Commissioning - Health Committee Contents

Examination of Witnesses (Questions 1-95)

Sir David Nicholson KCB, CBE, Dame Barbara Hakin DBE, Dr David Colin-Thomé OBE, Ben Dyson CBE

19 October 2010

Q1 Chair: Ladies and gentlemen, thank you for coming to the Committee this morning. Welcome, again, Sir David, and your colleagues for the first time.

As you know, the Committee has decided to launch this inquiry into commissioning believing that more than 20 years after the introduction of the purchaser/provider split, as it used to be called, it is time to ask of the Government's proposals in its White Paper what, I think, we regard as the core question, which is how the proposals in this White Paper are going to make the commissioning process more effective than it has yet proved to be.

In the Terms of Reference the Committee published, we referred to the inquiry the Health Committee carried out in the last Parliament which concluded, and I quote: "Weaknesses are due in large part to PCTs' lack of skills, notably poor analysis of data, lack of clinical knowledge and the poor quality of much of PCT management. The situation has been made worse by the constant re-organisations and high turnover of staff." That was, I guess, where we were when the new Government took office. I want to start the discussion this morning with what I regard as the Government's central conclusion in its White Paper, which is that, if we want to make commissioning effective, PCTs as they are now simply have to be regarded as broken, and we have no choice but to start again. That seems to me to be the central policy conclusion of the White Paper.

  First of all, is that a fair characterisation of the White Paper that it concluded we simply have to start again, and why did the Government reach that conclusion, because there clearly was an alternative which could have been based on evolution? Many of the questions we want to ask this morning flow, it seems to me, from the central conclusion that we have to start again, and I think we should begin by exploring why the Government reached the conclusion that that was the best way forward.

Sir David Nicholson: Thanks for the introduction. I am sure you are well aware that the consultation on the White Paper ended just over a week ago and we are currently preparing the Government's response, which will come out in December, as a precursor to the Bill. So we are meeting at absolutely the right time in the sense that many of the issues that I am sure you will describe have not formally been absolutely nailed down. So there is a conversation to be had about the strengths and weaknesses of a variety of positions, and I hope the Committee will take our conversation in those terms—that we are working towards resolving some of these issues.

  I think that is true about the White Paper as a whole. If you think about the kind of strategic objectives of the White Paper--more focus on outcomes, more clout for individual patients, aligning clinical, managerial and financial levers in the same kinds of place--you see that there is widespread agreement that that is the right thing to do. But in any kind of White Paper of this type there is both continuity and discontinuity, and I think we have a bit of both in here.

  We have learnt quite a lot of lessons over the last 20 years about a variety of forms of commissioning. The question, I think, that the coalition faced, and indeed we faced, was whether we would make the kind of step change we needed in commissioning, in terms of both the speed and the comprehensive nature of the implementation, particularly in the financial environment that the NHS is moving to, by simply having one more push on World Class Commissioning and one more push on Practice-Based Commissioning? The Government came to the conclusion that that would not deliver the benefits that we wanted. That is not to say we should throw away all of the past—the knowledge, understanding, expertise and skills in all of that—but we need to take it to a completely different level, and I think that is the context in which we are having those discussions.

Q2 Chair: I understand the context, but it still seems to me that there was an option, which was to take the existing core skills of the PCTs and develop them rather than start again, and I would just be interested to know what the argument was that convinced the Government to start again rather than to evolve the existing institutions.

Sir David Nicholson: Okay. If you look at what commissioning is, it is often kind of caricatured as some kind of transaction arrangement, but of course it isn't that at all. It has a major strategic context in relation to whole population planning. It is a major issue in relation to managing clinical change and making clinical change happen, and then it involves the kind of monitoring and transactional stuff.

  It was clear that reform of Practice-Based Commissioning—which was the major way in which we could take forward the clinical change bit, which is often the bit that is the most difficult to do—would not deliver that clinical impact because, simply, the power relations were in a different place. You did not align financial accountability with clinical accountability, so a step change in relation to Practice-Based Commissioning was required, and within the context of the PCTs it was felt that we were not able to do that.

  Then, secondly, on the whole population-based planning and commissioning that is required, we have a lot of expertise, lots of understanding and a lot of development in local government, which was in lots of ways significantly ahead of the way we had developed commissioning in this regard in the NHS. So using that as the other bit seemed to us the best way forward. So a mixture of taking forward the alignment of clinical and financial accountability and building on the expertise, knowledge and progress in whole population-based commissioning working in local government was the right thing to do rather than, in a sense, pushing PCTs through another wave of World Class Commissioning.

Q3 Valerie Vaz: So why don't you build on it then? Why are you changing everything?

Sir David Nicholson: We are building on it.

Q4 Valerie Vaz: But you are not. You are changing it.

Sir David Nicholson: We are changing the structural nature of it, absolutely right, but one of the lessons that we have learnt about World Class Commissioning, which I don't think came out particularly well in relation to the work that the Committee did before, was in relation to outcomes. World Class Commissioning did a lot of work for PCTs identifying outcomes and you can see those PCTs that focused on outcome priorities had the biggest movement and change in them compared with the rest. We are learning from those sorts of things and hopefully transferring that over to the new system. We learnt lots of lessons about Practice-Based Commissioning and, as you undoubtedly know, some of the leading Practice-Based Commissioners were arguing for "hard" budgets--as they described them--as a way of taking their service forward. We are going to do that as well. So I think it is possible to take forward some of those things into the new system.

Q5 David Tredinnick: Sir David, I hear what you are saying. You are taking out two enormous tiers of the structure. The PCTs are going and the Strategic Health Authorities. I hear what you are saying about the more effective commissioning process at doctor level, but how are we going to make major strategic decisions? Are these going to be made down the road at the Department? It seems that we are creating a huge gap between the top and the bottom.

Sir David Nicholson: I am sure we will get into this in detail. I am sure my colleagues can respond to this as well. One thing that we are doing is creating a whole commissioning system, and if you see commissioning as the Commissioning Board here and the consortia there and the kind of relationship between the two is what happens, I think it is to misunderstand the nature of the system we are going to create. For example, we have a lot of experience and knowledge on both national commissioning of highly specialised services and regional commissioning of specialised services. The arrangements we have put forward in the White Paper say that the National Commissioning Board will take responsibility for both of those elements--both the national specialist commissioning and the regional specialist commissioning. So that is a major plank of commissioning expertise, knowledge and understanding.

Q6 David Tredinnick: Forgive me for interrupting. So that is being taken up. That is being taken from the regions to the centre?

Sir David Nicholson: It will be the responsibility of the Commissioning Board. The issue for the Commissioning Board is how you best do it. The idea of just standing at the centre and trying to do it is nonsensical. I am sure you will have some kind of sub-national mechanism to make sure you make the connection.

Q7 David Tredinnick: So there will be a terrifically empowered Commissioning Board, much more powerful, because that which was done in the regions comes up and then there is a redevelopment of what was once GP commissioning and the structure there, but it seems there is not much glue in the middle?

Sir David Nicholson: The National Health Service Commissioning Board does not yet exist. We are currently working through how you take it from where we are now to the new system. I think you will see a variety of mechanisms by which the National Health Service Commissioning Board will be powerful nationally but actually will be active locally. If you take, for example--and I'm sure we will get on to this as well--maternity services, you can't nationally commission that. The Commissioning Board will have to have some mechanism locally to enable it to do that.

Q8 Rosie Cooper: Could we just split up the Department of Health and the Commissioning Board? Is that what you are really telling me, because in a funny way that is what I am hearing?

Sir David Nicholson: No, not at all. The Department of Health, of course, is responsible both for provision and commissioning and public health. The National Health Service Commissioning Board will be responsible for the commissioning of the NHS. The White Paper sets out very clearly that the bulk of services will be commissioned by consortia but that the National Health Service Commissioning Board will have responsibility for regional specialist commissioning and a variety of primary care commissioning. So that is not the same as the Department of Health by any stretch of the imagination.

Q9 Fiona Mactaggart: Can you explain why it has been given maternity services because that is one of things that I don't understand about the White Paper?

Sir David Nicholson: There are probably three main reasons why that is the case. The first thing is that maternity is not an illness service. It is not delivered in that kind of way.

Q10 Fiona Mactaggart: Even more reason for it to be done locally, but do carry on.

Sir David Nicholson: The link with general practitioners is not obvious, which is the second reason. General practitioners do not have the same impact on demand that they have in other areas. The third one is that it is increasingly not a medical model of care for mothers and children. That is not to say that the consortia will not be involved in it, but it is very clear that the National Health Service Commissioning Board will be responsible for leading commissioning on it on the basis of those three things that I have just said.

Chair: Can we try and move in a reasonably structured way? Obviously it is all one subject and you are right, Sir David, that we shall, I think, return to these themes later on in the session, but we thought it would be sensible to move now to explore questions that Sarah is going to ask.

Q11 Dr Wollaston: In a sense this is a massive re-organisation of the NHS and I think what a lot of clinicians are concerned about is the evidence base behind this. Of course clinicians do welcome the idea that you have more clinical leadership in the NHS to exert those levers in the right direction, but can you just put us in the picture about where the evidence base is and why we are not seeing more "pilots" for this?

Sir David Nicholson: I am sure one or two of my colleagues will want to come in on this, but in terms of the evidence base, even from this country there is good evidence for the idea that "focusing on outcomes delivers change". So with regard to the outcome stuff, I think, there is quite a good evidence base for that.

Q12 Dr Wollaston: For the outcomes, yes, but I am talking about the structure--GP commissioning.

Sir David Nicholson: Well, okay. Again, for patient engagement and empowerment, there is good evidence that shows empowered patients get better quicker and use less resource.

  In terms of putting power into the hands of GPs, we have quite a lot of experience in this going back more than 20 years. We had GP fundholding; we had total commissioning; we had primary care groups; we had PCTs; we had World Class Commissioning; we had Practice-Based Commissioning. Out of that there is a huge body of experience and knowledge about what works. That is not a random controlled trial, but I think there is quite a lot of experience and knowledge about the strengths and weaknesses of how that worked on one hand, and on the other hand the reality is, as you know probably better than most, that every time a GP refers a patient or writes a script, that is commissioning activity. You are commissioning a whole set of services. So, if you put those two things together, what we are trying to get at is, what is the best way of connecting that experience with that reality?

Q13 Dr Wollaston: Sure. I think most people accept that actually having clinical leadership in the NHS makes a difference, but the fact is that this is a massive reorganisation and there don't appear to be any pilots of this particular model. Would it not have been better to pilot this in certain regions and then see where the glitches are and move on from there, rather than have wholesale, across the system, change?

