Patient Safety - Health Committee Contents

9  Commissioning, performance management and regulation

197. Various bodies, both within the NHS and outside it, are responsible for deciding how well services are provided in the NHS and for taking action when services are poor. These bodies can be categorised as:

  • commissioners (which act as "purchasers" of services provided for NHS patients);
  • performance managers (which monitor how well NHS organisations commission and provide services); and
  • regulators (which ensure that appropriate standards are met).

In this chapter we look at how effective those bodies and their respective roles are at identifying and addressing unsafe care in the NHS.



198. Commissioning in the NHS is defined as "using the available resources to achieve the best outcomes by securing the best possible health and care services for local people".[198] It is supposed to be undertaken through a continuous "Commissioning Cycle", involving strategic planning, procuring services and monitoring and evaluation.[199]

199. Since 2002, Primary Care Trusts (PCTs), which were reorganised in 2006, have acted as the commissioners of NHS services in each locality of England.[200] In our report on Lord Darzi's Next Stage Review, we stated:

    We have noted on numerous occasions, and the Government has accepted, that PCT commissioning is poor. In particular, PCTs lack analytical and planning skills and the quality of their management is very variable. This reflects on the whole of the NHS: as one witness told us, "the NHS does not afford PCT commissioning sufficient status". We consider this to be striking and depressing.[201]

200. The perception that many PCTs have failed to assess adequately the quality of services they have purchased is reinforced by the fact that in none of the cases of disastrously unsafe care that have recently come to light had commissioners detected and addressed that unsafe care. The Mid-Staffordshire Trust case provides a powerful example of commissioning that was wholly inadequate in regard to quality and safety. The HCC found that South Staffordshire PCT:

  • "inherited a chaotic situation" from its predecessors in 2006, "with no detailed handover";
  • "Commissioning had not inquired in any depth into specific aspects of the quality of care being provided" by the Trust; and
  • the PCT relied on regulatory processes to guarantee standards, "gain[ing] assurance from the trust's performance in the annual health check of NHS trusts".[202]

201. Professor Sir George Alberti, the NHS National Director for Emergency Access, in his report on emergency admissions at Mid-Staffordshire Trust, said he found it:

    unfortunate that the main PCT commissioning services (South Staffordshire Primary Care Trust) did not pay more attention to standards and quality of clinical care and comments from patients but focused more on throughput and targets.[203]

Dr David Colin-Thomé, the NHS National Director for Primary Care, notes likewise in his report on lessons for commissioners and performance managers from Mid-Staffordshire Trust that:

    The focus of the PCT was not on commissioning for outcomes, but rather a reliance on pre-determined process […] In addition, there was not the expertise, particularly in the PCT to interpret data that was available.[204]

202. Dr Colin-Thomé does, though, conclude that:

    On balance, there is nothing within the Healthcare Commission Report to suggest that the Primary Care Trust (PCT) […] [and its] predecessors contributed to the problems at Mid Staffordshire NHS Foundation Trust or missed signs in the nationally recognised approaches to managing performance which operated in the NHS at that time. My review has confirmed that while the national approaches were being followed, local signs were missed.[205]

203. For his part, the Minister of State for Health Services reiterated this and argued that "The system has changed and the system changed before Mid-Staffordshire came to light".[206]

204. The DH sought to assure us that inadequate commissioning is being driven out of the NHS by a series of initiatives. Foremost among these is the "World-Class Commissioning" programme, which aims to build capacity for commissioning and involves PCTs being evaluated through the Commissioning Assurance System.[207]

205. At the same time PCTs are being given two new mechanisms through which to influence the quality of services: the Commissioning for Quality and Innovation (CQUIN) payment framework, which entails giving financial incentives for better quality care; and "Never Events", which may entail imposing financial penalties for harming patients.


206. CQUIN was announced by Lord Darzi in his final report for the NHS Next Stage Review.[208] It allows PCTs to make part of the payment to a provider conditional on the quality of care (comprising safety, effectiveness and patient experience) and on innovation in care.[209] One means of measuring quality will be "patient-reported outcome measures" (PROMs) which involve using patient-completed questionnaires to judge how much patients have benefited from their treatment.[210]

207. In 2009-10, the first year of operation, PCTs must have local CQUIN schemes in place for all acute services on standard national contracts; and in all non-acute services (community, mental health, ambulance and specialised services) there must be either a CQUIN scheme or an agreed Quality Improvement Plan. Many schemes are expected in the first year to focus on data collection, to establish a baseline. The size of the incentive, which is decided nationally, is set at only 0.5% of the contract value in 2009-10; but we heard from Lord Darzi that the DH hopes to increase this figure in subsequent years.[211]

208. The Health Foundation told us that "If applied appropriately such financial incentives could be beneficial".[212] When we considered the Next Stage Review, we strongly supported using financial incentives to improve the quality of care, but we did set out several concerns and recommended that the DH "proceed with caution", piloting and rigorously evaluating all such schemes before their adoption by the wider NHS.[213]


209. Never Events (the principle of which was also announced by Lord Darzi in High Quality Care for All) are adverse events that are both serious and largely, or entirely, preventable. The NPSA was asked to draw up a list of eight of these, which it did using the following criteria:

  • the event may result in severe harm or death;
  • it has occurred in the past;
  • existing guidance describes how it can be avoided; and
  • its occurrence can be monitored.

