House of Commons - Health - Written Evidence

Select Committee on Health Written Evidence

Further supplementary evidence submitted by the Department of Health (WP 01B)

SECTION 1

Transitional arrangements for International Medical Graduates (IMG) entering into the UK health system

1.1 The details of the changes to the immigration rules, including the transitional arrangements have been attached in annex 1 for information.

1.2 Transitional arrangements apply to those IMGs who were on a recognised training programme when the announcement was made on 7 March 2006, or who had been offered a place on such a programme before that date.

1.3 We recognise the need to offer opportunities to train doctors from developing countries in the UK, in skills they cannot get in their home countries. We have agreed a way forward with the Home Office. A new category for Medical Training Initiatives, has been introduced as part of the Training and Work Experience Scheme, which will enable overseas doctors to train in the UK for a up to 24 months and leave the UK with enhanced skills and understanding.

1.4 It should be noted that IMGs will still be able to train in the UK but they will now need to meet the criteria of one of the employment categories of the immigration rules such as the work permit requirements. Work permits will be granted for posts for which there were no suitable UK or EEA candidates (the process of ensuring this is known as the resident labour market test).

SECTION 2

Managers in Primary Care Trusts

2.1 The Health Select committee asked for clarification on the number of managers in Primary Care Trusts, reasons for the above average increase in this staff group and a description of the roles carried out by them.

2.2 Table 1 shows the overall growth in the number of staff in the NHS, in PCTs and the number of PCTs each year as at 30 September.

2001 2002 2003 2004 2005

Total NHS Staff (headcount) 1,166,016 1,223,824 1,282,930 1,331,087 1,365,388

Staff employed by PCTs 76,792 201,408 220,852 238,087 253,337

Of which managers and senior managers
2,577
9,941
11,660
12,815
13,780

Number of PCTs 164 303 303 303 303

Challenges faced by PCTS 2001-05

2.3 PCTs were set up in 2001 to carry out the following three key roles:

— to purchase care for local communities from hospitals and other local providers;

— to directly provide services such as community nurses; and

— to work with local agencies to tackle health inequalities and improve public health.

2.4 In fulfilling these roles PCTs have faced many challenges including:

— managing 75% of the NHS budget to buy and provide services on behalf of their local population;

— creating incentives in primary care including implementing a new contract for over 32,000 GPs that will improve the quality of patient care;

— preparing for a new contract for nearly 10,000 community pharmacists;

— managing over 300 million procedures by GPs and practice nurses every year;

— successful implementation of Agenda for Change and improving financial planning across the health care system;

— working with local government to provide joined-up health and social care;

— building effective relationships between acute and primary care to achieve service redesign;

— managing the largest-ever investment in IT to improve access to healthcare and patient outcomes;

— ensuring recruitment and retention of a workforce which has the capacity, skills, diversity and flexibility to meet the demands on the services it provides, including primary care services; and

— managing the public health agenda to prevent illness, promote health and reduce health inequalities across the country in accordance with National Service Frameworks as described below:

2.5 National service frameworks (NSFs) are long-term strategies for improving specific areas of care. They set measurable goals within set time frames. NSFs:

— set national standards and identify key interventions for a defined service or care group;

— put in place strategies to support implementation;

— establish ways to ensure progress within an agreed time scale; and

The New NHS

A First Class Service.

2.6 Each NSF is developed with the assistance of an external reference group (ERG) which brings together health professionals, service users and carers, health service managers, partner agencies, and other advocates. ERGs adopt an inclusive process to engage the full range of views. The Department of Health supports the ERGs and manages the overall process.

2.7 The rolling programme of NSFs, launched in April 1998, covers:

— Conorary Heart Disease.

— Cancer.

— Paediatric Intensive Care.

— Mental Health.

— Older People.

— Diabetes.

— Long-Term Conditions.

— Renal.

— Children.

— Chronic Obstructive Pulmonary Disease.

— Involvement of the Pharmaceutical Industry.

The Role of Managers

2.8 The real test for improvements in the NHS is not the number of managers it employs, but the outcomes for patients. For example:

— PCTs nationally reported that 99.9% of patients could be offered an appointment with a GP within two working days.

— Figures for March 2006 showed that waiting lists were below one million for the 38th successive month.

— The development of more NHS Walk-in Centres has increased choice and convenience for patients. There are 72 NHS walk-in centres currently open across the country and a further 17 are currently in development, bringing the total number of centrally-funded NHS walk-in centres in England to 89.

