trust board meeting where quite a lot
of members of the public actually do attend, that will go. Second,
I think there is a real issue about how much power stakeholder
groups will have in terms of working for continuous improvement,
in terms of scrutiny and visiting as against patient forums.
Dr Naysmith
281. The question was where did this come from
and I wonder if Dame Pauline Green or Peter Hunt would agree with
me, and I would be surprised if they did not, that there has been
a kind of re-incandescence of the new mutuality, that the whole
mutual thing has just started in the last two or three years and
it has been pushed on to the agenda. I wonder whether either of
those two would agree with me that there has been a rebirth, if
you like, of mutuals. (Dame Pauline Green) I think
we would probably want to agree that there is a renaissance in
co-operative innovation across all business sectors and we welcome
that and are of course engaged in it, but it is almost, Chairman,
a question to throw back to you because why it did not come up
before, we do not know, or government perhaps, because here is
the proposal and we are responding to and wanting to engage in
it. We think that co-ops actually offer an opportunity for us
to prove its worth. (Mr Hunt) The theory I would put
forward is that there is basically a collision here between two
things, which are the needs of the Health Service and the things
that other witnesses have already described and there is this
new way of looking at the ownership issue of our public services
and it is not just in the Health Service. It is interesting, perhaps
it is surprising, that it is the Health Service which has been
the pioneer in this respect and the Secretary of State for Health
has, I think it is fair to say, stuck his neck out a fairly long
way in proposing these changes. However, behind the scenes, particularly
looking at a whole range of local government services, there has
been a great deal of discussion around this over the last few
years and the whole state of mind of many people who have come
to the debate is starting to change. I think we are having a fairly
mature debate now about the relative value of different types
of ownership and I would very much agree with Doug's comment.
Andy Burnham
282. As you know, I have been involved in some
of the new mutuals, as was said before, and I take the point exactly
that it engages participation, and certainly participation in
a way which really is astonishing, particularly in the field I
am involved with, young men, some of whom obviously take very
little interest in anything and yet they go to public meetings,
600 or 700 of them, where these trusts are set up, so that is
partly where I want to come to. Football clubs are obviously a
motive, as are hospitals, and also the new mutuals in football
tend to have been borne out of crisis where you have a galvanising
effect where the community comes together and has to do something.
Now, there was a similar situation in Greenwich with the sense
of crisis around the future of the leisure service there. By definition,
what we are dealing with here is actually already highly successful
organisations and the third wave to go are going to be the three-star
trusts. I think we are into a very different exercise than perhaps
the traditional route to a model where there is a gap in the market
or there is a threat of closure of the service. What we are doing
here is kind of uncharted territory because it is introducing
the principles of mutuals and co-operatives into a state-run service
already. I do not know how many parallels there are to this, so
I wonder if you could comment on that, and particularly on whether
there are examples anywhere of the mutual sector running complicated
services such as the Health Service. (Mr Sesnan) I
would just like to come back on the crisis because I think you
are absolutely right, that to make change happen in local government,
and I am sure it is the same in the Health Service and central
government, you need a catalyst of things to force it, otherwise
the force of the management, the bureaucracy and trade unions
will prevent these things happening. The issue with Greenwich
is that Greenwich did what it had to do in 1993, and in 2003 there
are now 80 such organisations around the UK on a similar model.
Many of them now are elected, if you like because they realise
it is a much better way of empowering the organisation than just
keeping themselves in-house. They can see that they can build
up, create a future, even free up the intellectual capacity.
283. Your argument is: "Don't wait for
the crisis. This model works, so just get on and do it anyway"? (Mr
Sesnan) I am sure that in the Health Service everyday when
people go to their jobs they realise that they could do better
if they had the opportunity to be freer in the way they act. I
think that in public services across the piece, they recruit very
good people, but then they create an environment in which it is
very, very difficult to achieve and the one-size-fits-all National
Health Service straitjacket can be no different from one-size-fits-all
in all the other parts of the public sector. When you bring them
outside it, you begin to see new things flourish and activities,
empowerment and involvement, et cetera, and it is not just about
mutuality of the structure, but it is about the people who work
in the service, it is about engaging the customers and quality.
