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2.50 pm

Mr. Archie Norman (Tunbridge Wells) (Con): I want to build on the excellent speech made by my right hon. Friend the Member for Charnwood (Mr. Dorrell). Those of us who want the NHS to succeed know that that success depends not on the number of targets that we can generate, or even what they are, but on the management calibre that we bring to it, the teamwork and involvement of clinicians in a common vision of what they can achieve, and a framework of motivation and discretion within which they may operate. That of course is where the whole question of the target-based framework starts to apply.

Like other hon. Members, I do not believe that it is at all surprising that we have seen a proliferation in the number of targets. In fact, given that the Government

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have committed themselves to investing hugely greater resources in a substantially unreformed system with, in many cases, quite weak management, it is perfectly reasonable of them to say that they want to measure the outcomes. We must remember that in the early years, from 1999 to 2001, we had a 21 per cent. increase in expenditure for an increase in outputs of approximately 1.6 per cent. There are different ways of measuring output, but it is predictable that any Government faced with that sort of problem will want to establish greater clarity and measurement of performance.

It is equally true, as Labour Members have said, that if we are ever to create any sort of internal market or sense of choice in the health service, the public need transparency of performance so that they may exercise whatever choices might be available in future. I am not, therefore, against the idea of targets or measures for their own sake. The issue is what part they should play in management and how they help build better-quality management with better clinical involvement as well as the right framework of motivation and commitment.

The starting point is the sheer proliferation in the number of targets. It is quite unreasonable to generate so many targets that it is impossible for management to devote a reasonable amount of time to any single one of them. Chief executives of NHS trusts have 420 different targets to pursue. According to responses to my parliamentary questions, there are 151 performance indicators, up from 86 last year. That proliferation is a reflection of the preoccupation of Ministers and the Government with trying to impose control. Every time a new issue arises and every time something remotely threatening or critical of Government crosses their radar screen, it is extremely tempting to impose another target.

The delusion is that a target will in any sense be a substitute for effective management.The target system is at risk of becoming a substitute for management. It is inevitable that it will be politicised; that is the nature of our system, and the episode with the South Durham Health Care NHS trust illustrates how a target-based system leaves Governments vulnerable to that. For management, that results in a vicious circle of demoralisation, a wedge between clinicians and management and a resulting decline in the calibre of people and resources available and rising costs in NHS administration.

Mr. Michael Jabez Foster (Hastings and Rye) (Lab): The hon. Gentleman has made it clear that he is not against all targets, but against the extent of the targets. Will he make it clear which particular targets he is against? Which does he believe to be irrelevant, and which should be discounted?

Mr. Norman: The hon. Gentleman asks a perfectly reasonable question. It is obvious that removing any of the existing targets would be a difficult and sensitive problem. I put it to him, however, that if targets are to achieve any reasonable purpose, there is no point in having more of them than the chief executives and management of trusts can sensibly devote their time to. All that does is invite them to fail. It is inevitable that

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some trusts, even excellent ones, will underperform on some of the 420 different targets. As a result, the idea will be encouraged among the general public that the NHS is failing. I put it to Ministers that if they are sincere in their commitment to restoring public confidence in the NHS, and if they want to demonstrate that there is improvement, the first thing to address is the nature of the targets and whether they are giving the NHS a feasible or deliverable set of outcomes.

No one should be deluded about the extent of the problem. By way of illustration, the British Medial Journal survey of clinical directors on 22 March last year found 60 per cent. responding that they do not have confidence in the management of their trusts. The reason is that we are increasingly driving a wedge between clinicians and management. Clinicians have very low regard for many administrators and feel that the targets, which put pressure on the administrators, are being imposed upon them.

The evidence from all over the world of what succeeds in health management shows that it is top-calibre people and a common clinical vision. World-leading organisations, such as Kaiser Permanente in the United States, specialise in that. We need not more managers, but fewer. The Solucient study of the top 100 US hospitals found that they had 25 per cent. fewer managers and administrators than the average hospital.

