Examination of Witnesses (Question Numbers
80-99)
MR RICHARD
GREGORY, MR
STEPHEN FIRN
AND DR
BILL MOYES
3 JULY 2008
Q80 Chairman: Would it be fair to
say in the past that they would have built the unit and then looked
for the patients to go into it?
Dr Moyes: I would not want to
generalise.
Q81 Chairman: No, I do not want to
either, but I am too tempted not to ask you the question.
Dr Moyes: When we had our financial
problems with Bradford in 2004 that was part of the reason. They
built a modular theatre and, if I remember rightly, they took
on something like 300 staff, but there was no commitment from
the commissioners to transfer patients to the hospital to use
those facilities. That was part of the underlying reason why Bradford
got itself into real financial difficulty and in getting itself
out of that difficulty it had, if I remember correctly, to rationalise
services, move in-patient facilities from St Luke onto the main
Bradford Royal Infirmary to use those facilities they had created.
Personally, having been there, I think it is a better service
to patients so I am relatively relaxed about the outcome of that,
but you are absolutely right, that was a good example of creating
a facility and expecting the commissioners to send the patients.
Q82 Chairman: I meant that in general
terms about what has happened in the National Health Service for
the last 60 years.
Dr Moyes: You will forgive me
if I confine my response to the last four years.
Q83 Chairman: The other thing of
course is that there are very low levels of borrowing at the moment
but if things were different and if income going into the health
service budget was less than now, it might not be the case at
all and those barriers that you want for borrowing might be a
bit nearer. Would you have access to capital markets under those
circumstances? If you needed major investment or a new hospital
in Chesterfield or whatever, would you have access to capital
markets and what would be any restrictions that you may or may
not have in accessing capital markets?
Dr Moyes: I think from our contacts
with the commercial banks there is undoubtedly appetite in the
commercial banks to lend to the sector, but of course at the moment
the Department still provides loan funding and other dividend
capital at well below the prices the commercial markets would
set. I think there is a question of working out what is the capital
regime for the future. I think the banks are very keen and I do
not think from our contacts with them that the banks would be
looking for any particularly onerous conditions or anything novel.
But why would a Foundation Trust go to the commercial markets
when they can get cheaper money from Richmond House?
Q84 Chairman: Of course there would
be the issue as you have described with Bradford, the actually
commissioners decide on what the income is likely to be over time.
Would that in any way, do you think—talking about the future
here—restrict people in terms of loaning money into the
building new hospital sector? Could it do?
Dr Moyes: I think the banks will
have to work out how they assess the credit of different types
of Foundation Trusts and depending on the state of the world economy
at the time that this happens they might be more or less adventurous.
I would expect them to start by exploring very carefully the long
term future of the hospitals they are lending to. Our contacts
with them suggest that they would want to understand in some detail
how Monitor would behave if a Foundation Trust that was a borrower
got itself into financial trouble. Yes, I think they would take
a very, very detailed view of the hospital's prospects but I think
that is to be welcomed.
Q85 Dr Naysmith: Good morning, Bill.
I want to ask you about the private income cap for Trusts which,
as you know, varies quite considerably. I want to know if that
is a problem and if there is any rationale behind it and, if it
is a problem, what should be done about it?
Dr Moyes: It does vary considerably
and it does because that is the way the legislation is structured.
The 2003 legislation defined the cap and in essence what it does
is that it fixes the proportion of private income to the level
that it was in 2002/03. Therefore those trusts in 2002/03 who
had a high proportion of private income can retain that and those
that did not cannot. I feel slightly inhibited in talking about
whether that is a problem or not because, as you may know, Monitor
has started consulting on the private patient cap. The way the
legislation is framed, Parliament has expressed a principle that
private income should not grow unless NHS funding income grows,
but it has largely left it to Monitor to sort out what the rules
are. We thought we had done that but Unison has challenged us
and is now pursuing judicial review of our process which, of course,
they are entitled to do. That led us to think that we ought to
set out the complexity of this issue in a consultation document
and seek views from a wide range of not just Foundation Trusts
but all sorts of people. We published that two or three weeks
ago and the consultation closes in early September. If you do
not mind, I would rather not speculate on the outcome of that
consultation.