The eight Never Events chosen are listed in Box 14.Box 14: The eight Never Events chosen by the NPSA
  • Wrong site surgery;
  • Retained instrument post-operation;
  • Wrong route administration of chemotherapy;
  • Misplaced nasogastric or orogastric tube not detected prior to use;
  • Inpatient suicide using non-collapsible rails or whilst under one-to-one observation;
  • Absconding of transferred prisoners from medium- or high-secure mental health services;
  • In-hospital maternal death from post-partum haemorrhage after elective Caesarean Section;
  • Intravenous administration of concentrated potassium chloride.

210. Never Events derive from a system used in the USA, under which some private insurers and government-funded schemes have a policy of not paying providers for costs attributable to Never Events. Lord Darzi's report mentioned that Never Events were linked to payment in the USA, but did not state that this aspect of the policy would be introduced in the NHS. He indicated only that, starting in 2009-10, PCTs would choose priorities from the Never Events list in their annual operating plans.

211. By contrast, when the Chief Executive of the NPSA, Mr Fletcher, and the NHS Medical Director, Professor Keogh, gave evidence to us, it was clearly stated that Never Events would be linked to payment, beginning in the second year of the scheme's operation (2010-11). According to Professor Keogh:

    The eight Never Events which have been articulated, PCTs will not be expected to pay for that. For the first year [2009-10] the Never Events they will be expected to report on and, thereafter, it is anticipated that they will not pay. That is the key lever in the Never Events.[214]

212. However, when the DH subsequently wrote to us about this, it was more equivocal:

    Building on the experience gained during the first year, and emerging international experience, the NHS and Department of Health will work to define whether linkages to payment regimes would be appropriate and effective. Moving to this second phase of Never Events would be a possibility from the financial year 2010/11 onward.[215]

This was echoed by Lord Darzi:

    After a year I think we should have this debate about whether payments should be withheld or not. It depends who you ask really. There are those who are likely to suggest that it may suppress people reporting, in other words it will disincentivise them from reporting. There are those who think penalties are appropriate. I think we should wait and see what the [first] year [2009-10] gives.[216]

213. A further concern about attaching financial penalties to Never Events is the practical difficulty of disentangling costs associated with an adverse event from those relating to the treatment of the patient's original illness or condition. This could be done through a calculation of additional time spent in hospital (counted in bed days)—but such calculations are not necessarily straightforward; and in some cases a bed-day calculation clearly will not be appropriate, as Mr Fletcher admitted.[217]

214. Further arguments against the idea of fines for harming patients were given to us by the Health Foundation, which contrasted with the Foundation's support, noted above, for incentive payments for better quality care:

    The Foundation opposes the imposition of financial sanctions on hospitals which have unintentionally harmed a patient. Fining publicly-funded institutions penalises the population and can lead to the manipulation of performance data and the demoralisation of staff.[218]

Performance management

215. The function of performance management in the NHS, which might be described as monitoring how well organisations commission and provide services, is clearly an important one, but there appears to be some confusion as to which bodies are responsible for it—and what exactly it entails.

216. Some DH pronouncements have indicated that PCTs have a role in performance management. Dr Colin-Thomé's report on Mid-Staffordshire Trust refers several times to the PCT having failed to play such a role. He states that this "is an area where expectations have now changed considerably and PCTs have greater responsibility for performance management of the quality of care provided".[219] Professor Alberti refers likewise to the PCT performance managing providers.[220] The Minister of State for Health Services also spoke of "the performance management responsibilities of […] PCTs".[221]

217. However, performance management most often seems to be regarded as one of the responsibilities of Strategic Health Authorities (SHAs). These were created in 2002 (and reorganised in 2006) and effectively act as both regional headquarters of the NHS and regional offices of the DH. Their performance management role extends both to Trusts as service providers (but not Foundation Trusts)[222] and to PCTs as commissioners.

218. Dr Colin-Thomé notes that, in the case of Mid-Staffordshire Trust, West Midlands SHA and its predecessors failed to detect unsafe care, as did the PCT—although he adds that the SHA, like the PCT, did nothing wrong in terms of "nationally recognised approaches to managing performance which operated in the NHS at that time". [223]

219. This is perhaps unsurprising given that the performance management role of SHAs has seemed ill-defined, and when we asked the DH for a note on this, it was unable to give a concise definition of what the role entails.[224]

220. However, according to Dr Colin-Thomé:

    The SHA role, has also recently been strengthened with an overall system management responsibility including all the providers (but not directly Foundation Trusts), and commissioners in their area.[225]

This was also the view of the Minister of State for Health Services, who referred to the "evolving improvement of performance management across the NHS".[226]

221. One means of performance management by SHAs in respect of the safety of services appears to be through reports of Serious Untoward Incidents (SUIs). There is no standard definition of an SUI but they are usually defined along the lines of the following:

    something out of the ordinary or unexpected, with the potential to cause serious harm, and/or likely to attract public and media interest that occurs on NHS premises or in the provision of an NHS or a commissioned service.[227]

222. All SUIs should be reported by non-Foundation Trusts to SHAs, typically via the Strategic Executive Information System (STEIS),[228] although it is unclear what exactly SHAs do with the resulting data. There are doubts about the justification for having this reporting route alongside the NRLS, and we understand the NPSA is working to integrate STEIS reports into the NRLS.[229]

