Examination of Witnesses (Questions 620
- 639)
WEDNESDAY 28 JUNE 2006
MR KEN
ANDERSON, MR
BLEDDYN REES
AND MR
GEOFF SEARLE
Q620 Mike Penning: What lessons did
the Department learn from Phase 1 of the ISTC programme? How have
these been applied in phase 2?
Mr Anderson: We learned and we
are applying them now. It is actually reference to the schemes
we have looked at and decided not to go forward with. We need
to firm up local delivery plans with the local health economies
before we go out and start talking to private sector partners.
We are now in the process of having detailed discussions with
the folks on the ground. We are applying, I think, the lessons
learned very well indeed around that process. The result of that
were the seven schemes that you saw listed in the Health Service
Journal.
Q621 Mike Penning: The Secretary
of State referred to the seven schemes being cancelled but the
strategic health authorities affected in their own area have been
told to provide more independent sector services to NHS patients.
Can you explain how that is going to work if the ISTCs have been
cancelled?
Mr Anderson: I think it is an
unfortunate misnomer, quite frankly. When we say cancelled, we
should say cancelled in their present form.
Q622 Mike Penning: The word "cancelled"
means it is not going to happen: you have started and you have
stopped.
Mr Anderson: In their present
form. I guess it would be applied to the present form, so we go
back to the health economy and then we continue the conversation
around what their needs are. But they have gone out and they have
identified a gap or a necessity for extra throughput within that
economy that would be provided by the private sector, and so,
once you get down to nuts and bolts and you start talking about
case mixes and the number of patients, and very honestly how maybe
some of that will impact other local providers economically, then,
until you can delve into the detail, it is very hard to get a
true picture in that economy. The LDPs are a very macro look at
what a health economy needs over the next given year, so, when
you sit down and you start having discussions with the health
economy, the package may not stack up in the same way that it
was originally envisaged. We had the same issues, if you want
to call it that—and I think it is a good discussion to have
with the local economy—around how they stacked up, and we
cancelled schemes in wave 1 which came back to health economy
but in a different guise with a different case mix. Maybe, instead
of being a stand-alone scheme, it then became something that we
did on a JV basis with another National Health Service trust,
or maybe it was a completely different package, where it was attached
to a more community-based provision package. Until you can sit
down and describe specifically what the private sector components
are in their capabilities and have a detailed discussion, we cannot
take it forward around the constraints of value for money—which
we are going to talk about after this.
Q623 Mike Penning: I think I will
stop you at that point because I think you have used so much jargon
I do not believe you have answered the question in the first place.
We will come back to that.
Mr Anderson: Okay.
Q624 Dr Naysmith: The Secretary of
State also wrote in her submission "we remain committed to
investing £550 million on the procurement in the independent
sector: this includes £50 million from the first wave of
ISTCs." Is this £550 million per annum over a five-year
programme, which represents a total of £2.75 billion?
Mr Anderson: Yes, that is £550
million annually.
Q625 Dr Naysmith: If so, can you
explain how this relates to PEQ (public expenditure questionnaire)
from 2005, which suggests expenditure of up to £5.8 billion
over Phases 1 and 2 of the ISTC programme.
Mr Anderson: I am sorry, I do
not have that in front of me. I could go back and look at that.
I am not familiar with that figure.
Q626 Dr Naysmith: Which one are you
not familiar with, the £2.75 billion or the £5.8 billion?
Mr Anderson: I think I would recognise
£5.8 billion as a total between the Phase 1 and the Phase
2 combined procurements but I would not recognise that figure
attached to the Phase 2 alone.
Q627 Dr Naysmith: Phase 1 of 2.
Mr Anderson: That is correct.
Q628 Dr Naysmith: £5.8 billion
is an accurate estimate, is it?
Mr Anderson: I would imagine,
roughly, with Phase 1 and 2 combined, you would probably get fairly
close to that.
Q629 Dr Naysmith: We were told that
ISTC programmes were "consultative and pragmatic" and
that schemes had been cancelled if it was clear that the local
NHS had adequate capacity and also that the Government is "committed
to investing £550 million on the procurement in the independent
sector". How can you be sure that you meet that target and
at the same time be committed to a number that is flexible and
pragmatic.
