Select Committee on Health Second Report


1  INTRODUCTION

1. On 28 July 2005, the Government published Commissioning a Patient-Led NHS.[1] The central tenet of these proposals was that Primary Care Trusts (PCTs) would be reduced significantly in number in order to achieve 15% efficiency savings, whilst simultaneously strengthening their commissioning function by devolving more commissioning to GP practices, and contracting out the provision of NHS services.

2. In a damning report of initial reactions to the proposals, the Health Service Journal, the generally even-handed NHS trade magazine, described them as 'intellectually incoherent':

    The government's blueprint for primary care trust reform was this week slammed as 'incoherent', 'ill thought out' and 'an incredible way to treat important organisations' by senior NHS managers and policy analysts.[2]

3. In addition to their strong reservations about the content of the Government's proposals, commentators were appalled at the Government's specified timescale which allowed the NHS only 11 weeks, largely over the summer break, in which to consult local stakeholders and put together plans for reconfiguring local PCTs. It was initially thought that these plans would also have to cover the divestment of PCT provider services. The divestment of provider services, including community nursing services, to providers outside the NHS, was also greeted with astonishment, as this appeared to anticipate the outcome of a much-vaunted Government consultation on 'out-of-hospital' care announced only a month previously.

4. The background to PCT reforms is complex. PCTs were established three years ago, replacing larger commissioning structures called Health Authorities. The intervening three years have seen far reaching change in the NHS, including the establishment of Foundation Trusts, the introduction of the new financial system of Payment by Results, the expanding use of the private sector, the advent of patient choice, the introduction of new pay and contracting arrangements for NHS staff through Agenda for Change and new contracts for consultants and GPs, and the implementation of the European Working Time Directive. PCTs currently have a complex and crucial role in implementing all these policies, and currently control 80% of the NHS budget, which currently stands at £76 billion.[3]

5. While sometimes organisations are abolished or downscaled because their functions are no longer needed and they have effectively become redundant, it is clear that the functions PCTs perform are still highly relevant. In fact, at a time of unprecedented investment in the NHS, PCTs have never been more critical to the success of the NHS in ensuring the provision of high quality, value for money health-care. Reducing their number so drastically while their functions remain strongly implies that PCTs have not proved themselves equal to their significant task. However, at only three years old, PCTs are a new addition to the complex jigsaw of structures that make up the NHS, and arguably have not been given enough time to demonstrate their effectiveness.

6. It is perhaps inevitable that structural changes in the public sector attract a degree of resistance from those working in the organisations which are under threat, who obviously are concerned about their own futures. However, the strength of response to these announcements across the NHS suggested to us something more than a knee-jerk reaction prompted exclusively by thoughts of self-preservation and we, in common with many others, were concerned that the tight timescales might allow insufficient time for debate on these far-reaching reforms. Equally, all organisational change brings significant distraction from core tasks, and the prospect of a further reorganisation only three years after the last significant reform of NHS structures raises inevitable questions about the potential impact on PCTs' day to day functions, which include providing vital patient care. We were thus persuaded to conduct an inquiry, within a necessarily condensed timescale, into this complex subject.

7. We announced this inquiry on 21October 2005 with the following terms of reference:

    The Health Committee has decided to undertake an inquiry into potential changes to primary care trusts' functions and numbers arising from Commissioning a Patient-Led NHS, including:

    Rationale behind the changes

    Likely impact on commissioning of services

    Likely impact on provision of local services

    Likely impact on other PCT functions, including public health

    Consultation about proposed changes

    Likely costs and cost savings.

8. During the course of two sessions, we took evidence from the Minister of State for NHS Delivery, Lord Warner of Brockley; John Bacon, Group Director of Health and Social Care Services Delivery at the Department of Health; bodies representing the interests of those working in and with the NHS, including the NHS Alliance, the NHS Confederation, the Royal College of Nursing, the Faculty of Public Health Medicine, London Local Medical Committees, the Local Government Association, and the Association of Directors of Social Services; and from Chairs, Chief Executives and officials working in NHS Strategic Health Authorities and Primary Care Trusts. We also received over 50 written memoranda. We are extremely grateful to all those who gave evidence to our inquiry, many of whom prepared written material and accepted our invitations to give oral evidence at extremely short notice. We are particularly indebted to those witnesses working in the NHS who gave us frank and compelling accounts of the impact of these changes on their own organisations, against a backdrop of extreme political sensitivity and ongoing uncertainty about their own future roles. Their evidence was extremely valuable in shaping our assessment.

9. We would also like to thank our specialist adviser, Dr Richard Lewis, an independent consultant and senior health policy fellow at the King's Fund, for his detailed and insightful support throughout this inquiry.

10. This report begins by providing some brief background to the proposals set out in Commissioning a Patient-Led NHS. It then discusses the implications of these proposals in three separate sections:

  • The initial consultation process, including announcements about divestment of provider services
  • The likely impact of PCT restructurings, including immediate impacts on PCTs' day to day functions and clinical services, and longer term impacts on commissioning, on public health and financial impacts
  • The impact of divestment of PCTs' provider services

We have also included a chapter on issues surrounding the potential contracting out of commissioning in Oxfordshire, which is a separate, but related issue.


1   Department of Health, Commissioning a Patient-Led NHS, 28 July 2005. Back

2   Health Service Journal, PCT reform strategy slammed as 'intellectually incoherent', 4 August 2005 Back

3   Department of Health, Departmental Report 2005, Cm 6524, June 2005  Back


 
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Prepared 11 January 2006