APPENDIX 12
Memorandum by Bob Hudson (FT19)
WITNESS
Bob Hudson is a principal Research Fellow at
the Nuffield Institute for Health, University of Leeds. He is
a policy analyst and has written and researched widely for many
years into social policy, especially issues of partnership working.
The evidence presented here is on an individual basis and does
not represent the views of the Nuffield Institute for Health.
Contact details:
71-5, Clarendon Rd,
Leeds,
LS2 9PL.
Tel: 0113 2336357
Email: bob@hudsonb.fsworld.co.uk
The evidence will focus upon two of the issues
to be considered by the Committee—Governance and Accountability
(III) and Impact on the Wider NHS (V).
GOVERNANCE AND
ACCOUNTABILITY
1. The governance arrangements for NHSFTs
are truly innovative and mark a major change in the way the NHS
is run. The idea of vesting ownership and control in the hands
of local people is laudable, but questions remain about the efficacy
of such arrangements.
1.1 Unlike other NHS governance structures,
much is being left to local negotiation in the case of FTs. Determining
the details of what the constitution should look like is expected
to form part of the consultation on applications for FT status,
but the basic framework will be laid down in legislation and will
specify that the overall majority of the places should be reserved
for representatives elected from the patient and public membership.
1.3 Elections for the Board of Governors
1.3(i) The potential membership of a FT
is undoubtedly very wide, covering people who live in the local
area (the "membership community"), those who live outside
the area but have been patients in the previous three years, employees
of the Trust and the representatives of partner organisations.
Indeed, where a hospital is used by a significant number of people
in several local authorities, then people living in each of these
will be eligible for membership. Prospective Trusts are also urged
to access "hard to reach" groups which have traditionally
had little active engagement in citizenship. Once registered,
members will, at a minimum, have a right to participate in the
election of the Board of Governors, to receive information about
the activity of the Trust, and to be consulted on how services
could be improved.
1.3(ii) The issue of principle here is the
decision to go for indirect rather than direct democracy—a
debate not dissimilar to that in the USA over the respective merits
of open and closed primaries. The indirect route might suffice
where the membership is genuinely broad and popular, but where
this is not the case there is the danger of an unrepresentative
governing elite emerging—research from the USA suggests
that in closed primary systems, control over candidate nominations
translated into a higher likelihood that extreme candidates emerged
victorious.
1.3(iii) There is no reason to think that
the prospect of registering for membership of a prospective FT
will generate a groundswell of democratic fervour across England,
and in such a situation the membership will be small and unrepresentative.
There are two ways this might be counteracted. First, by instituting
direct elections for the Board of Governors from amongst all of
those groups eligible for membership, regardless of whether they
have registered such membership. And secondly, by opening the
candidates list to anyone eligible for membership who wishes to
stand for the Board of Governors—a "write-in"
candidacy. Without some such measures, there is a real danger
of a small and unrepresentative minority of people hi-jacking
the destiny of local hospitals.
1.4. Behaviour of the Board of Governors
1.4(i) A second issue concerns the nature
of the governing body and how its affairs will be conducted. In
an attempt to counter the possibility of an unrepresentative governing
elite, the Government has stipulated that "the full range
of members" interests" should be represented on the
board, with "a proper balance between different interest
groups"(para 1.26). This has two important implications.
1.4(ii) First, there is something akin to
a quota system being proposed for the Board of Governors, with
each "interest" assured of representation. Although
the Guidance fights shy of saying exactly what constitutes these
different interests—this should form part of a local application—it
will clearly limit the freedom of the membership to form its governing
body. Potentially this is an important inclusive requirement,
and it is unfortunate that fuller guidance is not given on which
interests might expect to have representation.