223. Safety First (2006) was clearly concerned about the role of SHAs and recommended that "The involvement of strategic health authorities in patient safety needs to be completely redesigned to ensure that patient safety is mainstreamed". This was to be partly accomplished as follows:

    The Patient Safety Management function currently delivered by the NPSA should be hosted by strategic health authorities (SHAs), and recast as 'Patient Safety Action Teams' [PSATs] to support the delivery of the national patient safety agenda by local NHS organisations. The team should consist of experts with skills in data analysis, incident investigation and solution development […]

    Prime responsibility for incident investigations should reside with local NHS organisations. Every NHS organisation should have access to a specialist investigator based within the Patient Safety Action Team. All reports should be considered locally within 24 hours of being reported. The NPSA should be notified of events that involve serious patient harm and death within 36 hours of the initial report.[230]

224. Accordingly, the NPSA transferred its 28 Patient Safety Managers to SHAs to be core members of the new PSATs on 1 April 2009; and the Agency provides a national network of events and communications, as well as policy support for patient safety leads in the SHAs. It also provides policy support for the SHA leads in patient safety. In addition, it has developed refined tools and techniques to help PSATs support local organisations with their incident investigations.[231]


225. Several bodies are involved in the regulation, inspection, audit and review of health and social care in England. Their efforts are coordinated through a voluntary agreement called the Concordat, which was launched in 2004 by 10 organisations, led by the HCC. Signatories work together to coordinate their activities, including inspections, audits and reviews.[232]

226. Regulation of NHS bodies by independent, formal structures and processes dates back to 1999. The history of regulation in the NHS is very briefly summarised in Box 15.Box 15: Brief history of NHS regulation
Formal structures for the regulation of NHS organisations as service providers were introduced in 1999, with the creation of CHI. From 2000-01, Trusts were given star ratings by the DH; responsibility for these passed to CHI in 2003 and in 2004 to the HCC, which replaced CHI.

From 2006, the HCC was responsible for the Annual Health Check system, which replaced star ratings, and was later extended to cover regulation of NHS bodies as commissioners of services, as well as providers. On 1 April 2009, the HCC (along with several other bodies) was replaced by the CQC. From 1 April 2010, the CQC will register all providers of health and social care, including the independent sector, in a unified system. At some point after 2010, the CQC will also register independent practitioners in primary care (such as GP practices), which have not hitherto been subject to such regulation.

The year 2009-10 is a transitional one, during which the CQC is conducting "periodic reviews" of health and social care providers and commissioners (in the NHS this will be similar to the Annual Health Check). From 1 April 2009, there is a legal requirement for all NHS Trusts that provide services for patients to register with the CQC in respect of requirements regarding the prevention and control of healthcare-associated infections. All NHS organisations will need to be fully registered with the CQC by the time the requirements come into force on 1 April 2010.


227. The heart of the regulatory process has been the Annual Health Check operated by the HCC until 1 April 2009. Under this system, trusts were rated in respect of the quality of their services partly on performance against targets set by the Government (and latterly also by commissioners) and partly on performance against a series of Core Standards, in respect of which Trusts assessed themselves.[233] Self-assessment declarations were cross-checked against "commentaries" from "third parties" (SHAs; patient and public representatives;[234] and local-authority Overview and Scrutiny Committees), with any significant discrepancies triggering "risk-based" inspections by the HCC. (In addition, a proportion of Trusts were randomly selected for inspection.) The HCC reported that in 2008 it received 1,930 comments from third parties, from which 8,779 items of intelligence were extracted and used. Across all the third parties, 9% of commentaries were given a high data-quality rating, 35% a medium rating, and 36% a low rating; 20% fell into the "no comment" category.[235]

228. The Annual Health Check was described as a form of "light touch" regulation; instead of there being an army of inspectors, Trusts assessed themselves. The process might also be described as "rules-based" in that Trusts had to show they had certain policies in place and followed certain processes.

229. Although described as "light touch", such regulation still clearly imposes a significant financial and administrative burden on the NHS. Professor Kennedy assured us that regulation justified its cost:

    Regulation is a lever: it is neutral. It is available to government to do a job. It is neither burdensome, nor the other. It has to be efficient in so far as it has to be cost-effective, the benefits outweigh the costs—and, in my view, in the Healthcare Commission case they do—and it has to be effective in so far as delivering what you have asked us to deliver, which is to promote improvement. In my case it has done that.[236]

230. However, while Professor Kennedy was able to tell us the cost to the NHS of his own organisation, he could not quantify the costs that it imposed on the organisations it regulated:

    Q 698 Sandra Gidley: […] Regulation is quite expensive. How much does it cost NHS organisations to meet all the requirements that your respective organisations put upon them? Have you made an estimate of that? […]

    Q 699 […] Professor Sir Ian Kennedy: Nought point one [percent] of the total cost of public funding allocated to the sector, or, if you want to put it another way, 94p for every thousand pounds spent […]

    Q 700 Sandra Gidley: The question I did ask was about cost. I was not clear whether that was the cost for each organisation that has to provide information or that was your cost of the total budget?

    Professor Sir Ian Kennedy: That is the cost to the public purse of what the Healthcare Commission does. As regards the cost to each individual trust, I do not have that data. It may well be that it is discoverable, but I would have thought it is quite difficult to calculate, because, of course, it depends on lots of things, namely the energy put into it.

