Examination of Witnesses (Questions 200
- 219)
THURSDAY 1 DECEMBER 2005
SIR NIGEL
CRISP, MR
JOHN BACON,
MR RICHARD
DOUGLAS AND
MR ANDREW
FOSTER
Q200 Charlotte Atkins: We cannot
clarify the financial costs, but what about the costs in terms
of staff morale and people taking overtime and people deciding
that really this is another reorganisation too far?
Sir Nigel Crisp: Yes, you are
absolutely right, this is deeply disruptive and disruptive for
individuals.
Q201 Charlotte Atkins: And demoralising?
Sir Nigel Crisp: Demoralising
for individuals and also for organisations, but you need to look
at the decision which we needed to take, which is actually that
we needed to get the commissioning organisations up and running
effectively so that we were able to manage what was happening
in the NHS more effectively, and I am sure you have had that argument
and discussion played out here. Regrettably, we came to the conclusion
that this was the only way we could do that. On the particular
point which we were asked earlier about service provision, we
have accepted that we were too constrictive on that and that,
indeed, was damaging, but on the basic point about reconfiguration
this, is something we need to do in order to deliver the changes
in the NHS which we believe will be necessary. The key for us
now is how well can we manage it, and we have agreed with the
trade unions the way in which we will handle the HR type issues,
we are putting in place interim appointments, we are putting in
place all the sorts of things you would expect us to do in order
to try and manage this as smoothly as we possibly can, and it
is helpful we now have some decisions to go out to consultation.
Q202 Charlotte Atkins: In the future,
Sir Nigel, will you try to avoid issuing ground-breaking letters,
as you did, at beginning of the recess? I was a bit worried earlier
on because you were talking about things coming out at the turn
of the year, and it seems to me that, as we go into the recess
just before Christmas, more letters or more documents may be slipped
out during the recess. Hopefully that is going to be avoided,
is it?
Sir Nigel Crisp: I am very confident
that the White Paper we are talking about will not come out during
the recess. This was not intended in any sense to be slipped out,
it was later that we wanted to do it, but we believed it was better
to get it out in July so that we got on with it. That was the
pure reason. We would like to have got it out earlier, but in
terms of actually getting things ready it was important that we
got on with it. That was the reason.
Q203 Charlotte Atkins: It will be
avoided in the future.
Sir Nigel Crisp: We will do everything
we can to avoid that in the future, yes. We have learned some
lessons from it, if that is part of your question, as well.
Q204 Mr Burstow: To pick up on some
reporting from the Health Service Journal and the Financial
Times of interviews with you, Sir Nigel, regarding the issue
of your role as the accounting officer for the NHS and the extent
to which, with the introduction of new primary care trusts as
part of this reorganisation, you will be withholding your accounting
function from PCTs. It is the issue of whether or not some PCTs
will be told they are not grown up enough to manage their own
budgets and whether that is actually going to happen.
Sir Nigel Crisp: Thank you for
asking that question. Firstly, I have not been interviewed by
either the Health Service Journal or the Financial Times.
Q205 Mr Burstow: So you have a double
somewhere?
Sir Nigel Crisp: Literally I have
not been interviewed by either of those two organisations on this
topic. I have been interviewed by both of them on previous occasions.
Let me tell you the process we are going through, because where
that came from was a leak of a document in the middle of an exchange
of different documents and, therefore, inevitably they both got
a little bit of a story and they also got it completely the wrong
way round. I think the Health Service Journal quoted that
following some comments I made at a conference about that. What
we are going to do on this reorganisation is make sure that we
do not just re-organise, get people into new jobs and then just
leave it. What we are going to do is the same sort of process
as we are doing with NHS hospitals as they become foundation trusts.
Firstly, we expect them at their starting point to set out very
clearly what it is they are going to do and how they are going
to deliver all their functions, use a process of diagnosis to
see if that is going to be effective and then have a development
programme thereafter. The nature of the development programme
will be tailored to the nature of the individual organisation.
In some cases, if we feel that they do not have adequate clinical
governance in their plans, for example, we will no doubt agree
with them—and by "we" I mean ourselves and the
SHAs—that they will have clinical guidance, some kind of
process for development. If we do not think they have adequate
financial plans, we will also be sitting very closely to them
to start off with to make sure that they convince us in end that
they have actually got adequate financial plans and management
skills for the next process. That is what we will be doing. It
is a development process. It is not about saying whether or not
people are, well, it is at one level about whether or not people
are capable of doing their full job, but that means—
Q206 Mr Burstow: They will be no
less financially autonomous after the reorganisation than they
were before?