Sir David Nicholson: I think there are two things. A lot of people have talked about the speed of all of this, and there is no doubt the coalition have been very quick off the mark in terms of delivering their vision for what the NHS of the future might look like. When you think it took, I think, Mrs Thatcher 10 years to deliver her plan for reform; it took Tony Blair about six years; and it has taken the coalition, I think, 60 days to do that. So the speed is fantastically important.

  The thing about the speed is that it makes it very clear right at the beginning what the vision is. The issue about how you get to that vision then--I think you are absolutely right--is that you need to take it a step at a time and be sensible and reasonable about it. If you think about it, we have got until 1 April 2013. That is the first time that the consortia will be statutorily able to take on a budget—that is two and a half years away—and we have got till 2014 for foundation trusts. So, we have got two and a half to three and a half years to take this forward in a logical and sensible way, and we propose to use that time effectively for doing it.

  But if you look back and think about Practice-Based Commissioning, in lots of ways that was piloting some of the aspects of some of the consortia powers that we will be getting. So we have got some experience of that. We have not finalised how we are going to roll all of this out, but we are going to take the appropriate amount of time to get from where we are now to the place we're going in two and a half years. The issue from the service now is that people want me to speed it up rather than slow it down.

Q14 Dr Wollaston: But some things are happening very quickly. If you take the definite purchaser/provider split, a comment from many people that I have talked to has been that that has been too rapid to allow setting up, for example, of social enterprises in some areas. Do you have concerns about the pace?

Sir David Nicholson: The last time that we tried to deal with the outstanding issues in the purchaser/provider split was in 2005-06--in Commissioning a patient-led NHS. What happened after that was that in 2007 we set out to the service that over the next period we expect people to deliver the purchaser/provider split, and it is particularly community services we are talking about. In 2007, I wrote out to the service saying to do it and we gave a series of deadlines, all of which the NHS missed. So, during the period of the last Government, we set out another deadline which came out as part of "Good to Great". We put 31 March 2011 as the date when that would be completed and there was lots of evidence that people weren't pushing it hard enough, because they are difficult decisions to make and many PCTs did not want to give up their provider arm for a whole variety of reasons. Lots of PCTs like running things as well as commissioning things.

  What the coalition have done is absolutely made clear that timetable. My view, for what it is worth, is we could have had a timetable in five years' time and they still wouldn't have delivered. We had to make a decision to do it and, all right, in most places it has worked fine and people have got on and done it. In some places, it has been, I think, more difficult, but the issue for me was the prize of getting the split between commissioning and provision which, for a whole variety of reasons, we failed to do over the last few years. So, I do not think it was a short-term thing. We have been talking about this for at least three or four years.

Q15 Grahame Morris: Can I just develop this point about the scale and pace of change in commissioning because the Committee has heard evidence from a number of individuals and organisations—the Royal College of GPs and a number of stakeholders, including trade unions' concerns—about the pace of change posing major operational risks to the NHS. We are not talking about a five-year track production plan here. We are talking about the health of the nation. So I would be interested in your professional view, as the Chief Executive of the NHS, in terms of that and also in terms of the evidence base that my colleague Sarah referred to about the international experience in terms of primary care and GPs commissioning secondary care. What is the evidence base from what is happening internationally to support what we are doing here?

Sir David Nicholson: I will ask Barbara to talk about the evidence. In any management of change work that you do, there are arguments for speeding things up and slowing things down, and I think we have taken a relatively middle rate in relation to that because we were very concerned that we needed to build a new system. As I say, it is not just the consortia. It is the regional Commissioning, the national Commissioning and all those things we need to build the whole system as we go forward.

  At the same time, of course, we are, as we discussed at the last Committee, facing the biggest financial challenge the NHS has ever faced. So do you go slow or do you go fast in that environment? That is a matter of some debate and some discussion.

  What I would say is that, once you announce a set of changes like the White Paper, things start to happen irrespective of whether you want to go slow or fast. Already you see people wanting to move out of PCTs. You already see problems in some parts of the country sustaining the commissioning capability there so that, in a sense, drives you to need to get the consortia working as fast as you possibly can. It is the nature of change management.

  I think, if you look at the evidence around big change elsewhere, three or four years is a reasonable amount of time to make that happen, but that is not to say that in 2013-14 we'll have a new system running completely perfectly. It will take several years for that system to mature and bed down after that.

Dame Barbara Hakin: I have something to add to that. I think it is difficult with something like this because clinicians are used to double blind trials and carefully constructed randomisation, which is more difficult, but I do think there is a wealth of evidence both in this country and internationally that connecting clinicians much more into the design of services for patients and the resource committees into responsibility for the resource for patients actually does make a huge difference. We have significant numbers of examples both from this country and abroad from where that has happened and it makes a difference to the quality of the care that the patients get in terms of both their experience and effectiveness.

I think the main aim of this change really is to tip back into a situation where there is more clinical dominance than the administrative and technical dominance. The NHS always tries very, very hard to keep clinical change and making things best for patients at the heart of everything that it does, and I think that lots of things that happened through PCTs helped us learn lots of lessons about World Class Commissioning, the technical aspect and the big strategic aspects, but we lost some of our frontline people. We lost those very people who see patients on a day-to-day level and have a more intimate understanding of their needs, and actually all day every day listen to what patients find good and bad about the system.

Again, I think David has got some international examples. We could give you a range of examples from this country where Practice-Based Commissioning consortia actually have made huge differences to the clinical quality and often to the productivity—to the elimination of waste in terms of care for patients. If you start to look abroad, certainly in New Zealand, there are some quite significant changes in regard to giving primary care a much more dominant role in commissioning. There aren't always analogies, of course, because our primary care system and our general practices in England are unique. There is nowhere else really where an absolutely holistic view of patient care is held centrally. There is a record which travels with the patient for life. That is the premise and the basis for this change, which I would argue probably needs to be significant to get the mindset change we need, because actually our frontline clinicians don't own this. So we need the mindset change, which needs time and radical change in the organisational shape.

  We have a system whereby general practice in this country is responsible for co-ordinating all aspects of care that patients get, and therefore it seems that they are absolutely best placed to co-ordinate the commissioning. They wouldn't dream of doing all the care themselves and they work very hard with patients themselves. They refer patients to a broad range of other clinicians at all times, but that central co-ordinating role is the one that we have in this country which is really very different from anywhere else. David, I am sure you can give us specific examples.

Dr David Colin-Thomé: On the clinical connection, of course, we have got the US models of Managed Care Organisations where clinicians enrol, but, as Barbara has intimated, British general practice, with very few exceptions around the world, is unique because of its registered population of patients. That makes quite a difference—to have a holistic responsibility that is both budgetary and clinical—and not many countries have. There are one or two in northern Europe, like the Dutch and so on, and New Zealand, interestingly, has only gone in the last 10 years towards a registered population. So most general practice, as in Canada, Australia and so on, does not have that population responsibility. So we are building on something which has not led so well to international evidence because in terms of the organisers of general practice they are not as developed as us.

Q16 Grahame Morris: Can I just ask about the size of commissioning units because we have had evidence given to the Committee about international examples in terms of size of commissioning units, and it seems to me that the weight of evidence in Europe and elsewhere is that commissioning units are getting larger rather than smaller, as we are reporting, under these health service reforms? Is that the case?

Dame Barbara Hakin: I think that it is very easy to talk about commissioning because we use one word to describe it as one action and start to think that you can describe the perfect world and size, and say, "At what level should you commission certain services?"

  Commissioning is a broad series of actions. David has described the strategic overview for the population, clinical change and the technical aspects. Frankly, you need to do those different aspects with different local sensitivities. So there are some of the particular technical aspects which you could very easily do at a national level and get economies of scale because that local knowledge and understanding and that connection with patients is not relevant. For other issues of commissioning, particularly for the more clinical aspects and particularly for common services, you need to make your decisions on the clinical change at a very small and focused level. So what we are trying to build here, again as David described, is a commissioning architecture which is capable, flexible and fluid enough to do the local things locally, which are meaningful for patients, but do at a much higher level those things where we will save a lot of money by doing them once, twice or however many times, as we work through. It is very, very different.

With regard to the clinical aspect of commissioning, the referral, as David talked about, or the design of a small pathway and data analysis, those two things need to be done at completely different population levels. So for these consortia, one size will not work for everything. Therefore, it is inevitable that larger consortia will need to work on a locality model so that they can actually get right down into that local population that GPs represent, often a population even smaller than the local authority base. So the large consortia will need to do that or smaller consortia will need to work in a federated model. But there is absolutely no question that the smaller consortia will need to come together to commission services across, say, the geography of a local authority or the geography of the clinical patient flows where they might go into the local hospital. We will need to see collaboration in the lead commissioning arrangements.

So I think the answer to the question is, there is not a right size for a commissioning unit. You can't even have a right size if you pick out specific diseases. We need to create a system where the right part of commissioning--the right aspect of commissioning--is done in the right size unit at the right time.

Dr David Colin-Thomé: The last thing we want is to have a mechanistic size which does not pick up the subtlety of what we have to do to commission it all.

Q17 Chair: If we accept that thesis, then who will determine— to use Dame Barbara's phrase—"the right size" for a given condition or a given type of commissioning, because there can clearly be more than one opinion about what is the right way of commissioning a given service? There can also be evidence about which model works and which one doesn't, or which works better and which works less well. Who makes that decision?

Dame Barbara Hakin: I think it will be a combination of decisions. The final authority for ensuring that the whole commissioning architecture works and works well sits with the NHS Commissioning Board. It will authorise the consortia. The consortia will be accountable to it. The National Commissioning Board will make sure that the overall commissioning architecture in England delivers and secures the very best services for patients, but we do need to see a significant bottom-up approach here. Where consortia choose to do things in a federated approach rather than ask the board to do certain things, or in different areas, it will be very different. It is very different commissioning services, say, in the middle of London or in the middle of Birmingham than it is in the outreaches of rural Lincolnshire. For some of these things, the actual geographical size will be dependent on the demographics of the population.

  I do think that as a system, as we move forward, what we need to always be doing and be mindful of is where economies of scale save public money and, as we move through, whilst we still have SHAs and PCTs and when the Commissioning Board comes into being, we ensure that on those things, in terms of eliminating waste and in terms of the strategic decisions that you were talking about--the overarching strategic decisions about the shape of services--the board will need to keep an overview on that and see that that is not fragmented.

Chair: I think those questions about the strategic overview and the national local balance Rosie would like to follow up.

