Examination of Witnesses (Questions 1000-1019)
LORD HUNT
OF KINGS
HEATH, MS
CLARE CHAPMAN
AND MR
NIC GREENFIELD
25 JANUARY 2007
Q1000 Mike Penning: But the financial
planning which has caused so many problems, especially for trusts
which are having severe financial problems, these contracts were
imposed, they did not negotiate them, but centrally they were
imposed and that was not integrated into workforce planning.
Lord Hunt of Kings Heath: No,
although, to be fair, NHS trusts, through NHS employers, also
played a key role in the contract negotiation, so I do not think
it would be fair to say that the NHS—
Q1001 Mike Penning: I did not say
it was only them. I specifically said it was joint.
Lord Hunt of Kings Heath: In relation
to the contracts, as the Committee knows, the costs of those contracts
were underestimated and it is a factor in the financial deficits
that trusts are facing at the moment, but I would also say to
Mr Penning that the fundamental principle of the contracts is
vitally important in ensuring that we reward staff in relation
to the work that they do for patients. I do think they are a good
foundation. They are subject to adjustment. We have seen, for
instance, in the GP contract the adjustments that were made last
year which have been very helpful in terms of what has been received
for the money spent, but all of these contracts actually do give
the NHS a much better prospect of realistic discussions with clinicians
about the work they do and about ensuring that that work fits
into service developments. Whatever the issues about the cost
overruns, these contracts were a huge change and they are a much
better foundation on working with doctors in the future, they
really are.
Q1002 Mike Penning: I think everybody
would agree that quality staff need quality pay and they need
to get the benefits that they so rightly deserve, but, because
of the cost overruns, that has had a huge knock-on effect on others
within the workforce within the NHS which has caused problems
with workforce planning and you have got the redundancies, et
cetera, et cetera. All I was saying was surely, right at the start
when this first came in, there should have been better integration
and better work done centrally because at the end of the day the
Department and the ministers are in charge of the NHS, that is
what they are there for, so that we should not have got into this
position in the first place?
Lord Hunt of Kings Heath: If you
are saying, "Are there lessons to be learned from contract
negotiations?", the answer is of course, but there are always
likely to be lessons learned when you are bringing in a huge change
in the way doctors in particular are contracted with the Health
Service. Have we learnt those lessons? Are we seeking to develop
the use of those contracts in a way which is positive for the
Health Service? The answer is yes. For instance, if you take the
consultant contracts, the job plans of the consultants are open
to review on an annual basis and that is happening and the GP
contracts are open to annual negotiations in relation to the quality
requirements, so I believe the Health Service is learning, and
we are learning, from what happened with the introduction that
we will be getting more and more out of those contracts in the
future.
Mr Greenfield: I think that the
issue about lessons to be learned is absolutely fair and the consultant
contract was the first contract that we negotiated. By the way,
I did not recognise the figure of £540 million overspend.
Q1003 Mike Penning: Well, I did not
use that.
Mr Greenfield: It was used earlier.
Q1004 Mike Penning: I think you will
find it was my colleague next to me, but I am sure he will back
it up afterwards.
Mr Greenfield: The figure, as
I understand it, for the consultant contract was £90 million
which is a very large figure, but, when we look at it, one 40th
of 1% of the consultant pay bill is £4 billion. Our pay bill
is £34 billion a year.[2]
Q1005 Mike Penning: You are into
an argument I did not make, to be fair, Mr Greenfield. I did not
make that argument with the Minister at all, so you are raising
something which I did not even raise.
Mr Greenfield: The point I wanted
to make about lessons learned is that we were acutely concerned
that our forecasting of those costs was not as accurate as we
could possibly make it, so we are working with the NAO to try
to look to see if we can improve the modelling. We immediately
fed back, we did not wait, we fed back immediately the lessons
learned to have stronger piloting for Agenda for Change which
was a much bigger pay deal, we piloted it thoroughly in 28 separate
trusts and indeed we suspended the implementation of one of the
elements which we are still working on because we were not sure
of the costings, so the point I am making is that we do learn
the lessons, we are committed to piloting and to improving our
modelling and we are working with what we consider are experts
to take that forward.
Mike Penning: You have done a very political
thing there, you have answered a question I did not even ask.
That is brilliant!
