Commissioning - Health Committee Contents


Examination of Witnesses (Questions 493-595)

Rt Hon Andrew Lansley CBE MP, Dr David Colin-Thomé OBE, Dame Barbara Hakin DBE

15 December 2010

  Q493 Chair: Secretary of State, Dame Barbara and Dr Colin-Thomé, you are—all three—very welcome.

  I would like to begin, if I may, by expressing formally, on behalf of the Committee, our disappointment that we have not had the opportunity to consider the documents that you have published this morning. That creates a problem, given that this session was intended to be our last evidence session to look at the evolution of policy on commissioning in the context of the White Paper. I understand that there was contact between the Department and Committee staff that was designed to try to facilitate the Committee having access to these documents overnight so that we could have had the opportunity to read them and question you on them this morning. It is regrettable that that was not possible. However, against that background, I think that a message was sent to you, Secretary of State, asking for a brief statement of the key points so that they don't come out slowly during the session. Will you make a brief statement to introduce the session? I then propose to allow a general question session based on your introduction before moving on to more detailed questioning. That seems to me, given where we are, to be the sensible way of handling it. I hope that is acceptable.

  Mr Lansley: Of course. I am in your hands.

  Q494 Chair: I invite you to make a brief opening statement of the key points announced today.

  Mr Lansley: Thank you, Chair.

  May I introduce my colleagues? Dame Barbara Hakin is the Director of Commissioning Development for the Department of Health, and Dr Colin-Thomé is the National Clinical Director for Primary Care. I think that you have had the opportunity to talk to both Barbara and David in previous evidence sessions. Both of them are, by profession, general practitioners of seniority and long standing.

  I entirely understand the Committee's point of view, but it will understand that there are limitations to how far in advance of publication before Parliament these documents are ready to be circulated. That is the matter, I am afraid. It would have been, in my view, far more regrettable for us to have met today and then to have published them at some later point. At least they are available, and they are available to the Committee to consider before you publish your report. I note that the Committee had to publish a report on spending yesterday that expressed views on the quality, innovation, productivity and prevention plans and their credibility before they had been published by the Department. I hope that all the evidence will be available to the Committee before you have to publish your report on this occasion.

  I am very glad to be able to say a few words about what we are publishing today—almost literally in three minutes' time—to Parliament, and which you received earlier this morning. First, there is the response to the consultation on the White Paper and those documents published in late July, on which we asked for responses by October. That document, Liberating the NHS: Legislative framework and next steps, sets out how we propose not only to respond to the points made in consultation, but to take forward the policy for the Bill. To that extent, although the Bill is planned for introduction in January, the policy for the Bill is in the response published today.

  We are also publishing today The Operating Framework for the NHS in England 2011/12 and the allocations to primary care trusts across England. In my view, the three documents collectively give a platform for improvement in the NHS, a platform for development during the course of 2011-12, and a platform for the reforms generally for the service to pursue.

  Liberating the NHS: Legislative frameworks and next steps sets out in particular our conclusion that, on the basis of the response to the consultation, we reaffirm our commitment to deliver reforms on the basis of the principles that we established. There was very wide support for the principle of greater patient control of their own care. The principle of "no decision about me without me" was set out very clearly in the White Paper and has been widely supported. Indeed, I would say that it has been embraced across the NHS, literally, over the past few months. There is a great deal of work to do and further consultation is still under way on the information that needs to be supplied to patients to hold the NHS fully to account. Another consultation is still under way on how patients can exercise greater choice. None the less, the principle in the White Paper was very widely supported.

  On the second principle, our ambition to achieve outcomes at least as good as anywhere in the world was also very strongly supported, particularly the structure of the new framework of outcomes for the NHS. If we want to deliver the best possible outcomes, we need to focus on them and have a process to measure them. Of the 6,000 responses to the White Paper consultation, some 800 were specifically related to the draft outcomes framework. I think that when anybody sees the draft outcomes framework, which we hope to publish before Christmas, they will see that it has enabled us to break new ground in capturing a representative set of real outcomes for the NHS on the basis of which the service will properly hold itself to account. The service will be held to account not just by the public, but by those inside the service. People will see these as clinically relevant outcomes that are a proper basis for clinical peer review and clinical governance. I think, in its breadth and detail, that this is something that has never previously been attempted by other health care systems. So this is ambitious, and we make no bones about that.

  Thirdly, the principle is that the service should be professionally led, that it should be decentralised, and that decisions should be made as close to patients as possible by front-line clinicians. As a consequence of that, we wish to increase the autonomy of health care providers, creating a more independent structure. That is reaffirmed in the Command Paper, as is the determination to move towards GP-led commissioning consortia at a local level and towards a much enhanced and stronger role for local authorities.

  There are clearly issues with the implementation and the process, on which good points were made in the consultation. If I may, I will run through some of the main enhancements and adaptations to the proposals. First, we have decided to strengthen further the role of health and well-being boards in local authorities, not least through a new responsibility to develop a joint health and well-being strategy spanning the NHS, social care, public health and, potentially, other local authority services. Local authorities and NHS commissioners will both be statutorily required to have regard to that.

  Secondly, HealthWatch England is to have a distinct identity as a statutory committee within the Care Quality Commission. There were people who felt that HealthWatch England should be entirely separate from the Care Quality Commission, but the conclusion we reached—there was strong support for this in the response—was that the powers and responsibilities of the Care Quality Commission are in themselves very important and, overall, that HealthWatch England could play a stronger role, particularly at a national level, by being able directly to influence the way in which the Care Quality Commission goes about its quality inspection and enforcement tasks.

  Thirdly, we will increase the transparency of commissioning by requiring all GP consortia to have a published constitution. I should emphasise that we will not prescribe the nature of those internal constitutions.

  We have taken on board all the views expressed and, on balance, have concluded that, contrary to our original proposal, maternity services should be commissioned not by the NHS Commissioning Board, but through the GP-led commissioning consortia.

  We intend to extend councils' formal scrutiny powers to cover all NHS-funded services. Again, contrary to what we initially stated in the White Paper, local authorities will be given freedom to determine how those scrutiny powers should be exercised. Many local authorities have taken the view that they wish to have independent scrutiny in other areas, and in health and social care, too. There will also be a phased timetable for local authorities to take on responsibility for commissioning NHS complaints advocacy services and for giving them more flexibility over from whom they commission complaints advocacy services.

  We will give GP consortia a stronger role in supporting the NHS Commissioning Board to drive up quality in primary care. Many respondents, especially GP consortia themselves, wanted a strengthened role for consortia in relation to their practices in quality focus. We will create an explicit duty for all arm's length bodies to co-operate in carrying out their functions, with a new mechanism for resolving disputes between those bodies.

  The context of all that, as the Committee will remember, is that recently the first wave of GP-led commissioning consortia responded to the invitation to become pathfinders. I issued the invitation in the second week of October, I think,[1] and by the end of November, a significant number had put themselves forward. Of those, 52 have become the first wave. They represent, collectively, 1,860 practices and 12.8 million patients, which is a quarter of the country. To be fair to them, there are many consortia that, in every reasonable sense, are as well-developed; it's just that the timetable for them wasn't quite the same as the initial first wave.

