Examination of Witnesses (Questions 960-979)
LORD HUNT
OF KINGS
HEATH, MS
CLARE CHAPMAN
AND MR
NIC GREENFIELD
25 JANUARY 2007
Q960 Chairman: Does not 340% over
target on nursing suggest that some NHS organisations—I
am not saying all—felt that this was really a blank cheque
that they had been given in terms of recruiting? Would you say
that was the case?
Lord Hunt of Kings Heath: In relation
to the specific question, my understanding is that these targets
were floors not ceilings, so in a sense they were setting a minimum
level.
Q961 Chairman: Why bother then?
Lord Hunt of Kings Heath: We are
learning, are we not, by experience, and what is happening is
that the NHS is getting more and more information about staffing,
about staff requirements. The aim of workforce planning, which
I am determined to see is effected, is that we do get better and
better at predicting the long-term requirements and then that
we ensure that we are training the right number of people and
that those people are then able to be used by the Health Service.
It is not perfect, but it is getting a lot better, and I think
that the new relationship that we are developing between the department
and the Strategic Health Authorities will ensure that it will
get better still in the future.
Ms Chapman: Can I make a point
to illustrate that. Coming from outside, one of the first things
I looked at was the vacancy rates, because if you have got high
numbers of vacancy rates it always affects the amount of service
that can be delivered to patients. On nurses it looks like around
2001 the vacancy rates were running about just over 3%, about
3.4% from recollection, and in the last set of numbers in 2006
that had come down to 0.9%.
Q962 Mike Penning: That is because
you have cut the posts? You cannot do this comparison, because
it is not factually correct. If you cut the posts, you do not
have the vacancy rates.
Ms Chapman: I understand your
point, although actually the key thing is the trend, and what
that is actually showing to me is that there is work going on
around recruitment to make sure that you have got posts filled
to ensure the delivery of service, and that will be adjusted by
SHAs dependent on their plan for the year.
Q963 Chairman: Does anybody else
have anything to add on that?
Mr Greenfield: On the issue that
you raise about the growth of posts, I think it is important to
note that we do look at the costs of workforce as a routine part
of the CSR process in order to get our resources for the next
three-year cycle of government, we assess the costs of pay reform
before we embark upon it, very clearly, and have done so, but
we have grown the service significantly, as the Minister has explained,
and the vacancies have reduced, the size of the workforce has
increased significantly and the service to patients, above all,
has increased markedly.
Q964 Chairman: I think the issue
around the table is that we took evidence in and around these
issues on other inquiries and found that different things were
being said at different times. Could I just finish on my opening
session. This issue about The NHS Plan 2000, there
was nothing in it about productivity. You have quite rightly pointed
out, Mr Greenfield, that you need to take into account costs and
everything else, but in reality evidence that we have taken in
other inquiries has shown that staff costs have been grossly underestimated
and, as a consequence, have led to some of the problems that there
are currently inside the National Health Service in terms of funding
and problems with overspend. It is an extraordinary situation,
I would have thought. First of all, The NHS Plan
does not talk about productivity, and yet we have just allowed
this situation to happen where I think 70% of current National
Health Service costs are costs of employing people, and we have
had all these overshoots in the three grades that I have told
you, some quite dramatically. Clearly it has affected how the
National Health Service is running and clearly it is likely to
have affected the productivity of the National Health Service
as well, or is that too crude a measure?
Lord Hunt of Kings Heath: First
of all, productivity is important, no question about it, and,
as you probably know, Chairman, the ONS have done various calculations
in relation to productivity. I think, looking at the different
calculations, one can say that the productivity figures are probably
level rather than plus or minus anything dramatic. I would also
say to you that my understanding is that the general trend in
healthcare worldwide is actually a reduction in productivity,
partly because of the cost of drugs and other of the features
that tend to increase costs as the years go ahead, but we are,
of course, committed to increasing productivity. The contracts
that you have referred to are very strong foundations, I believe,
for increasing productivity in the future, because what they are
doing essentially is tying rewards for staff with outcomes in
terms of what patients get from the service. I would also say
that the productive time targets that have been set for the NHS
are reckoned to deliver about 2.7 billion per annum in efficiency
savings by 2008. That is through reductions in length of stay,
reductions in do not attend, reductions in agency spend, reductions
in staff sickness, so that in fact the Health Service is doing
a lot to improve its efficiency. We can do more. I think that
the conditions are there to enable us to do it, but I am certainly
not complacent about the issue of productivity.