The answer is that no, we have not done it in something as complex
yet and to say that possibly we should be saying, "Why don't
we just do it in one or two hospitals"? Indeed in this process
we may end up with only one or two. You should pilot these things
because it is very dangerous to go launching off until you understand
what you are doing. (Ms Campbell) I wanted to pick
up on a couple of questions which were asked earlier by you. I
must say, I do share what I sense is a certain cynicism behind
some of your questions about why these governance arrangements
are linked to these foundation trusts, and I think it is very
important to point out that foundation trusts are neither necessary
nor sufficient for greater democracy, involvement, participation
or better governance of the NHS, and that those things could all
be brought about without introducing foundation trusts. The introduction
of foundation trusts does not necessarily mean that those things
will happen. I think unfortunately what is clear from the way
that my fellow panel members have been talking to you is that
people who rightly support the co-operative model and feel that
the history of the co-operative movement has an awful lot to offer
in relation to citizen empowerment and engagement are finding
themselves having to defend the foundation trust model in order
to promote that. That would be my answer to why these two things
have come together. I think also just to address something Ms
Drown said, I think it is very important to distinguish, as she
was rightly doing, between ownership, democracy and engagement.
Again those three things may be closely related to each other,
but they are not the same thing and they are not necessarily mutually
interdependent. You could, I am sure, have greater democracy in
the NHS without introducing the co-operative model of ownership,
which I think is problematic because it suggests a kind of two
tier form of ownership of the NHS. We all own the NHS already.
It is not as though we are the people of Greenwich who did not
own the leisure services because we own the NHS and we own it
as a national service. The model that is being proposed I think
is in real danger of losing sight of the national character of
the NHS which is very, very important for tackling the huge health
inequalities which exist between different parts of the country
and for redistributing health as well as wealth.
Dr Naysmith
284. In your evidence you sort of said that
the co-operativism had serious flaws. Is that what you mean, what
you have just outlined? (Ms Campbell) I do not think
I actually said that it had serious flaws. I think that in—
285. Sorry, not serious, but fundamental. (Ms
Campbell) In terms of the governance model for the NHS, I
think that is correct because of what I have just said about the
possibility of two-tierism at the governance level, but I think
the co-operative movement, as Dame Pauline has already said, has
got an awful lot to offer in terms of good practice in relation
to engaging people and involving them. That is not the same as
going for having this ownership model, nor is it the same thing
as democracy because—
286. You could argue that some democratic institutions
do not have a lot to offer in terms of engagement if you look
at some recent election results, but that would not wipe them
out as a model that you would want. (Ms Campbell) No,
it would not, but I think they are not sufficient on their own
and I would say that having elections to NHS bodies is not sufficient
without, as Dame Pauline has said, that deliberate attempt to
be inclusive and to engage people, but I still would say it is
a wholly different concept and we need to be very clear about
how we want them to relate to each other.
287. I was going to pick up something that was
in the evidence that Peter Hunt and Cliff Mills submitted. You
suggested that mutuals could promote a citizenship culture, despite
what has just been said by Fiona. What do you mean by that and
how do you think this would benefit the National Health Service?
Presumably you are suggesting that there would be improvements
in the way that health services are delivered and experienced
by patients. What would these be and why can they not be delivered
under the present system? (Mr Hunt) I think the difference
really is about ownership and starting off as the human shield
of foundation hospitals and then moving to be the defender of
foundation hospitals. I think the position we are in is that we
did not invent this idea, but we are responding to an idea which
has been proposed by the Department of Health. Now, in principle,
we can see that there could be significant benefits if this is
carried out in a proper manner. You have heard from other witnesses
today that they feel the great benefit from this being carried
out in a proper manner, one of those in particular, and this is
based on the long experience of people in our sector, is the fact
that engagement builds citizenship. It builds a real sense of
involvement, a real sense that the service we are talking about
has some sort of resonance, and the individuals who are taking
part in democratic structures through the rights that they get
from their ownership are able to play a full part as citizens.