  To a large extent, I would say that, today, not only are we publishing the Command Paper in a way that is clear about the policy for the Bill, but we are seeing much more of a transfer to the service of the responsibility for shaping the reforms, and we are doing so from the bottom up rather than top down. Some two dozen local authorities have expressed an interest in being trailblazers for the establishment of new health and well-being boards in anticipation of the new statutory arrangements.

  Through The Operating Framework, we are giving an opportunity for the service to be clear about how the management of transition and the introduction of reforms are going to work together. I think we discussed previously, when I was last here, that, through The Operating Framework, we are going to be clear in 2011-12 that PCTs will be clustered together. That will do two things, essentially: it will create a source of financial and managerial control within the service to assure ourselves about quality and financial accountability during the transition; and, at the same time, it will give space for the GP commissioning consortia. The PCT clusters will not fulfil all the day-to-day responsibilities of their constituent PCTs. They will meet their statutory responsibilities and the control responsibility, but they will also facilitate the devolution of commissioning activity alongside GP commissioning consortia in 2011-12.

  We now stand at the prospect of having, through The Operating Framework, the commissioning consortia really actively engaged in 2011-12 in shaping the system of learning from each other, in the learning network that Barbara and her colleagues are putting together, and also in what is being done through, for example, the Royal College of General Practitioners and its centre for commissioning, and the National Association of Primary Care and others, which is going to enable that to make a lot of progress.

  There are details in The Operating Framework that are probably not specifically what you want to discuss today, which relate to how we are going to make further progress on key priorities such as reduction of infections—hospital and health care-acquired infections—the elimination of mixed-sex accommodation, the emphasis that we place on veterans' health and support for service personnel, the implementation of the dementia plan, the implementation of carers' breaks, the introduction of the health visiting implementation plan and the doubling of family nurse partnerships. Those are all set out in The Operating Framework.

  We have also now published the allocations to primary care trusts. In total, there is a £2.6 billion cash increase in 2011-12 over 2010-11. That represents a 3% average increase across England in the cash available to the NHS next year. The individual primary care trust increases vary from a minimum of 2.5% to a maximum of 4.9%. Of course, this is achieved not least by our being very clear about holding down management costs, the costs of arm's length bodies to the Department itself and the central budgets that we control. This gives a pretty strong platform for 2011-12 for the reforms.

  Of course, in addition to that, as you observed in your report published yesterday, there is a great deal of scope and, indeed, necessity for the generation of savings through improved productivity, efficiency and quality gain inside every part of the service, which will, I hope, enable us next year not only to meet demands, but to improve the service that we offer.

  Chair: Thank you very much.

  If I may, I encourage the Committee to focus this morning's discussion on the commissioning inquiry, which is our current concern. As I said at the beginning, I think that members of the Committee would like to question you in general about what you've said in relation to commissioning, and then we will move on to specific questions arising from the material that we had available to us before this morning.

  Which member of the Committee would like to go first? Valerie.

  Q495 Valerie Vaz: Thank you. Secretary of State, I am pleased that you have mentioned the report, and I hope you take it on board in any of your considerations. I think it's fair to say that the NHS is facing a number of challenges. One has been dubbed the Nicholson challenge, then, as far as I'm concerned, the White Paper is clearly the Lansley challenge, and we may yet face a third challenge, which is the Letwin challenge. Focusing on the Nicholson challenge—this £20 billion-worth—I wonder if you could tell the Committee how you are getting on with that. Is it being delivered?

  Mr Lansley: The first thing is that there is a slight misconception around the idea of the proposal—or the intention—that there should be between £15 billion and £20 billion of savings achieved within the NHS. That was not initiated by me; it was initiated before the general election, with a view to its implementation beginning in April 2011. To that extent, asking "How is it getting on?" is misplaced, because technically it hasn't started. Everybody in the NHS is preparing to achieve this degree of efficiency savings.

  There have, of course, been substantial changes compared with when that was first promulgated. It was promulgated on the basis that £15 billion to £20 billion was a range, depending on whether the NHS was going to receive a flat cash settlement or a flat real settlement in future years. Essentially, the £15 billion was over three years under circumstances where there was flat real, and the £20 billion was under circumstances where there was flat cash.

  David Nicholson, who was with me last time we were here, explained that a number of things have changed—and changed positively—since then. First, through the spending review, the NHS has had a settlement that is in excess of real terms. To that extent, we are on the more favourable scenarios for financial support for the NHS. What we have done, however, is not to confine ourselves—the spending review was not over three years; it was over four. The intention of the efficiency gain is now stretched over a four-year period, and therefore we did not revert to the original £15 billion figure but have sustained the £20 billion figure over four years. In addition, across the public services, a pay freeze in the first two of those four years has been agreed. That, in itself, will deliver something approaching 10% of the overall savings that are required. I have made it clear, and we set it out in the spending review, that we would reduce in real terms the total administration costs of the NHS by £1.9 billion by 2014. That will deliver 10%.

   You are aware, and you said in your report, that there are continuing requirements for efficiency savings through the operation of the tariff. I won't go on at length now about how we can further develop and improve payment by results, but one of its purposes—only one—is to deliver continuing efficiency gain and productivity gain in the hospital sector. That is probably equivalent overall to between one third and 40%—I think it is between £7 billion and £8 billion of the total £20 billion savings. How that is achieved will vary from place to place. The point of the QIPP process is to equip—if you'll forgive the pun—people working in health care services with a substantial range of opportunities as to how they can do that. I am sure that you will have looked at the QIPP website, for example, for the breadth of ideas on how the service can improve productivity, reduce cost and improve quality. The Better Care, Better Value programme is already achieving that. It's true to say that, at the moment, in this year the hospital sector in the NHS is achieving, on average, 3.5% efficiency savings. We are looking for that to rise to 4%. The sector is doing that while sustaining quality and, in many respects, improving the quality of what is being provided.

  I think your report did say this, but the critical area beyond that—that needs to be done, but beyond that—is the achievement of improved services in primary care through improved commissioning and community services. Of course, the reform process is central to that. I don't think that, in the past, we've achieved what was possible in terms of improving the management of long-term conditions and the development of community services. It's not just access to services for people in the community; it's their ability to have the right care at the right place at the right time, as well as reducing avoidable and unnecessary hospital admissions and high-cost procedures, and so on. In the QIPP process, that is a substantial part of what needs to be done, and I think the development of GP-led commissioning consortia is central to that. One of the criteria that all the pathfinder consortia were asked to meet when coming forward in the first wave was that they were already engaged in developing that.

  Q496 Valerie Vaz: I am really sorry to interrupt you; I know that time is short, and I am trying to keep my questions as brief as possible. Did I understand you correctly when you said of the £15 billion to £20 billion Nicholson challenge that nothing had been delivered yet, nor is it intending to be?