Q965 Sandra Gidley: I want to challenge
you on your assertion that because the drugs budget is rising
that means productivity falls. The amount of money may be increasing
but the proportion of the NHS pot that is spent on drugs has actually
decreased; so how can you assert that that has had an impact on
productivity?
Lord Hunt of Kings Heath: I am
not a technical expert on how productivity is worked through,
I confess. I was referring to other countries.
Q966 Sandra Gidley: You seemed to
be extrapolating.
Lord Hunt of Kings Heath: No.
I certainly would be prepared to let the Committee have further
details of other countries where productivity has gone down. My
understanding is the reason for that is in relation to drug costs;
I am not at all complacent about the issue of productivity. Clearly,
from the taxpayers' point of view, if you put a lot more money
into the Health Service, you want something out of it. I think
that looking at what has been achieved in the Health Service,
in terms of better services, more access, reduced waiting times,
we are getting a hell of a lot out of what has been put in. Can
we do more in the future? Yes. What is one of the ways to do it?
It is, in fact, to do what we are doing with staff: to reward
them for the contribution they make, to give them greater skills,
use the skills to better effect, and that is what we are seeking
to do.
Q967 Mr Jackson: I can understand,
Minister, that you want to look forward and not back, but if I
can gently take you back to the Chairman's original question,
which was about accountability, it seems to me what you have said
is that you had a target with respect to workforce planning in
The NHS Plan in 2000 which you took no notice of,
effectively, and you did not have a target for productivity. If
I can come back to Mr Greenfield's point about planning of costs,
salaries, wages, there is a £540 million overspend on that,
so I would not think that is something that one could necessarily
put aside, but I would say, just on one example, Chairman, briefly,
in terms of the use of resources, the BMA told us recently that
there will be possibly 3,200 consultants for whom there will not
be posts. If you look at the cumulative investment that the NHS
has made in those consultant posts, that is an enormous waste
of resources. Can I ask you to respond to that: why you had a
target you took no notice of and yet in respect of productivity
you had no target at all?
Lord Hunt of Kings Heath: My understanding
in relation to workforce targets in The NHS Plan,
as I have said earlier, is that those were floors rather than
ceilings. In other words, it expressed the minimum that we wanted
to get to. I would just refer you to the situation in 1997 and
1998 and the crisis that the NHS faced in terms of shortages of
staff. We had to take quick and decisive action, and that has
happened. As a result of that, we now have a huge number of extra
staff in the Health Service. Of course there are always going
to be issues about how you make sure that the supply of staff,
by and large, matches the availability of jobs. Clearly that is
part of our function in workforce planning. I am not complacent
about that. Clearly, in your previous sessions you have met colleagues
who have identified some of the issues that they are now facing,
but what I would say to you is that the position of the Health
Service now in relation to its workforce is hugely strengthened
compared to the absolute difficulty of the situation when we had
such shortages. What we have to do is to build on that. Of course
we need to make sure that the number of staff we have, and those
we want in the future, is matched with the amount of money that
is available and with the service planning requirements, but that
is not an easy task, that is a very complex task, particularly
in the context of the Health Service, which is continually changing
because science and technology is making huge changes in the potential
Health Service and in the kind of service that needs to be operated.
So there are lot of factors that have to be considered, but I
would come back to you and say that we are in a much stronger
position to deal with those issues than we were 10 years ago.
Q968 Dr Naysmith: First of all, Lord
Hunt, may I say it is a pleasure to see you back in front of the
Committee. You referred to the inquiry we did on NICE, and it
was a good and interesting inquiry and we got some very good stuff
out of it, not least by your concise and useful answers, so maybe
we will have the same sort of thing this morning as well. In respect
of what you have been talking about with Mr Jackson, nonetheless,
despite what you say about the National Health Service now being
in a strong position, because of recruitment levels and pay levels,
which have both grown much more rapidly than planned, this is
a major cause of current National Health Service deficits quite
clearly—we can argue about the balance although it clearly
is—and these deficits have led to redundancies, graduate
unemployment and major cuts in funding for training. There is
no other way of looking at this other than to say that it is a
spectacular failure of NHS workforce planning, which we have been
trying to do.
Lord Hunt of Kings Heath: I would
argue with your words "spectacular failure". There is
no question that the requirement on the NHS to eradicate deficits
has led to NHS organisations having to make some difficult decisions.