Q86 Dr Naysmith: Could I just ask
you a specific question, do you think there is a demand from some
of the Foundation Trusts which have a historical low base to increase
it, or is that too difficult to answer in the circumstances?
Dr Moyes: What I can say is that
I do not believe that Foundation Trusts find the rules that we
have written out of the private patient cap to be restrictions,
but they might find restrictive some other interpretations of
the rules. That is what I think I can say.
Mr Firn: It is a specific problem
for Mental Health Trusts because, I think I am right in saying,
everyone who has been authorised so far has had the private patient
cap set at zero because that was the position in 2002. It is something
of an absurdity because if we were not a Foundation Trust we could
set up services that have private patient income, but because
we are a Foundation Trust we cannot. I have worked in the NHS
for 27 years and I agree with all the principles about care being
free at the point of delivery, but I know from all the work we
have recently been doing with employers, that the support we could
provide to employers about getting people back into work and retaining
people in work and getting income from them would meet some of
the Government's policies around keeping people in work and recovery,
we cannot take forward because it would count as private income
at the moment. There are other things around psychological therapies
where we could set up units with free access for people on the
NHS but we could part fund it by having private patients; we are
not in a position to do that. I think it is actually inhibiting
us from taking forward some key policies but also getting income
to improve other NHS care.
Q87 Dr Naysmith: You have raised
a very interesting point there which is not really a part of this
inquiry but can I just ask you about it? There are known to be,
all over the country, long waiting lists or longer lists than
there should be for psychological therapy. If this problem you
are describing could be solved would it help to make psychology
more available?
Mr Firn: I think it would be one
part of the jigsaw, yes.
Q88 Dr Naysmith: Bill, returning
to joint ventures with the private sector is something that is
suggested will increase NHS efficiency (and it probably will).
Will Foundation Trusts' capacity to enter such arrangements be
restricted by some of the things we have been talking about and
would this not be a failure to ensure a level playing field for
the National Health Service and for Foundation Trusts and for
private providers?
Dr Moyes: Depending on the consultation
and depending on whether the judicial review proceeds to a hearing,
and depending on whether or not the outcome of that is that our
roles are supported or overturned in the court, we could find
that there are circumstances in which joint ventures and other
types of cooperation between the Foundation Trusts and the private
sector are inhibited. It is very hard to answer the question at
the moment, I am afraid, until we get to the point where either
the judicial review has come to a conclusion or something else
has happened. I am speculating really.
Q89 Dr Naysmith: Richard, much has
been made of the new autonomy that is granted to Foundation Trusts.
What is different now you are a Foundation Trust? There are obviously
quite a few difference, but what are the main ones?
Mr Gregory: I think, as I said
earlier, the ability to try to shape your own future, to prioritise
and the speed of decision making.
Q90 Dr Naysmith: Some people would
argue that that could have happened before, prioritisation and
speed of decision making.
Mr Gregory: When I joined back
in 2006 one of the first major items on the board agenda was the
business plan for the new children's development that we are building
in Chesterfield, bringing services that are currently delivered
in rather dilapidated buildings in the town centre onto the site
of the Royal (which is a large site) and having an integrated
set of services and an improvement to those services. We had the
board meeting and I noticed after we gave the business plan approval
the chief executive and the financial director and a few others
were smiling at each other. I asked what I was missing and they
said, "You don't realise, Richard, but what we have just
done in two months would have taken at least two years to achieve
before".
Q91 Dr Naysmith: What was it specifically
about the Foundation Trust that enabled that to happen?
Mr Gregory: We could make the
decisions. We did not need to bid into a central pot. We had the
resource, we put forward a proper analysis on clinical and financial
criteria and we debated it rigorously and we decided to approve
it. We did that within our own boardroom; it took as long as the
process took which was probably less than two months actually.
Apparently these things took an awful lot longer before.
Q92 Dr Naysmith: Stephen, what have
you done that you could not have done before?