  Mr Lansley: Well, the point is—

  Q497 Valerie Vaz: Is that yes or no?

  Mr Lansley: You can either have a proper answer, or you can have a yes or no answer. The answer is—

  Q498 Valerie Vaz: Is that not a proper answer—yes or no?

  Mr Lansley: It was only ever intended to start—

  Q499 Valerie Vaz: You either know or you don't know.

  Mr Lansley: The point is that it was only ever intended to start on 1 April 2011. That does not mean that in 2010-11 there is no efficiency gain.

  Q500 Valerie Vaz: But I thought you said the QIPP process was getting it going. You said it started under the previous Government.

  Mr Lansley: But if you want a formal answer to the question, "Has it begun?", no, technically it has not begun. It starts on 1 April 2011.

  Q501 Valerie Vaz: So let's move on to the cost of reorganisation—the Lansley challenge. I have tried a number of times to ask you this question on the Floor of the House. Do you have a figure for the cost of the White Paper reorganisation?

  Mr Lansley: When we were here last, we said two things. First, we said that we know that there are certain associated costs, not least with redundancy and the reduction of management inside the NHS, and that that is nearly £900 million. We know that the recurrent savings to the NHS are such that that cost is more than recouped within two years, and subsequent recurrent savings flow from that. To that extent, we have made that clear. Beyond that, there will be further costs, but they will be reflected in total in the impact assessment that we publish at the time of the Bill's publication.

  Q502 Valerie Vaz: Okay, pretend I'm stupid—and I am this morning because I woke up really early—but just give me a figure. Other people have put it between £2 billion and £3 billion.

  Mr Lansley: I don't recognise that figure.

  Q503 Valerie Vaz: So what figure do you recognise?

  Mr Lansley: As I said, we will publish an impact assessment when the Bill is published.

  Q504 Valerie Vaz: But surely you must know now.

  Mr Lansley: We will publish an impact assessment. I am not going to publish a single figure now on the basis of—

  Q505 Valerie Vaz: You must have a clear idea of how much it will cost.

  Mr Lansley: I have a very clear idea, but I will publish an impact assessment when the Bill is published.

  Q506 Valerie Vaz: How do you know—you are asking people to make savings, and you don't know what the figure is?

  Mr Lansley: I'm not asking people to make savings on the basis of that figure—

  Q507 Valerie Vaz: You are.

  Mr Lansley: The QIPP programme is asking people to make savings. We are very clear about the reduction in management costs that we are looking for, and we are very clear about the policy and the basis on which people will make progress. Once the policy has been published, the task of the Department is to publish a full impact assessment that looks at all those impacts and measures them. And we will publish that when the Bill is published.

  Q508 Rosie Cooper: So when will we get the Bill?

  Mr Lansley: It will be introduced in January.

  Q509 Rosie Cooper: It will definitely be introduced in January.

  Mr Lansley: A written ministerial statement today says that we plan to introduce it in January.

  Q510 Mr Virendra Sharma: After how long will you give us the figures?

  Mr Lansley: I intend to publish an impact assessment when the Bill is published.

  Q511 Valerie Vaz: Just going on to something very important, I know that people do not like the National Audit Office, but there is an obligation—

  Mr Lansley: Who doesn't like the National Audit Office?

  Q512 Valerie Vaz: I have heard on the Floor of the House that people think that—well, it has been abolished anyway.

  Mr Lansley: No, that is the Audit Commission, which is going to be abolished.

  Q513 Valerie Vaz: Oh, yes; sorry. Well, yes, it's going to be abolished. So there is a duty—

  Mr Lansley: I actually have the greatest respect for the health work of the National Audit Office.

  Q514 Valerie Vaz: Can I finish my question? You always interrupt me. I'm sorry; I hope I don't interrupt you, but we don't often get a chance to talk like this. There is a duty, and I think it's clear that this is a significant reorganisation of the health service, isn't it?

  Mr Lansley: It is a significant reorganisation in the management of the health service, yes.

  Q515 Valerie Vaz: A significant reorganisation with £80 billion going to GPs, and there wasn't actually an electoral mandate for that, but anyway.

  Mr Lansley: Sorry, am I allowed to interrupt you?

  Q516 Valerie Vaz: No, you're not, until I have finished my sentence. Have you actually presented anything to Parliament indicating what the outcomes will be in terms of the positive outcomes of the reorganisation, so that there can be some sort of measure?

  Mr Lansley: Two things. First, I have explained to the Committee previously that the shape of the NHS reforms was indeed the product of the coalition coming together and bringing together with benefit to the reforms overall our Liberal Democrat colleagues' intention that there should be stronger democratic accountability in the NHS. I think we have not only incorporated that, but used it positively to engage local authorities more fully strategically in integrating health, social care and health care. That is very much to the benefit of the reforms overall.

  Strictly speaking, from the Conservative party's point of view, it is not true to say that there is no electoral mandate for GP-led commissioning consortia. There is an explicit mandate set out in our manifesto to do that.

  Q517 Valerie Vaz: It's not a Conservative Government; it is a coalition Government.

  Mr Lansley: No, no; I did just say that. The reform process as a whole combines elements of what we said in our manifesto and elements of what the Liberal Democrats said in their manifesto, and indeed the working out of those collectively differs from those two component parts.

  Valerie Vaz: Okay, in terms of the National Audit Office.

  Mr Lansley: In terms of the outcomes, from my point of view, the outcome that matters is the outcome for patients. We have already made clear in The Operating Framework how we want to see further improvements today for the next year in some aspects of the priority quality of services for patients. We will set out before Christmas the draft outcomes framework, which we hope, in 2011-12, will be a basis on which the NHS begins to orientate progressively towards those results. From the point of view of how the commissioning consortia interact with that, we will need to go through a further process of consultation as to how this structure of outcomes for the NHS as a whole is also, in particular, related to a structure of outcomes that supplements what is in the quality and outcomes framework for general practice.

  Q518 Valerie Vaz: So you didn't present it to Parliament, and we don't have the benefits by which we can measure how good it is.

  Mr Lansley: We published a draft—

  Valerie Vaz: I mean, it may be good. The Lansley challenge may be good; we don't know. But is there anything we can measure it by that has been presented to Parliament?

  Mr Lansley: As I say, The Operating Framework sets out some specific intentions in terms of continuing improvement in the service to patients. The outcomes framework we will publish before Christmas will go further in that direction.

  Chair: Can I interpose in this dialogue? Mr Morris.

  Q519 Grahame M. Morris: Thank you very much indeed, Chair. Arising out of those questions that my colleague has just asked in relation to the documents that have been published on The Operating Framework and your earlier statement, clearly huge organisational changes are being implemented. There are concerns that that might have a destabilising impact on the service, which in turn may well adversely affect outcomes. I have heard it said that destabilisation of the system is the enemy of reform and, clearly, it is not in anyone's interest to see that happen.

