Examination of Witnesses (Questions 339-359)
TUESDAY 4 MARCH 2003
RT HON
ALAN MILBURN
MP AND MR
ANDY MCKEON
Chairman
339. Colleagues, can I welcome you to this session
of the Committee and welcome our witnesses. Can I thank you both
for agreeing at short notice to rearrange this meeting. It was
at my convenience and I am most grateful to you. I wonder if you
would both mind introducing yourselves briefly to the Committee?
(Mr Milburn) Alan Milburn, Secretary
of State for Health.
(Mr McKeon) Andy McKeon, Director, Policy and Planning,
Department of Health.
340. Thank you. Can I place on record our thanks
to you and the Department for co-operating with our inquiry and
for the written evidence that you have given us. Perhaps I could
begin by asking a question about the timetable in respect of foundation
trusts. The guidance document that was published before Christmas
set out in paragraph 7.5 the key stages for the first wave of
applications beginning in December and concluding in April 2004
subject to legislation. Does this timetable remain the same? It
has not been altered in any way so we are working to this timetable
with the first wave of applicants. At what stage do you see legislation
being introduced?
(Mr Milburn) Shortly. As soon as we are able to. I
am hoping that we will introduce the Bill within the course of
the next three or four weeks.
341. So there will be a Second Reading debate
presumably by May.
(Mr Milburn) Yes, I would have thought so, easily
by then.
342. In terms of the expressions of interest
that have come forward so far, I had an answer from the Minister
of State at the last round of health questions two weeks ago where
he indicated that local communities would have a say in applications.
I am not sure he fully understood my question, but he gave me
an assurance that that would be the case. Can you advise me, Secretary
of State, on what steps are being taken in terms of the initial
expressions of interest and the initial applications to take account
of the views of local communities in the areas where the applications
have been brought forward?
(Mr Milburn) I think what you have is a two-stage
process first of all as far as this first wave is concerned and
perhaps I can say something about future waves in a moment or
two. On first waves, you have expressions of interest and I can
tell the Committee that we have had expressions of interest now
from 32 trusts wanting to move forward to the next stage and if
Committee members want a list of those I would be quite happy
to supply them with one or I can read them out to you. What happens
from here on in is that the formal process begins and they will
need to work up an application and at this stage it is a preliminary
application. They will need to work up a fully fledged plan to
move to NHS Foundation Trust status and that will involve them
in pretty detailed discussions not just inside the trust but outside
too. For example, they will need to have discussions with their
staff, they will need to have discussions with local primary care
trusts, they will need to have discussions with various stakeholder
groups in the community and they will need to gauge the depth
of community and local health service support for their proposal
to move forward and we will look at that very carefully. Where
I have been to see various trusts who might be interested both
in this first wave or in the future, it is already clear that
at least informal discussions have begun with staff and there
will be a variety of views, although I am pleasantly surprised
to see that quite a lot of staff seem to be supporting the idea
in those trusts that want to go forward.
343. In the document you produced before Christmas
and in the policy statements that you have given the Committee
the whole idea of community ownership is very strongly emphasised
as a key element of the foundation trusts idea. What community
ownership has there been in determining the expressions of interest?
(Mr Milburn) I think there have been some informal
soundings but probably no more at this stage. At this stage it
is for the trust to decide whether or not it wants to express
an interest and basically get itself over the first hurdle. The
second stage is the most important and that is when they have
to submit formal applications which they will have to have in
by the summer and at that stage they would need to engage with
both the local community, local members of staff, crucially local
primary care trusts and they will need to demonstrate evidence
that they have done that and what the views of various stakeholders
might be. There might be a variety of different views. It is our
intention to provide help for the various 32 trusts that have
come forward with expressions of interest and we will provide
help to the local health community and not just the individual
trust so they can assess what the benefits might be of foundation
trust status and then it will be for each individual organisation,
whether it is the local council, the local primary care trust,
the local patient organisations, the local trade unions or members
of staff, to take a view about whether or not they think foundation
trust status is appropriate for them and is going to work. Then
I will have the job of gauging their opinions.