Mr Firn: I think there are a couple
of examples, first around money and then around the work with
governors. We are a Mental Health Trust, as I alluded to before
and do not have a tariff, we just have block contracts. Prior
to being a Foundation Trust there was no incentive to make or
declare a surplus because we were essentially given a block of
money on the first of April and you were expected to have spent
it all by 31 March otherwise the risk—and often the reality—was
that any left over was used to cover problems elsewhere in the
health economy. Now that there is a recognition that if we work
with commissioners and work with our commissioners to generate
a surplus and we can carry that over and invest it in ways that
are agreed with governors and commissioners that has made a huge
difference. This year, as I have alluded to, we have put part
of it into developing a personality disorder day hospital which
is part funded by commissioners but part funded out of our surplus.
That would not have happened; we would not have been able to do
that. We have increased the level of psychological therapies through
funding through our surplus because this is what governors said
was the highest priority amongst local people. That has been a
big difference and, as I said before, we have set up something
called an opportunity fund where any of our clinicians can now
say, "I can see a good service that we could develop; if
you can give us non-recurrent funding we can demonstrate that
it works to commissioners and then hopefully they will pick up
the funding". We can get that approved within a month. The
example last month were some commissioners from our child and
adolescent mental health service who wanted to develop a service
in a number of schools providing advice and education and counselling
to young people. We were able to fund that. Already one of the
schools has said that they will pick up the funding in the future.
In that sense we are much more able to look at the money we have,
work with clinicians and work with commissioners to re-invest
it in a way that we were not able to before. The other big difference
is the governors. As a Mental Health Trust we have often been
used to involving users in care and having things like user councils
that we have had for many years, but actually the Council of Governors
which has 12 elected members of the public, 12 elected patients
and six elected members of staff really are now holding us to
account and making us focus much more on patient quality, sitting
in on serious incident investigations and being part of those
panels, and they are coming to our board strategy days to help
us plan the future and approve our plans. That really has shifted
our focus onto what are the local needs, to look outwards rather
than look upwards. If I give one further example around the governors,
we appointed onto the Council of Governors people from partner
organisations who had not really been involved with us before,
so representatives say from JobCentre Plus, from the Chamber of
Commerce and through those new links we have been able to do things
like set up employment schemes where we have been able to get
our service users into jobs and supported, we have a lot of events
with local employers showing how we can support them to employ
our staff, and we have set up a partnership with Charlton Athletic
where they have had us on the pitch giving messages about mental
health. I could go on, but I think those are the two big things:
the flexibility around the money and being able to invest it locally,
and the work with the Council of Governors.
Q93 Dr Naysmith: Playing the devil's
advocate, an awful lot of what you have said about the governors
helping you to make contacts in the local community could have
been done before through things like Community Health Councils
and the new Links organisation. Or is that just not feasible?
Mr Firn: I do not think we would
have been able to do all this within the last two years. I think
the fact that if you ask somebody to be a governor you are asking
them to give up a certain amount of time but you are also asking
them to carry out a very important job (appointing non-executive
directors, approving annual plans, holding me and the organisation
accountable for our performance) and when people come onto that
Council of Governors it gives them an investment that they want
to see something coming out of and being involved. It does open
up those new links and opportunities. For Charlton Athletic, for
example, one of their footballers was the first member; he signed
on the football pitch and that was the kick start to a lot of
other things we have done. That would not have happened if we
had just gone and knocked on the door and said, "We're your
local Mental Health Trust; we would like to work with you".
It gives you levers that you do not have otherwise.
Q94 Dr Naysmith: You are obviously
very enthusiastic about this?
Mr Firn: Yes.
Q95 Dr Naysmith: Finally, Bill, on this
autonomy section you have had a rather well-publicised discussion
about autonomy, particularly over MRSA. Is this an area that you
think has now been solved and resolved or is it still lingering
around?
