Governance and local accountability
45. The governance arrangements for FTs have
three main elements:
- a membership community
comprising local people, patients and staff, including patients
and carers living outside the area if the Trust chooses to make
them eligible for membership
- a board of governors made up of members
elected from the membership community as well as people appointed
by primary care trusts and local authorities. Foundation trusts
with a medical or dental school are also required to have at least
one university governor. There may also be other partnership governors
to represent local partner organisations. Governors elected by
public and patient constituencies must be in a majority
- a board of directors made up of a Chair
and non-executive directors appointed by the governors, a chief
executive appointed by the non-executive directors with the approval
of the governors, and executive directors appointed by the chief
executive and non-executive directors.
46. The Chair of the board of directors also
serves as the Chair of the board of governors. The Deputy Chair
of the board of directors is also a governor.
47. The governors' powers are limited:
- They appoint the Chair of the
FT (the Chair of the FT chairs both the board of governors and
the board of directors of the FT)
- They appoint non-executive
directors to the board
- They can dismiss the Chief Executive (with a
75% vote) (The other Executive members of the Board are appointed
by the non-executive directors with professional support from
the Chief Executive and an independent external assessor).
48. Within this framework, each FT is able to
determine its own governance arrangements, and the detail of these
arrangements varies.
49. The Health Committee's inquiry into FTs in
2003, before their inception, noted 'considerable confusion' surrounding
arrangements for local accountability and governance. Many witnesses
expressed concern that FTs would end up merely 'going through
the motions'.[34]
50. A recent Health Service Journal editorial
reported that "there are huge obstacles to making foundation
trust membership anything other than a fig leaf of accountability".[35]
Marini et al agree that:
greater local accountability has not, as yet, been
adequately demonstrated. Public and patient membership of boards
is low and even where it exists, does not seem to be "active"
in terms of producing high turn-outs for board elections"
51. However, they noted that
there are signs of improvement in terms of the numbers
of people becoming members of FTs, although the degree to which
they are representative of the community is not known.[36]
52. The Healthcare Commission and Audit Commission
found that:
FTs were also positive about their governance arrangements
and the greater connection with the local community, through the
governors and the membership. They reported that clinical services
are now starting to be planned in discussion with the membership,
rather than in isolation. FT governors reported that they felt
engaged, had assisted with recent board appointments and had sat
on working groups in the FT. However, the extent to which they
were informing local priorities was not clear. It was apparent
that there can be frustration on both sides where governors seek
to get involved in operational issues, which is outside their
remit. Our qualitative research did not find significant evidence
that FT governors were having a clear and identifiable impact
on FT development. Indeed, we identified some instance of confusion
of roles between the governors and board of FTs.[37]
53. Research carried out for the Department of
Health by Chris Ham and Peter Hunt of Mutuo is more positive:
The evidence we have gathered suggests that the unusual
hybrid governance model adopted for NHS foundation trusts is working
increasingly effectively. There is greater clarity than in the
initial stages about the role of the board of governors and how
the knowledge and skills of governors can be used to best advantage.
The statutory powers of governors have helped to ensure that they
are taken seriously and are not treated as rubber stamps.
There is less clarity on the role of the membership
community and the most effective way of governors relating to
members. Foundation trusts are communicating with members in various
ways but recognise that more needs to be done to become membership
organisations. The experience of the mutual sector needs to be
drawn on to enable foundation trusts to make further progress
in this area.[38]
54. Our witnesses from FTs provided us with some
examples of good practice where the involvement of governors and
members had had a positive impact, and generally believed that
the approximate £200,000 annual cost to their organisations
of running the new governance structures was good value for money:
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.[39]
Our cleaning regime has changed; we are spending
more on it. We are doing things in a different way; we have brought
housekeepers back onto the wards, we have re-introduced matrons;
we are looking at bringing our food sourcing into the locality
rather than importing it from South Wales.[40]
55. However, Mark Exworthy argued that there
was certainly room for further improvement with regard to the
performance of governors:
I think there is some evidence that the governors
have failed to identify their role in a sufficiently well-defined
sense. In a way that was my implication about this further development
in that area. I think also there are areas to test between the
board of governors and the executive team in the sense of on what
occasions has that role been exercised in audits, appointments
et cetera. Maybe they have not entered into that territory yet.[41]
56. Surprisingly, Monitor has only recently issued
guidance to governors, despite the fact that several reports over
the last five years have identified the need for this, starting
with the then Health Committee which recommended the establishment
of a national training system for Governors in 2003.
57. The Involvement of members seems less well
developed than that of governors. This may be caused by a number
of factors, including duplication of public involvement in NHS
services by other bodies, including patient and public involvement
bodies and Overview and Scrutiny Committees.[42]
Mark Exworthy summarised his observations on progress to date
in this area:
I think that the focusor priority if you likehas
not been on [public membership and governance] so far, it has
been about getting financial stability, robustness and making
sure that their operation as a Trust (usually it is a hospital)
is efficient and effective. There are signs that they are moving
into developing better relationships with their memberships but
I think there is a danger that initially at least these efforts
have been focussed on people who might have been engaging with
those Trusts anyway and extending it out to a broader membership
is traditionally very difficult so foundation trusts would encounter
similar problems.