344. Would you not have thought that if community
ownership is to be meaningful at this stage in areas where trusts
are expressing an interest in being in the first waive then key
figures such as local elected representatives should have been
consulted at least on the issue?
(Mr Milburn) I think it would be a matter for the
individual trust to decide what the appropriate means of consultation
is at this stage, but just bear this in mind. It is possible that
not all 32 will get through the final hurdle, I do not know how
many will at this stage. I am encouraged by the numbers that have
applied at this stage because there has been a lot of talk around,
not from me incidently, about it only being a few hospitals who
would come forward. As you know, I think we had 51 three star
trusts the last time the star ratings were done. The majority
of those trusts have expressed an interest and there is a pretty
even spread north and south, a lot of poorer areas, for example
places like Aintree , Bradford, Sunderland, Doncaster, North Tees
and Hartlepool, Sheffield, Rotherham, Stockport, Newcastle upon
Tyne, Walsall and quite a good smattering too of hospitals in
the London area, for example Guy's and St Thomas's just over the
road from here, Homerton University Hospital, King's College,
Moorfields Eye Hospital, The Royal Marsden, University College
Hospital and so on. So there is a fair cross-section of trusts
who at this stage have expressed an interest but that is what
it is. I am encouraged by that and I think it indicates that foundation
trust status for many parts of the National Health Service provides
attractions and that is good and it can only work if people want
to do it, but the next stage will be the crucial stage where,
as you say, there will have to be detailed consultation with appropriate
stakeholders including local representatives and Members of Parliament.
345. Would you accept that for some people this
community ownership concept is somewhat tokenistic and that that
belief has been reinforced by the way in which these expressions
of interest have been developed without any discussion whatsoever?
(Mr Milburn) No, I do not really.
346. As a local MP I resent very strongly the
fact that there is a trust that covers part of my constituency
that is in this first wave of applicants but they have had no
discussion at all with myself and as far as I know there have
been no discussions with the local primary care trusts. It does
not seem to me to smack of community ownership when from the word
go the communities have been completely disregarded on the issue.
(Mr Milburn) We are not at that stage, Chairman.
347. We are at a stage where there are expressions
of interest. Once we are down the road then that is it. The point
I was making about health questions last time was that if we mean
what we are saying about community ownership then surely this
is the stage when the community comes into play. Do we want to
go in this direction in the first instance? There are a lot of
people in my area that have grave doubts about the impact upon
the local health economy of certain three star trusts moving in
this direction. To me the very least I could have expected as
a local MP was to be asked what my views were on a process that
has been adopted without any local consultation whatsoever by
a trust that covers my constituency.
(Mr Milburn) Let me say two things to that. There
will be an opportunity for individual members of the community,
individual organisations and of course elected representatives
to do that at the appropriate stage. Frankly, this is not the
appropriate stage. Some will have consulted informally and some
will not. Make no mistake about it, at the next stage when they
have to move to formal application status then of course they
will have to consult and they will have to demonstrate to me that
they have been through an appropriate process of consultation
with the local community and with the local health service and
not just with people working for the local hospital where foundation
trust status might be granted. That is the first thing. The second
issue is the point that you raised about the concerns about foundation
trust status and I well understand that there are concerns about
foundation trust status and indeed I have discussed those informally
with individual members of this Committee and with many other
colleagues in the House over the course of the last few weeks
and months. I think there will be a variety of concerns, but the
principal concern really boils down to this and it is what you
touched on. The worry is amongst constituency Members of Parliament,
quite reasonably, that if their local hospital does not get NHS
foundation trust status it could in some way, shape or form be
disadvantaged against the foundation hospitals. I well understand
that and that is a perfectly legitimate concern for constituency
MPs to have. Let me just say this and I want to say this at the
outset and then there is a context for the discussion and questions
that we are going to have, it has never ever been my view that
this should be a policy that should apply to an elite group of
NHS hospitals. Indeed, our whole effort in Government has been
about raising standards across the piece, making sure that standards
are high in every single part of the health service and in every
single NHS hospital, that is why we put in the national levels
of inspection and so on. What we want to do is make sure that
NHS foundation hospital status is available not just to some hospitals
but to all and I do not see any reason why we should not be able
to achieve that in a four or five year period. So the problems
that many people have identified in the informal discussions I
have had with colleagues in a sense become transitional problems.