Q18 Rosie Cooper: I would indeed. The current model exerts a lot of centralised power down through strategic health authorities and PCTs. I have to say that in my area, without those two bodies, we certainly would not have the improvements that we have had over the last four years or so and I commend the chief executives of both those organisations who have done some heavy lifting, to coin a phrase. If this new model weakens that and you have got the two fledgling Commissioning Boards, who are they going to be accountable to?

Sir David Nicholson: The Secretary of State.

Q19 Rosie Cooper: So the ultimate accountability still remains with the Secretary of State?

Sir David Nicholson: Yes.

Q20 Rosie Cooper: So you have got the Commissioning Board. This new model will weaken it. Can you outline for me just how the system will then handle serious differences of opinion between, say, consortia, the regional commissioning boards and the local population via local authorities? I will come on to test a bit more of that in a minute. But how do you see that actually working?

Sir David Nicholson: Okay. It is a very different system which is being constructed than the one we have had in the past. That is absolutely true. I think you are absolutely right. The current system has delivered a lot for patients and a lot for populations. The question is, in the future, could we continue to work in that way? But, also, that comes with a cost. There is a significant cost to all of the PCTs and the SHAs, and of course we need to reduce that cost as part of the overall change in the NHS. We have to take 30% of those costs out anyway. So, if you take 30% out of the cost, do you get a system that could function anyway in those circumstances? I think it is unlikely that you could, just in the way that you have described. But the system is quite different in the future.

Q21 Rosie Cooper: So the new system is designed to be cheap?

Sir David Nicholson: The new system is designed to maximise the amount of money that goes on delivering services for patients. That is what it is designed to do. I am sure we will talk about management allowances for consortia and all that and of course generally. But that is exactly what it is. That is part of the design of the system.

  In the circumstances that you describe where there are differences, I think there are new players on the pitch. The local authority, I think, is an increasingly important player on this particular pitch. Whether we have health and wellbeing boards, or whatever, it will have a strategic oversight of the place in which these organisations function.

Q22 Rosie Cooper: Sorry, Sir David. What I think we are all struggling with is this. I hear what you are saying. When the Secretary of State was here and gave evidence—I have been looking at it—he was clear that the accountability in this new system would come via local authorities, and people who were listening to him believed or thought he was saying that the local authority members and/or whoever would be on the Commissioning Board. That now is not true. It is on the wellbeing board. I understand that. I have a great fear that they will be like the current Overview and Scrutiny Committees, who don't have the capacity, the training, the understanding or the financial base. So you are not really telling me that out of nowhere somebody is going to be able to test the system as well as the professionals you had in the PCT designing it and testing it? I just don't buy that at all. I genuinely don't understand. Will there be NEDS on the consortia? Where is the accountability here?

Sir David Nicholson: The individual consortia are accountable to the National Health Service Commissioning Board. It is very clear. They are not accountable to anybody else. They account to a whole set of other organisations and other groups. They account to a whole set of stakeholders. One of the most important in that environment is the local authority, not just because we say it but because the local authority is responsible for the development of the Joint Needs Assessment, which is critical to all of this, because the Joint Needs Assessment is the basis on which the individual consortia will deliver their commissioning plan. So that connection for us is very, very important.

  The second one, of course, is that the local authority will be responsible for the delivery of the public health service locally and will commission the NHS directly for the things that it wants the NHS to do in terms of public health, and that is a significant amount of resource and money wrapped up in the local authority.

  If you are asking me would an Overview and Scrutiny Committee be able to do that, I think it is unlikely they would be able to do all of that. But that is the important thing about it. What we want to do through local government is to make health the very important strategic element of their overall place plan.

Q23 Rosie Cooper: While that is all happening, you are letting rip without any real accountability. I have a real great fear. This White Paper is huge on autonomy and very, very poor on actual accountability. Will the consortia boards be (a) open to attendance by members of the public and (b) will there be non-executive directors on it?

Sir David Nicholson: I am sure Barbara will talk a little bit about the detail of those. What we are saying at the moment is that the consortia will have a constitution, in which they will set out whatever way they want to manage themselves. We have not as yet set out what the elements of that constitution would be.

Q24 Rosie Cooper: The whole basis of this change was set out by the Secretary of State to be based on transparency, openness and accountability to the public. People will be able to make real choice and be really involved. You have not described anything at the core where the power is being held. You haven't described anything which shows that real people have any real access with training and ability to challenge at the level at which it will be required.

Sir David Nicholson: That is exactly what the local authority will be doing. The local authority will have the oversight of the commissioning process overall. It will have the power of the Joint Needs Assessment. It will have the public health budget. It will have access to all of those things in a way it has never had before.

Q25 Rosie Cooper: If they are not at the table, it will be currently like the Overview and Scrutiny Committee that you see around and about the country. It is just like throwing snowballs at a moving truck. It is not going to have any impact whatsoever.

Sir David Nicholson: But in this environment the local authority is the table. That is the whole point of it.

Q26 Rosie Cooper: Forgive me, but I won't describe it. I will have sleepless nights about that rubbish. Can I just ask you a couple of questions about consortia and the leverage they will have? I have not had any answers--it hasn't escaped me--on non-execs on the boards and whether the boards will be public. Will the consortia have leverage over constituent practices, because normally that would be held by primary care contracts--JMS, PMS? That will be held at the consortium National Commissioning Board level. So how will any leverage be exercised because if there is no set of incentives and penalties how will consortia have any influence over constituent practices?

Sir David Nicholson: Can I ask Ben to respond to that?

Ben Dyson: Sure. I think the first thing to say is that, as David says, the consortia will need to work out their own constitution and so their own internal working arrangements. One of the questions asked in the consultation on commissioning for patients is how far the Government should set down requirements about the way in which they do that, and that was a fairly open question in the consultation document.

  The proposed principle is that consortia should be held to account for the outcomes they achieve and for their fulfilment of statutory duties, and that the Government should be careful not to be too prescriptive about the way in which that happens. We will probably come back to that issue.

  In terms of leverage over individual practices, one of the proposals in the consultation document was that there would be something called a Quality Premium, which is effectively money allocated to a consortium to recognise, first of all, how far it is achieving good outcomes for patients through its commissioning activities; secondly, how far it is managing the public resources with which it is entrusted effectively; and, thirdly, how effectively it is meeting its other statutory duties. The proposal in the consultation document was that it would be for the consortium to decide how that sum of money is distributed between the individual practices that make up the consortium. One of the ways in which the consortium would have leverage, if you like, is by being able to disburse that money.

  I think more broadly what the proposals are seeking to achieve is a situation where there are the right intrinsic incentives for general practices to work as part of a consortium to commission, partly because they want to deliver better care for their patients. I think the evidence from Practice-Based Commissioning is that too many practices have felt that, despite some clinical involvement in commissioning processes, too much commissioning is felt remote from them as clinicians and what they want from this is to get greater control in order to deliver better care for patients and also because good commissioning will enable practices to redesign pathways and, in some cases, allow more work to be done outside a hospital setting.

Dr David Colin-Thomé: I think one of the problems—and I was a GP for 30-odd years—is that one of the reasons we have had poor clinical engagement is because the first recourse is to a contractual relationship and that immediately alienates virtually every clinician I know, even the good guys. If we always look at a contractual way of keeping the leverage, then we fail. One of the good examples of good management round the country which some PCTs have achieved is by using softer leverages, as Ben has talked about, and that is a whole lot of things. You might want to use some local incentives. You use comparative data, a bit of praise and a bit of pressure. It is those skills, I think, or the lack of them, that have alienated so many clinicians, and unless we get those back we will have a contractual model again which alienates lots of people, and they do not want to play. Certainly, in fact, for some of the PBC--the Practice-Based Commissioning--things it became a bureaucratic exercise rather than an evolving exercise, and unless we change that managerial mindset, which is part of the principles of the reforms, we will get clinical disengagement. It has been clear from the Blair-Milburn times right through to Andrew Lansley that some of our clinical outcomes are disappointing internationally, and unless we get that better clinical engagement, including maybe in commissioning, then I think we will struggle to get the improvement in clinical outcomes that we need.

Q27 Rosie Cooper: How will you actually measure improvements in outcome because, for example, not every consortium will have the same health base from which to start? If there are incentives within the system, how will that enable poorer areas to get some real benefit out of a step change in health?

Dame Barbara Hakin: One of the problems that we have had for PCTs—that we have given PCTs—is exactly as you describe, in that the difference that clinical health care makes to an individual's health in the reduction of inequalities and the impact of the broader determinants of health have been conflated. So simply by looking at the broad-based health outcomes that we have at the moment, it has been quite difficult to measure and determine where the impact is coming from and who is actually making a difference.

I think one of the things about the new suggestions, the new system, which will make it easier for us to differentiate is to look at the different elements of outcomes. So what is very clear is that we will create a system whereby we look at the public health outcomes. We look at those issues that are largely from the broader determinants of health—that budget will sit with local authorities and they will have that responsibility—but we will be able to carve out, albeit as part of one whole system, the clinical outcomes, the actual health outcomes for which the consortia and NHS Commissioning Boards will be responsible where it is the difference in outcome that is dependent on the health services that they will commission.

  Now, they will still have a duty in discharging those health outcomes to reduce inequalities and improve health across their populations, but for the first time we are starting to be able to try and measure better and have a little bit better evidence about the difference between the broader determinants which sit as a responsibility of the public health budget and the more clinically based outcomes that are the result of better and more effective clinical care.

Dr David Colin-Thomé: Even if there is a difference in the demography of the population—say, there might be more poor areas—they could measure themselves against themselves in terms of year-on-year improvements, which we have done poorly in the past. Some of the clinical outcomes will take some time, but, if you look at some of the NICE Quality Standards, in them are some indicators to show progress is going the right way, for instance.

Q28 Rosie Cooper: I totally accept that. What I am not hearing is that you know what those things are and how you are going to do it. Disappointingly for me, I have not heard anything that makes me feel more comfortable in terms of accountability and real patient-centred care—patients at the very core of this. I just have not heard it because the actual power is going further up into boards where the ordinary member of the public will have less and less influence, and I don't buy for one minute that a Wellbeing Board is actually going to exert any influence over a consortia grouping which will, in all probability, meet in private and may or may not have non-execs on it. I have not heard one noise from any of the panel to tell me I am wrong.

Dame Barbara Hakin: I think there are two questions in that, or two comments. Firstly, we are doing a lot of work on the outcomes and exactly how we will define much more specific outcomes, both clinical and health based, that will be ready for the consortia when they come into being. I can assure you that work is going on. It is very focused and, in terms of the clinical outcomes, NICE are involved in a lot of areas, but we have a lot of outcome measures for the major disease areas which will come in.