  We have seen reports as well, Secretary of State, about the fact that Oliver Letwin has been drafted in and asked to review the reform plans. We have heard reports that there are mounting concerns at the Treasury, and possibly in Downing Street, over the implementation. I would be interested in your views on what Mr Letwin's role is and what impact that's likely to have in terms of the timetable and the plans that are before us.

  Mr Lansley: Well, Oliver Letwin is the Minister for Government policy. This policy is one of the most significant and hopefully most beneficial and impactful of Government policies. So he is engaged in the process of the formulation of Government policy; it would be surprising were he not. Today we have published, in Liberating the NHS: Legislative framework and next steps, a document on behalf of the Government that sets out the Government's further intentions in relation to the reform process.

  Q520 Grahame M. Morris: Is Mr Letwin's appointment, or the announcement of his appointment and the work that he is doing in relation to the health reforms, significant at this stage?

  Mr Lansley: I'm sorry; I'm not aware of any announcement.

  Grahame M. Morris: Well, it was a report in the Financial Times on 30 November.

  Mr Lansley: Oh I see. Ah, so that won't be an announcement, then?

  Valerie Vaz: Well, you didn't announce anything else.

  Mr Lansley: When we shape Government policy, we do it collectively. I seem to be in a position where on the one hand people are saying, "Oh, but it's the Lansley challenge." It's not; it's the Government's challenge. It's not me alone; it is the Government, together. We are not only a coalition Government—

  Q521 Valerie Vaz: The Prime Minister said he didn't want any reorganisation.

  Mr Lansley: We made it very clear that we weren't going to have a major top-down reorganisation. That was not our intention. But actually when we looked as a coalition at how we could deliver in all these circumstances the reforms that were required, including the authority and the responsibility in the hands of clinical leaders—and with our Liberal Democrat colleagues genuinely empower local government in a way that we hadn't, from our point of view as Conservatives, intended originally to do—I think that strengthened the process. I think it strengthens the reforms. The response from local government to the White Paper has been overwhelmingly, almost without exception, very positive both in relation to the public health and their role in NHS commissioning. It has taken us to a new place.

  It is very easy to overstate the impact on the NHS. When you think about people working in general practice, community services or hospital services, the processes of NHS reform that impact on them are processes that already existed. It is just that we are making them consistent and impactful where they weren't before. Practice-based commissioning existed, but it didn't really have the benefits or the impact it was intended to have. We are going to make that happen. Transforming community services was a process started under the Labour Government, but we are going to make it happen. The translation of all NHS trusts into foundation trust status was something that was announced by a Labour Government in 2005 and was intended to be implemented by December 2008. We are going to make it happen.

  I make no bones: there is a reorganisation of the management of the NHS. That, frankly, would have had to happen anyway. When you look at the finance of the NHS, we cannot carry on spending £5.1 billion on administration. Some of what Mr Morris says is destabilisation is, frankly, simply the inevitable consequence of reducing the management overhead to the NHS by 45%.   

  Q522 Grahame M. Morris: It's rather more than that, isn't it? The switch to GP commissioning as a method of commissioning services is rather more than a tweak that would have happened anyway. There is an argument for a more evolutionary system in relation to the existing PCTs; this is quite revolutionary.

  It was interesting yesterday; I was at the seminar on cancer services, "Backing Cancer". It was very well attended, with more than 350 delegates. Just as a bit of feedback—because I am not sure whether you were present for the earlier session—when delegates, from a wide range of charities and specialist patient groups, were asked whether they thought that the new commissioning arrangements with GPs would assist in improving outcomes, I would suggest that three quarters of them thought that it wouldn't. I thought that that was quite significant. There wasn't any kind of doubt in their minds. There is quite a job to do to persuade people that it is going to improve outcomes for patients.

  Mr Lansley: Well, perhaps I'll ask my colleagues to add a bit on this. Let me just say, because I was there to hear some of the session—indeed, not all of it—and spoke to the Britain Against Cancer conference yesterday, that I have been to those conferences previously and one of the central issues, including the report of the National Audit Office, was that cancer services suffered not least from weaknesses in commissioning. So we are not in the place we need to be. We are not in the place we need to be in terms of outcomes for cancer, and I won't go on about that, but I was actually very surprised at people there yesterday. Positively, they said that they overwhelmingly supported the focus on outcomes and the structure of the outcomes framework that is in the White Paper. They clearly don't understand how the clinical leadership of general practice coming together locally can actually give us a stronger place in terms of managing care on behalf of patients, including cancer care. I think they understand that specialised commissioning is the responsibility of the NHS Commissioning Board. It is worth my colleagues—Barbara first, then David—speaking about how GPs, collectively, can improve the quality of commissioning.

  Dame Barbara Hakin: I've gone round the country talking to a lot of patient groups and other stakeholders about the changes. One of the things that struck me, perhaps, is the misconception about how the system worked before, which actually makes some of this look more radical. I think that people did not understand that primary care trusts, which are based on primary care and have clinicians involved as part of them, actually received the vast majority of the funding for all NHS services, and that those organisations were responsible for working together and not only doing the clinical design of services, but then going on and contracting them. So I think that there are a lot of people who have been anxious because they felt that the money went directly to the hospitals and that now it is going via the GPs.

  I have talked to a lot of people who have that view, particularly patient groups. They start to understand that this is just a more clinically oriented way of doing things with the people who will be more responsible. GP consortia will have really strong and good managers supporting them in the same way that PCTs had good clinicians helping them. The clinical leaders, who understand the needs of their patients, will have much more of a say in the clinical design of those services and the pathway from primary care to secondary care for patients with all sorts of conditions.

  Q523 Grahame M. Morris: I don't necessarily agree with your analysis. Yesterday, I participated in the all-party cancer group, where it was identified that in 2007 the cancer strategy made a quantum leap forward with the design of the clinical pathways, the establishment of the cancer care networks and so on. We were moving along the right track. This isn't a conversion on the road to Damascus; the general consensus is that we were moving positively in that regard. There is an acceptance that, generally, the outcomes are not as good as they should be. I accept that, and there is work for the Committee to do on that.

  Mr Lansley: The truth of the matter, and we know it, is that in the period since the introduction of the cancer reform strategy, important and beneficial as the improvements have been, the improvement in cancer survival rates in this country is still no different in trend terms than that which preceded it, and it is no better relative to other European countries than in the past. To that extent we need to close the gap in terms of outcomes, and we know that there are a number of things that we need to do.

  I have talked to the Committee about the cancer drugs fund, but, as I said yesterday, we also have to be much more aware of the signs and symptoms of cancer. We have to be much better at early diagnosis and have much better access to treatment at an early stage. Yesterday's meeting of the all-party parliamentary group significantly understated the importance of general practice in doing that.

  Taking one example, lung cancer, when I have talked to lung cancer physicians, as I have done at Papworth in my constituency, they feel very strongly that there is a difference in practice between, for example, ourselves and France. The point at which patients are referred to X-ray or other scans for signs and symptoms of cancer is, on average, significantly earlier in France than in this country. The essence of that is changing the practice in the community and having people identifying those symptoms. General practitioners can make an enormous step forward in educating their patients and making such referrals at the right time.