231. Doubts about the effectiveness of regulation have been raised by the fact that none of the recent appalling cases of lethally unsafe care in the NHS was brought to light by the Annual Health Check. Mid-Staffordshire Trust, for instance, was rated "Fair" on Quality of Services in 2005-06 and 2006-07; and provisionally "Good" in 2007-08.

232. The Cure the NHS group asked whether "this method of 'self-assessment' [the Annual Health Check] has not been seriously discredited by the failures at Stafford Hospital?"[237] This view was echoed by the Patients Association, which stated that the case of Mid-Staffordshire Trust "raises serious concerns over the assessments made by the [HCC] since its inception in 2004".[238]

233. In respect of this case, Professor Kennedy told us that the Annual Health Check "will not always spot every area of inadequacy" and problems could be "masked by the bigger picture". He stressed that the "Fair" ratings for the Trust had indicated that services were "barely adequate and in need of improvement"; and that the "Good" rating for 2007-8 had been provisional, pending the outcome of the HCC's investigation of the Trust.[239]

234. The HCC was alerted to unsafe care at Mid-Staffordshire Trust by data showing a high hospital standardised mortality ratio (HSMR).[240] When the Trust gave an unsatisfactory explanation of the data (arguing that it was the result of administrative issues rather than a genuine indication of unsafe services), a long and thorough investigation by the HCC was triggered. In consequence, the HCC brought issues to the Trust's attention as they were uncovered and published its findings in full (in March 2009), leading to a change of leadership at the Trust and action to improve services. The HCC also downgraded the Trust's 2008-09 Annual Health Check rating for Quality of Services from "Good" to "Weak".

235. The Minister of State for Health Services argued, on this basis, that regulation could not be said to have failed:

    I think it is […] fair to say that the procedures of the Healthcare Commission […] have been constantly evolving, they have been constantly improving and they have constantly been becoming more sophisticated. It was indeed the growing sophistication of the Healthcare Commission's procedures with use of HSMRs and other alert systems that finally alerted them to the potential problems that were there at the hospital.[241]

A similar point was made by the CNO regarding one of the other such cases:

    I would say one of the reasons that Maidstone and Tunbridge Wells came to the fore was because we had some of these systems in place that were beginning to bite, the Healthcare Commission doing inspections and all those sorts of things, so that whilst it was a very sad event for Maidstone and Tunbridge Wells it was showing that our systems were beginning to work.[242]

However, the fact remains that annual assessment failed in each of these instances, so that abysmal standards of care continued for some time before finally being detected by other means, and then investigated and addressed.

236. The DH maintained that it was possible to say confidently that these cases of very unsafe care are isolated instances. Regarding Maidstone and Tunbridge Wells, the CNO told us: "No, I do not think it is widespread".[243] In respect of Mid-Staffordshire Trust, the Minister of State for Health Services told us:

    This issue of whether Mid-Staffordshire was an isolated incident was dealt with by the Healthcare Commission itself, by the independent regulator, who made clear both in the report and subsequently to it that they went back and did a very careful check of other trusts that had similar high levels of hospital standardised mortality rates and other indicators that may be a cause for concern and they satisfied themselves (Anna Walker [the Chief Executive] is on the record as having said this […]) that there were not any other trusts that gave rise to similar concerns.[244]

However, the Annual Health Check is clearly not a sound basis for such assumptions; and absence of HSMR data giving cause for concern is no guarantee that there are not further undetected instances of things going badly wrong.

237. Understandably, scepticism has been expressed about the assurances of the type given by the CNO and the Minister. Cure the NHS told us they had:

    been contacted by people from a number of other places. Performance will be like most other things in human affairs, 'distributed' roughly in the shape of the 'bell' curve, the 'normal' or 'Gauss' distribution. Stafford Hospital is probably at the very end of the tail of the poor performers but the big question is, how many more poor performers have been missed?[245]


238. The year 2008-09 is a transitional one in the regulation of NHS care. On 1 April 2009, the CQC took over from the HCC and from 1 April 2010 a new system, based on "registration", will be implemented.

239. We asked Baroness Young of Old Scone, the Chairman of the CQC, how she would ensure the organisation maximised effectiveness while minimising the burden and cost of regulation:

    Q 704 […] Baroness Young of Old Scone: We have made a commitment to be what I call a modern regulator.

    Q 705 Sandra Gidley: Yes; I wish I knew what that meant. It is one of those phrases that is bandied around endlessly and means zilch.

    Baroness Young of Old Scone: For me it is risk-based, it is proportionate, it is working with providers on issues that they ought to be focused on because they are important issues and also with a strong focus, and, indeed, we have introduced into our structure and our processes a strong focus on looking at the administrative burden particularly of changes in regulation that we make. So we will be doing impact assessments of all of the regulatory changes that we make to ensure that they are not putting disproportionate burdens on the folk we are regulating. But I think the point that [Professor] Ian [Kennedy] made is absolutely the case, and that is that, if the regulator is asking questions about things that the governance structure or the commissioners or the performance managers are not asking questions about, somebody is on the wrong page. So we have got to explore, if people are saying, "We do not want to look at this because we do not think it is important", why there is a difference of view as to the importance of a particular issue […]

    Q 706 […]It will vary with the issue and it will vary with the organisation. For some organisations a ticking off behind the bike sheds is just as effective as doing any formal enforcement mechanism. In some cases there will be issues that are best resolved, for example, through a professional process rather than a regulatory process or through a managerial process or a commissioning process, and I think we have got to be flexible and alert about that, but in terms of our regulatory mechanisms, we have built into our structure a way of making sure that, before we make any change, before we lay any new requirement on the people we regulate, that we are assessing whether that is truly a justifiable additional or changed requirement and whether there are ways we can do it that will reduce the cost.