However, this is tempered by the work that is being done to make
sure that the impact on the staff and patient services is minimised.
If you take, for instance, the issue of compulsory redundancies,
no-one, and certainly not me, would ever take lightly anyone having
to be made compulsorily redundant. From the figures I have got,
which relate back to September last year, we reckon that 903 redundancies
have occurred, 736 were non-clinical, 135 nurses and 11 doctors.
As I have said, I could never take lightly any compulsory redundancies,
but they are a relatively small number and clearly the NHS has
done everything it can to ensure that they are minimised. As regards
the employment of newly qualified staff, again there are issues.
From the figures that I have got, overall we reckon just over
60% of newly qualified nurses have now found employment from the
cohorts that came out last year.
Q969 Dr Naysmith: You are not saying
that the workforce planning has worked, are you? It is a mess.
Lord Hunt of Kings Heath: It is
not a mess. Clearly what has happened is that, because of the
need to deal with the deficits, there have been some short-term
decisions that have had to be made. What the Health Service is
doing, and has been doing, is to ameliorate those issues as far
as possible, to ensure that, for instance, where nurses are finding
it difficult to find a job, they are given advice about where
vacancies may be, but I see this as a very short-term issue. The
more long-term proposition is that the NHS will have an ability
to identify trends and issues where either you have got a shortage
or you have a surplus of staff and is able to take action, and
that, of course, is what is behind the work that is being done
at the moment.
Q970 Dr Naysmith: We now seem to
be moving into another phase where the NHS is contracting following
its far too rapid expansion. How long do you expect the contraction
phase to last?
Lord Hunt of Kings Heath: I would
draw your conclusion that in terms of where there have been reductions
in staff posts you have to put that in the context of over 300,000
extra staff now being employed in the Health Service. My own expectation
is that the issues that we face this year are very much one-off
issues, that we expect the NHS overall to come back into financial
balance at the end of the financial year and that that will place
the NHS in a much better footing for future years. Clearly changes
are taking place in services all the time, there is redesign of
services going on, reconfiguration proposals, which will always
lead to changes in the number of staff that will be required in
the integral parts of the NHS—that will never go away—but
our requirement on the Health Service, particularly on Strategic
Health Authorities, is to ensure that workforce planning does
sit consistently with financial planning and service delivery,
and that is what we will be aiming to do.
Q971 Dr Naysmith: I know we cannot
blame it on you, because you were not there when all this was
happening, and whether we call it a mess or not is a matter of
judgment, but you are going to have to sort it out. What lessons
can we learn from this boom and bust cycle that we are in now?
Lord Hunt of Kings Heath: The
first thing to say to you is that what you describe as boom and
bust is much less than traditional boom and bust in the Health
Service. The scale of numbers of staff we are talking about, although,
of course, significant for every individual concerned, is much
smaller than some of the acute problems the Health Service has
faced in the past.
Q972 Dr Naysmith: Are you saying
it has grown faster than at some times in the past?
Lord Hunt of Kings Heath: No,
I think if you look back in history, for instance, the early 1990s
when there was a huge reduction in nursing training places that
led to acute shortages, we are not in that position. We are in
a much healthier position than that. The key lesson, and it is
very much for Strategic Health Authorities and their local leadership,
is that they have to pull in the three elements of workforce planning,
finance and service delivery, to plan for the long-term, to make
sure that the training commissions that they are now commissioning
actually do fit in with the long-term plan of the health system.
Those are the key lessons. It is the job of the department and
myself to monitor the performance of SHAs to make sure that that
happens.
Q973 Dr Naysmith: Ms Chapman wants
to come in. I am sorry, I cut you off. I wanted to pursue that
with the Minister.
Ms Chapman: I just wanted to respond
to your point about both the workforce planning being a mess but
also what are the lessons learned: because again, I think, coming
from outside, whilst a three-week insight needs to be understood
as being first impressions, I have worked for two world-class
companies and there are some things that I noticed coming in.
I managed to get into some hospitals before I started to work
in December, and what I did see was that the way that they had
managed to build up their services and build up their workforce
actually showed that they were doing a number of things right.