Now, inevitably you will be talking about proportions of the whole
population which potentially could be active, but that is the
way it works in anything. It is the way it works in elections
and I think we should think in this building itself that the number
of people who choose not to participate in the elections for people
to get into here also have an interest, but we do not then say
that their views are completely discarded and of course they get
the choice of taking part or not. That is part of the democratic
process and people can choose to take part in these things or
not. Now, in terms of the citizenship element of it, there are
significant programmes of work which have been taking place within
a number of mutual organisations recently which have built up
a whole range of different community activities. It is not just
like Shell plc or somebody else doing nice things for the communities,
but actually engaging those communities and making sure that there
is some real give and take, as was already described by one of
the previous witnesses, between the institutions and the community
itself and it goes through a whole range of different activities.
288. Sometimes it does not work. You and I both
know that sometimes co-operatives fail and I wonder if you have
anything to say on why it is that sometimes co-operatives fail
and if you have any examples of it. (Mr Mills) I think
I would make the basic point that a legal constitution or a model
of itself will not solve any problems. It is not a magic wand,
but what it can do is create a framework within which other results
can be achieved and which will support the endeavours to achieve
those results. Whichever approach one adopts, it has to be based
on being properly supported by people with vision who want to
make those things work in the ways planned. I think that yes,
we have all seen models of legal structures in every field fail,
which just goes to show that there is not a model that is the
key to success, but I think where one is looking at the objectives
that we are looking at here, then one can see how what is proposed
in relation to mutual form of ownership could help to deliver
some of the results. I was about to add to what Peter was saying
that I have certainly seen, and I am sure most of the people in
this room who are involved in community organisations within their
own communities have seen, people, and Mr Burnham referred to
the football clubs, young people particularly getting involved
and acquiring a level of maturity and then moving forward and
taking part and really influencing. If there is an organisation
which we cannot participate in, it is closed to us. If there is
an organisation which is open, we can become members and those
living in our houses, our children and partners, can become members.
Those who wish to take a role have the ability to do so. It is
going to be a minority of people, it is not going to be the majority
of people who sign up to become members and get involved.
289. Something you said earlier and in relation
to what you have just said strikes me as being very true, that
successful co-ops almost always have some people who have got
some vision and a really powerful urge to make it work. (Mr
Mills) Yes.
290. What we are talking about here is taking
a big organisation and saying to them, "You are going to
move in a mutual direction". How can you ensure that there
will be people there who have got vision and who want to make
it work? (Mr Mills) Well, if you take the current approach,
hospitals have to apply and somebody with leadership has to say,
"I want to do this". Now, my experience of setting up
a new mutual organisation is that it is absolutely essential that
the desire to set it up comes from the organisation, the people
themselves, because if it does not, if it is an imposed solution,
it might work for a while, but it is not what that community wants.
What we have to develop, and this is one of the reasons why choosing
the three-star hospitals is the appropriate way forward, is that
there are leaders who want to do these things who potentially
can galvanise and inspire their staff and their communities and
explain to them so that there can then be a real test of whether
the community wants to take that forward, and in fact if it will,
then that will provide a basis for supporting and operating within
the structure.