There will be other concerns and I understand that, but the principal
concern that you have just identified and other colleagues have
identified too in a sense become transitional problems about how
you get from point A to point B.
348. We have no legislation in the House of
Commons and I find it quite incredible as a local MP that I should
be seeing parts of the health service in my local area going in
a direction that has not been agreed within the House of Commons.
Surely that raises serious questions about the whole purpose of
Parliament in certain situations. This is a very radical departure.
(Mr Milburn) It is all subject to legislation, as
we keep making clear. There are two things that I would say to
you about that. The first is that when we published delivering
the NHS plan—and you will remember it was the day after
the Chancellor's Budget last year—I made a statement to
the House precisely about our intention. It is not unusual, Chairman,
to have a position where ministers come forward with policies
and say this is what we want to happen for the future and, of
course, it is subject to the will of Parliament and the Bill will
have to go through Parliament before you can have these NHS foundation
trusts, but it is also very important that at least I am clear
about what the future direction of policy is. It seems to me that
basically there are two alternatives to what I suggest which is
that every NHS hospital should have the opportunity of getting
foundation trust status. The first is do you say okay, this is
only for an elite number of hospitals and that the drag of excellence
will raise standards everywhere? I think we need incentives in
the system. I think that is absolutely right, I think there should
be rewards for those organisations and those individuals within
the health service that are doing well and that is what we are
trying to put in place. Equally, I think there should be incentives
for others to improve. I do not believe in the end that is sufficient.
The second alternative is to do what some advocate which is to
go for a "big bang" which I think would have a cataclysmic
effect on the National Health Service. You have argued and we
have had this debate before when I have appeared before you that
people have called for less big bangs within the National Health
Service. That is why I think the way that we are approaching this
is the right way and we do it in transitional phased way but we
are very clear about the end objective. I can also tell the Committee
that it is our intention, just as we have a programme to raise
standards and performance among zero star trusts—and that
is working, three-quarters of the zero star trusts in the first
star rating got out of the zero star category, a quarter of them
became two stars and so there is improvement under way—to
put in place a programme to raise standards and performance amongst
one star and two star trusts so they too can become foundation
trust status. The question and debate from my point of view is
how we get there not whether we do. If we can do that and we get
the appropriate programme in place and we raise the standard and
we raise the performance, there is no reason whatsoever why every
NHS hospital should not become an NHS foundation hospital within
a four or five year period.
349. You do not see any inconsistency between,
on the one hand, arguing that this process of change towards foundation
trusts is about community and local governance, it is about engaging
with the public and yet the entire process of starting this exercise
has begun in my view with the treatment of local communities with
complete contempt. We have had no engagement whatsoever.
(Mr Milburn) Let us have this conversation in three
or four months' time.
350. It will be down the road by then. The process
has started now without any contact with the community whatsoever.
If you disregard the local MPs, Secretary of State, surely that
does not give the impression of local community ownership.
(Mr Milburn) You know fine how the application process
is going to work. You know at this stage it is very encouraging,
it is good that 32 trusts have come forward—
351. It is not surprising.
(Mr Milburn)—and want to have NHS foundation
trust status. There will be an opportunity at the appropriate
point for proper engagement to take place and that will be this
point now, where these 32 come forward and they have to decide
whether or not they want to move forward first of all and, secondly,
whether the local community and people in the local health service
and not just in the local hospitals decide that it is appropriate
for them.
352. That could well be in advance of any legislation
being constituted here.
(Mr Milburn) The Bill will be before the Commons very
very shortly.
Julia Drown
353. If securing better local social ownership
and devolving power to communities is the key aim of these policies,
why not introduce elected boards of governors to all of the NHS
and deal separately with increased access to capital and management
freedoms for high performing trusts, particularly if you think
that within four to five years all trusts will be foundation trusts
so the increased access to capital will be a short lived dream
for some trusts.