240. The CQC will span all of health and social care, both public and private, allowing it to take an all-encompassing view and deal with interconnections between services; after 2010 the CQC will have power to address safety issues within primary care. Registration will be the central plank of the CQC's regulation of providers. Details of the registration compliance criteria are still being worked out, but Baroness Young assured us that "about 75% of the registration requirements are directly about issues of safety, so there is safety threaded right through the registration requirements".[246] The CQC will publish periodic assessments of both providers and commissioners (equivalent to the Annual Health Check) and it will also have the power to carry out "special reviews". Formal enforcement powers will include warning notices, prosecution and a fine of up to £4,000 (in lieu of prosecution). The CQC will also be able to impose conditions on, temporarily suspend, or cancel, a provider's registration; cancellation will be the ultimate sanction, as it will effectively close down the provider.[247]

241. The Minister of State for Health Services assured us that the CQC would have the same power as the HCC to conduct a thorough investigation where there were serious concerns about the performance of a Trust.[248]

Coordination and cooperation

242. Effective regulation, commissioning and performance management requires the maximum possible clarity about the roles of all the bodies concerned, coordination of their respective efforts, avoidance of duplicated roles and efficient use of resources. However, there is worrying evidence that these are all to an extent lacking, as Dr Colin-Thomé noted in respect of Mid-Staffordshire Trust:

    A key lesson has been about the need for clarity of role and responsibility to ensure that each organisation understands where it fits and what accountability it has. This was not clear in Mid Staffordshire and there were cases of issues falling between organisations.[249]


243. Monitor (the Office of the Independent Regulator) is an independent statutory corporate body that grants authorisation for Trusts to become Foundation Trusts and ensures that they comply with their terms of authorisation—effectively a licence to operate.[250] Monitor is supposed to ensure that Foundation Trusts have maximum freedom in their operations while safeguarding the interests of NHS service-users, using a system of regulation that should identify actual and potential problems, both financial and non-financial. In a case of significant failure by a Foundation Trust, Monitor has substantial formal powers of intervention. According to the DH:

    While Monitor does not play a direct role in defining patient safety, it does have an important part to play in ensuring that Foundation Trusts are effectively governed, including meeting the required standards in relation to clinical quality and patient safety.[251]

However, serious doubts about Monitor's effectiveness in performing this role have been raised by the case of Mid-Staffordshire Trust.

244. Dr Bill Moyes, the Executive Chairman of Monitor, told us his organisation had accepted the Trust's explanation that its poor HSMR figures were an artefact of how cases were coded (classified), rather than evidence of actual lapses in care standards. Consequently, Monitor did not pursue the matter when considering whether to grant Foundation status.[252] At the same time, the HCC was, as noted above, exploring this further. Incredibly, it transpires that the two organisations were not in communication about the Trust, and the HCC only found out by accident that Monitor had decided to grant it Foundation Trust status.[253] Monitor, according to Dr Colin-Thomé, "emphasise[d] that prior to the foundation trust application process, both the SHA and PCT had an opportunity to comment on a hospital's suitability".[254] The HCC investigation, however, found that "The PCT […] considered that the trust and its activities were the subject of scrutiny as part of its application for foundation trust status", and was thus reassured about the quality of services.[255]

245. Dr Moyes informed us that Monitor had changed its approach since the Mid-Staffordshire Trust case came to light:

    Since Mid Staffs, we have expanded our assessment process, so we do take a look at local press cuttings, for example, we do ask the Healthcare Commission, not just at local level, but at national level, "Is there anything you want to tell us?"[256]

246. The case of Mid-Staffordshire Trust also raises questions regarding the arrangements for overseeing authorised Foundation Trusts. Dr Colin-Thomé notes:

    There was […] lack of clarity over the respective roles of the SHA, PCT and Monitor once Mid Staffordshire hospital trust achieved foundation trust status. The SHA and PCT, in particular, were unsure of their ongoing management relationship with the Foundation Trust, in relation to the independent regulation role taken on by Monitor.[257]

247. Foundation Trusts, unlike ordinary Trusts, have Boards, or Councils, of Governors,[258] through which they are supposed to be accountable to their local communities rather than to SHAs, the DH and the Secretary of State ("looking outwards, not upwards"). However, it seems unclear whether these governance structures involve any equivalent of the performance-management role played by SHAs on behalf of the Secretary of State. The DH informed us that "Monitor cannot replicate [SHAs'] powers [exercised on behalf of the Secretary of State] or have any role in performance managing Foundation Trusts."[259] Yet this was directly contradicted by the Minister of State for Health Services:

    Q 1080 Dr Stoate: […] [W]hy do we need Monitor [as well as the CQC]?