  Dr Colin-Thomé: Could I just say two things? One of the reasons for the poor outcomes in this country is the delay between symptoms and diagnosis, which is longer than most and has a big effect on outcomes. That may be about the public's awareness, but it may also be that primary and community services require better access to diagnostics to improve. The second point is that you can't give all of the credit to commissioning, because those were national strategies and the national directives are still continuing with those guidelines.

  We are still doing poorly in cancer outcomes, despite our improvements, and for care of the elderly we are actually going the other way; we are getting worse. As some 70% of people with cancer are over 65, that is an indictment of our present system, which isn't doing the trick. We need to have a much greater clinical focus. We have a lot to do, despite the improvements, most of which came from central approaches, rather than local commissioners.

  Q524 Grahame M. Morris: I don't want to drive the agenda away, but I want to make one point that came out of yesterday's conference, particularly from patient groups. GPs are perhaps diagnosing, on average, eight or nine cases a year. So there are issues there that need to be seriously addressed.

  Mr Lansley: I think that, strictly speaking, they said that on average there are 250,000 new diagnoses of cancer a year and there are 35,000 GPs. So there will be some eight new diagnoses per GP across the country; it is not that they necessarily make the diagnosis. The point we were making yesterday was that, on average, those GPs might see 200 patients who have potential signs or symptoms of cancer. To that extent, it is the response to those signs and symptoms that is most significant.

  Dame Barbara Hakin: Can I make it very clear that GPs will be the co-ordinators of commissioning and all clinicians will be involved in the clinical pathways? This is not about GPs determining the clinical aspects of the complexity; it is about GPs using their relationships with their colleagues and using their clinical skills to bring that together in a much more clinically based system.

  Chair: I am conscious that we are trying to get away for the beginning of Question Time at 11.30. We have an hour and a half left, and we haven't yet started seriously questioning the commissioning structure. Rosie wants to come in, and then I would like to move on.

  Q525 Rosie Cooper: Could I go back to what Dame Barbara said about talking to patient groups about the scale of change? You imply, and the Secretary of State is reported to have implied, that concerns over time scale are exaggerated. As you just said, Dame Barbara, people woefully overestimate the scale of change, because practice-based commissioning, choice of provider, NHS price list and foundation trusts already exist. If that is all so exaggerated, why, after seven years, have so many NHS trusts that have got off to a flying start compared with the consortia that you are trying to establish in a very short time scale not become foundation trusts? If you have all the building blocks and they can't do it in seven years, how are you going to get commissioners off the—

  Mr Lansley: To be fair, Barbara is responsible for commissioning development and the question you ask is about the development of provider services within the NHS. We are shaping ourselves in the Department in relation to the future in the same way as we are asking people to do throughout the country, and that is divided between the provider services and the commissioning services. Barbara is responsible for the development of commissioning services.

  Let me answer that. You're right: in 2005, a Labour Government said that every NHS trust should be a foundation trust by December 2008. That did not happen. There were a number of reasons for that, but some of them were policy reasons. The foot literally came off the accelerator and in 2009 it went on the brake. You can see more than 20 FTs going through the pipeline year after year until 2009, and then suddenly it was a handful. We have restarted the pipeline and are working hard on it. There are about 120 existing NHS trusts. To some extent, we are adding to the number of NHS trusts, because community services are turning into NHS trusts, so the numbers will be slightly misleading. None the less, we have about 120 NHS trusts. I wrote to the chair of every NHS trust in late September and asked them all to respond to me by the end of November with their own timetable, milestones and challenges in moving to foundation trust status. We are working through that, but I can tell you, roughly, that at least a third of those are clear about the timetable and will do it. They are confident that they will be able to do so before 2014; some quite quickly.

  Another third feel confident that they will be able to do that, but they have specific challenges that they need to meet. They will come through towards the end of that period, because we need to tackle those. There is probably another third where we need to make significant changes in the configuration, management or functioning of those NHS trusts in order to make that happen. I won't, for reasons of time and otherwise, go into detail about how we will do that, but much of it is literally, I promise you, about facing up in individual NHS trusts to problems that have been allowed to go on for too long.

  Q526 Rosie Cooper: So why do you not think you are going to face that sort of scale of problem with consortia? Why do you think you will just drive it through?

  Mr Lansley: Well, consortia are a completely different point. I think that the essence of the development of consortia is that people talk about commissioning as though it is something that GPs collectively don't currently come together and do. They do do this.

  Rosie Cooper: Of course they do.

  Mr Lansley: So why would they not be able to? Frankly, there is a whole range of support available to the new commissioning consortia as they establish themselves. We will assign staff to the consortia from within primary care trusts to enable them to establish themselves. They can seek to use existing primary care trust staff. From our point of view, there is absolutely no intention that the reduction in staffing in primary care trusts should be so widespread that it excludes managerial and expert staff in primary care trusts from continuing to be responsible, but within the context of clinical leadership rather than managerial control.

  Q527 Rosie Cooper: So you would say that the NHS is not facing its Ark Royal moment where you have taken a calculated risk that leaves the NHS without air cover and, I believe, risks the financial stability of the system. At this crucial time, what are you doing? You are making massive reductions in management costs. People are leaving all over the place. You have your headlines of train wrecks et al—someone else is going to ask about that. There is grave concern that you expect this to be driven through by people who aren't there.

  Mr Lansley: I don't think that's true for a minute. This is Barbara's responsibility, so she might like to add to this, but make no bones about it, we intend to reduce the number of management staff. We have been clear. We talked to you before about the mutually assured resignation scheme, and I think 2,200 staff have left under the scope of that scheme. Because we published the Command Paper today and The Operating Framework, it will also enable Sir David Nicholson, Barbara and their colleagues to make clear how the transition is to be managed. David will issue a letter to the service alongside The Operating Framework that helps on that and the human resources consequences.

  Essentially, it means that there are staff who will leave, and we accept that they will leave. That will enable us to reduce the overall administration cost, the management cost and the number of managers. The number of managers in the NHS has been declining since earlier this year, and it is declining at a rate of some 600 or 700 over the course of the past six months, which will continue.

  We will, however, maintain the quality-critical and service-critical staffing. We will maintain them through the PCT clusters so that we don't have to have 152 teams all over the country. We will create space for the GPs. That will allow us then to assign staff to support the commissioning consortia. There are many staff—you should not underestimate the extent to which there are staff and leaders inside primary care trusts who see their role in future as being alongside the GP-led commissioning consortia, with management, yes, but with clinical leadership and management working together rather than the separation between clinical decision making and managerial decision making that has so characterised the service in the recent past.

  Q528 Rosie Cooper: A very final, quick statement; almost yes or no would be okay. What you are saying is that you can provide assurances that changes to management arrangements at strategic health authorities and PCTs won't lead to increased financial difficulties and that, for example, waiting times will be as good as they were when the coalition Government came into power.   

