Select Committee on Health Second Report

7  CONCLUSIONS

188. The publication of Commissioning a Patient-Led NHS in late July 2005 caused dismay throughout the NHS. Many aspects of the proposals were criticised. We were told that the initial consultation process was flawed, the impact of the proposed reconfiguration had not been adequately analysed, the risks had been underestimated, the potential savings overestimated and alternatives not canvassed. During this short inquiry we examined these claims and conclude that they are well-founded.

The consultation process

189. There have been many failings in the consultation process, namely:

• NHS organisations were expected to consult and put together proposals for far-reaching changes to local services to a timetable which was impossible to meet; as a result patients, local people, NHS staff, other NHS organisations, MPs, local councillors, and other key organisations have been unable to contribute meaningfully to the process;
• despite the Government's repeated reassurances, the consultation has been a 'top down' process: change has been imposed on local NHS organizations by central government for financial reasons; as a result solutions that would best meet local needs are being overruled because they do not yield the required savings;
• the provisions about the future of PCT-provided community services are especially unsatisfactory, in particular:
  • Commissioning a Patient-Led NHS was published five months before the end of the consultation on Your Health, Your Care, Your Say, which had been launched in June to shape the Government's forthcoming White Paper on out-of-hospital care—its publication made a mockery of the consultation;
  • in November, four months after publication, the Government was still unable to clarify whether or not PCTs would eventually divest themselves of their provider functions;

190. The Government's numerous announcements and subsequent retractions mean that it is still unclear what it's policy is on the divestment of PCTs' provider services. This clumsy and cavalier approach to NHS staff has had a very damaging effect on staff morale.

191. The Secretary of State has promised that all proposals that have not been subject to extensive local consultation will be rejected. Our evidence indicates that insufficient consultation has taken place in several areas. To ensure that what remains of the formal consultation process in respect of changes to PCTs is as transparent as possible, offering a genuine choice about how local health services are structured, we recommend that in statutory local consultations all SHA areas be obliged to consult on at least two options.

The impact of reconfiguration

Impact on day to day functions, including clinical services

192. We were told by a senior NHS official that it takes on average eighteen months for organisations to 'recover' after restructuring, ie. to bring their performance back to its previous level. The restructuring of PCTs is likely to have significant effects on their ability to undertake their core functions, including commissioning services, providing community health services, and protecting public health. The destabilising effects are already becoming apparent: clinical staff are moving from PCTs to the acute sector because of uncertainty over their future roles. There are well-founded concerns that patient care will suffer because of the proposed reforms.

193. After the immediate disruption of reorganisation, it is thought to take a further 18 months for the benefits to emerge - a total of three years from the initial reforms. Thus, just as the benefits of PCTs (established in 2002) are about to be realised, the Government has decided to restructure them. The cycle of perpetual change is ill-judged and not conducive to the successful provision and improvement of health services. Major restructuring should only be undertaken if there is an overwhelming argument in its favour; in this case there is not.

THE LONG TERM IMPACT ON COMMISSIONING

194. The Government claims that the main reason for the reforms is to strengthen PCTs' commissioning function. We strongly support its aim, but it is clear that improvements in commissioning should have been addressed before, or at least at the same time as powerful incentives were being introduced which strengthened the provider sector. The fact that it was not has given rise to an uneven balance of power in the NHS that may now prove difficult to redress.

195. The Government's reforms promise the increased bargaining power of larger organisations. Although they may lose links with departments of district councils such as housing, more of the new PCTs will be co-terminous with county council social service departments. However, such advantages have to be balanced against the loss of local engagement which smaller PCTs provide. The introduction of Practice Based Commissioning will make some amends—it may achieve local clinical engagement—but it will not provide adequate patient involvement. Moreover, the Government in initiating its reforms has not properly thought through the consequences: for example, there are real concerns that the implementation of the public health improvements announced in Choosing Health might be threatened.

196. The evidence presented to this inquiry indicates that there is a practical alternative way forward which does not require restructuring. It involves focussing on the most effective ways of improving commissioning. It does require managers with better skills and better information systems. The Department should ensure that the poorest performers become better commissioners by offering central support to them and by facilitating the adoption of the best practice from good performers.

197. In so far as there are advantages in becoming larger, PCTs are already capturing them through successful collaborative working with one another. The Government should allow PCTs to develop organically, enabling them to evolve into larger organisations where this clearly best meets local needs. This approach would avoid the hugely disruptive and costly impact of another root and branch reform of the NHS.

FINANCIAL SAVINGS

198. The Government has downplayed the financial motivation for its reforms, concentrating instead on its aim of strengthening commissioning. However, cost savings seem to have been the key consideration in the reconfiguration proposals. Plans which would better meet local needs were discounted because they did not yield sufficient savings. Achieving savings is a very important aim but it should be stated explicitly so that it can be subject to proper scrutiny.

199. In fact, it is doubtful whether the reconfiguration will yield the £250m savings the Government is hoping for if the costs of restructuring including those incurred by redundancies and by establishing new structures to secure local engagement are taken into account.

200. It is also doubtful whether it makes sense to reduce expenditure on PCTs rather than other parts of the NHS. PCTs are currently responsible for spending 80% of the NHS's £76 billion budget. At a time when PCTs' commissioning role is crucial to the success of the NHS, it is probably a false economy to deplete the NHS' managerial resources in an attempt to save only a fraction of that total amount. It is worth noting that only three years ago, when they were created, the Government thought PCTs good value for money.

Contracting out PCT provider services and commissioning

201. There are also important concerns about the consequences of the divestment of PCT provider services. Should this go ahead, it could lead to the fragmentation of community services, and make joined-up care even harder to provide. Moreover, it is unclear whether sufficient alternative providers exist to provide a market in community services.

202. During the course of this inquiry, it emerged that proposals had been made to put commissioning in Oxfordshire out to tender. These proposals raise crucial questions about accountability and transparency. Once again, a significant policy change was proposed without consultation.

203. The status of the divestment and the Oxfordshire proposals are now unclear following the outcry they engendered. If either policy is to be introduced, it will now be done more slowly than originally intended. If it is to pursue either of these policies, it will be vital that the Government learns from the mistakes it has made with Commissioning a Patient-Led NHS: it must allow sufficient time and opportunity to consult on and debate fully its proposals, both nationally and locally.

General lessons

204. The unhappy episode which this report has recounted provides a number of lessons for the management of the NHS. The risks of the proposals contained in Commissioning a Patient-Led NHS are high and there is little evidence that the costs will be outweighed by the benefits. The Department must more carefully consider the impact of its proposals on its staff, which are its most valuable asset. They should not be shoved around like the pieces on a chess board. Major changes to the NHS have large costs and should not be embarked upon lightly.

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Prepared 11 January 2006