58. Dr Exworthy did find cause for optimism that
this could improve:
However, I think there are signs of much more outward
focus; I mentioned that, rather than looking upwards, looking
outwards. There are signs that they are taking that on board,
entering into dialogue with all the various stakeholders that
have been mentionedlocal authorities, other NHS trusts,
the public in all its dimensions.[43]
59. On the other hand, Dr Exworthy thought that
new tensions may arise if, as suggested in the Darzi report, PCTs
rename themselves to become, for example, 'NHS Derbyshire', in
an attempt to better engage with their local populations, and
find themselves vying with local FTs for the affiliation of the
people they serve, when clearly there are not enough evenings
in the week for people to attend all of these public meetings.[44]
60. While we saw some examples
of good practice in FTs' new governance arrangements, in general
they seem to be slow to deliver benefits and despite numerous
small studies, there remains a lack of robust evidence of their
effectiveness. The governance process currently costs circa
£200,000 per trust, giving a total of around £20 million
per annum. We recommend that the Department of Health make it
a priority to evaluate rigorously the FT governance system and
to give guidance on best practice so that public money as well
as members' and governors' time can be used as effectively as
possible to improve services.
61. We are also surprised and
concerned that Monitor did not issue guidance to governors until
shortly before our evidence session took place, despite several
reports over the last five years having identified the need for
this, starting with the Health Committee which recommended the
establishment of a national training system for Governors as long
ago as 2003.
Conclusions
62. In considering the impact
of FT status on FTs themselves, a recurring theme has been a lack
of firm evidence that FT status is yet conferring the benefits
hoped for. While it is clear that the majority of FTs are high
performers in terms of finance and quality as measured by Healthcare
Commission ratings, these were high-performing organisations prior
to becoming FTs, and so it is difficult to ascribe this high performance
to FT status per se. Two other major aims were to give trusts
the freedom to invest in innovation and to promote better local
engagement with the public and other health providers through
new governance systems. Evidence of benefit on both of these scores
is also thin. Systematic and independent evaluation is needed.
The Department of Health should make it a priority to commission
research to measure FTs' progress objectively, and to disseminate
their successes more widely.
3 As an incentive to reduce unnecessary secondary care
treatment, any emergency care provided which is over and above
the volume stipulated in contracts is only reimbursed at 50% of
tariff. This applies to all NHS acute trusts. Back
4
Payment by Results (PbR) is a payment system introduced into the
NHS in 2003-04, whereby providers are paid for the activity they
undertake according to a tariff derived from national reference
costs. Back
5
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
6
The net surplus (before exceptional items) for 2007-8 for the
89 Foundation Trusts authorised as at 31 March 2008 was £514
million (after public dividend capital dividends of £352
million, but before exceptional charges of £120 million).
This represents 3.1% of FTs' total revenue for the year (£16.3billion). Back
7
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
8
Q8 Back
9
Casemix is the range and type of patients treated by a hospital
or health service. Back
10
'Foundation Trusts in the NHS: does more freedom make a difference?'
Marini et al, Health Policy, University of York, 2007 Back
11
Q70 Back
12
FTM 02, Alan Maynard Back
13
Q78 Back
14
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
15
Q74 Back
16
Reference costs itemise the cost of every treatment provided in
a trust Back
17
Q86 Back
18
High quality care for all: NHS Next Stage Review final report,
Department of Health, June 2008 Back
19
Process measures, such as waiting times, test whether parts of
a system are working as planned; outcome measures, such as whether
health is improving, test the results of a system. Back
20
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
21
NB the star rating system has since been superseded Back
22
Q16 Back
23
Q108 Back
24
http://www.monitor-nhsft.gov.uk/documents/Q4_report_June_08.pdf
Back
25
Q106 Back
26
Department of Health, A Short Guide to Foundation trusts,
2003 http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_4050483
Back
27
FTM 04, Foundation Trust Network Back
28
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
29
Q6 Back
30
Q5 Back
31
Q9 Back
32
Q3 Back
33
Qq 97-99 Back
34
Health Committee, Second Report of Session 2002-03, Foundation
Trusts, HC 395-I Back
35
Health Service Journal, 5 June 2008 Back
36
'Foundation Trusts in the NHS: does more freedom make a difference?'
Marini et al, Health Policy, University of York,
2007 Back
37
Healthcare Commission and Audit Commission, Is the Treatment
Working?, May 2008 Back
38
Mutuo and University of Birmingham, Membership Governance in
NHS Foundation Trusts: A Review for the Department of Health,
2008; available at: http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_086374
Back
39
Q92, Stephen Firn Back
40
Qq 110-111, Richard Gregory Back
41
Q19 Back
42
Q22, John Carrier Back
43
Q18 Back
44
Q21 Back