  In terms of the accountability and the public, I suppose a bit depends on whether you really see accountability and responsibility to patients and the public as being discharged simply through a board. You are right, and Ben made it very clear, that for the moment the consortia will have to have a constitution. They will have to be authorised. They will have to meet the principles of good governance. For their authorisation, they will have to demonstrate how they are properly accountable and how they are properly involving people in shaping their opinion, which are two different things.

  I do think that there are many other ways that we can involve patients and the public much, much more in what we do, in how we make decisions about health and in how we understand what they want than a small number of non-executives sitting on a board, and that is something that we will clearly have to build through HealthWatch.

Q29 Rosie Cooper: Dame Barbara, if you really believe that you should get rid of all the non-execs on every hospital board in the country because they challenge the managers and they challenge the system. There has to be built-in challenge. You can't just go about doing as you wish.

Dame Barbara Hakin: That is right. There are the two areas. There is the challenge—the accountability—and the constitution for the consortia will say they will have to demonstrate that governance, but we haven't been prescriptive how it happens. But equally important is that broader based understanding of patients' opinion.

Rosie Cooper: Let me tell you—I really will stop now, and I am very grateful to the Chair for his forbearance—in Lancashire county council they just did a consultation and 1.5% of the population supported the item that they were consulting on. They did it anyway, and that is what I am hearing here.

Q30 Fiona Mactaggart: Just taking the point that you were making, Dame Barbara, the power of the individual patient is, I think, what I was hearing about. I have heard from the Secretary of State the saying, "No decision about me without me." We know, and it is referred to in the White Paper, that there are risks associated with people from different population groups being better or less good at exercising that choice. I do not see any mechanism within this structure which provides for those population groups which are least effective at exercising choice and holding clinicians to account. I am not sure I believe in this bringing back of clinical success--intrinsic rewards for doctors. When you are faced with ill, ignorant people who do not want to make decisions about their health, they want you to fix it. I do not see how this helps with that at all.

Dr David Colin-Thomé: Two things. One of the specific dynamics, I suppose, is the focus we have made on patient-reported outcomes so that clinicians are going to have to be held far more to account. We started that off in the previous Government in a very small way, and I think Mr Lansley is very keen for the outcomes framework to carry that further. I take Rosie Cooper's point about the broader issues of accountability, but that specifically does change the dynamic of the outcome measures for clinicians. It makes quite a difference. For instance, it is interesting, just because it is relevant to me, that when we did some of the work, we found that 20% of people who have had a knee operation for arthritis have felt no benefit from it. That can be used in a very much more positive way of having a proper engagement. However ignorant or whatever, people will come to clinicians. So patient-reported outcome measures is a specific area I think we have not spent enough time on, which is a healthcare issue. I take your general point about broader accountability, but, unless local government also changes their way of doing things, and I speak as having some experience of local government, their leadership on the Joint Needs Assessment is crucial for those groups that are below the radar screen. In fact I was involved with Ben on some work about social inclusion at the Department—which, I think, the Minister accepted—which found that some groups are so far below the radar screen that even a Joint Needs Assessment doesn't pick them up.

  Public Health Directors, working with local government colleagues and consortia, need to be charged as the ones who have responsibility. So, in one sense, rather than saying, "It is under the health care system", it is an issue about change of local government. You were talking before about the Overview and Scrutiny Committee, and in one sense that may be a relevant, useful beating-up, but I would like local government to be part of the answer here rather than always just trying to check on what health care is doing, and that is what the whole point of these changes will bring about.

Q31 Rosie Cooper: Part of the question that I was asking is, what are you going to do to enable them to do that? You are asking them, from a standing start, to be able to examine commissioning, to represent their areas and to examine commissioning at the level at which--

Dr David Colin-Thomé: No, I am asking them to do a proper needs assessment that picks up those relevant things.

Q32 Fiona Mactaggart: Then let's be clear. Local government is good at doing needs assessment of things which it pays for, and it does it quite well and it commissions, on the whole, more effectively than a lot of commissioning that operates within the NHS. It commissions rubbish collection services which reach down difficult alleys. You know, it is quite good commissioning, but you are not giving it the power to commission--not even maternity services, which are not going to be done on a medical model, which seem to me perhaps a logical thing to give. They are not actually doing the commissioning. They are not using the resources or the professional officers they have to commission. They are just doing some jolly little report that other people commission against. That is what it looks like.

Dr David Colin-Thomé: But they do have the Public Health Director, who will be in local government, and with his/her connection with health care as well and the part of health care that can contribute to the public's health. That makes it a much more complete picture.

Q33 Fiona Mactaggart: I like that bit of this paper. I think it is probably the only bit of this paper that I like. But you know and I know that what that Public Health Director will mostly be doing is things like dealing with poor housing contributing to ill health, and dealing with the bits of local authority provision that improve physical activity amongst children or improve the diet in schools. Those are the kinds of things that I think their biggest obsession will be about, and indeed they will improve the health of the population. So I am not diminishing that.

One of the things that I managed to do shortly after I was first elected was to get Slough to know that at that time we were among the top 10 towns in the country for early male deaths from heart disease. Giving citizens that knowledge helped them and the local authority to focus energy and helped a number of people to do things which means that we are not any more, but they are not going to be procuring cardiology services. You know that and I know that, and that is part of the equation.

Dr David Colin-Thomé: They will be advising. But they are taking, as it were, some of the health service money. Public health doctors come from the health service, as well, because in 1974 they were corporatised, weren't they, into the health service, whereas before that they were not. One of their responsibilities is not necessarily to do all the work themselves, but to engage clinicians to look at some of the needs assessments and why we are underperforming in clinical care too. They will have an important overall responsibility which is now in local government.

Q34 Rosie Cooper: But they won't be at the table. They won't be influencing commissioning, which is the whole point.

Dr David Colin-Thomé: If they have the skills, they will be.

Chair: I think we have probably covered the point.

Q35 Fiona Mactaggart: There is an issue here about power, and I think my anxiety about the White Paper is that it assumes that power exists without giving people the equipment which enables them to be powerful. I am particularly concerned about this because I represent patients who disempower themselves, whose view is that it is the doctor's problem when they are ill, not theirs, and who find taking responsibility for their own wellbeing very hard.

I think this is a model which is designed—I think it is interesting talking about intrinsic rewards—on everyone behaving like the best and using all the power that is available for them. For those people, this model will succeed. The analytical strategy document that came with the White Paper specifically said that the patient choice inherent in this poses risks associated with people from different population groups benefiting disproportionately, and I do not see any mechanism which deals with the risks of that in the White Paper. I do not see any mechanism which can improve the quality of primary care. I don't see how a central board is going to be able to do that. I think there is a lot of wishful thinking, and, if all the wishful thinking works, this could perhaps be, but actually it won't. I don't see where the risk avoidance is in this White Paper.

Sir David Nicholson: There were a thousand and one things in all of that, some of which we agree with and some we don't.

Q36 Fiona Mactaggart: Yes. I made a speech, forgive me.

Sir David Nicholson: When it comes to critical people who are engaged and working in the detail of how this is going to work, we are not there yet. We have not even responded directly to the consultation on the document. So criticising us for the absolute detail of how some of this stuff will work, I think, is a bit unfair, but nevertheless I think there are good markers in all of that.

  What is very clear is, if you want to focus on outcomes, which is what the Commissioning Board is there to do and what the consortia are there to deliver, you have to take into account how you reach those people that it has traditionally been difficult for the NHS to reach. You have to do it. As the kind of ultimate localists here, GPs are very well equipped to do that because they are absolutely involved in all of that.

Q37 Fiona Mactaggart: My constituents go to A&E for their GP services.

Dr David Colin-Thomé: Only some.

Fiona Mactaggart: They do--quite a lot.

Sir David Nicholson: Some of them do, but they will not get their best outcomes if they go to A&E and, if the consortia continue to let that exist, they will not get the best outcomes for their patients. So they need to think about redesigning their service to deliver it. I think the potential in that is fantastic for our patients and it can be done. If you add to that the central stage of local government with the Joint Needs Assessment, I think you have got the building blocks there where you could improve significantly the lot of those people.

Q38 Rosie Cooper: How are disputes handled, and I really will shut up? How are disputes going to be handled--differences of opinion at each of those stages?

Sir David Nicholson: Between?

Rosie Cooper: The consortia and local population, Wellbeing Board, regional--

Fiona Mactaggart: Let me give you a specific example from Berkshire. The Berkshire Mental Health Trust wants to move inpatient mental health care to a hospital the other side of Reading, and Slough has the highest incidence of mental ill health. Nobody in Slough wants this proposal; they want to retain something more local, but they will end up with this proposal because it is cheaper. They will risk also ending up without any improvement in community mental health service which would reduce inpatient admissions. Where is the power in this future system to stop things like that happening?

Sir David Nicholson: Obviously I do not want to comment on the way you have described the issue in Berkshire. I have to say, one thing about mental health inpatients is, of course, that the biggest determinant of the incidence of mental health in a community is the existence of an inpatient mental health organisation. So an issue about whether everyone should have one is, I think, important in terms of the mental health of the population. But, that aside, if you look at the arrangements that we propose, which are not that dissimilar to the arrangements that we have at the moment, and we have not worked out all the detail of that, we would expect the Health and Wellbeing Board to be a crucial part where that debate and discussion is played out, and we certainly wouldn't see the local authority having any less power to refer that to the Independent Review Panel or the Secretary of State than they have at the moment.

Q39 Fiona Mactaggart: Would that local authority, for example, have the power to say, "We want to commission the community interventions, which would reduce the incidence", because I don't disagree with you completely? My view is that I could consent to this change only if we improved community mental healthcare. It is bad at the moment in Slough. If it was hugely better, I would be much less worried about this proposal.

Dr David Colin-Thomé: GPs are more likely to want that because we feel often very unsupported within a community base. When you have the complex problems of the vulnerable, the mentally ill with problems, general practice generally is quite isolated from the connection with mental health services, and so they would be advocates for improvement. It is interesting that all the major GP organisations support this. One of their key tasks that they specify is, "We want to improve primary and community services." That was their main focus.

Q40 Fiona Mactaggart: Quite a lot of GPs I know would quite like their floridly mentally ill patients to be somewhere else.

Dr David Colin-Thomé: The floridly ill might need to be somewhere else at the acute exacerbation. It is trying to see whether we can have a more pro-active approach to lessen some of those, and I have been involved in some of that work when I was a GP, which lessened emergency admissions and lengths of stay because we had a more pro-active approach in the community. That is what we need to be commissioning for and I think more clinicians will be up for that than may be at the moment.