  Mr Lansley: Well, I encourage you to look at The Operating Framework, which is absolutely clear.

  Q529 Rosie Cooper: Waiting times won't increase?

  Mr Lansley: The Operating Framework is absolutely clear that the service will not only maintain financial control, but continue to improve measures of service.

  Q530 Rosie Cooper: Waiting times are currently increasing all over the place. How can you give that assurance?

  Mr Lansley: Have a look at The Operating Framework. It talks about continuous improvement, including in waiting times.

  Q531 Rosie Cooper: But the fact is that waiting times are increasing now—today.

  Mr Lansley: No, they're not.

  Rosie Cooper: Yes, they are.

  Mr Lansley: No, they're not.

  Q532 Rosie Cooper: The evidence is that that is true.

  Chair: Evidence can't proceed on the basis of, "Yes, they are," and, "no, they're not."

  Mr Lansley: We have published the data.

  Rosie Cooper: The patients you're supposed to be listening to will tell you it is increasing.

  Q533 Andrew George: We had previously agreed an orderly process of questioning, and we seem to have lost that to a certain extent—that is not a criticism of you, Chair, I hasten to add.

  The role of Parliament ultimately, when the Bill comes before us next year, in making the big decisions about proceeding—or potentially not—and deciding whether there should be any amendment to the Bill as it is presented, is clearly going to be critical. In that regard, what we have before us is a product of a White Paper so far, leading to a Bill that has been variously described—by you as a logical reform. I think it is acknowledged as a challenge, and we have also had reference to one PCT chief executive referring to it as a "bloody awful train crash" about to happen. I'm sure you know about that particular chief executive and he's not alone, which I think is the important point—we are not talking about someone who is talking alone. Certainly, evidence to this Committee, suggesting that that is widely reflected, is that it will inevitably cause, as he claims, organisational upheaval and staff demoralisation—I think that has been covered—and it will also undermine the focus on patient care and financial control. In respect of that, how do you respond to the fear that this will result in some awful catastrophe about to happen as a result of having to save lots of money and achieve efficiencies, while at the same time going through very significant reorganisation?

  Mr Lansley: Well, I think it would be sensible for Barbara to add, but, from my point of view, I of course never expected that when we make changes, and in particular when we make changes that involve a reduction of 45% in the number of managers and senior managers in strategic health authorities and primary care trusts, those senior managers would all express themselves delighted at the prospect. It would be unreasonable to expect that to be the case.

  What I would simply say to you is that Sir David Nicholson and his colleagues in the NHS have set out very clearly how we can manage the transition effectively. There will be people who don't want to be a party to the management structures in the future, and we will make arrangements for them to be able to leave, which would be part of the overall reduction in management cost. There will be many others, however, who want to be part of that transition. I think that Mr Creighton, who said those things, wants to be part of the transition. He wants to be chief executive of one of the north-west London PCT clusters. There are others who actively and positively want to be part of the new shape of commissioning in the future, and we will make arrangements for them to be able to do that, too, through assignment and the commissioning consortia having a financial allowance to enable them to take on some critical staff to enable that to happen.

  What I would just say to you is that I have visited a number of the pathfinder consortia. There is energy and enthusiasm among not only GPs, but the whole staff, including often the primary care trust staff who are working with them to make that happen. This is true. You can go to Cumbria, and Sue Page is working with the GP consortia to make it happen. You can go to Bexley, as I did last week, and Anthony McKeever and the PCT staff are critical to making this happen. The energy and enthusiasm being generated in those places where the new consortia are being established is, in my experience, far in excess of the energy and enthusiasm for commissioning that was generated inside primary care trusts.

  I have to say—I'm sorry, but it is a simple truth—that there is a world of difference between clinical leadership and a focus upon how we can deliver improving care for patients, and the enthusiasm that is generated by people being given the freedom and the authority to do that, as distinct from people who are going through what is essentially more of a managerial and bureaucratic process. The allying of those resources and responsibilities to this clinical enthusiasm for delivering positive change is instrumental in making commissioning work more effectively.

  Q534 Chair: The Committee visited Hackney yesterday, which, as I understand, isn't a pathfinder consortium, but there was similar enthusiasm for the process. Other issues will arise as well.

  Mr Lansley: Barbara and David will have seen many other examples.

  Dame Barbara Hakin: Absolutely. I would like to refute the reflection of what I said earlier. I said that we need to ensure that we help the public, stakeholders and patients to understand what exactly is happening in the reforms, but, in terms of the management through the transition, this is a significant transition period for management change. It would have had to have been that level of change, because we are reducing management costs, and we have to find a great deal of money actually to improve outcomes for patients without an enormous uplift in the NHS budget and with ever-increasing need.

  In order to do that, The Operating Framework and David Nicholson's transition letter will make it clear that, in forming PCTs into clusters and in the way that we work with PCTs to take us through from the middle of next year through to 13 April, when the new system is much more established, we will actually have a much more robust system working through the cluster units and on to their PCTs. I think that the PCT chief executive in question has subsequently said that he feels that his words were ill chosen to relay what he meant, which was that it was absolutely necessary that we create a transitional infrastructure to ensure that we have really good grip through that period.

  Dr Colin-Thomé: Can I just say quickly that you will always get siren voices whenever there is change? Of course, this particular group feels more embattled. You don't get that much noise from clinical areas—including not only GPs but others—about the demise of PCTs. There are plenty of PCTs, as Andrew has said, which have been very positive about the changes, as we have described, because I have also been to other places around the country such as Tower Hamlets, Cambridge and Peterborough. Those have been doing it already, so you would expect the odd siren voice.

  If you look, for instance, at your waiting times, we have always driven these in the past by top-down, 18-week programmes, and so on. However, if you could engage all clinicians, including primary care who are often not involved, most of the care that's done with our patients could be done completely differently—clinically, rather than a top-down approach. There are something like 40 million follow-up appointments a year, which doesn't seem to be the best use of resources. Those redesigns will tackle some of the targets, because of clinical involvement rather than some mechanistic top-down approach to some of these changes.

  Chair: Mr George has a follow-up question.

  Q535 Andrew George: Yes, it's a follow-up question to the question about it being Parliament which will decide, because the Bill will come before Parliament. The issue is that a lot of this change is already happening—the pathfinders have already been announced. The Bill will be coming before us towards the end of January or February, and then it will be scrutinised by Parliament. Parliament will be making its decisions after the event. On most of the decisions, it will be a train—whether it is a crash or not is a debating point—that has already left the station and is way down the track before Parliament has the opportunity to begin the process of expressing a view.

  On this issue, it is quite important to note that, Secretary of State, you say that the Government are making these decisions collectively. Well, collectively, they went into the coalition agreement saying that there would be no major top-down reorganisation. That is precisely what this is, and therefore, it should be subject to significant parliamentary scrutiny. That scrutiny should be ahead of—instead of after—the event itself, particularly in relation to the geographical upheaval in terms of the boundaries. I don't think anyone has any love for the quangos themselves—the PCTs, the unelected boards. Putting it in the hands of clinicians is fine, but only one sector of clinicians will be driving this commissioning process. There are a lot of debating issues, but we as a Parliament will be invited to take part in the debate—in spite of the scrutiny now—very much after the event.