Chairman
291. Would you agree, and I think this was a
point made by the Democratic Health Network, that if we are taking
this whole issue of linking the Health Service to local people
seriously, then surely before there is a formal application for
foundation status, then this local governance ought to come into
being and local people could determine whether they wish to go
for foundation status? I got an interesting answer from the Minister
of State today, which you will not have seen, but I asked him
about the context of West Yorkshire where we have a three-star
trust in Bradford applying for foundation status and I made the
point that surely if we are serious about local governance and
connecting the community, my constituency of Wakefield, which
is 15 miles away from Bradford, ought to have a say in that and
he said that this would happen. I am not quite sure how it would
happen, but he says that this would happen. Do you not think that
before we move towards this application, then there ought to be
soundings and local people should determine whether or not they
wish to go for foundation status? (Mr Mills) I think
that not only do we want to make sure that we have got exactly
the right sort of model that we are moving towards, but I think
that the process of moving towards that model does need to be
built around what we are trying to move towards. This is not simply
like a corporate reorganisation where the parent company can say,
"We want to change the way we're set up today and we'd like
it to look like that." That is not what we are talking about
here. We are talking about a large number of people involved both
as staff and as patients, supporters and volunteers, etcetera,
and it is necessary to have their support. I think the process
of moving towards community ownership does need to include a mechanism
for drawing the community along and getting them to want to take
the status that they are offered.
292. And defining the community presumably,
which we may come on to later on? (Mr Mills) Yes. People
tend to think of that as an insuperable problem. Obviously it
can be difficult. In my experience it has not proved particularly
difficult in practice, but yes, it has to be done.
Jim Dowd
293. I am glad that John Austin has returned,
because apropos what Andy was saying about football supporters'
co-operatives, one of the most effective campaigns was actually
run by Charlton Football Club supporters who, if you remember,
actually formed their own party. It was co-operative in the sense
that they campaigned successfully to get Charlton safely ensconced
with ownership back to the Valley. It was not a co-operative model.
It was just a community issue that people felt galvanised by.
It was still run by the club, there was clearly close collaboration
between the club and its supporters, but it was not a co-operative
as such. That brings me to Greenwich Leisure which has done pretty
well, by all accounts, in the time it has been going, but has
this not been at the expense of facilities in neighbouring boroughs,
and is that not a model that should not be translated into the
NHS? (Mr Sesnan) Coming from Lewisham, you might think
that I could not comment.
294. I am asking you to comment. (Mr
Sesnan) The issue is that if we took Lewisham versus Greenwich,
since we have operated the Greenwich centres we invested, innovated,
made them popular, and we were beginning to drag in heavily off
the boundaries particularly from Lewisham. The response of Lewisham,
however, has been to enter into new partnership agreements to
operate their centres, and they are now beginning to stabilise
the market and provide improvements. So what we have got is improvement
across the Capital, not competition. At the end of the day, a
leisure centre is like a hospital, it is largely geographical
how you deal with it. People do not want to travel in London traffic
somewhere else if the right quality is available on the doorstep.
295. Is not that a general reason for the existence
of any commercial market, that it drives up standards through
competition? There is nothing particularly co-operative about
that, is there? (Mr Sesnan) No. I am not sure it is
competition in that particular case. I think, for instance, as
far as the customer is concerned, they just want quality. Leisure
centres are like hospitals and geographically located anywhere,
so they are not really in competition with each other, but people
will migrate where they can get quality, even if it means a longer
journey. They would rather it was provided locally. As I repeat,
I think that if three-star hospitals can do even better, then
that is good news for everybody. What this whole process is about
is finding a way to improve the Health Service generally, is it
not?
Andy Burnham
296. Can I follow up on Jim's point. Are you
absolutely clear that the structure was crucially linked to the
cycle of improvement you began, so that you have a different structure?
Say you had been privatised, you would not be where you are now.