Q41 Chair: Can I move the discussion on a bit? It is quite striking to me that, with regard to the discussion we have just had about the importance of having local solutions, and the ability to channel resources locally and target prioritised resources locally, that is all being said and it is a familiar narrative, but at the same time, as I read the White Paper, contracting for primary general medical services, primary care, that authority is being shifted away from the locality back to the centre in the form of the Commissioning Board. So I would be interested to know whether that is a correct reading of the White Paper, and whether that is a clear decision.

There is a related subject, which is that one of the effects of Commissioning Boards where existing general practitioners are, by definition, the members is that, if for a locality current primary care is substandard—typically in some of the areas that Fiona and Rosie have been talking about it will be substandard—one of the problems, it seems to me, is that people who might have an idea about how you could improve that have first to get past the people who are currently providing the substandard care.

Dame Barbara Hakin: I think it is a difficult dilemma about the commissioning of primary care and I think that, if the White Paper had said that primary care was to be commissioned by the consortia, we would have been sitting here this morning with you perhaps suggesting that there was a conflict of interest and was this not GPs commissioning services from themselves? So there is no doubt that from the probity point of view it is right that the NHS Commissioning Board oversees the commissioning of primary care and has the absolute authority for that as a quite separate body.

  Nonetheless, what you say is absolutely right. If we are to get the improvement and the changes we want to see in primary care—everybody in this room and everything we are talking about is people saying they want to see much better services in primary care, much better community-based services that means that patients do not have to go to hospital—we know from the evidence base that you need a very local flavour. We also know from the evidence base that peer pressure is much more successful at changing clinical practice, changing behaviour and improving quality than top-down managerial suggestions for change. Therefore, we are at the moment working through--we are in the early stages; we have not got all the detail, and I will pass over to Ben to see if he wants to add anything to the detail—question such as, how do we achieve a situation where there is a degree of earned autonomy? How do we have a situation where the NHS Commissioning Boards and the consortia work together to commission primary care so that the consortia can have a real impact through peer pressure on bringing up those practices which are not very good?

  It is easy to get fixed on a relatively small number of practices which provide poor care and forget about the very high standards and the very high percentage of satisfaction that patients have in this country about general practice. But I think the people who want to take on this change, some of the practitioners, the ones who want to leave this consortia, are saying to us, "Please, what we need more than anything else is the ability to have leverage and authority over our peers."

  Like David, I was a GP for 20-odd years, and the biggest changes that I think were made to the quality of care across an area—I was a GP in deprived inner-city Bradford—was when there was a movement of the responsibility for improving that care from a managerial focus to a clinically peer-led focus. I think we could cite lots and lots of examples whereby in a group of GPs the good will lead the poor ones. The good will be more able to root out and challenge poor practice than a managerially focused organisation would be. Ben, I don't know if you want to add anything.

Ben Dyson: I would certainly reinforce that. If you look at some of the more advanced versions of Practice-Based Commissioning, there was a greater sense that PCTs really were letting go more in allowing GPs and other clinicians to make the right decisions about the quality of care for their patients.

  I think what we saw in those examples was, of course, precisely this stronger focus on using peer influence and peer pressure to look not just outwards at the care one is commissioning for patients but also inwards at the quality of general practice itself and the way in which resources are used.

  The consultation document on Commissioning for Patients said, as Barbara says, that although the Commissioning Board would have to have the final say, for instance, on who should hold a contract for providing primary medical services, if there are issues about poor performance, they would have to make the final decisions about how to tackle that. But, the consultation document proposed that they would be able to involve consortia in reviewing how effectively individual practices are providing primary care and build on, I think, the greater peer influence that leading GPs want to have on the quality of general practice.

Q42 Dr Wollaston: Does that not bring us to the nub of this? Would it not be better to look at where it works well, because there are some models where it works very well, and develop that rather than take the big risk of the complete upheaval that we are going to have under the White Paper?

Ben Dyson: I think I would say that, if one looks at the evidence, I talked about some successful PBC groups that were beginning to do this, but I am afraid they were rather in a minority. What GPs were tending to say in the majority of cases was that PCTs were not letting go.

Q43 Dr Wollaston: Could you not just make them let go? Could you not say, "Where is this happening that they are letting go?" Could we not force PCTs to let go on much more clinical leadership, because that is what we are hearing? It is not just doctors: it is clinicians--all clinicians.

Dr David Colin-Thomé: We have tried that but we couldn't do it.

Q44 Dr Wollaston: Couldn't you push it to say, "Why isn't it happening? Why can't we force that through?"

Ben Dyson: I think the effect of letting go would be to create what is proposed in the White Paper, which is commissioning that is led by general practice and other clinicians. It does not in any way preclude them from using them. They would clearly have to use managers. They might well use some managers from the existing system to do those elements of commissioning that do not particularly need their clinical insight, but it is them in charge rather than, I think, what a number of GPs and PCT managers would say was the muddle of Practice-Based Commissioning--this rather uneasy halfway house.

Q45 Rosie Cooper: You would have avoided that muddle in foundation hospitals by doing it in phases. To press the point Sarah was making, why aren't you doing it, if you like, in phases, doing it in pilots and learning from it? Why just throw everybody, good and bad, into this melée?

Dame Barbara Hakin: I think it will be phased. David has already talked about the timing for this--that we have got a number of years to make this change. What is going to happen, what we are going to see, is some areas moving ahead with the consortia as Practice-Based Commissioning consortia, as they are now, moving forward under those rules and regulations as we have now to become much more like the GP consortia for the future.

Q46 Rosie Cooper: You do not have time to learn from the good ones really. It's so fast.

Dame Barbara Hakin: We have learnt a huge amount from what has gone on over the last decade and certainly what has happened with Practiced-Based Commissioning over the last few years, and the ones who are advanced are ready to roll now.

Q47 Valerie Vaz: Sorry, can I just ask what percentage of GPs actually want the commissioning so far? Do you have a figure?

Dr David Colin-Thomé: It is hard to say. If you look at the GP organisations who might have a vested interest, they say that it is a significant majority of their members. The only thing that was done recently was the poll on the BBC, which was an online poll of 827 GPs, which is hardly representative, and about 25% wanted to be actively involved in commissioning; 18% said they did not know. Basically, even if you had 25%, that would be 9,000 GPs that seemed to be up for it, if we extrapolate that, and 18% were "don't knows". They weren't all "antis".

Ben Dyson: I think the important thing about that BBC poll was the question they asked was, "Do you want to be personally responsible for commissioning?" Not, "Do you want to be part of a collective group, a consortium, that does this? Do you want to be personally responsible?" And over 25% said, "Yes".

Q48 Chair: Can I just bring you back to the question I asked five minutes ago? Am I correct in thinking that the consequence of the answer that Dame Barbara gave is that we are moving back to a single national contract negotiated for general medical services between the Department and the professions?

Dame Barbara Hakin: We have a number of contracts at the moment, but the bulk of that is a single negotiated contract between the Department and the professions, which is GMS. There is the possibility for local contracts, which are personal medical services contracts, but across the country there are very, very few that significantly differ from what is negotiated nationally—they just follow the pattern nationally. As well as that, we have a range of other contracts with independent providers.

  The contract, instead of being negotiated by the Department of Health, will be negotiated through the NHS Commissioning Board, but in reality the contract is one part of getting good general practice. It is one part of commissioning. It is contracting back to my point about breaking down commissioning into its various parts. We need to continue to make that contract better, to make it more focused and to make sure that it delivers outcomes, but it is so important how that contract is monitored and played out on the specific commissioning that goes round it on a local basis. Again, I think, our aspiration is that the consortia will be better placed to do that than the PCTs have been.

Q49 Chair: I understand all the qualifications, but the direction of travel is towards a single formula for the delivery of primary medical services?

Ben Dyson: Indeed, the White Paper certainly signalled that the intention over time was to move towards a single model.

Q50 Chair: If somebody wants to offer primary health care on a different model, the answer is that the NHS is not interested?

Dame Barbara Hakin: A single contract would not mean that individuals could not offer different elements of care and that there is not a broad range of things that you can do in addition to the contract. Public health services may wish to commission from primary care providers, general practitioners and others, and some of those elements will be different. But actually we are moving to uniformity over contracting across the board in the health service for the simple reason that we have had a plethora of local contracts which has created an enormous amount of waste and has not always given us the quality outcomes that we want to focus on. So the idea is to describe a single core contract, both for primary care and a lot of elements of secondary care, which absolutely make it clear nationally what we expect from our national health service--the outcomes we expect for our patients.

  There is nothing to stop any commissioner and provider putting additional things in or agreeing the way in which some of these outcomes will be delivered. So it is about uniformity and standardisation of what our patients should expect, but then trying to give everybody as much flexibility to deliver that as it takes to meet the local needs.

Q51 Mr Sharma: So they can adapt locally what suits the providers?

Dame Barbara Hakin: Provided it fits within the national framework, which simply identifies the basics, the outcomes, what is expected and what people will be paid for. There is no question whatsoever that there will be plenty of room for additional services to be commissioned if those are what is needed at a local level, as there is at the moment.

Q52 Chair: Sorry, just finally, that national contract, as far as GMS is concerned, will be negotiated with the BMA?

Dame Barbara Hakin: It will.

Q53 Grahame Morris: Are other Departments supporting this concept of the Any Willing Provider model? When you mentioned the contractual model for performance management of GPs, there are concerns that the Any Willing Provider model for general practice could cause problems if short-term competitive tendering situations will develop.

Dame Barbara Hakin: The policy is for Any Willing Provider to work across all health services. We already have a number of areas. This particularly works in the deprived areas where it is actually quite difficult to deliver traditional general practice. It is actually quite difficult to attract general practitioners to become self-employed in those areas and that is why we have got what is called the APMS, the contract, independently. I do not see that as being very different than it is now. The philosophy is that we need to encourage other providers because competition drives up quality, and particularly encourage different ways of addressing the inequalities that come from poor primary care in our deprived areas. I am not sure I have answered your question there.

Q54 Grahame Morris: I am not sure whether the Department's move towards the Any Willing Provider model is to supplement existing services or to identify those areas of deficiency, perhaps in a deprived area like mine. I am not quite clear from your response there.

Dame Barbara Hakin: I think it is "both and", to be honest, and one of the issues that we believe will make a difference is a single contract. At the moment we have a different contract, depending on who is providing the service, and this sometimes makes it more difficult (a) for money to follow the patient and (b) for the quality standards to be quite as clearly defined. We believe we would get higher standards of primary care if we had a more consistent approach irrespective of who the provider was and in that way potentially encourage, particularly in deprived areas, an opening up of the market.