Any organisation that can build up its workforce by 300,000 in
the period of time we are talking about shows that there is a
lot of effort going into making sure that people match the aspiration
of services, but I do think there are some lessons to learn when
you compare what we are doing in the NHS to what goes on in world-class
companies, and I think there are three things you have to get
right. You absolutely have to get your forecast right. Any business
that wants to get good availability on any supply chain, whether
it is people or products, has to have a good forecast. I think
that there is good forecasting going on on the base business,
but when we change what services are being delivered I think there
is a faster way that the NHS could be responding to translating
that into workforce demands.
Q974 Dr Naysmith: You are talking
about a more flexible workforce, are you?
Ms Chapman: Indeed. If there are
different services required, actually working through, through
the SHAs, as the Minister described, what are the implications
for the workforce needs to be done quickly and well, and I have
seen some evidence of that being started with recent policy changes.
The second thing you have to get right is flow. I think where
workforce planning is a once-a-year activity, what you tend to
get is too much central planning. Where you have got flow being
created, because workforce planning is a dynamic process built
into the management process, and this is where you will get the
true link to productivity, I think that what we have got through
the creation of the 10 SHAs is actually the forums to enable that
bottom-up and top-down planning to come together as part of a
management process with the appropriate finance data. The third
thing you have got to get right is it has got to be simple. Because
there are so many moving parts, the more complex it is the more
opportunities there are for a supply chain to go wrong, and I
think that what has been identified in the report commissioned
by Lord Warner last year is that there are some things that we
could do to simplify it, which I know is being worked on right
now. I think there are genuinely some lessons to be learned, both
internally and externally.
Lord Hunt of Kings Heath: Can
I ask Mr Greenfield to come in?
Mr Greenfield: On the issue: has
workforce planning been a spectacular failure, it is very easy
to draw such a conclusion, wrongly, in my view, when we have the
difficulty we have at the moment for those 903 people who have
been made redundant compulsorily, which we would all wish to have
avoided; but I think we have to go back to the late 1990s, early
2000s, when what we had were vacancies which were relatively high—4.7%
vacancies in the medical profession in consultants in 2003—where,
because of our wish to meet the growing aspirations of patients,
we needed to expand the workforce rapidly, and we have invested
in that. We have recruited internationally to meet those demands
and we have reduced vacancies now for doctors to 1.8%, for nursing
to around 1% from over 3%, so that has been hugely successful,
and even the unfortunate 903 redundancies, which we seek daily
to try to minimise and avoid, has to be borne in mind by the fact
that we have around 2,500 people turnover each week in a workforce
of over 1.3 million and an annual turnover of about 130,000. This
is the third biggest workforce in the world.
Q975 Charlotte Atkins: Clearly, as
Lord Hunt says, we do not want to see any redundancies in the
workforce, and certainly the figures you have given give the lie
to what has been in the press, but representing an area like North
Staffordshire, where there has been a concentration of redundancies,
the impact on that community, particularly if you are talking
about nurses, who possibly trained knowing that they had a good
opportunity of getting a local job, because nurses are not that
flexible if they have got children, are married and their husband's
cannot move jobs, they are not hugely well paid and, therefore,
there is a big issue there. Clearly, if they have just qualified,
should there not be some sort of guarantee of, say, a year's work
within the NHS? Otherwise they are in a position (and many of
them are looking at going to Australia and so on) of having not
worked in the NHS and, therefore, they are not able to market
themselves very effectively. I know that the ideal would be not
to have those redundancies, but given what does happen in the
NHS, given that it is such a big organisation, should we not at
least guarantee some of sort of experience within the NHS so that
we hold faith with our staff who have committed themselves to
working in the NHS?
Lord Hunt of Kings Heath: I do
very much understand the question, and, of course, I know that
the rate of redundancies in the hospital you are talking about
is higher than in many other hospitals, which I think reflects
some of the longstanding challenges that the hospitals face.
Q976 Charlotte Atkins: And the poor
management?
Lord Hunt of Kings Heath: Well,
I hope now that we do have effective leadership in the trust.