Mr Anderson: I think the flexible
and pragmatic piece is being realised through the fact that we
have dialogue with the local health economy and, in some cases,
if the health economy has come to the conclusion, based on some
of the assumptions they had made in the local delivery plan exercise,
that that amount of activity is no longer needed then we talk
to other health economies. Across England I do not think there
is a lack of need for extra capacity, particularly around some
of the elective procedural pieces that we are doing.
Q630 Dr Naysmith: Will new ISTCs
go ahead in any areas where it is clearly demonstrated there is
no need for additional capacity? Is that what you are saying—although
we have this figure of £550 million—if the demonstration
is that ISTCs are not needed?
Mr Anderson: If they demonstrate
not a need for ISTCs, then that is a conversation they will have
to have with ministers. As far as I know, we are not forcing ISTCs
down anybody's throat, to add extra capacity in an area where
they say specifically and categorically they do not need it.
Q631 Mike Penning: We had evidence
on Thursday's session from the Chief Executive of West Herts Hospital
Trust, who clearly said to this Committee that they do not want
the ISTC. It will have a major effect on them. They will physically
have to knock down a hospital which is perfectly okay: five theatres
working very well. Are you saying that, if that trust does not
want that ISTC, they go to the Minister and the Minister would
listen?
Mr Anderson: We have a conversation
with the trust initially. We are still having conversations with
Hertfordshire as we speak. That scheme was one that started in
the Phase 1 portion of the schemes, and one of the reasons it
has not gone forward to date is because we are still talking to
that health economy about their needs.
Q632 Mike Penning: That you have
not progressed because there is an argument over the need.
Mr Anderson: No. I would not characterise
it as an argument. I would characterise it as a discussion. The
flip side of that is that health economies used the independent
sector treatment centre programme as a reconfiguration tool as
well. There is capacity in the NHS that we pay for that is not
necessarily applicable to today's type of health care. Those are
very detailed conversations around an extremely sensitive and
extremely involved strategic issue for health economies. It is
not something that you can resolve in a matter of days or weeks
even and it takes a detailed conversation with the health economy
around what does reconfiguration look like and what does 21st
century healthcare look like.
Q633 Mike Penning: If West Herts
Hospital Trust want to reconfigure, and you are aware of the situation
. . . Reconfigure, by the way, means knocking down a general hospital
because that is what is going to happen.
Mr Anderson: Not necessarily.
I would not accept that.
Q634 Mike Penning: The only way that
can go ahead is if the ISTC comes in. It is a tool.
Mr Anderson: It is not the only
way. There are a lot of health economies who are reconfiguring
without ISTCs or independent sector involvement. It depends on
what tool that health economy needs.
Q635 Mike Penning: I am interested
in your comment that if they are not happy they go to the Minister—and
the Minister says, "It is nothing to do with me," and
passes it down the line.
Mr Anderson: No, that was not
what I meant at all.
Mike Penning: That is what happens in
real life.
Q636 Dr Naysmith: Following on that
line, the Minister also said, when we were discussing the decision
not to go ahead with seven of the Phase 2 schemes, that "in
other [areas] it has become clear that the level of capacity required
by the local NHS does not justify new ISTC schemes"—which
is really what we are discussing now. You ought to be able to
provide us with a list of those areas where you have been looking
at the possibility of going ahead.
Mr Anderson: I think we can give
you a note on that. I do not have that detailed information in
front of me.[1]
Q637 Chairman: Presumably it would
not be much different from the seven that are highlighted in the
Health Service Journal.
Mr Anderson: I think it might
reflect the Health Service Journal article.
Q638 Chairman: You think it is pretty
accurate, do you?
Mr Anderson: I think they had
reasonable information, and they tend to . . . I do not know the
complete content of the Health Service Journal. I do know
the seven schemes that they were talking about. The article was
accurate to the point of the seven schemes that we have decided
to look at differently, or to go some place else and try to draw
that value out of a different area.
Q639 Mike Penning: There are clearly
other schemes that you are looking at on top of that seven.
Mr Anderson: If there are not
in ITN, yes.
1 See Ev 218 Volume III Back
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