  Mr Lansley: I think that the criticism would be valid if we were not, in truth, taking what is essentially an evolutionary process at the moment. We're not actually anticipating, strictly speaking, in any sense the introduction of the legislation; we are reorganising primary care trusts under existing legislation.

  Q536 Andrew George: But the pathfinders have been announced. The train has left the station.

  Mr Lansley: With delegated powers under existing legislation, we are creating—and I think we will demonstrate—the opportunity for the development of general practice-led commissioning. That will—I hope and I think—demonstrate how the general practice-led commissioning consortia can take responsibility, improve commissioning and improve the services for patients. We are doing that under existing powers. Of course, under existing legislation, if we went down that path, we end up trying to have all three things: strategic health authorities, primary care trusts and the GP commissioning consortia. That was why we ended up—I was very clear, so I won't repeat what I said before—with what was effectively a managerial reorganisation of the NHS. I don't think that it is a reorganisation at the front line, but it is a managerial reorganisation in order to empower the front line.

  We had to make a decision about that but, strictly, Parliament will make a decision on whether to leave all these bodies in place or to accept, which I believe Parliament will do, that it is better to devote resources to supporting the front line. It is better to give more responsibilities to local authorities for democratic accountability than to leave them with unelected primary care trust boards. The Liberal Democrat manifesto proposed the abolition of strategic health authorities, and we are proposing that in the legislation. These are things that I think will be the consequential decisions made by Parliament, not least because we are demonstrating, over the course of the coming year, how the new shape of commissioning—and provision, for that matter—is capable of achieving benefits for patients in the future.

  

  Q537 David Tredinnick: Apropos train crashes, I am sure that we are all hoping that we will see the light at the end of the tunnel and not the headlamp on the express train as it comes towards us—that's the old joke.

  I would like to ask you a few questions about PCT clusters and commissioning, but, if I may, I want to pick up on something that you said earlier. You're very keen on the devolution of commissioning, but is there not a contradiction here in that you've got this Commissioning Board that will be more powerful than any other commissioning board we've ever had? Do you think that's a fair statement?

  Mr Lansley: Of course the NHS Commissioning Board has considerable powers—and necessarily so. In a national health service, we need clear national standards and there needs to be a body that holds the contracts with the individual practices across the country, and that would be the Commissioning Board's responsibility. GPs themselves take the view that this is the right way for it to happen. Strictly speaking, does it have more power than the Department of Health under the current system? No, of course not, because the Department of Health, as things happen at the moment, pretends that there is devolution of responsibility in different places across the country, but, strictly speaking, it can control it all.

  Q538 David Tredinnick: On the PCT clusters, which are coming—this is going down to the devolved part—is there not, in a sense, a safety net as the primary care trust organisation dissolves? Some parts of the country may lose a lot of employers. Is it not, in a sense, a circle of wagons to ensure that you can get through this phase in some sort of shape?

  Mr Lansley: If I may say so, I think that that is an entirely negative way of seeing what we regard as a very positive way of approaching this. We're managing organisational development by concentrating resources in primary care trusts, so that the management resource is effective at delivering financial and quality control, while creating space. That is space in terms of resources, commissioning responsibilities and budget management, so that the commissioning consortia can establish themselves.

  Q539 David Tredinnick: Yesterday at Hackney, I got the impression that there were savings that could be made through restructuring, certainly in the primary care trust areas. At the end of the transition period, do you think the clusters are going to be redundant? I think Sir David said that at the end of the transition it would be a matter for the Commissioning Board, "because the board get them from 1 April" 2010—I am quoting him exactly.

  Mr Lansley: 2012. The clustering of primary care trusts is a transitional measure. Subject to the approval of Parliament, primary care trusts will be abolished on 1 April 2013. We intend to establish the NHS Commissioning Board in shadow form during 2011, so, to that extent, the primary care trust clusters will be a basis on which the NHS Commissioning Board exercises its responsibilities as part of the transition. From 1 April 2013 onwards, the NHS Commissioning Board will be able to make its own decisions on how it manages its relationship with commissioning consortia across the country.

  Q540 David Tredinnick: Going back to my safety net, isn't the reality that the board could quite conveniently say, "Actually, we're not going to dismantle this framework", so you'll still have a primary care trust skeleton report network going up to the Department? They won't be disposed of and, probably, quite rightly, because you've got a lot of skills there. The second part of my question is, are they going to be able to support these new GP consortia? Is there not a role for them to provide support services to doctors who really don't want anything to do with administration?

  Dame Barbara Hakin: Absolutely. The clusters are a transition vehicle and a way in which we can both support the GP consortia and also support the NHS Commissioning Board as it comes into being. PCTs are currently accountable to strategic health authorities, which will be abolished and disappear, and then all PCTs for the year of 2012-13 will accountable to the NHS Commissioning Board. By that time, the NHS Commissioning Board will, through the creation of clusters, have a more appropriate way to relate to PCTs.

  The board at that time will have to determine how it chooses to discharge its functions. Obviously, some of its functions are national and are done once, but some of its functions are about relating to consortia. Some of its functions are the direct commissioning that it undertakes itself—say, of primary care. After it's formed, the board can determine what shape it needs to best discharge those functions.

  The clusters will be there, in the board's early days, to ensure that we have the rigour and grip that we need, but it will be for the board then to choose whether the cluster shape and the cluster distribution is something that it would want to use for the future. That will hugely depend on the size of the consortia, of course. Until we see the size and shape of the consortia, it will be very difficult for the board to determine what's the right shape for it.

  Q541 David Tredinnick: You talk about the board choosing. Sir David, when he came before us, said that there would be a need for central Stalinist controls during the transition period, and he didn't sound like a very consensual individual. I got the impression that they were going to be told to get on with it. Do you think that's fair? "Stalinist controls" was the phrase he used.

  Mr Lansley: If Barbara wouldn't mind my adding to her comments, from my point of view, we have always been very clear, and clear with the Committee, that during the transition, we are going to create space for the GP-led commissioning consortia to establish themselves, and give them support to do so and engage them directly in improving quality and delivering on the challenge in relation to quality, innovation and productivity. But at the same time, we have to maintain financial control. We are asking the NHS, notwithstanding a 3% increase in cash next year, to enter a period during which the increases in resources for the NHS are not what they have been previously. We are entering a period when there is going to have to be continuing improvement in the quality of service in a time of financial constraint. To that extent, we've always been very clear. There is a combination: the service will experience tight controls of financial management and performance management, while at the same time building the capacity of the front-line commissioning consortia effectively to take over responsibility.

  Q542 David Tredinnick: So we've got the Nicholson effect; we've got the Letwin effect; and now we've got the Joseph Stalin impact. Is that right?