Chairman: It is not known for people
to ask questions that they should not have asked as well, Mike,
though I do not mean you particularly.
Q1006 Sandra Gidley: Now a change
of tack to education and training. You will be aware that this
year there have been cuts in the budget. In one submission we
had, it said that the general range was 10 to 15% and in some
cases large reductions of up to 30% are being proposed for some
programmes. Does this reduction concern you at all?
Lord Hunt of Kings Heath: Well,
you probably know that we gave SHAs more discretion in the use
of their budget this year and that some of them have used that
discretion to reduce some of the training that they finance, and
that is a product of the deficit position in the Health Service.
Now, my concern is to make sure that this is very much a one-off
and that going into the next financial year SHAs will ensure the
continuation and investment in long-term training programmes,
so it is a fact of life that SHAs have had to deal with a very
difficult situation. I think it was inevitable in that circumstance
that training had to bear some of the cost of that, but I do not
want to see that happen again. I do want to see SHAs highly committed
to training and education in the future.
Q1007 Sandra Gidley: I do welcome
your honesty and candour which is sometimes not something we see,
but you said earlier that the Strategic Health Authorities should
have some responsibility and take a long-term position and, as
the Department, you obviously monitor the Strategic Health Authorities,
but clearly, if you cut by 30% one year, you cannot then expect
a school to suddenly find the staff to train again the next year.
It places an almost impossible burden on the schools that have
to plan as well. Is there any plan from the Department to try
and smooth this out and ensure that these measures are a one-off?
You say you would like to see it happen, but you cannot just devolve
the responsibility, I do not feel.
Lord Hunt of Kings Heath: I think
it is fair to say that the experience of SHAs differs, and you
quoted a figure of about 10% which we think is about right overall.
The second thing is yes, they have had to make very difficult
decisions this year, but clearly my role and that of the Workforce
Directorate is to make sure that that does not happen again and
that SHAs do have their minds on the long term. We will monitor
that, I can assure you.
Q1008 Sandra Gidley: Why is education
and training funded as a separate activity anyway and could not
some form of training be funded in other ways, such as using a
payment by results system?
Lord Hunt of Kings Heath: Well,
it is interesting. I think historically the case for ring-fencing
training and education was to make sure that the money was spent
on training and education of course. On the other hand, it must
make sense to devolve as much as possible to the NHS at the local
level and that of course is why we allowed SHAs to have more discretion,
and I intend to continue to allow SHAs to have discretion because
I think they are well capable of making their own decisions. Our
job is to monitor that to make sure that they do continue to invest
appropriately in education and training, that they do plan for
the long term and we all make sure that that happens, but, given
the size of the job at SHA level in terms of the negotiation which
has to take place between a lot of individual organisations and
higher education institutions, I think it is much better that
we do give them a greater deal of discretion, but then checking
up that they use it appropriately. I think that is perhaps the
developing role of the Department and its relationship to the
NHS which is to give as much authority as possible, but having
the ability to step in when you think decisions are being made
which actually detract from an overarching national strategy on
education and pay.
Q1009 Sandra Gidley: Nic, I get the
impression that you want to say something.
Mr Greenfield: The issue of PBR
is about what price you charge for things and particularly having
a standard national price adjusted for the market forces factor
in different communities to reflect their local cost of living
primarily. The issue that we are looking at at the moment, or
begun looking at, is whether the way we currently fund education
and training is consistent with reform and that work is ongoing
and we will be looking at it over months, but we have made some
progress towards, for example, the introduction of a benchmark
price in the last couple of years for all of our education, contracting
with the higher education sector to take the issue of price out
and to be fair to both the NHS and to the higher education sector,
but the issue that the Minister makes quite rightly is that it
is not so much about the price, it is about the volumes of activity
and ensuring that they are consistent with our long-term workforce
plan.
Q1010 Chairman: Evidence has been
given to the Committee by the Chartered Society of Physiotherapy
that, we have been told, last year 70% of graduates were unemployed.
Obviously this is something which is not very tradeable in the
marketplace if you have done a degree course in that. It was described
to us as a "scandalous waste" of public money. What
do you say to that?
Lord Hunt of Kings Heath: Well,
I am concerned about the specific position of physiotherapists.