1.4(iii) A second implication concerns the
capacity in which members of the governing body serve. The creation
of a quota system implies that members are there to represent
their constituencies of interest—indeed the first listed
duty of a Board of Governors is said to be "establishing
mechanisms for consulting the members or partner organisations
they represent". This could have very significant implications
for Trust governance, for there can be no assumption that there
is a consensus of view amongst the members, nor indeed that they
necessarily support the mission of the organisation. Democracy
and cosy consensus rarely go together hand in hand, and the situation
could easily arise in which division gives rise to voting systems
and a split Board. And there is a further underlying question
as to whether members are serving as representatives, as delegates,
or as individuals exercising their best judgements
1.5. Relationship between Board of Governors
and Management Board
1.5(i) A Management Board, "with a
constitution similar to that widely accepted in other organisations",
will be responsible for the management of the NHSFT, including
its day-to-day operation and forward business plan. As with the
Board of Governors, there will be local freedom to determine constitutional
detail over and above a basic framework laid down in legislation—this
framework does not extend much beyond appointing a Chief Executive,
Finance Director, at least two other executive directors, plus
non-executives. The Board of Governors will be responsible for
electing the chairs of both their own body and the Management
Board, and the Chair of the Board of Governors is seen as having
a crucial role to play in ensuring effective communication between
the two boards.
1.5(ii) The relationship between the two
bodies will be crucial to the running of the FT. Unlike previous
guidance on NHS governance, there are no reserved seats round
the table for specific professional groupings or partner agencies,
and much will depend upon local negotiation during the application
phase. Who is in and who is out? And what scale of representation
will each interest possess?
1.5(iii) Once representation has been decided,
uncertainties remain about the clarity of separation of responsibilities
between the two levels of governance. Guidance states that the
main function of the Board of Governors will be "to work
with the Management Board to ensure that the NHSFT acts in a way
that is consistent with its objects and with the conditions under
which it is licensed to operate, and to help set the strategic
direction" (para 2.32). This ostensibly logical separation
of powers leaves some uncertainty about the relationship. For
example, will the Board of Governors ratify the business plan
set by the Management Board or will it have the right to reject
it?
1.5(iv) What all of this could add up to is
a significant curtailment of the promised freedoms to be conferred
upon FTs, with centralised bureaucracy replaced by local politicking,
and perceived "interference" by representatives into
the domain of managers. Alternatively, management and clinical
staff could seek to reduce governing bodies to the status of "talking
shops", thereby stripping the entire mission of its raison
d'etre.
IMPACT ON
THE WIDER
NHS
2. The underpinning mission of turning local
hospitals into locally owned and run enterprises is itself worth
greater scrutiny. It has come to represent the main defence against
the charge that FTs are a step towards privatising the NHS, and
has allowed the Government to portray the proposal as the rebirth
of popular socialism (McCartney, 2002). In reality the concept
of "mutuality", and its application to local hospitals,
is far from unproblematic.
2.1 The Guidance repeatedly draws parallels
between NHSFTs and other forms of mutuality. It is said that "In
a similar way to becoming a member of a co-operative society or
mutual organisation, the members of an NHS Foundation Trust will
become its owners" (para 2.3), and that "membership
of an NHSFT will, in many ways, be similar to being a member of
a cooperative society, mutual organisation or charity" (para
2.11).
2.2 Cooperatives are member-owned enterprises,
voluntarily owned by the members for their mutual benefit. There
are many different types of cooperative—consumer, producer,
worker-owned, housing and financial. The underpinning notion of
"mutuality" goes back to the Rochdale Pioneers of early
Victorian England, and the building societies also had their origins
in mutual societies. More recently the idea has been applied to
enterprises such as credit unions, housing cooperatives and community
development activity.
2.3 There are two main ways in which the
cooperative model does not correspond simply with the role of
an acute hospital. First, it is not clear what the dividend will
be to potential members. In the case of a consumer cooperative
or credit union, for example, there is a clear incentive for members
to join, and an explicit measure of "dividend" through
cheaper products. This is not the case with an NHSFT, and is likely
to affect enthusiasm for "joining up". Joiners are therefore
likely to come from amongst the ranks of the middle classes who
have the time and inclination to undertake such relatively prestigious
local roles, and perhaps from those who oppose the very notion
of FTs and fight for election on that ticket.