    Mr Bradshaw: Their roles are slightly different. Monitor also has what I would describe as a performance management role […]; Monitor has the power ultimately to deal with personnel issues, deal with boards for failing, failed management and so forth. The independent regulator - I think this is a very important distinction not least in terms of public confidence - has to be completely independent from the performance management and from the financial management role that Monitor has […]

248. Monitor has expressed misgivings about the impact that the creation of the CQC will have on Foundation Trusts and the role of Monitor itself. In evidence to the Public Bill Committee on the Health and Social Care Bill in 2008, Monitor stated:

    The creation of a new regulator, the Care Quality Commission, with statutory powers over NHS foundation trusts puts [the success of the Foundation Trust regulatory regime] at risk. Giving two regulators powers of intervention over the same bodies risks confusion, duplication and loss of accountability.[260]

Dr Moyes was less outspoken when we asked him about this, but he did indicate that this issue still had yet to be resolved:

    It is still an area I am anxious about. Monitor has been consistent throughout, quite openly saying that we believe that the strength of the system is that we have the responsibility to intervene in circumstances of failure where other mechanisms such as the Commission's pressure, and so on, has not had an effect […] [T]he Care Quality Commission has a power to register and, therefore, to deregister and, therefore, to vary the registration conditions, and I think we both recognise that that is an area where, once the CQC comes into being properly, we are going to have to work quite carefully together to identify who does what in what circumstances. But it is an obvious issue that has to be sorted. We both recognise it has to be sorted. We are developing a memorandum of understanding between our two organisations which tries to make sure that we can describe to the world in language the world can understand, how our compliance system and the CQC's registration system will bolt together. It is not an insuperable problem […][261]


249. A significant complicating factor in regulation is the involvement of the NHSLA, through setting standards in respect of the Clinical Negligence Scheme for Trusts, an issue that we raised with Steve Walker, the Agency's Chief Executive:

    [T]he background is that the Clinical Negligence Scheme is a risk-pooling scheme. It began during what used to be called the internal market, when trusts were first exploring autonomy and the idea was that risks would be pooled, claims would be settled from the pool, and the rather wise people, I think, who were putting that together recognised that if it were a mutual insurer, for example, that insurer would want to instigate some risk management activity to protect the pool. That is how standards were initially devised […]

    No one has volunteered to take it on historically, I should say, and what has happened is that people like the Healthcare Commission, for example, have used our assessment outcomes and fed them into their own data to produce things like the annual health check. I think that what we do, we do very well, but I am not saying that we are the only people who could do it, nor am I saying that it is not possible that someone could do it better, but lots of people take our data on the basis of what we do now and make use of it.[262]

250. For the DH, Ann Keen MP, Parliamentary Under Secretary of State, told us: "The Department is satisfied by the work undertaken by the NHSLA on standard setting […] We see no compelling case for asking [the CQC] to take on an additional role at this stage".[263]

251. However, we heard as follows from AvMA:

    We believe the NHSLA is the wrong body to be responsible for developing and monitoring safety standards. Currently, they are, in the form of their "risk management standards". Whilst it is important that lessons from NHSLA's work inform standards for improving safety, we believe it is wrong to have responsibility for standards underpinning patient safety with what is essentially an organisation with an insurance industry approach. This work would more appropriately be handled by another agency/agencies such as the NPSA and Care Quality Commission, so that standards are informed by other areas of their work.[264]


252. There seemed to be a general concern that there were too many organisations involved in regulation, commissioning and performance management, but uncertainty about how to change the situation.

253. Baroness Young told us:

    [T]here are a lot of players on the pitch, but I think there is an opportunity for us to make sure that all of that effort is aligned because there are distinctive contributions that each of the players are making. Clearly, the bodies that particularly are important in the safety area are ourselves, the National Patient Safety Agency, NICE, the Litigation Authority, the PCTs the SHAs, Monitor, probably a good few others besides, the providers themselves, of course. Our role is as the regulator of quality in which safety is our first principle of quality […] Safety will be a fundamental part of that and we will enrich that risk profile with information, not just from stuff that we collect ourselves through our regulatory processes, but from a whole variety of other players, including Monitor, including the SHAs and the performance management system, including the commissioners, including the Litigation Authority and also from things like professional quality assurance processes and accreditation. So it will be a very rich and increasing profile for each provider, and safety will be a fundamental element of that.[265]

Lord Darzi's views were as follows:

    How do we align all of these people together with the ultimate aim of improving safety and quality? If I could bring you back to accountability—I think Liam [Donaldson] said this earlier—someone needs to be out there accountable for core standards of safety and quality. That should be just one, and that will be the CQC and only the CQC. Anything above core standards, everyone who wants to be on the pitch, they should start talking about quality improvements whether it is Monitor, whether it is commissioners, whether it is the SHA and that is the culture we need to move to. The only way to do that is to go back to the teams in A&E who are providing that care to look at themselves and what they are doing. From an accountability perspective it is very important to know who is doing it exclusively. Then you come up and ask how we do it at a national level. I have tremendous expectations from the National Quality Board which was launched last week.[266]

254. The CQC will reportedly be convening routine "risk summits" in respect of NHS organisations, involving all bodies with relevant information, allowing swift intervention where problems in care standards are brought to light.

255. The Government response to the Alberti and Colin-Thomé reports states:

    In the case of Mid Staffordshire Trust, it is clear that there was not enough cooperation and communication between the different management and regulatory bodies. Various warning signs were known by different organisations, but they did not pool their knowledge to expose the Trust's failures.