They do a hugely valuable job and, speaking as if I had my former
DWP hat on in terms of promoting health in the workplace, the
role of physiotherapists in early intervention, preventing some
people from having to go off work on incapacity benefit is absolutely
critical, so I am concerned about the position of physiotherapists.
There is to be a summit of NHS employers, my Department and professional
staff organisations in a couple of weeks' time to see what more
we can do to try and deal with these issues, but I can assure
you that I do take this one very seriously and am doing everything
I can to make sure that we deal with it because I think physiotherapists
are absolutely vital to the future of the Health Service. Some
of the things that we are looking at are seeing if more posts
can be developed in community and primary care and looking at
whether more temporary posts can be created. There is also the
problem that there are a lot of basic-grade physiotherapists who
are not applying for more senior posts where there may be vacancies
and we will also be discussing whether we can have some accelerated
programmes so that we can move these basic-grade physios on to
more senior posts and then create vacancies, but it clearly is
a big issue and we do want to tackle it.
Chairman: I think we would appreciate
it if you could keep us in touch on that as a committee.
Q1011 Mr Campbell: I would like to
welcome you to your post, Lord Hunt. I am sure that it is better
than the last one you had in the Child Support Agency!
Lord Hunt of Kings Heath: I was
hoping no one would mention that!
Q1012 Mr Campbell: In 2002, there
was a full review of education and training. It was recommended
that the three separate elements of the training budget should
be integrated into one single budget. What happened to this? Did
this just fall by the wayside?
Lord Hunt of Kings Heath: I think
I am going to have to defer to Mr Greenfield to answer that.
Mr Greenfield: I believe what
you are referring to in your comment about the budgets is that
traditionally we have split the funding for undergraduate medical
education, known as SIFT, the service increment for training,
the medical postgraduate budget, known as MADEL, the medical and
dental education levy, and also the budget for non-medical education
and training which includes a budget for staff development. It
is true that those were tightly ring-fenced and separate in the
past. Since the 2002 arrangements, we have merged them so that
there is now complete freedom from one to another, but still,
in the way that we calculate the allocation to each SHA, we do
base it on a bottom-up approach which takes account, for example,
of the number of undergraduates and medics in medical school,
dental school and planned commissions, so we use it to allocate
the resource, but we do not restrict the way the resource is spent.
Q1013 Mr Campbell: Is it working
better than the old system because there was a lot of criticism
of the old system and that is why a lot of witnesses came forward,
saying that it should have been put into three, so is it working
properly? Is it working better than the last one?
Mr Greenfield: I think the freedom
is certainly helping, but I think there is still a measure of
inevitable inertia because a lot of the budgets for education
and training are not funds which you can switch easily from one
to another. For example, if you had a certain number of undergraduates
in medical school, they are there for five or six years and you
have to keep funding them and similarly with postgraduate medical
education, so there is a large and overwhelming majority of all
of those budgets which is committed and the room for flexibility
is probably in the order of 5 to 10%.
Lord Hunt of Kings Heath: It must
make more sense to give greater flexibility because we want SHAs
and their constituent bodies to take on much more responsibility
for ensuring that the workforce planning does indeed fit with
finance and service priorities, so clearly the more flexibility
we give to them, the better. Our job then is to make sure that
it hangs together in terms of a national strategy.
Q1014 Dr Naysmith: The expectations
are often that people will proceed along a track and once you
start on a track, you carry on to the end, which might be becoming
a heart surgeon or something like that. Do we not need much more
flexibility both in the education system as well and in the way
people are trained and also with the workforce being prepared
to decide maybe, "We've got too many heart surgeons. I will
have to switch to becoming a GP"? Building in the education
a system of flexibility and the expectation in people who start
off on long medical careers and other associated careers that
they may have to change as well is vitally important for the future.
Lord Hunt of Kings Heath: I think
that must be right and, as I was saying earlier, it would be very
difficult today to say with certainty that in 20 years' time what
are the medical specialties that we are going to need. When you
think about some of the huge developments that we have seen, for
instance, new drugs which come along, it may mean that certain
procedures are no longer required. We do not know what that might
be. What I think we have to do is ensure that professionals who
are highly trained, highly skilled and experienced in taking difficult
decisions, if that does happen, they are not suddenly left in
a siding, that the Health Service is able to use their skills
to the full, but develop them in other professions. It may be
that Mr Greenfield might like to comment on how we are developing
that professionally, but, as a matter of principle, you must be
right.