Q55 Chris Skidmore: Dame Barbara, I was wondering if it might be possible to move the discussion on to access of information which you have set out in the Department's written evidence is essential to inform decision making regarding commissioning. You mention in the written evidence also that, "Devolving power, along with real budgets, the consortia of GP practices would mean the quality of management data and financial information will become of increasing importance." At the last Health Select Committee inquiry on Commissioning, the previous Committee was fairly critical about the Department failing to provide any clear and consistent data on the transaction costs of commissioning. That was a case where we had 152 PCTs. Can we be sure that moving from what we had to the 500-plus consortia we are going to have the financial transparency that enables us to identify the transaction costs of commissioning?

Dame Barbara Hakin: First, I think we should not necessarily assume that there will be 500-plus consortia. That is still to be determined, and I think we would all absolutely and completely agree that, irrespective of the shape of the commissioning architecture, information for both commissioning and for patients is key to delivering a much better service, and we are very much focusing on how we get an information revolution which helps both commissioners and patients.

  I think, with the new system, one of the things that we want to see, and I know I am saying what I have said before, is that things that can be done locally are done locally and those that can be done nationally are done nationally, so that we get economies of scale, which is a different approach from 152 PCTs doing most things.

Q56 Chris Skidmore: I appreciate the division between local and national. One of the crucial national frameworks set out in the White Paper is obviously the maximum management allowance, which Sir David mentioned earlier. I know the "Health Service Journal" of 22 July 2010 mentioned that speculation management budgets might be as low as £9 per person. Is that a figure you recognise or would there be alternative MMAs, let us call them, for different local areas which then might reflect different local scenarios?

Sir David Nicholson: One thing I know the Committee was critical of before was the lack of data in terms of the financial underpinning of a lot of the existing commissioning arrangements, and in some ways that point was well made. One of the things, I think, that focusing our attention on the financial position of the NHS overall has done, of course, is that it has made us focus much harder on the cost of overheads generally in the system. We had over some time devolved a lot of responsibility for that kind of thing.

One of the things we have done, certainly over the last 18 months or so, is to focus very hard on all of that and, in order in a sense to identify the amount of money you have available to support commissioning of consortia, you also have to identify the money available for the administrative costs of the public health service, of the Commissioning Board, of the economic regulator, of the whole system, and that is essentially what we have been working on over the last period.

  We propose to finish that work in December when we publish the operating framework of the NHS. We will set out what the management allowances for the public health service, the economic regulator, the Commissioning Board and the consortia are at that time.

  I have to say that it is significantly less than 5% across the system as a whole and we are moving to a situation where we would expect, certainly for consortia, to have a cost per head of population, and we would set that out in December.

Chris Skidmore: So the 5% figure is nationally across the board? Sir David Nicholson: Yes.

Q57 Chris Skidmore: So the 5% figure is national, across the board?

Sir David Nicholson: Yes.

Q58 Chris Skidmore: The previous Select Committee identified on unpublished research that we were previously around 14%. So, it is a sort of 9% cut nationally--

Sir David Nicholson: No. There was a whole series of information in the public domain. It certainly was not the Department's figure of 14%.

Q59 Chris Skidmore: Do you have a figure? Does one exist?

Sir David Nicholson: We are moving towards getting a figure for the totality of the administrative costs of the whole system, and that is what we are trying to break apart at the moment. We have not finalised those calculations. What I can say is it is significantly less than 5%, but even on all of that we plan to reduce that over the next three years by 30% anyway as part of our plan. So we will publish those figures and we are going to go for a cost per head of population for GP consortia. I can't comment on that. I do not want to negotiate on the number.

Q60 Chris Skidmore: You can't comment on that. Still on information, we have covered financial information and accountability. The other crucial part is also clinical information and health care outcomes, and you mentioned in your written evidence that you will work with the profession and the wider NHS to identify how best to support consortia in the significant challenge of accessing accurate and real-time data. I just wondered if you could just comment on that because at the same time it is going to take two to identify that data. You have spoken at length about the role of the local authorities, and it is obviously going to be a bit of a jigsaw placing these different roles together. In different areas with different clinical needs there are going to be significant discrepancies. Yet at the same time in your written evidence you talk about not proposing to be prescriptive, about the exact organisation and Government's arrangements of the commissioning consortia, and it seems quite woolly the way you say that consortia might choose to act collectively. They might choose to buy in expertise and support. It might, for instance, include analytical activity to profile and stratify health care needs. With that being so conditional, how can we ensure that we are going to get uniform analytical data that will be accurate and that we can make clinical decisions and commissioning decisions maybe at the National Commissioning Board?

Sir David Nicholson: The first thing is that, in terms of standardising of data, the standardisation of the definitions of data, all of that sort of thing, will be done by the Commissioning Board and the Information Centre. The Information Centre will be the main hub into which the national information, all information, will go and from where information will be drawn, which is different from where we are at the moment. It seems to me that is an important first thing.

  What we have not made the judgment on yet is where we are going to go, and I think we discussed this a little bit at the last meeting, on how much freedom individual consortia will have. So, for example, what we are saying across the arm's-length bodies in the Department is that we will do all of their back office work in one place. We will have one systematic way of doing it. We will not allow every single organisation to create their own back office in order to deliver change, and we have not quite got to the discussion point yet with the consortia about how that might work. What we want to avoid is every consortium inventing its own system.

Q61 Chris Skidmore: Can you define "back office work"? What would that mean?

Sir David Nicholson: I am thinking about the financial accounts, the way financial information is collected, the data definitions of all of that, the way in which invoices are paid, all of that; the HR arrangements; and bringing people in on contracts. All of those sorts of things are what I would describe as "back office", and increasingly we want to move the NHS to very much simplified arrangements for that, but we have not got to the point of working out how we are going to deal with the consortia. Given the amount of money we are going to give them, and given that we have reduced the administrative costs by a third, I think most of them are going to have to look towards bigger units to support their organisations.

Dame Barbara Hakin: I think there are two kinds of back office functions, although there is a second kind particularly for commissioning, because there is what we have always traditionally known as back office functions which are all part of the health service and most industries, such as HR and the financial issues. But what we are hoping to see with the consortia, and what we are working through, having discussions on and trying to support them in doing, is doing the same with some of what we would call the commissioning support functions. Again, there is a broad range of things on commissioning which you would not expect individual consortia to all want to do for themselves. So, that would include areas such as health needs assessment and quite a lot of the public health input as well as some of the transactions that Sir David talked about. Again, we are working--we will be working--with the consortia to try to ensure that we get the economies of scale on commissioning support as well as the absolutely traditional back office.

Q62 Chris Skidmore: How will local authorities dovetail within that, as you have just mentioned, public health, for instance? It is one of those things that, at the moment, with so many bodies or players on the pitch, as you have referred to, who is going to be refereeing all this? You have mentioned that, for instance, consortia will need to ensure they have access to draw upon the necessary expertise of those working in health and social care, and yet we know what the integration of health and social care is. Is it one of the things that is vitally lacking in the current system?

Dame Barbara Hakin: This is a devolved system--there is no question about it--but the consortia will have to demonstrate as part of their authorisation process and the constitution that they are capable of doing the full range of functions that they need to do. We are working with them on getting a very clear description of all the things that need to be done, obviously subject to consultation and subject to the changes that David mentioned at the beginning. So they will need to demonstrate that they can do all those things.

Q63 Chris Skidmore: Demonstrate to the Commissioning Board?

Dame Barbara Hakin: To the Commissioning Board in order to be authorised. I suspect that, without significant economies of scale and sharing of functions, particularly working with local authorities and buying quite a lot of commissioning support from the bigger local authorities, they would not be able to demonstrate that full range. So that will be the way in which sharing is encouraged, although, again, from talking to consortia, that is what they expect to do anyway. I think they are expecting to have some quite big units supporting them on some of the more technical aspects of commissioning, considerably bigger potentially than PCTs, and the use of specialists, making sure that where necessary they draw in specialist information when they are commissioning more specialist services. So I am not just talking the absolute importance of involving the local consultants and other clinicians, but we are seeing some interesting models for commissioning support. For example, the neurological conditions societies have come together and suggested that they could provide really good commissioning support to a huge range of consortia because they would actually be able to really help to describe and do some of the commissioning support functions, and they are wanting to be part of the commissioning support system. We are in the early days of going through the thinking, but that kind of model gives us the potential to get much more focus.

Q64 Chris Skidmore: Like alternative strategic health authorities?

Dame Barbara Hakin: A consultant neurological voluntary sector would not be like a strategic health authority. SHAs do a huge range of things. There may be some commissioning support functions that would be best done on the geography of a region, but that body would not look at all like a strategic health authority. It would be an independent unit from which the consortia drew their commissioning support. So it is much more likely to be like a kind of business support unit.

Chair: David Tredinnick would like to ask some questions about patient choice.

Q65 David Tredinnick: Chairman, if I may. The White Paper promises choice of treatment and, if I may start by saying, I think the Department support for the right of consumers to exercise their choice of treatment was showing in its response to the Science Committee Report of the last Parliament on homeopathy. Your report clearly supports the use of homoeopathy, as there always has been in the health service. So I do not want to dwell on that, but whether doctors themselves, as individuals, are supportive of homeopathy or not, there is a broader issue, and that is, are GPs capable of allocating and rationing resources appropriately and effectively, when there are tensions between the wants of an individual and the general need? So can they ration resources in this new era of choice?

Dr David Colin-Thomé: I think, before we go to rationing--I have said this to people before--I used to belong to a thing called the Anti-Rationing Group. We define rationing as a delay or denial of appropriate and effective interventions. Since a lot of what we did was neither appropriate nor effective, that is the place to start. There is a lot of duplication. There is a lot of even clinical interventions which now have a limited shelf life, and also better care is cheaper.

  Before we start saying we are going to cut systems and, things that work, there is a lot to play for and clinicians are up for it. All the preparation that Barbara has talked about--fundholding, total purchasing and all that stuff--a lot of us have got quite a bit of experience in this. So I think what we would be doing is challenging the clinical organisation of care, and there is a lot. Just as an example, and I do not want to be too precise, there are 31.5 million follow-up outpatients a year and many of those people are seeing their GPs too. We just need to systematise somehow. There is a huge variation of lengths of stay and GP referrals.

Clinicians, now they have got commissioning responsibility, will want to challenge a lot of those clinical activities, and that is the shorter term hit that we will make rather than rationing things that work, and, I think, there is too much thinking that anything we say we should not do in future is labelled rationing, when actually it is getting rid of stuff that is duplicative or ineffective. That is where we will start.

Q66 David Tredinnick: So it is more to do with a more rational use of resources rather than rationing?