2.9 Managers are a key part of the success of improvement in services provided by PCTs. They manage the talented, hardworking people who make up the NHS, controlling the finance and providing the equipment, buildings and services needed to deliver effective healthcare to nearly 60 million people. Managers oversee the renewal of ageing healthcare premises making them fit for the future. Extensions to surgeries and health centres make it possible to develop one-stop shops that house a range of healthcare professionals and new services. PCTs act as a catalyst to redesigning the services available to patients in these state-of-the-art premises. Where patients would once have had to travel to the district general hospital for treatments such as podiatry or physiotherapy, often they now need go no further than a GP surgery. By working collaboratively alongside clinicians and acting as enablers to make changes happen, managers play an essential role in connecting those services provided by the PCT and those services commissioned elsewhere.

2.10 Managers fulfil a wide range of functions within PCTs. They work closely with frontline staff enabling them to concentrate on the delivery of high quality services for patients. Much of their work is invisible, but it is crucial to the organisation and to patients. Taking HR and workforce as an example, managers:

— look at the bigger picture and put plans in place to ensure that their organisations have the staff with the appropriate skills and knowledge to deliver all the services provided by the PCT;

— have responsibility for the day-to-day management in improving working lives by working closely with clinical staff on issues of recruitment and retention, sickness and absenteeism—all matters that affect service delivery;

— ensure staff get the training they need to deliver a high quality service for local people; and

— work closely with education and local authorities to provide opportunities that will attract people to the area playing a significant role in sustaining local communities.

PCTs 2006 and beyond

2.11 From October this year the number of PCTs will reduce to 153 from 303. The reduction, as part of Commissioning a Patient-Led NHS, is expected to result in administrative savings of £150 million to be invested in patient care. As workforce data is collected each year as at 30 September it is likely that most of the reductions will not be seen in published data until Spring 2008.

2.12 The new PCT structures will:

— Save money by streamlining management and administration to provide better value for money so greater resources can be dedicated to patient care.

— Cut out unnecessary bureaucracy by bringing together administration services and reducing the duplication of administration, human resource functions, accounts and hospital contract negotiation teams.

SECTION 3

Community Nurse Numbers

3.1 The table below sets out the growth in the primary and community sector since 1997 compared with growth in the number of nursing staff working in other areas and the total NHS workforce.

1997

2004

2005 Increase
1997-2005 % Increase
1997-2005 Increase
2004-05 % Increase
2004-05

Total NHS Workforce
1,058,686
1,331,087
1,365,388
306,702
28.9%
34,301
2.5%

Nurses working in primary or community care settings

77,249

102,364

105,753

28,504

36.9%

3,389

3.3%

Other nurses 241,607 295,151 298,408 56,801 23.5% 3,257 1.1%

Total Qualified Nursing staff
318,856
397,515
404,161
85,305
26.7%
6,646
1.7%

3.2 As shown in the table, the percentage growth since 1997 in the number of nurses working in primary or community care settings is 13.4% above that of nurses working in other areas and 8% above growth in the total NHS workforce.

3.3 The table below provides a detailed breakdown of the growth in the community sector since 1997.

NURSES WORKING IN PRIMARY OR COMMUNITY CARE SETTINGS 1997-2005 HEADCOUNT

	1997	2004	2005	Increase 1997-2005	% Increase 1997-2005	Increase 2004-05	% Increase 2004-05
Community Matrons	..	..	267	..	..	..	..
District Nurses	14,150	12,827	12,067	-2,083	-14.7%	-760	-5.9%
Health Visitors	12,410	13,303	12,818	408	3.3%	-485	-3.6%
School Nursing Service Nurses	..	2,409	2,887	..	..	478	19.8%
of which:
Nurses with a school nursing qualification	..	856	943	..	..	87	10.2%
Other Qualified Community Services Nurses1,2	1,219,338	33,020	35,218	15,880	82.1%	2,198	6.7%
Sub Total	45,898	61,559	63,257	17,359	37.8%	1,698	2.8%
Practice Nurses3	318,389	22,144	22,904	4,515	24.6%	760	3.4%
Total	64,287	83,703	86,161	21,874	34.0%	2,458	2.9%
Community Learning Disability Nurses	3,226	3,752	3,748	522	16.2%	-4	-0.1%
Community Psychiatric Nurses	9,736	14,909	15,844	6,108	62.7%	935	6.3%
Sub Total	12,962	18,661	19,592	6,630	51.1%	931	5.0%
Grand Total	77,249	102,364	105,753	28,504	36.9%	3,389	3.3%

3.4 Although there have been decreases in the number of district nurses and health visitors between 2004 and 2005, there has been significant growth in the overall number of nurses working in primary and community care settings in both 2004-05 of 3,389 (3%) and since 1997 of 28,504 (37%). Many of these nurses are working in general practice, while others staff new delivery models such as intermediate, and hospital at home teams.