2.4 Secondly, a local hospital does not
bear the same relationship to its community as a local store,
credit union or housing organisation, because accountability goes
beyond the membership. Members of a cooperative store only have
obligations to their members within the context of an essentially
private and limited arrangement, whereas health is an inherently
public and political issue that has to be run on different lines.
2.5 It is this inescapable politicisation
of health that makes the "private club" model of an
NHSFT entirely inappropriate. Local interest groups that do not
either represent or have close links to wider constituencies of
interest could easily hijack FT governance and the strategic agenda.
Examples might be changing a regional specialist trust into a
more local hospital, opposing reconfigurations of acute care which
threaten the traditional character of the hospital, opposing the
whole concept of foundation status, or diverting money from national
priorities to local pet schemes. This is precisely why health
issues require accountability to a direct electorate, not a self-registered
"membership". Whether this is a local or a national
electorate is a critical debate that the Government seems anxious
to avoid.
2.6 There is a strong danger that the granting
of independent foundation status to one part of a local health
and welfare economy will undermine partnership working across
a "membership community". Acute hospitals are already
the weakest link in local partnership chains, and giving them
the additional freedoms associated with FT status will only increase
their insularity to the detriment of the wider community.
2.7 The crucial local relationship will
be that between an FT and its corresponding PCT/s. Those hospitals
acquiring foundation status will not be subject to performance
management by the Department of Health or Strategic Health Authorities,
but instead will be held to account for delivering the outputs
agreed with PCTs and others as part of the commissioning process.
These outputs will be agreed with PCTs and formalised under legally
binding agreements that will, according to the Guidance, introduce
greater clarity and transparency into the relationship. However,
PCTs generally have not yet established a strong commissioning
role viv-a-vis their local acute trusts, and these proposals do
not look likely to change matters. The focus of the new relationship
seems to be firmly upon the nascent FTs rather than the fledgling
PCTs. Foundations will enter into legally binding contracts with
PCTs running for between five and seven years, and the imperative
is largely to give FTs the financial stability they need to attract
private sector investment, rather than to ensure a stable and
coherent local planning environment. PCTs are accordingly likely
to be left in a relatively weak position.
2.8 The paradox of this reinforcement of
the position of the power of acute trusts is that it comes at
a time when the key commissioning issue of the next decade is
the need to change acute care configurations—there has never
been a less opportune time to insulate acute trusts from their
local partners. Memberships of FTs will probably form a strong
attachment to "their" hospital and seek to repulse attempts
to reconfigure service delivery. The paradox is that even the
latest generation of hospitals are in danger of becoming quickly
redundant. The King's Fund, for example, has forecast that 50,000
new beds will be available to the NHS through new technology allowing
patients to be monitored in their own beds at home. Other new
developments will include nurse-led minor injury treatment centres,
combined health and social care centres, and hi-tech specialist
care units considerably smaller than existing hospitals (Coote
and Appleby, 2002). The last thing the NHS needs right now is
a system of governance that fuels loyalty to an institutional
building rather than an evolving system of health and welfare.
2.9 Also, little or no thought appears to
have been given to the relationship between NHSFTs and the wider
local spectrum of commissioners and providers of health and welfare.
The Guidance contains the usual routine exhortation to be a good
partner. Reference is made to a "whole system approach intended
to engender shared ownership of change at the local level and
the important continued commitment to partnership working"
(para 7.17). One of the tangible ways in which such sentiments
could be given expression is to ensure the main stakeholders—especially
local government—are represented in governance arrangements,
but this is left entirely to the FT.