Dr Moyes: I am not going to say
that it will never happen again in the sense that the issue will
never come up again. We underestimate the scale of change moving
to Foundation Trusts. The Department, for 60 years, has seen itself
in essence as corporate headquarters of a corporate hospital system
and with Foundation Trusts they are no longer in that position,
whereas they are the headquarters of a commissioning system. The
issue that David and I were debating—I think it is a debate
amongst people who are trying to make this happen rather than
a personal difficulty between us—was: how can the Government
express absolutely legitimate points of view from ministers saying
that they are worried about cleanliness in hospitals and what
is being done about it? But how can ministers convey the desire
to see something done through commissioning rather than through
issuing operational instructions to hospitals? That is the issue
I was really opening up with David, that we have to try to find
a way to use commissioning, the power of commissioning and the
language of commissioning to convey legitimate political aspirations
rather than revert to saying that the secretary of state wishes
this to be done. That is a huge change and I suspect we will still
uncover examples in the future where we have to round that territory
again and work out how we could have done it better. It is not
in any sense a running dispute; it is something that he and the
permanent secretary and I have talked about and I think we are
pretty clear that this is an important issue that has to be tackled.
Q96 Dr Naysmith: Have you managed
to get the MRSA issue into commissioning to your satisfaction?
Dr Moyes: No, I do not think I
do see it as being in commissioning to my satisfaction. It still
remains in the Foundation Trusts an issue that was largely being
dealt with through regulation, through our compliance system rather
than through discussions between commissioners and suppliers.
My aspiration for the future for C.difficile, for example, would
be that much of the discussion about whether C.difficile performance
has been delivered or not will be between the commissioners and
the Foundation Trusts and that we will only get involved in the
most extreme cases of difficulty.
Q97 Sandra Gidley: Going back to
innovation, the recent HCC/Audit Commission report concluded that
"On a national level ... Foundation Trust status does not
yet seem to be empowering organisations to deliver innovative
models of patient care". I have to say that in the submissions
received there did not seem to be any specific examples of improvements
in patient care, so I just wondered whether Richard or Stephen
might be able to put some meat on the bones really.
Mr Gregory: I think we are now
at the point in time after the Darzi report and the discussions
about how Foundation Trusts can engage with their commissioners
not simply in terms of negotiating the traditional bones of the
activity and payment structure, but in actual fact trying to reshape
services to improve them for the benefit of the patients in the
local community. Those challenges that were laid out a few days
ago will enable Foundation Trusts and commissioners, hopefully,
to engage in some innovation. At the moment our innovative capability
and capacity from where I sit is constrained by the quality of
the contract and by the quality of the dialogue between the commissioner
and the provider. That needs to be opened up and one of my personal
concerns and priorities is that we need to escape our organisational
barriers here and engage intelligently over and above the contract
negotiation in terms of delivering change to the benefit of the
patient.
Q98 Sandra Gidley: Surely you did
not have to wait for Darzi.
Mr Gregory: I have not seen much
evidence of an enabling framework for us to be able to do that
from my perspective.
Q99 Sandra Gidley: So this sentence
in your submission when it says that this is what you have achieved,
"an altering vehicle model, goes everywhere, does everything,
unrestricted by the usual boundaries" is not true because
you have just mentioned boundaries that are in place.
Mr Gregory: I think there is a
boundary. Yes, it is an exaggeration if you take that literally.
I think that we have got the ability to deliver that; I think
we have got the ability to be very flexible and innovative in
the future, but we do need the right conditions. It is not simply
about the contract, it is about the key individuals, it is the
relationships. For example, yesterday we had a Council of Governors
meeting at Chesterfield and we had the chairman, the chief executive
and the director of corporate strategy from our PCT—Derbyshire
County PCT—to actually present the Derbyshire vision following
the Darzi work streams. We asked and they agreed for the implementation
issues and the questions in those implementation issues to be
consulted upon by 12,000 public members. We are beginning now
to see evidence of like minded individuals in both camps actually
putting their heads together to try to achieve this. The real
trick is to enable the clinicians and the patients through their
public elected members, the governors, to exert some leverage
on that process. I am not unhopeful that we can deliver innovation;
I would like to deliver innovation and I think we are at an interesting
moment in time now.
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