3.5 Many of these nurses working in the community have specialist expertise in areas such as diabetes, palliative care and tissue viability. As well as seeing patients whose needs are complex to meet, they also advise, teach and support other nursing and GP colleagues to improve overall standards of care. There are also nurse practitioners who provide first contact care in GP surgeries or other settings, and the new clinical role of community matron was implemented to case manage those with multiple, long-term needs.

3.6 The Department recognises there is a need for nurses with specialist skills and knowledge in caring for and promoting the health of people in the community. There will be many opportunities for nurses working in the community and demand for more specialist and advanced level skills, especially in light of current reforms to move more care out of hospitals and improve the public's health. New approaches to child health, end of life care and models for addressing long-term conditions mean we need to re-visit the roles, responsibilities and training of the community nursing workforce. The Department will be working with others to review career and education strategies for nursing in the community to ensure the workforce evolves in order to deliver the vision outlined in the White Paper. This work forms a strand of Modernising Nursing Careers.

SECTION 4

Clinical Training in Primary Care

Post Registration

4.1 The majority of investment in post-registration training for existing staff is funded through MPET levy monies held by Strategic Health Authorities (SHAs). SHAs invest this money to develop the skills and competencies of staff in primary and secondary care according to local workforce and service priorities. The DH does not collect information on whether staff benefiting from this resource are from primary or secondary care. However, across the country PCTs have increasingly been involved in directing this investment, which had historically largely been spent on staff in secondary care.

Specialist Practitioner Community Nursing

4.2 SHAs also invest workforce development funding in specialist practitioner community nursing programmes, which lead to a degree or postgraduate diploma. These programmes are for qualified and (usually) experienced nurses and lead to a further professional qualification as a Specialist Practitioner able to lead the development of services in the community. Spending on these programmes has increased in recent years.

2003-04 2004-05 2005-06

Community nursing

Spend £m 48.6 58.3 60.6

Student Population 1,910 2,160 2,245

Community Specialist Practitioner

Spend £m 8.2 10.6 14.7

Student Population 350 450 620

SHAs are also investing MPET funding in developing and funding training programmes for modern matrons.

Medical Training

4.3 Costs of training doctors in primary care are funded through MPET in a similar way to funding provided in secondary care. In 2005-06, funding of £232 million was provided to support 2,786 GP Registrar posts and 125 GP PRHO posts. In addition, from 2006-07 funding will be provided to enable 55% of second year Foundation Programme doctors to spend up to four months in primary care settings.

Undergraduate Training

4.4 MPET funding is provided to support the training of undergraduate doctors and dentists in both primary and secondary care through the SIFT (Service Increment for Teaching) levy. These arrangements are negotiated locally between SHAs, Universities and GPs however funding will generally be allocated on a similar basis to the funding paid to secondary care providers (about £220 per student week).

SECTION 5

GP Contract Costs

5.1 DH response to HSC request for follow up data that details the estimated additional cost of the 2004 GP contract in 2004, 2005 and the estimate for 2006 (this to include and separately list the cost of alternative out of hours coverage).

5.2 The introduction of the new General Medical Services (nGMS) contract was underpinned by a three-year deal, ending in 2005-06, which guaranteed a 36% increase in resources (available to all primary care contractors in England, including those that fall under the national GMS contract arrangements), from £5 billion in 2002-03 to £6.8 billion in 2005-06. Negotiators agreed to measure increased investment in Primary Medical Care Services, in the three-year period ending 2005-06, through a mechanism known as the Gross Investment Guarantee (GIG).

5.3 Evidence from PCT expenditure returns shows that Primary Care Trusts have also made available additional resources to secure the range of services and improvements in care to meet national and local priorities. The overall increase in resources is now forecast to total between 40-50% for the three-year period, based on an estimated spend on Primary Medical Care Services of around £7.7 billion in 2005-06. Final audited information on 2005-06 contract spend will not be available until the Autumn.