2.10 There are two formal constraints on
unilateral action. First, the "duty of partnership"
which is already laid upon NHS bodies. It is said that "in
line with its statutory duty of partnership, an NHSFT will be
expected to use new freedoms in a way that does not undermine
the ability of other providers in the local health economy to
meet their NHS obligations" (para 1.37). Elsewhere, it is
stated more strongly that "As a condition of legislation
and the licence (an NHSFT) will be subject to a general requirement
to co-operate with other public service providers and NHS bodies"
(para 3.21). Particular mention is made of NHS and social care
providers and commissioners, education and training bodies, and
the Department of Work and Pensions. Secondly, like other NHS
bodies, an NHSFT will be expected to develop a cooperative working
relationship with the local Overview and Scrutiny Committee. It
remains to be seen how tough the Independent Regulator will be
on the issue of partnership working, but it would be naïve
to expect much more than lip service.
FT ROLL-OUT:
ADMINISTRATIVE ENTANGLEMENT?
3. The potential insularity of FTs from
the rest of the local health and welfare economy is something
that will increase as the promised roll-out of FT status unfolds.
Ministers are coy about how widely the new status will be awarded,
but the Guidance states that "as more NHS Trusts improve,
more will be eligible to apply for NHSFT status, and in later
waves, eligibility will be opened up to other types of NHS Trust".
Indeed, it is further suggested that "In time, NHSFT status
could also be opened up to organisations that are not currently
part of the NHS" (para 1.41). It seems, then, that the charge
of elitism currently being levelled at the first wave of FTs is
to be countered by making foundation status the norm for all NHS
bodies and for some unspecified non-NHS bodies.
3.1 Such an extension of foundation status
would be foolhardy, replacing elitism with a local administrative
nightmare. It is bad enough to have one part of the local public
sector separately and indirectly elected; to have similar arrangements
for many bodies throughout a locality would take this country
back to the administrative entanglements of the nineteenth century.
3.2 In Victorian England, all kinds of ad
hoc authorities—some elected, some appointed—were
established by local Acts of Parliament, each providing a specific
service within a particular area. These included Turnpike Trustees,
Improvement Commissioners, Boards of Guardians, local health boards,
highways boards, elementary school boards and sanitary districts.
Such fragmentation eventually collapsed under the weight of its
own cumbersomeness and resulted in the passing of the Local Government
Act of 1888 which created 62 county councils and 61 county boroughs,
all directly elected.
3.3 This lesson from history is highly relevant
to the debate on FTs, and points to a much more coherent and comprehensive
way of shifting power from the centre to local communities. One
option would be to focus upon coterminosity and local authority
representation on traditional NHS boards. Essentially this is
the Welsh model, whereby from April 2003 the five health authorities
will be replaced by 22 health boards that match the boundaries
of the 22 local councils, with town halls guaranteed strong representation.
3.4 A second option would be to use a revitalised
and modernised local government system as the overarching body
responsible for local health and welfare—the model that
is commonly found in most European countries, and one that has
the virtue of strengthening direct democratic representation.
It is hardly surprising that voters are apathetic about their
local councils in the most centralised state of Western Europe.
3.5 What these alternative options would
offer is a chance to avoid the reinforcement of a hospital dominated
health service that NHSFTs will bring. As noted earlier, hospitals
are no longer the stand-alone institutions they were in the last
century. The aim today is integrated hospital, primary, community
health and social care; it is about whole-systems working, not
competitive bodies; it is about building networks of professionals
across agencies and traditional boundaries, not about locking
them into a series of local silos; it is about local communities
feeling a sense of ownership for facilities and services across
an entire locality. This is the real challenge of "local
ownership" and decentralisation.
Coote, A. and Appleby, J. (2002), Five Year
Health Check: A Review of Government Health Policy 1997-2002.
London: King's Fund.
Department of Health (2002), A Guide to NHS
Foundation Trusts. London: Department of Health.
McCartney, I. (2002), Keep your nerve: this
is the rebirth of popular socialism, The Guardian, December
12.
| 