    As the regulatory system evolves, all parties are determined to ensure that cannot happen again. On 1 April 2009, a new statutory duty came into force under the Health and Social Care Act 2008 for the CQC and Monitor to cooperate with each other in the best interests of patients.

    The Secretary of State has also asked the new National Quality Board to look at how we can ensure that any early signs that something is going wrong in the NHS are picked up immediately, that the right organisations are alerted and that action is taken quickly. The NQB [National Quality Board] will review key issues relating to alignment and co-ordination at a system level and will report by the end of 2009.

    Linked to the NQB's review, we will work with the CQC and other key partners to organise a programme of local clinical risk summits, which would bring together a range of organisations to assess and address the risks across a particular health community.[267]


256. As we have argued elsewhere, we have grave doubts about Primary Care Trusts' performance in their commissioning role. The DH's hope is that World Class Commissioning will transform PCTs, but there is a danger that it will be another tick box exercise. As we stated in our report on the Next Stage Review we welcome the principle of linking payment to the quality of care, but recommend that it be tested first in a pilot project. We support the use of Never Events by PCTs, but have doubts about whether they should involve a financial penalty; we recommend this be the subject of a pilot project.

257. The performance-management role of Strategic Health Authorities appears to be ill-defined and to vary between SHAs. We are not convinced that this function is being effectively discharged throughout the NHS. There seems to be no definition of it laid down by the DH; and the Department was unable to supply this when we asked. We recommend that the DH produce a formal definition of the performance-management role of SHAs.

258. Regulation has been burdensome and costly and its main mechanism, the Annual Health Check, has failed to pick up major failings in healthcare, although the HCC did through other means identify the problems in cases such as Mid-Staffordshire Trust and things would have been even worse without regulation. We do not, of course, know how much poor care the Annual Health Check failed to identify.

259. Regulation in the past decade has been characterized by an expansion in rule-based mechanisms, looking at processes and procedures rather than actual outcomes and consequences and professional competence. Too often the rule-based approach has been unable to capture the complexities of frontline care. Worse, it may fail to engage professionals, who are quick to recognize opportunities to work around rules. Inappropriate rules will foster ingenuity in compliance but detachment from the more demanding role of asserting and fulfilling the needs of patients. Sustained improvement depends on releasing the potential of staff to see, develop and own solutions.

260. The new Care Quality Commission's registration system must focus on the outcomes being achieved by NHS organisations rather than formal governance processes; it must ensure that organisations only collect information which they should be collecting for their own purposes.

261. We recommend the DH consider how to reinstate the best aspects of the Royal Colleges' inspections in the new system.

262. The relationship between commissioning, performance-managing and regulating bodies is not defined clearly enough. There are, as Baroness Young put it, "a lot of players on the pitch" and we are concerned that too often they are not an effective team. There is evidence of overlapping functions and multiple submission of information to different regulators. Most disturbing of all is that Foundation Trusts appear to be operating in an entirely different regulatory framework from non-Foundation Trusts.

263. What all the complex panoply of organisations has actually achieved is called into question by the fact that these systems have been shown recently to have failed in several instances promptly to expose and address major instances of unsafe care.

264. The case of Mid-Staffordshire Trust has also exposed serious shortcomings in Monitor's assessment process when granting authorisation. Not only did Monitor fail to detect unsafe care—it effectively allowed the Trust to compromise patient safety in premature pursuit of Foundation status. We note the Healthcare Commission found that achieving Foundation status was one of the factors that distracted the Trust from patient safety issues. Monitor's acceptance at face value of the Trust's excuse that its poor mortality figures were a statistical anomaly is wholly unacceptable.

265. We are also concerned about Monitor's role in regulating Foundation Trusts following authorisation. We are told that Monitor does not replicate the performance management role played by SHAs in respect of Trusts, but it is unclear by exactly which means Foundation Trusts are intended to be performance managed—or whether they are supposed to be performance managed at all. In Monitor's defence it could be said that too many SHAs have also done no effective performance management.

266. There appears to be considerable potential for confusion, and possibly conflict, regarding the respective roles of Monitor and the CQC, as Monitor itself has indicated. The DH must clarify exactly what these two organisations' regulatory roles are in respect of Foundation Trusts and how those roles fit together.

267. While the NHS Litigation Authority has performed an important role in setting standards, its involvement in scrutiny of NHS bodies leads to burdensome and wasteful duplication of time and effort for both Trusts and regulators. Moreover, the role of indemnifying Trusts against litigation over clinical negligence is quite distinct from the role of setting standards on safe care and safety culture—and there is potential for tension between the two, notably regarding openness about unsafe care. We recommend that the inspection process currently undertaken by the NHS Litigation Authority should be subsumed within the work of the Care Quality Commission.

268. The DH should produce a succinct statement regarding how commissioning, performance management and regulation are defined, and how they (and the organisations responsible for them) relate to each other.