Q1015 Dr Naysmith: It also means
that you must interact with the education establishments so that
they are flexible and provide part-time courses and in-work training
courses to move into other areas, and there is not a lot of that
at the moment.
Lord Hunt of Kings Heath: I think
again Mr Greenfield will come on and speak, but he talked about
inertia. I think you are right, the traditional approach might
be, "How many places? Here's the money", and clearly
part of the reason we want SHAs to take this as being one of their
top priorities is to start to think through with the higher education
institutions in their own patch how in fact you can develop a
much more flexible workforce, how you can ensure that maybe the
competencies people are developing are ones which can be used
to change courses, if they have to be changed, but a much more
sophisticated approach. Perhaps I could ask Mr Greenfield to comment.
Mr Greenfield: I think we recognised
the concern that you have outlined which is about people progressing
through one career and then finding there is no opportunity for
them perhaps because of a technological change, such as is the
case with cardiothoracic surgeons, and then having to come down
a snake and climb a very long ladder. Our vision of the future
for that is to move towards a workforce which is based on competencies
rather than exclusively on professions, although we would still
place very high regard on professions because those are fundamentally
what people want to join, but we are working, for example, in
the medical profession with the MMC, the Modernising Medical Careers
Programme, and all of the royal colleges that represent the 58
different specialties in medicine to identify competencies at
each stage of progress, so we will make the snakes a little bit
shorter and enable people who are displaced or frankly want to
make a change of career to move more quickly and easily into a
different career. We are also working with Skills for Health to
define the competencies for the whole workforce including non-medics.
Q1016 Dr Naysmith: When you say you
are working on it, I hope that does not mean you are just thinking
about it, but that things are actually happening.
Mr Greenfield: We have curricula
which are being approved by PMETB at the moment to support Modernising
Medical Careers, some have already been approved, for example,
a GP curriculum, and I think most of those will have been approved
this year.
Q1017 Mr Jackson: I want to try and
focus on real-life experience in the next question. Given the
financial stringency that the NHS will be under from 2008 and
given the rather belated, I think, admission that there has been
endemic failure of the system to co-ordinate properly financial
and service planning with workforce planning, do you think it
is wise to give Strategic Health Authorities, who have not got
a good track record in education and training, such a big role
in workforce planning for the future?
Lord Hunt of Kings Heath: Well,
allow me, if I can, to pass over your words "endemic failure".
I do not believe that is the position.
Q1018 Mr Jackson: Your own document,
as Mr Penning pointed out, does very gently allude to the fact
that, "The workforce planning lacks integration with financial
planning and with service planning".
Lord Hunt of Kings Heath: I do
not recognise the words "endemic failure" in that, but,
coming to the substantive question you have asked, is it wise
for us to give more authority to Strategic Health Authorities,
and I cannot anticipate the next Comprehensive Spending Review,
as you have done of course? The answer must be yes because, whatever
the financial position of the NHS in the future, there are hugely
difficult judgments to be made about how it should be spent, where
services should be delivered, how they should be delivered and
what are the staff required. Now, what is the alternative? The
alternative is that at the centre we decide all this centrally.
We decide on all the training places that are required and we
simply issue edicts to the Health Service that they have to fit
in with that. Having now spent my second term at the Department
and my whole career in the Health Service, I just know that you
cannot micro-manage the Health Service from the centre, but you
have got to put your trust in people locally to do the best that
they can. The way you do that is you actually give them as much
discretion as possible, but then you monitor them against the
national strategy, and that is what we are doing and I am convinced
that is the way to do it.
Q1019 Mr Jackson: That would be a
more convincing argument, Minister, had there not been this sort
of Maoist cultural revolution of reorganisation that we have had
over the last 10 years, establishing bodies, getting rid of them
and putting them back. That is less convincing, given the situation
we have had up to now, if I may say so. Can I move you on to a
supplementary question—
Lord Hunt of Kings Heath: Can
I answer that because it is a very important question which you
have raised. It is always good to be called a Maoist and my branch
Labour Party would be very surprised to hear that, I might say!
2 The witness later contacted the Committee to clarify
this information as `only 1 quarter of 1% of the total pay bill
of £36 billion a year'. Back
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