That is the crucial point, I think. The particular form of governance
and ownership that Greenwich Leisure has is linked to the performance
it is now achieving for people in South London, is it not? (Mr
Sesnan) Yes. Every borough does a MORI opinion poll. Greenwich
comes out top consistently on that poll. In the 32 boroughs in
London they have all adopted different delivery mechanisms. In
the boroughs where we operate—and we are in the top quartile
all the time—the privatisation route has not brought quality,
it has just brought a different way of deliveryt. When we are
in customer-facing services—and the Health Service is the
same as the leisure service from that point of view—what
people want is to engage with something that they can communicate
with, recognise, influence, be empowered by, work for. It is a
wide-ranging set of things that you are doing here and it is very
complex. If you are in the social enterprise, not-for-profit,
co-operative environment then you are able to allocate energies
to that kind of engagement. When you are in the private sector
your energies are allocated to shareholder value. When you are
in the public sector, unfortunately you are subject to a range
of constraints. I am a great believer in the public sector. People
say to me, "Why couldn't you do what you did when you worked
for the council"? You just cannot do it. That is the reality.
I am sure in the Health Service they have exactly the same thing.
You want the best values of public sector resource, non-profit
leakage, state ownership of assets, but you want to free up the
people to work within it to have some empowerment, enthusiasm
and commitment to what they are doing and reward to some extent.
John Austin
297. I think you have emphasised the co-operative
ethos and the public service ethos that still drives Greenwich
Leisure. You contrasted it, and you mentioned also the private
sector which might be like that. However, was not one of the key
reasons for the success of Greenwich Leisure, apart from the way
in which you deliver the service in that excellent way, the fact
that you are not constrained by the constraints of local government
finance, capital control, and as a free-standing entity you have
the ability to attract funding from outside, from charitable and
other sources, which would not be available to a local authority
and would not be available to a private company that was running
a leisure facility, so you have the ability to attract money and
you have the ethos? Would that be true of a hospital? (Mr
Sesnan) It is certainly true for us. I believe that there
are ways in which hospitals can enter into partnerships if they
are not managed by the Health Service, which they would be able
to do if they were under foundation status, because they are another
actor, they are free of the state, if you like, so they can act
alongside the state, and if you get one plus one plus one it equals
three., For instance, certain European Social Fund moneys cannot
be matched against public sector money, but they can be matched
against private sector money, so our money counts as clear matching
in bidding regimes. So when we are looking at employment initiatives,
training initiatives, education initiatives, we are able to bring
in new European money by that route. But it is a different market
place, is it not? The guys at the back run hospitals, but they
run them within the framework that they have been brought up in.
I repeat what I said earlier on, I think it is an absolutely excellent
idea to pilot this sort of thing. I am not sure it is something
the Government would be wise to go at it wholesale without having
some very carefully constructed pilots to start with.
Jim Dowd
298. Clearly, part of the reason for Greenwich
Leisure's success has been the dynamic and far-sighted leadership
of Greenwich Council over the years—I knew that would get
a laugh—but was not part of it as well breaking free from
the traditional town hall decision-making process? (Mr
Sesnan) Yes, absolutely. Investments used to take 18 months
or two years to come to fruition. In a fast-moving market like
leisure, by the time the investment was approved by the council
the market passed. Not only that, it was on a hierarchy of "Should
we put a roof on the school? Should we sort out the housing and
social services"? and leisure comes last. So now are were
able to act separately, much more flexibly and commercially and
borrow money and do things to improve the service. I think that
probably is the case with the Health Service as well.
299. My final point on this is that you referred
in your submission to concessions—pricing concessions, for
example—for some groups of the population. It does not say
anything about equality of access to services. Is there any evidence
that Greenwich Leisure is now able to cancel the disparities there
are, particularly in the leisure field, between various socioeconomic
groups? (Mr Sesnan) Yes. We now track everything. In
Greenwich 130,000 out of a 220,000 population are members, so
you are really talking about this business attracting and engaging
them. So there are actually more people who join a leisure centre
than vote for our excellent council. They are all on the database
and all tracked in socioeconomic and gender initiatives. We are
required by the authority, which effectively still commissions
the service, to meet social inclusion targets across the piece,
and it is monitored on a centre-by-centre basis.
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