Dr David Colin-Thomé: Yes.

Q67 David Tredinnick: So did your thoughts and your experience lead to the idea that there should be personal health budgets, including direct payments, and these are being piloted? I would like to know whether you are intending to extend that to a voucher system.

Dame Barbara Hakin: It is quite early days in terms of piloting personal budgets and there is a lot of learning to come from that and it is a small cohort of patients. We are looking at specific instances and obviously working--

Q68 David Tredinnick: I think it is very helpful to say, "It is under consideration. It is something that is definitely there.

Dame Barbara Hakin: Yes.

Q69 David Tredinnick: With the idea that individuals could make a personal contribution to increase that little pot whether it is transportable or not?

Sir David Nicholson: No, no. Much of the lessons learnt on the benefits of personal budgets has come from local government who have made huge strides and we can all think of inspirational examples of how they have changed life chances and lives of people to do that.

The NHS is different because we do not have a means-tested element to our activities. We are free at the point of use as far as individual patients are concerned. As we go through the piloting stage where this is being exposed, obviously, as you might expect, the position we have taken very firmly on all of this is that in terms of health personal budgets they will be based on an assessment of need and that that need should be delivered by the NHS free to that individual.

Q70 David Tredinnick: So is the amount then a function of a doctor's decision?

Sir David Nicholson: It might be a multi-disciplinary team, but it would be a clinical decision about what that individual's needs are and how they might be met in consultation with that individual. If the individual wants to buy more than that—i.e. more than their assessed elements of needs—that is a matter for the individual. You would have to separate that out from the package that was delivered, and that is the dilemma. That is why we are piloting it. That is why it is so difficult.

Q71 David Tredinnick: I have only got two further questions and then I will stop. If a patient comes to the doctor and says, "Right, choice of treatment: I know what I need. I know what I want and I've got a preference, and it's based on anecdotal evidence of family experience", what guidance are you going to give to GPs as to the decision-making process in a situation like that?

Sir David Nicholson: It is about personal budgets or about things generally.

Q72 David Tredinnick: I really want to get on to a range of services. Perhaps I should amalgamate my two questions. If we are going to have wider choice, we need more availability of treatments. I've already referred in the last meeting we had to the importance of diet and the importance of taking personal responsibility for your own health. In fact I was talking to somebody at the weekend who had just had a heart condition treated and I said, "I am sure you will be quite interested in your inputs, your food consumption", and he said, "Oh, no, I'm not at all. My doctor is treating me. He's given me drugs." I thought, "Well, we clearly have got a lot of education to do out there." But, if we are going to have more choice, we need a wider range. Osteopathy is very, very effective in treating back pain, and that has been partly available. There are big issues about, for example, the use of Ayurvedic medicine in the health service. We have the issue with the Traditional Herbal Medicines Directive which has to be complied with by April next year. It has been at the Department for six years. There have been endless consultations. Lord Chan and Michael Pitillo have been coming forward with recommendations for the Health Professions Council to take that forward, and indeed that whole range of services will be excluded if something is not done, and there is the registration of the herbs too. There is a major issue of compounds. Very, very few have come forward for registrations and we end up with not just a health issue but an economic issue as well-known companies are shut down because of this issue.

So I am suggesting to you that (a) if we are going to have wider choice, we need actually to have the choice, have the availability there, and the Department needs to look at these with more care and give more thought and more pressure to those issues of this particular area of herbal medicine.

Sir David Nicholson: Fortunately, we have two doctors here.

Dame Barbara Hakin: I think what you describe about working with a patient to decide what is the best treatment for that patient is what GPs do all day, every day, and the good ones do it very much in consultation with the patients. The good GPs have always given their patients choice, not just choice of where to go for a secondary care treatment but, "This is how physiotherapy might help you. This is how some medication might help you."

  We need to get better at the NHS, though, across the board at being sure that we all understand which interventions really are evidence-based and it is not just about looking at homeopathic treatments versus traditional medical treatments. Sir David has rightly said that, with regard to a number of traditional medical treatments, the evidence base of certain things that are done is not that great.

  It is absolutely critical that we protect our relationship between the individual clinician, whether it is a doctor or someone else, and the patient, so that they will be in a position to do the best for that patient at that time and will not be influenced by cost.

  Actually, what the system needs to do, and the consortia will be instrumental in this and the NHS Commissioning Board, the architecture, will be actually in defining through proper outcomes and understanding the proper outcomes, which interventions really make a difference. If we can get better at that, then we can get better at helping people to make informed choice.

Q73 David Tredinnick: There is a very good model at the Hale Clinic not far away from here where they have a matrix of treatments available for different conditions and they will go down a different route according to different problems relating to a particular treatment. I think I am done.

Dr David Colin-Thomé: Just on a quick point, one of the things we have to do in the consultation is to make us more participant, which is why the package of things that we have touched on, including patient reported outcomes, including personal budgets, is to try and alter that dynamic in clinical practice because that is the issue. Most people's choice is not about, "I want to go to a different doctor or a different hospital"; it is to have more say in what happens to them. We have got to do quite a lot of work with the profession rather than it being a White Paper issue. But it is interesting if you look at the international work on shared decision-making where you give people more and there is an equal partnering that they often make more rational choice than their clinicians in fact, and it is for two reasons. One is that obviously they need to be more empowered, if that is the right word, but actually it could well be more cost-effective as well. That is the double whammy. Actually, that is not a White Paper issue. That is about our education of clinicians, which some of us are--

David Tredinnick: Except, Doctor, you have absolutely gone to the position I was going to go to. The medical schools need to be teaching what these alternatives are capable of producing. They can't be experts in every field, but a sort of MBA degree, master of business administration degree approach, where—I happen to have done one of those some time ago and so I can speak to it—you are actually taught not how to solve every business problem but you are taught who to go to when there is a problem, and I think there is a distinction there.

Q74 Mr Sharma: The question I am going to ask may not be linked with the White Paper. Maybe doctors see it differently. Certain areas have few GPs but a very overpopulated area where the population have different needs--needs based on cultural, traditional as well as language problems. In my constituency this is a major problem, where a patient goes and demands alternative medicine, alternative choices. What developments have you made in that?

Dr David Colin-Thomé: We have. I mean, we haven't really addressed in over 62 years the maldistribution of general practice. Successive Governments have tried and that is why we have introduced a lot more private sector people and so on. So it is a crude thing, which is where the Any Willing Provider bit comes in, and we do need to expand the range of primary care services in areas of underprovision. That is a general issue.

  On some of the more subtleties about the particular needs around language and things, that has got to be essentially a local issue. That is coming back to the discussion we had on the other side of the table about the Joint Needs Assessment. It is in those areas where healthcare and local government just need to get into that community need issue because those people also may well be not having access to other services too. Like Barbara, I worked in an area of social deprivation as a GP and the needs were not just health care or social care. There was a package of what we could do for them.

  Look, the first task we have got to do is to increase primary care provision and access in those areas, which is what we are still committed to do, and that is not a new thing in the White Paper. That is a continuation of what Government policy has been for the last about 20/30 years. We may not have done as well as we could, and that is where the Any Willing Provider is sometimes needed because, even though my colleagues in my profession do not always welcome this extra input, we just need to think that commissioners have got to be, if I can use a slightly creepy description, the people's organisation rather than the organisation representing professional groups.

Q75 Mr Sharma: Those may not be yet finally decided, but that national model, which is the framework, the language used in that, do you think that these kind of needs could be included in that framework?

Dr David Colin-Thomé: I think locally, the Joint Needs Assessment is key. Are you talking about the National Contract responding to it?

Q76 Mr Sharma: Yes. When you are dealing with them nationally, then local people can adapt it.

Dr David Colin-Thomé: The underprovisioning is something, and Ben is probably more expert in this, and that is a national issue. It has got particular pockets of it, but it is a national approach. But some of the subtleties about the work involving social inclusion and so on, has got to be, I am afraid, locally, but the needs assessment and making certain that somebody delivers on it, which is part of that accountability issue, is absolutely fundamental and that cannot be, I don't think, prescribed nationally in the National Contract. The National Contract at its best might present some minimal standards and so on and be looking at incentives. But to get the subtlety of localness, which is what the whole point of the White Paper is, that has got to be local, but how we hold those to account for that is the issue, and people like you as well as others should be contributing to that.

Chair: Another part of that discussion is public health, which Valerie would like to bring herself in on.

Q77 Valerie Vaz: I know time is short and we are coming to the end, but I think that is quite a key area and I notice with some of your answers that it is not quite clear where public health fits into this whole model. But, my question is, could you outline what is their role? I have seen that public health directors are accountable to the Secretary of State, but they are also involved with the local authority. In your answer, could you say what their role is as commissioners, if any, and, secondly, what discussions you had with the Faculty of Public Health?

Sir David Nicholson: And there is, of course, a public health White Paper to be produced in the near future. I am not quite sure of the date, but a public health White Paper is coming out. You are absolutely right. We are having to deal with some of these issues now because of the redesign of the service generally.

  What you have is you have a public health service which will be nationally organised. You will have direct accountability to the Secretary of State. You will have all of the Health Protection Agency and the national bodies in that. Each local authority will have a —sorry, this is all subject to the consultation, the legislation and all the rest of it. We are having to make some assumptions in order to build the rest of it. Each local authority will have a director of public health, which will be a joint appointment. They will have a public health ring-fenced budget, which will be allocated to them by the Department of Health, and with that budget they will commission public health services and interventions and work across the whole of local government to make that a---

Q78 Valerie Vaz: Is that separately from the GPs?

Sir David Nicholson: Yes, this is completely separately and that will be part of what is the existing NHS budget. It will be in the national public health service.

Q79 Valerie Vaz: Do you have a figure for that?

Sir David Nicholson: We are currently discussing it. I think Health England did a work that showed it was about 4%, but, genuinely, as we sit here at the moment, we do not have a proper figure around all of that, and they will commission public health services. That is the national public health service. But, of course, the NHS does regard itself, and quite rightly, as a key player in the public health system. So we are not saying that all that happens on public health only happens in the public health service. The NHS has a responsibility as well.

  What will happen is that either nationally the public health service can say to the Commissioning Board, "We would like you to commission some public health interventions" so they would work through the consortia to do that, or the local public health service can commission NHS bodies to deliver some public health interventions. So that is the kind of mechanics, I think, that will broadly happen as part of these changes subject to consultation.

Dr David Colin-Thomé: They will also have connections with the broader social determinants that local authorities have and that might be a better fit than we have had at the moment.

Q80 Valerie Vaz: I was going to say, how is that better and how is that more cost-effective than what we have now?