I am not convinced that a cast-iron guarantee is the right way
forward. Another national target, I guess it would mean, in terms
of instructions to the Health Service. I also think that, if you
were actually to insist that an individual trust actually had
to take on so many places, it would constrain them in the kind
of decisions that they have to take. There are also issues about
if you guarantee, say, one year, what happens to those people
at the end of the year? So I think it is much better that we encourage
the NHS to ensure that locally there is flexibility so that as
many nurses as possible are employed: because, clearly, there
is absolutely no point in training nurses to be nurses if they
are then lost to the system. Indeed, one of the past problems
of nurse training has been the high attrition rate during training
or, indeed, at the end of it. We clearly want to reduce the attrition
rate; we want to make sure that nurses who are suitably qualified
are able to come into the NHS. We have obviously had this very
short-term problem this year. What we are learning from that is
that there is much that the NHS can do to try and ameliorate the
problem. Some of them have developed joint appointments with the
independent sector; others have offered part-time appointments
and then an opportunity to work in the trust bank; so people are
trying to find ways through. I accept what you say, that some
nurses can only accept a job locally, but we do think that better
career advice can be given to those newly qualified nurses if
they are finding problems. There are still vacancies for newly
qualified nurses throughout the country, and I think if we can
give better career advice we ought to be able to, because some
people can be encouraged perhaps to think of specialties that
they had not thought about. There are lot of lessons we can learn.
I have been encouraged by the way NHS bodies are seeking to sort
these issues out, but I am not convinced that simply having a
quota, which is what I think would follow from that guarantee,
is really the way forward.
Q977 Charlotte Atkins: You mentioned
specialities there. Is it not the case that specialist nurses
or advanced skills nurses, epilepsy nurses, cancer nurses, are
in fact more likely to be at risk in terms of the workforce cuts
than others? It is not just the newly qualified; it is actually
the specialist nurses that are particularly vulnerable when a
hospital is downsizing.
Lord Hunt of Kings Heath: I do
not know if my colleagues have got figures on that and if they
are available. I would be very disappointed if a specialist post
of that sort were being unduly singled out in terms of decisions
being made by an individual trust. Of course specialist nurses
have an awful lot to offer in terms of the special skills that
they can use and, indeed, looking at the way the NHS is going,
our whole programme has been about encouraging nurses to develop
their specialist skills, but I hope, if that is occurring, it
is very much a one-off in relation to today's circumstances and
that will not be a trend.
Q978 Charlotte Atkins: I am certainly
aware of advanced skills nurses in North Staffordshire who have
been made redundant?
Lord Hunt of Kings Heath: Can
I ask Mr Greenfield to respond?
Mr Greenfield: I am not aware
of the specific numbers or particular problems on specialist nurses.
I will go and have a look at that and come back to the Committee
in writing,[1]
but I think the point worth making is that of the 903 redundancies,
broadly 80% of them have been on non-clinical staff and only 135
around the country have been on nursing staff, including specialists;
so it tends to be a very local decision depending on the configuration
that is required for the service to be well-founded for the future.
What I draw attention to is that you talk of a guarantee. What
we are trying to do as a first step is to promote a much stronger
partnership working between the higher education institutions
which actually look after these students as they rotate from trust
to trust, even in primary care, to do their training and to introduce
them to improved opportunities, which may not be in the traditional
teaching trust, where many of them, frankly, have always looked
first because they get structured supervision, they feel more
comfortable in that environment, but we have opportunities in
the voluntary, independent and private sector who also employ
significant nurses, we have significant vacancies and opportunities
in social care, and so we are trying to look at those. David Nicholson,
the Chief Executive of the NHS, wrote out at the tail end of last
year to promote and require Strategic Health Authorities to look
collaboratively at this responsibility, and we have been delighted
with the response we have had from NHS employers, from the HEI
institutions and also from the trade unions to try to work that
through to come up with really practical solutions to solve these
problems.
Q979 Dr Naysmith: On the question
of specialised nurses, I know that in some parts of the country
(and it has happened probably in Bristol) specialist nurses are
being asked to fill vacancies on general wards and are not being
funded to carry on with their specialised function. There is evidence
for that. I think it has been mentioned here in one evidence session
as well. It may not be the case that people are not funding specialised
nursing posts, not cutting them, but they are being redeployed
in other areas, and that is quite worrying.
Lord Hunt of Kings Heath: Can
I repeat that we will do some more work on the information we
have relating to specialist nurses and come back to the Committee.
In terms of the future for specialised nurses, individual trusts
are not going to achieve the kind of service change that we need
to achieve if they do not use specialist nurses and their skills.
If there are instances where this has happened, it is very much
my hope that this was a very, very short-term decision in relation
to the requirement to get rid of the deficits this financial year.
I would be concerned if there were long-term trends in this area.
It is, of course, a matter which I would expect Strategic Health
Authorities to monitor in their own localities, but perhaps we
can go back and see what information we have got on that.
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