(Mr Milburn) I think some trusts have done this in
a sort of informal way. I can think of one in Newcastle that has
done it, for example, where although they have not quite gone
for the process of election that we envisage for foundation trusts,
nonetheless they have sought to establish a wider advisory group
drawn from representatives from the community to work alongside
the trust board on issues that are really of concern to the local
community about how the local health service is doing and how
the design of parts of the hospital should work directly for the
benefit of patients. I think the people that have been selected
in Newcastle represent a broad cross-section of society in terms
of class and gender and ethnicity and so on and so forth and as
far as I am aware that is working very well. There is no reason
why that should not happen now under the rules and if trusts want
to do that that is perfectly fine and I would very much welcome
it. It would provide a broader constituency of community representations.
354. Sorry, are you talking about those people
being non-executives?
(Mr Milburn) No, because I think that is a different
sort of position and to do that we would have to affect legal
changes and since the ambition I have is to ensure that every
hospital gets the opportunity of becoming a foundation hospital
in due course and I do not see why that cannot be achieved over
a four or five year period, then I think that is the right way
to institute democratisation into the health service. Why? Because
many of us have long been concerned, and I have certainly said
this in previous hearings here, that the current process of how
we get local community representatives onto local trust boards
really is not appropriate for what most people would say is the
key public service. It is a public service, it is supposed to
be there to represent the local public. Quite simply, whether
it is me, I do not do the appointments now, or an independent
appointments commission appointing people and parachuting people
in from the top somewhere, I do not think that is an appropriate
way of ensuring good democratic governance in a key public service.
Indeed, when I have asked colleagues to name their five non-executive
directors of their local trust most people have found it quite
difficult to answer. I think the way to do it is through the foundation
trusts. Can I just make a second point? Do you want to come back
on that?
355. If you are suggesting that you are disappointed
and you think that is not the best way of appointing non-executives,
why are you not changing that straightaway? That might be particularly
important for the poor performing trusts.
(Mr Milburn) Regardless of whether they are poor performers,
we are going to have programmes in place to raise their performance.
The opportunity that comes from local democratic governance will
come from the opportunity of foundation trust status for all hospitals
and we can do that. I know there is an argument about how to do
it and I perfectly understand that, but I strongly resist the
idea that somehow or other the best solution for organisations
that, frankly, are not performing terribly well at the moment
is yet more freedom.
356. More freedom is not the same as having
a different way of getting your non-executives onto the board.
(Mr Milburn) They can do that because they are all
going to get the opportunity of it and they can do it through
foundation trust status. The first point you raise which I did
not reply to is can you separate the governance from the freedom,
which is the point that you have raised in your Adjournment Debate
and so on and so forth and I think that is difficult because what
I am worried about is a point the Chairman touched on, which is
either this is for real or it is not and I think it should be
for real and I think what would be a terrible mistake in my view
is to hold out the prospect to a local community that somehow
or other they are going to be in charge of a local hospital but
in the end they are going to have no freedom to decide anything,
so they are going to be elected to this board that is still effectively
controlled by me or whichever way it is controlled from above.
This is why it is very important that I try to get an understanding
about what this means. Local governance and local freedom go together.
357. On the other hand, there are still going
to be an awful lot of central directives. You are still going
to get national data in, you are still going to want key targets
and all the national standards kept too. So it is not about completely
local freedom, there is going to be a balance for people to manage
anyway and we will be discussing later exactly how far these freedoms
go. There is an extent to which you could look separately and
say if community involvement does deliver things better then that
should be able to happen just as much in what you see as the poor
performing trusts.
(Mr Milburn) I think that would be a good argument
if we were in a position where what people have argued as my position
but is not actually my position were true, ie if NHS foundation
trust status were to be for half a dozen or a dozen elite hospitals,
but that is not my position. I have never believed that that is
the case. I have always said there should be no arbitrary cap
on numbers.
358. There is a cap on numbers at the moment
because the most that could possibly become foundation trusts
is every single three star hospital, which is not every hospital.
(Mr Milburn) At the moment that is absolutely true.
359. Let alone no community trusts.
(Mr Milburn) You have got to start somewhere.
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