198   Department of Health, Health reform in England: update and commissioning framework, July 2006, para. 1.2, p 3 Back

199 Back

200   Under the Practice-based Commissioning initiative, some aspects of commissioning are supposed to be delegated by PCTs to GP practices. Back

201   Health Committee, First Report of Session 2008-09, NHS Next Stage Review, HC 53-I, para 55 Back

202   Healthcare Commission, Investigation into Mid Staffordshire NHS Foundation Trust, 2009, pp 118 Back

203   Professor Sir George Alberti, "Mid Staffordshire NHS Foundation Trust: A review of the procedures for emergency admissions and treatment, and progress against the recommendation of the March Healthcare Commission report" 29 April 2009, p 4 Back

204   Dr David Colin-Thomé, "Mid Staffordshire NHS Foundation Trust: A review of lessons learnt for commissioners and performance managers following the Healthcare Commission investigation", 29 April 2009, pp 19-20 Back

205   Ibid., p 5 Back

206   Q 1043 Back

207   The Commissioning Assurance System involves an annual assessment cycle, covering outcomes, competencies and governance, overseen by the Strategic Health Authorities. Back

208   Department of Health, High Quality Care For All, Cm 7432, 2008, paras 40-41, pp 41-42; para 21, p 52 Back

209   Hitherto, the amount paid under Payment by Results has been determined by the volume of care alone. Back

210   From April 2009, all licensed providers of hip replacements, knee replacements, groin hernia surgery and varicose vein surgery have been expected to invite patients undergoing one of these procedures to complete a pre- and post-operative PROMs questionnaire. Back

211   Q 872 Back

212   Ev 77 Back

213   HC (2008-09) 53-I, para 86 Back

214   Q 55 Back

215   PS 01A Back

216   Q 874 Back

217   Q 58 Back

218   Ev 77 Back

219   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust", 2009, pp 12, 16 and 23 Back

220   Alberti, "Mid Staffordshire NHS Foundation Trust", 2009, p 7 Back

221   Q 1043 Back

222   Foundation Trusts are part of the "NHS family", but free from the control of the Secretary of State for Health and so not accountable to their local SHA. Back

223   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust", 2009, p 5 Back

224   PS 01A Back

225   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust", 2009, p 14 Back

226   Q 1043 Back

227 Back

228   Ev 210, 211. Foundation Trusts are apparently supposed to report SUIs to Monitor and PCTs. Back

229   Ev 13 Back

230   Department of Health, Safety First, 2006, pp 26 and 27 Back

231   Ev 150-151 Back

232   The full signatories to the Concordat are: the Audit Commission; the Care Quality Commission; the Conference of Postgraduate Medical Deans; the General Medical Council; the Health and Safety Executive; the Human Fertilisation and Embryology Authority; the National Audit Office; the NHS Counter Fraud and Security Management Service; the NHS Litigation Authority; the Postgraduate Medical Education and Training Board; and Skills for Health. The associate signatories are: the Academy of Medical Royal Colleges; the Council for Healthcare Regulatory Excellence; the Department of Health; the Health and Social Care Information Centre; the Healthcare Inspectorate Wales; the NHS Confederation; the Quality Assurance Agency for Higher Education; and the United Kingdom Accreditation Forum. Back

233   Under the first Core Standards domain ("Safety"), Trusts had to self-certify compliance in areas including the implementation of NPSA Patient Safety Alerts. Back

234   This role was initially fulfilled by Patient and Public Involvement Forums (which took on part of the remit of CHCs when they were abolished in 2003) and then passed to Local Involvement Networks, which replaced the Forums in 2008. Back

235   Healthcare Commission, Core Standards Assessment 2007/2008, Third party feedback Back

236   Q 703 Back

237   PS 101 Back

238   PS 50A Back

239   PS 52B. See also Q 707. Back

240   The HSMR compares the actual number of deaths in a hospital with the average national experience, after adjusting for several factors that may affect in-hospital mortality rates, such as the age, sex, diagnoses and admission status of patients. The ratio provides a starting point to assess mortality rates and identify areas for improvement, which may help to reduce hospital deaths from avoidable adverse events. Back

241   Q 1035 Back

242   Q 80 Back

243   Ibid. Back

244   Q 1041 Back

245   PS 101 Back

246   Q 733 Back

247   Ev 157-160; PS 41A Back

248   Q 1037 Back

249   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust" 2009, p 22 Back

250   Access to Foundation Trust status is supposed to be based on the principle of "earned autonomy"-in theory, only high-performing Trusts are permitted to apply for Foundation Trust status. Trusts must also show a financial surplus before they are permitted to become Foundation Trusts. Back

251   PS 01A Back

252   Qq 721-5 Back

253   "Mid Staffordshire crisis: quality of care sacrificed in Foundation Trust bid", Health Service Journal, 19 March 2009 Back

254   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust", 2009, p 22 Back

255   Healthcare Commission, Investigation into Mid Staffordshire NHS Foundation Trust, 2009, p 6 Back

256   Q 722 Back

257   Colin-Thomé, "Mid Staffordshire NHS Foundation Trust", 2009, p 22 Back

258   Governors are partly elected by Trust Members, who are drawn from the public, patients and staff; and partly appointed by local partner organisations, such as PCTs and local authorities. Governors play an advisory, guardianship and strategic role. They are not involved in the day-to-day running of the Foundation Trust and so do not deal with matters such as budget-setting and performance-management. They also directly appoint the non-executive directors of the Foundation Trust, including the Chair. Back

259   PS 01A Back

260 Back

261   Q 741 Back

262   Qq 769, 771 Back

263   PS 01B Back

264   Ev 222 Back

265   Q 694 Back

266   Q 928 Back

267   Government response to Alberti and Colin-Thomé Reports, 2009, pp 7-8 Back

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