Yet the target-based culture will inevitably create more administration and management for no clinical purpose. The reality is that as long as we create huge numbers of targets, changing them every year, we will create a highly politicised system. While the Secretary of State acts, in effect, as the executive chairman of the NHS and is held accountable from day to day for the targets set, it is in the DNA of the system that we have that it is highly politicised, unless those targets are separated from the process of Government and there is a process of audit and verification that is seen to be independent.

Dr. John Reid: The hon. Gentleman is making an extremely interesting and constructive speech. I do not recognise the 400-odd targets to which he has referred; I estimate that there are about 62. It is arguable whether there are too many; that is a moot point. Certainly, however, we will have that many in future precisely for the reasons that the hon. Gentleman has given about the need for strong leadership and so on in the first instance, which perhaps is not there. A radical transformation requires a degree of—I will not call it autocracy—central direction of targets, which will increasingly disperse downwards as we go through the transformation. I agree with a great deal of what the hon. Gentleman says, though I do not necessarily agree with his numbers.

Mr. Norman: I thank the Secretary of State for that. I do not want to engage now in a debate about the numbers, but would say only that they are quoted from responses to parliamentary questions that I have asked of his ministerial colleagues. We can engage in discussion about the figures at a later date.

What I do put to the Secretary of State, and what I think is undeniable, is that there is a question of morale among the management of NHS trusts. The evidence for

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that is widespread, not least in the recent MORI survey showing that 62 per cent. of chief executives said, when asked about the target culture, that their role was becoming increasingly unattractive. Some 66 per cent. said that the NHS was losing its best leaders, and 69 per cent. said that negative perceptions now make it hard to attract clinicians into management, something which it is extremely important to achieve. The result is undoubtedly the loss of good managers and a failure to attract new management talent into the NHS, which is an increasingly difficult task when salaries are comparatively less competitive and perceptions are comparatively negative. Creating a management framework that is motivational for people, within which chief executives believe that they have the wherewithal to deliver their outcomes—a feasible set of outcomes—is absolutely crucial to the future stewardship of the health service and individual hospitals. Our system is simply not achieving that, and the target culture is one reason why.

On top of that, I believe that the average life of a chief executive of an NHS trust is only 700 days in the job. One reason for that is that there have been substantial changes in management and mergers in the NHS, but it also results from the demoralisation and despair many managers feel about their ability to deliver in their role. At the same time, there has been a huge proliferation in the number of administrators. Ministers have failed to explain why the number of NHS administrators has increased. There may be many different reasons for that. One is that many of them are engaged in monitoring and responding to the scatter-gun approach to the proliferation of targets. I understand that the number of administrators may begin to reduce, but we have yet to see that. There was a huge increase—48 per cent.—between 1995 and 2001 compared with a 7.8 per cent. increase in the number of nursing and clinical staff.

Faced with a crisis of management in the health service, according to my parliamentary questions—the Minister of State, the right hon. Member for Barrow and Furness (Mr. Hutton) and I have had a dialogue on this—the Department has no knowledge of the career background of 60 per cent. of NHS chief executives. He has told me that that is not right, but it is the response that I received to my parliamentary questions. Even if the responses are incorrect, which I am prepared to accept, they must reflect the management priorities and the attitudes of Ministers.

Just in case anyone thinks that targets do not affect attitudes within the NHS and among managers, I refer hon. Members to the article in the British Medical Journal on 20 December last year entitled "Snakes, ladders and spin", which states:

Some of it is gripping, some is tongue in cheek, but it does say:

It refers to different ways of distorting the data and how managers and clinicians can represent themselves in the best possible light. It concludes by saying:

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That is what administrators talk about. If Ministers can show that the target system is not distorting management priorities, they have to explain why everything in that article is wrong.

Unless we get a different approach to management—one that concentrates more on developing quality leaders in the NHS; on getting better co-ordination between those leaders, managers and clinicians; on developing a common clinical vision of what is to be achieved; and on moving away from what is seen as a highly mechanical and one-size-fits-all approach to target setting—we will not get good value for money from the extra investment.

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