5.4 The estimated cost of implementing the new GMS contract is given in Table 1 below. The introduction of the contract was underpinned by a three year deal ending in 2005-06. From 2006 onwards, the contract will be annually reviewed and is the subject of negotiations with GPC. Negotiators have agreed there will be no uplift to any existing element of the contract for inflation or cost pressures in 2006-07.

Table 1

EXPECTED COST OF IMPLEMENTING NEW GMS CONTRACT


Financial Year	Cost £ billion

2003-04	5.8
2004-05	6.9
2005-061	7.7
2006-072	7.7

1 Estimated cost subject to validation/agreement with GPC.

2 The increase in spending over the period 2003-04 to 2006-07 is largely due to increased investment in the Quality Outcomes Framework (c £1.1 billion) and Enhanced Services (c £0.5 billion).

5.5 Table 2 provides a breakdown of the GIG against outturn covering 2003-04 to 2005-06—the agreed coverage period for the GIG. From 2006 onwards, GIG arrangements no longer exist.

Table 2

FORECAST ACHIEVEMENT AGAINST GROSS INVESTMENT GUARANTEE (GIG)


			£ billion

Financial Year	GIG	Outturn	Over

2003-04	5.6	5.8	0.2
2004-05	6.2	6.9	0.7
2005-061	6.9	7.6	0.7

1 Forecast outturn, ie still subject to validation/agreement with GPC.

5.6 The England GIG agreed with the General Practitioners Committee (GPC) is detailed in Table 1, against which current figures indicate the GIG for all years will be significantly over-achieved, ie more spend than was guaranteed.

5.7 The Gross Investment Guarantee (GIG) is the mechanism by which minimum levels of investment is guaranteed for Primary Medical Care services in the three-year period ending 2005-06. The England GIG agreed with the General Practitioners Committee (GPC) is detailed in Table 1 against which current DH forecasts indicate the GIG for all years will be significantly over-achieved, ie more spend than was guaranteed, for each of the three financial years.

5.8 The GIG comprises of expenditure on the following elements:

— Global Sum payments for core services (including Minimum Protection Income Guarantee).

— Quality and Outcomes Framework.

— Enhanced Services.

— Primary Care Trust Administered Funds (eg payments for locum cover, seniority, dispensing).

— Premises (capital and revenue expenditure).

— IM&T.

— Out of Hours.

— Personal Medical Services (PMS) contracts.

5.9 Whilst arrangements were put in place to determine minimum levels of investment guaranteed for the three year period ending 2005-06, the new GMS contract did not formally commence until 1 April 2004.

5.10 The 2004-05 over-spend against the GIG was some £700 million of which £250 million are in the main attributable to additional costs arising from the new GMS contract:

— Circa £150 million due to over-achievement of the QOF.

— Circa £100 million due to pressures on the OOH service.

5.11 Whilst citing the above over-spends, the remaining balance is predominantly due to an increase in the level of investment in PMS contracts, over and above that initially assumed at the time GIG was set. Work is still ongoing in investigating this further.

5.12 We currently estimate in 2004-05 that PCTs are having to manage a financial pressure of £250 million as a consequence of resourcing the contracts. Final audited information on 2005-06 will not be available until late autumn 2006.

5.13 PCT forecasts for 2005-06 indicate a similar over-spend as that reported for 2004-05, ie £700 million. DH assessment is that the QOF and OOH services will exceed allocated resources by similar amounts to those experienced in 2004-05.

5.14 Looking across all three years of the deal: In England the final costs of providing Primary Medical Care Services over the three years 2003-04 to 2005-06 was some £1.6 million more than the amount originally guaranteed to GPs.

5.15 Measurement of spend against the Gross Investment Guarantee should not be confused with spend against resources allocated to PCTs.

5.16 DH currently does not have available information from the NHS on the forecast spend on the GP contract 2006-07 position.

Quality Outcomes Framework (QOF)

5.17 High levels of achievement in the quality and outcomes framework are to be congratulated. It shows we have a system in place that motivates General Practice to provide high quality evidence-based clinical care. This benefits the vast majority of patients and improves health prevention in ten of the most common long-term illnesses as well as impacting on the wider NHS; for example, fewer avoidable hospital admissions due to better chronic disease management.

Out-of-Hours

5.18 Increased spending on Out-of-Hours shows that PCTs are maximising use of their unified budgets in order to establish integrated networks of unscheduled care provision so that when patients contact out-of-hours services they can be assured that their clinical needs will be consistently met through fast and convenient access to care, delivered by the most appropriate professional in the most appropriate place.