Sir David Nicholson: The benefit, I think, is partly, taking Barbara's initial point, that there is some confusion in the NHS about population health and delivering services to patients, and they get confused. A great benefit, I think, is set out very clearly both in terms of what they are, the population health stuff, and them putting it in the local authority which has a much bigger impact on the wide determinants of health than does the NHS. So it will now be a much more cost-effective way of doing it.

  The second thing is that we are ring-fencing that resource because one of the issues, I think, particularly in the NHS, is that when the NHS comes under financial pressure it is very often the public health bits of the NHS that get dropped off that we cannot afford that get taken out. At its most extreme, someone says, "Do you want a cycle path or a neo-natal intensive care cot?", and the neo-natal intensive care cot nearly always comes first. Bringing public health out into a separate ring-fenced area is a much better way of managing that resource and being accountable for it, and we are engaged in discussions with the Faculty of Public Health on all of these issues as part of the development of the White Paper.

Q81 Valerie Vaz: Because they were saying that their members were quite concerned that you had not done that previously?

Sir David Nicholson: How long ago was that?

Q82 Valerie Vaz: When did you first start your discussions?

Sir David Nicholson: As soon as the White Paper came out, I guess.

Q83 Valerie Vaz: I am also concerned about this interface between the local authority and GPs. They are well known not to have got on previously and not every GP likes local authorities.

Sir David Nicholson: They don't like the PCTs either.

Q84 Valerie Vaz: No, but they like some of them. There was some good service out of PCTs, but I am just wondering. When the GPs have their plans, presumably that is going to be signed off by the local authorities. Is that right?

Sir David Nicholson: Yes. It is true that there are a lot of views expressed about the relation between local government and GPs. One of the things, I think, that has been very impressive over the last few weeks is the ways in which we have brought local government and GPs together in a way perhaps they hadn't done before. I know David sponsored a whole series of meetings and I have had meetings trying to bring them together, and on both sides there is a great deal of interest and willingness to make it work.

  Of course what happens is the GP sees the local authority provision of service from a different angle. They see it from an individual patient perspective up into the system, and they see the frustrations and concerns that individual patients have trying to interact with this sometimes quite complicated health and social care system. So their determination to make things happen, I think, will be greatly received in the system. It will give a different perspective, I think, and local authorities could learn quite a lot from the perspective that GPs bring.

  The consortia will be part of the Health and Wellbeing Board and the Health and Wellbeing Board will do the Joint Needs Assessment. So the GPs will play a full role in relation to all of that. Our expectation would be that the commissioning plans of the consortia, although they are accountable to the Commissioning Board, would also be agreed by the Health and Wellbeing Board.

Dr David Colin-Thomé: Just on that, there are a small number of GPs who are involved in things like local government and so on, but we are trained as doctors and the short-term specific thing which the public health directors need to be encouraging us to do is to go beyond even where the Quality and Outcomes Framework has taken us because the shortest-term hits you can have for helping health inequalities in this country is people with existing disease to get better treatments and more optimal treatments and better outcomes.

  QOF has already shown a narrowing of the performance between practices in posh areas to those in poor areas, for instance, so those incentives are working, but locally you might want to make a difference. You know, if a lot of GPs only want to be doctors, we can actually focus their minds on doing the things that will have a big impact on health inequalities within their remit rather than always saying they have to do all the broader things.

  But, again, if you look at the White Paper consultation documents from the GP organisations, all of them have said that they want to be involved far more in health and wellbeing and working with local authorities. As David has said, I organised a meeting with the leaders to meet the Local Government Association the other day, and we met the directors of social services. So I think this is a catalyst where there might have been Berlin walls or whatever. I think this is a catalyst to begin to shape a difference because as a GP you get fed up with the inequities of what is happening to your patients, even if you cannot do much about them. Maybe now there is a better chance to do something different because we have now got the budgetary influence.

Q85 Fiona Mactaggart: I am surprised. I think that you are describing something which, in the best of all possible worlds, could work. I am concerned that we do not live in the best of all possible worlds.

Dr David Colin-Thomé: That is where I think the leverage that consortia might have on their GP practices, rather than only going through a contractual route, will help the ones who can be helped, which might include some incentives. I think it is interesting how QOF nationally has made a difference. That is one of the best outcomes that we have achieved. It is now about addressing the under performance on outcomes between those who live in poorer areas--and, after all, the population are often sicker, and whether we can do that in a more focused way.

I do not want to think that all GPs are going to be into broad public health social services. Many of them won't, but what they can do is refocus on what they are doing better and I think incentives work. There will be those, as we have now, who are not that good. It is not just GPs. It is other doctors too. In fact some of the more successful PCTs, and we have got to give them credit for that, have actually made great strides in actually re-shaping the landscape of general practice. I could quote Tower Hamlets, Knowsley and so on, socially deprived areas where they were having struggles with some of the quality of general practice and they have made big strides. I expect consortia, using managers like that, to carry on that good work. I am not saying everything is perfect. All I am saying is that there is more an alignment of trying to get things done now than we have had before.

Q86 Fiona Mactaggart: My question was really a precursor to asking why there are not more friends of the White Paper?

Dr David Colin-Thomé: The GP organisations have all supported the GP commissioning bit. The BMA have had issues on other things, but if you looked at the NHS Alliance and the NAPC, they have been very positive and we have actually had one feedback from a group of young doctors and medical students who also support it. They will have individual queries but there has been positivity.

Q87 Fiona Mactaggart: The evidence that we have received suggests really very deep concerns about the risks and the proposals.

Dr David Colin-Thomé: You might need to think of who you have as witnesses as well and there are different opinions and support.

Fiona Mactaggart: We have put a very wide call out for witnesses.

Q88 Valerie Vaz: And other GPs wanted it.

Dr David Colin-Thomé: 25% in that survey.

Q89 Valerie Vaz: You quoted the BBC survey.

Dr David Colin-Thomé: Yes, but how would you know more, apart from the anecdotes?

Q90 Valerie Vaz: I thought you had been working with them?

Dr David Colin-Thomé: But the GP organisations have given higher figures than that, actually, and they are the ones I have been working with.

Dame Barbara Hakin: It is really important to remember that we are not expecting every practice to be actively engaged in the biggest strategic running of the commissioning consortia. That is not going to happen and it does not need to happen. Actually, what we are trying to do--

Q91 Fiona Mactaggart: But as soon as the other guys get to commission, the guys who do not get to commission will start squabbling with them because that is what happens.

Dr David Colin-Thomé: One of the issues is how you engage them. If you look closely, some would want to. Maybe some GPs may wish to be executives and apply for those positions. Most of us want to do something different would want to be leaders in some way to shape a culture, but we need to encourage the GPs who do not want to get involved to be like leading care pathways for diabetes and so on, which happens already. It is just that being on the GP consortia is the only option. Actually, if you just want to be better at your general practice, that will help you to commission better primary care. It is in all those strands that GPs can contribute, and I think that most of the discussion is always on the technical side of the issue. I think, as I said, without being rude, there are many GPs and GP organisations who have a much more nuanced approach of how all GPs can be involved in making things better rather than sitting on boards or being chief execs. That is the issue and I think that is why I am quite positive given the fact there is variation of opinion and skill as there is in all parts of the Health Service.

Q92 Chair: Can I ask perhaps Sir David to focus finally on one issue that I think is of concern in the Committee and outside? You have laid quite a heavy stress this morning on the fact that there are two and a half years before the new consortia actually take up their responsibilities and therefore there is time for this process to mature. I understand that argument, but I am struck that the same day the new consortia take up their responsibilities is the end date of the subject we were discussing when you were here last week, which is the process of change in service delivery, which you have described as not merely the most ambitious in the public sector but the most ambitious currently in the economy and arguably the most ambitious anywhere in the world.

You might think that would be enough to take on during that two and a half year period without this completely separate process that is often confused with that process of service change. We have got two processes actually going on in parallel and I wondered how confident you are. We can deliver the £15 to £20 billion service reconfiguration objective because without that all of this becomes a rather secondary debate.

Sir David Nicholson: This is very large and very challenging and in a sense it is hardly surprising, is it, that people raise concerns about it because we all either work in it or depend on the NHS for our health and wellbeing. So it is a very serious set of issues that we are facing. It is interesting the way you describe the two parallel approaches, and part of the skill of the transition is going to be making them not parallel but mutually reinforcing. That is quite difficult to do, but I think we can already see ways in which we can do that. I may have said this before, but, for example, all of the plans for sustaining ourselves in future going forward, both in terms of improving quality and reducing cost, have an element around better management of long-term conditions and the better management of hospital admissions.

  GPs are in the unique position of being able to influence that like no other group can. So getting them engaged in that very early, you know, I would rather have lots of GPs running around the country talking about and doing that than perhaps talking about the governance of consortia. For me, that can wait. So how do you do that? Similarly, on the foundation trust issue, how you make these organisations sustainable in the future again is mutually reinforcing the existence of today.

  The third area is the whole issue about community health services--a relatively unreformed bit of the system which we spend £10 billion on and treat huge numbers of patients in. How can we use the reforms, the Any Willing Provider arrangements, all of those things, to engage in community health services now to make those changes? That is the way, I think, we have got a good chance of making it happen. If we keep them as parallels and separate them, then I think we will not make a success of it.

Q93 Chair: It is a substantial challenge?

Sir David Nicholson: Yes.

Q94 Chair: I think you have been very clear. Does any member of the Committee wish to conclude or are there any closing remarks from you?

Dr David Colin-Thomé: Can I just add to that as a recently retired clinician. Basically, it is us clinicians who spend the money by our actions and, before, we were disconnected from the responsibility of the finances, and I think, as David was saying, there have been parallel universes and this is the best bet we have of trying to bring them together around the particular issues that David mentioned around emergency admissions and so on, as well as long-term condition care. Unless we get those together, we will struggle. In the examples that we have quoted from the States where they have got clinician engagement, it is because they have actually got the alignment of those finances of clinical activity and, instead of rationing, then we could have that rational approach as well as challenge a lot of the stuff we spend money on. There are certainly in the care of those with long-term conditions a lot of duplication and unnecessary admissions, etc, etc. Unless we bring those two together, I think, we would have a bigger struggle in trying to hit this financial aim.

Q95 Chair: It is a question of whether you can actually get the clinical engagement in that process at the same time as there is the management change process going on?

Sir David Nicholson: You can't do one without the other. We simply can't deliver the 15 to 20 billion productivity gains without a significant degree of clinical engagement and leadership, and this is one part of that.

Chair: Thank you very much for your time.

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Prepared 21 January 2011