Sir Nigel Crisp: They will be
in the same position as foundation trusts are if they are not
yet convincing us absolutely that they are in control of everything,
that they will have much closer monitoring. This is about monitoring.
I will not rule out the point that conceivably I might use my
accounting officer status, but I think I have only ever had to
threaten to use that once in my entire time. It is not something
that I will be waving around. We want those organisations to do
the job as effectively and be equipped effectively to do a really
important job—that is what it is—and that is why leaks
often get it completely the wrong way round.
Chairman: I am very conscious of the
time, so I think we should be able to have time to ask all the
questions and hopefully we will get them answered as well without
having to exchange even more paper than what we have agreed already
this morning! I am going to move on to Anne.
Q207 Anne Milton: We have mentioned
foundation trusts. Can you tell me what the cost of setting the
foundation trusts up was?
Sir Nigel Crisp: In individual
foundation trusts?
Q208 Anne Milton: No, setting them
up to date, all of them.
Mr Douglas: I have not got the
information at hand on what the total cost will have been. I do
not know whether any of my colleagues could help on that. I am
sorry; I have not got that figure at hand.
Q209 Anne Milton: Can you let us
have that?
Mr Douglas: We can. What we will
do is provide the costs for individual organisations and the costs
of the regulators office as well, which are the principal elements.
Q210 Anne Milton: Have any additional
resources been given to foundation trusts that are in deficit?
Mr Douglas: No, nothing has been
given to foundation trusts that are in deficit. They have not
been treated any differently from any of the rest of the NHS,
so those that are in deficit have to manage them.
Q211 Anne Milton: Twelve out of 25
operating in 04/05 reported a deficit. Do you think the piloting
of Payment by Results contributed to their difficulties?
Mr Douglas: I do not think it
has contributed to the deficit, no. I think the reasons they have
got deficits are probably very similar to ones in the rest of
the NHS. For most foundation trusts piloting Payment by Results
is generally beneficial to them, because they tend to be low cost
organisations and their income tends to rise under Payment by
Results and so they will not have lost out as a result of Payment
by Results, they will actually have gained income.
Q212 Anne Milton: No, Payment by
Results might in time be good for them, but it is the piloting
of it that might have cost them and caused them difficulties now?
Mr Douglas: Even in the short-term
most of them will have benefited, so even ones that became quite
well-known with deficits, like Bradford, Bradford was getting
significant income growth under Payment by Results that it would
not have been getting under the previous system, even in the first
year.
Q213 Anne Milton: Are you happy that
12 out of 25 are in deficit? Do you think that is reasonable?
Mr Douglas: In some ways it is
not initially for me to be happy. It is for more for the regulator
to be happy.
Q214 Anne Milton: I am just interested.
I feel quite happy asking you about your happiness with this.
Happiness is important!
Mr Douglas: What we have always
said with foundation trusts is that they will not be in a position
of being tested on break-even each year statutorily by government
interested organisations, and they will have to demonstrate their
financial viability. That can then be looked at over a longer
period than one year. Would I have expected to see 12 out of 25
in the first year? I would have probably hoped there would be
more in surplus than there actually were.
Q215 Anne Milton: They are doing
worse than non foundation trusts, are they not?
Mr Douglas: Overall it is broadly
the same.
Q216 Anne Milton: I have got something
here that says 28% of trusts overall are in deficit, so it is
not broadly the same, it is slightly worse?
Mr Douglas: In financial terms
it is not dissimilar.
Q217 Anne Milton: But it is worse?
Mr Douglas: In financial terms
it is about the same.
Q218 Anne Milton: Is it worse or
better?
Mr Douglas: In numbers terms proportionally
I think there are slightly more.
Q219 Anne Milton: More foundation
trusts in deficit?
Mr Douglas: In terms of numbers
of organisations who have a value.
Sir Nigel Crisp: But in terms
of the overall deficit, the amount of deficit they have scored
between them is in proportion to the number of other organisations.
Chairman: We are going to move on to
private sector involvement in the NHS.
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