5.19 Less than 5% of GPs provided their own out-of-hours (OOH) care to patients before new general medical services (GMS) contracts were introduced. OOH opt-outs were a key feature to improve GPs working lives through ending 24-hour responsibility for their patients.

5.20 Under the GMS contract, where a GMS GP practice opts-out, it will surrender 6% of its global sum funding, equivalent to around £6,000 per average GP.

PMS practices surrender an equivalent amount. If every practice in the country opted-out, this would amount to some £180 million. In addition:

— There is a ring-fenced Development Fund of £91.2 million.

— £14 million to support PCTs facing the biggest challenge in developing out -of-hours services.

— £33.4 million to support the development of urgent care services.

— £3 million to support the OOHs exemplar programme.

5.21 Taken together these resources of up to £322 million will be available in 2005-06 to help fund PCT provision of out-of-hours services. The majority of OOH provision is provided under Alternative Provider Medical Service (APMS) contracts.

5.22 Patients continue to receive a safe out-of-hours service that also needs to meet new national quality standards such as access through a single phone call.

SECTION 6

New Contracts Information

Agenda for Change Costs

6.1 The committee requested information on the budget for 2004-05 or the over-spend (or under-spend) for 2005-06.

6.2 The original funding envelope for Agenda for Change from 2004-05 to 2006-07 is set out in the Table below.

6.3 Monitoring of the costs of Agenda for Change in 28 sample sites in 2005 suggested that in the first 12 months from October 2004 to September 2005 direct earnings costs exceeded those originally estimated by 0.5% of the Agenda for Change paybill, or around £120 million a year in cash terms. In the same period, this data suggested that the indirect costs of replacing additional hours and leave arising from Agenda for Change exceeded those originally estimated by at least £100 million a year. However, these indirect costs are based on trust estimates rather than actual payroll records, and are susceptible to management action. Analysis of subsequent 2005-06 accounts data for non-Foundation Trusts suggests that Hospital and Community Health Service pay costs overall have been running at less than our original assumptions (5.2% overall against our original 5.8% assumption.).

6.4 In addition, from October 2005, a significant minority of staff who were previously on their scale maxima, or on spot salaries, will have gained access to some further pay progression. This was allowed for in the cost estimates below. But whether actual experience of progression is more than expected, or less than expected, is not known, and we are currently considering what further information and analysis is necessary to measure this.

6.5 There are also a number of benefits from the pay reform which will arise over time and are not taken into account in the analysis above. One example is that the net effect of harmonisation of working hours on nursing hours (37.5 hours per week) will be to gradually increase the total hours available to the NHS, including hours available from key groups such as radiographers.

6.6 It is also important to note that it will become increasingly difficult to separate out costs due to the new system from other changes as time goes on.

ESTIMATED COST OF IMPLEMENTING AGENDA FOR CHANGE


Year	Cumulative total £ million1

2004-052,3	490
2005-06	950
2006-07	1,390

1 Totals rounded to nearest £10 million.

2 Original envelope figure. This was subsequently reduced to £480 million.

3 A further £30 million in non-recurring funding was made available in 2004-05, primarily for the transitional costs of the change in pay systems—such as backfill for staff assisting with job evaluation.

SECTION 7

Consultant Contract Costs

7.1 The Committee requested information on the budget or projected variance for 2005-06 or 2006-07.

7.2 We invested additional, recurrent funding to meet the costs of the consultant contract. This investment, a total of £250 million, was introduced over the three-year period from 2003-04 to 2005-06.

7.3 Representations from trusts in late 2004 suggested that the costs of the consultant contract had exceeded plans by as much as £150 million, mainly due to higher levels of programmed activities decided by local trusts. We uplifted the tariff for 2005-06 by this amount.

7.4 Evidence obtained subsequently, however, from the DH consultant contract survey (on data as at October 2004), suggested that while the levels of programmed activities were higher than expected, the difference suggested an excess cost of the order of £90 million rather than £150 million.

7.5 Data from the October 2005 DH consultant contract survey has shown a further reduction in average programmed activities from 11.17 in October 2004 to 10.83 in October 2005. It has also shown a reduction in the proportion of consultants receiving on-call supplements, which had also been cited as a cause of cost pressures.

Department of Health

27 October 2006



© Parliamentary copyright 2007	Prepared 22 March 2007