  Mr Lansley: The Committee seems very keen on attributing names to these things. It is the Government's policy, and the Government are collectively responsible for it.

  Q543 David Tredinnick: I have one last serious question, which is about the strategic health authorities' role. The White Paper says the SHAs have "a critical role during the transition in managing finance and performance", but they are to be abolished in 12 months, before the new system is operational. Why is this, and which body, if any, will take on this role in 2012-13?

  Dame Barbara Hakin: The NHS Commissioning Board will come into being as the SHAs are abolished and will take on responsibility for overseeing the PCTs, which will be accountable to it, and the growth of the consortia during the year, at the end of which PCTs will be abolished. The final state is a devolved situation with a lot of local leadership and freeing up of the front line to make the changes that we know it wants to make, but it is clear that as you go through the transition, it is really important to be very clear and to have clear direction. That was what Sir David was saying—particularly over the next year, we need to be very clear about how the system operates in the transition in order to put the NHS Commissioning Board and the new structures in the right place when they come into being in 2012.

  Mr Lansley: And, to be fair, the enthusiasm of the GP commissioning consortia is very much focused on being able to engage with clinical services, being able to design services and being able to improve services. They have a concern, which we completely understand, in that they don't want to be in a position where they are given control of finance at a point where they can't understand the nature of what they're commissioning and how they're commissioning it, and where they can't shape it, they can't shape the contracts. From the general practice point of view, the process is to think about clinical care and improve that, shape the contracts with providers so as to be able to have the framework of commissioning that you're looking for, and then put a financial control mechanism alongside it. We're trying to make sure that through the transition, they are confident that that financial control mechanism is in place and is available for them to see at the point at which they take responsibility.

  Chair: We will now have a short question from Nadine and then go to Dr Wollaston.

  Q544 Nadine Dorries: This question is on the back of the SHA question and is probably for Dr Colin-Thomé. Can I first say this to you: Liverpool, Runcorn—1980?

  Dr Colin-Thomé: Yes, I was a GP in Runcorn.

  Q545 Nadine Dorries: We knew each other in a different life. This question is for you, then. Where will Jim Easton's responsibilities for driving quality, innovation, productivity and prevention reside? And will GPs be expected to pick up the cost of this, particularly in terms of new technologies and innovation?

  Dr Colin-Thomé: Once the NHS Commissioning Board is, it will have to decide who is going to be within that board, including some of the QIPP work. But if you look at the GP organisation, consortia and the pathfinders we've put in place already—and there is more to come—that redesign is at the basis of their enthusiasm. They feel that the present structures have not allowed that enthusiasm to flourish and reshape care, because it is clinicians and especially doctors who spend the money, as I said before. The GP leaders have lots of ideas, all of them, about how we can reshape care around the varying lengths of stay we have in hospitals or the follow-up outpatients, and the need to actually refer in the first place. That fundamental reshaping will make a difference to financial control. That is what QIPP is about. I think you will find that, with GP leadership, they'll have a good vehicle out there that maybe the present architecture hasn't been so good at.

  Q546 Nadine Dorries: And will the financial provision be available within that vehicle? Will they be able to afford to do this?

  Dr Colin-Thomé: If we are going to be allowed—as we are, and that's not just the 3% growth but the fact that, whoever's challenge this is, we can reinvest the £15 billion to £20 billion—then it is up to us to release resources for that. The 3% growth, especially if consortia and pathfinders are allowed to flourish as we think they will, will mean that we can use that growth much more imaginatively now. There is lots of money in clinical care, around ineffective care, care of lower value and the way that we organise care, which is hugely inefficient at the moment. Clinicians have never had a vehicle, until now, to be able to challenge what we do and to make it for the better. We will be able to release the money as we go along, because we know there is lots of money that we are not spending as appropriately now.

  Mr Lansley: I understand that you won't have had an opportunity to read The Operating Framework, but if I could just draw to your attention that we are clear in the transition that there will be a small allowance for the pathfinder consortia during the course of 2011-12. Creating space will include generating management savings through primary care trusts that are available to the consortia.

  We said in the revision in June that we will set out how resources will be released from the infrastructure and running costs of strategic health authorities and PCTs in order to provide a running cost allowance for GP consortia. The Operating Framework , in paragraph 5.16, goes on to say that our "expectation is that GP consortia will have an allowance for running costs that could be in the range of £25 to £35 per head of population by 2014/15. We will not determine the exact amount until further work has been undertaken with pathfinders". So we will use 2011-12 to identify what is required in order to be the support for the commissioning consortia. I quote: "This work will explore the optimal balance between insuring sufficient investment in organisational sustainability with maximising resources for front line services. Before this, during their development phase, the running costs will be locally agreed within the running cost envelope for each region."

  Dr Colin-Thomé: And currently in London, for instance, the idea of clustering PCTs has released money to allow the pathfinders to have a bit of money, even now, to develop the ways that we were talking about. I believe that the clinical challenge of the way we organise our care will make a significant difference, especially if those clinicians are helping commissioning.

  Chair: I am going to restrain Sarah, if I may, just for one more time, because I know Chris wants to come in on management first.

  Q547 Chris Skidmore: I wanted to bring that up. I managed to pick that up from The Operating Framework. In a previous session, Kingsley Manning from Tribal told us that he thought a maximum management allowance could work on £5 to £7 per head. We have also known from previous experience that primary care groups have operated on £3 per head for a management allowance. Do you not feel that £25 to £35 is actually, in the words of Sir David Nicholson, "remarkably generous and…that people will be shocked by the size of it"? The Government are attempting to reduce management costs—

  Mr Lansley: Sir David hasn't said that about this figure.

  Chris Skidmore: He has, on 18 November, to the NHS Alliance conference.

  Mr Lansley: No, no. This figure is published in The Operating Framework, so he won't have been referring to that then.

  I understand the point you're making. There is a fundamental discontinuity between the way in which people have expressed the figure for management costs in the NHS, which was used widely but actually only ever measured the salary cost of managers and senior managers. What I am referring to is not that management cost; it is a running cost total, so it is in effect the total cost of administration of an organisation—everything that is not the provision of services to patients. So, to that extent, it is a different calculation.

  At the moment, therefore, what are we comparing with? What's the baseline? The baseline on running costs across the Department, arm's length bodies, strategic health authorities and primary care trusts is £5.1 billion. I'll happily let you know—I think, broadly speaking, about £3.5 billion of that would be the running costs of primary care trusts at the moment. So the figure, the range that we've expressed in The Operating Framework, is entirely consistent with bringing the administration cost of commissioning down in exactly the way that we previously said in the spending review.

  Q548 Chris Skidmore: You don't think it can be cut any further.

  Mr Lansley: No, to be fair, the point we've made in The Operating Framework is that we set a range that is consistent with reducing the overall administration cost very dramatically, from where it is with primary care trusts at the moment; but the actual figure will be built up from the bottom up, rather than top down.

  Chris Skidmore: On that point, I see in paragraph 5.17 that you've said that "in line with NHS foundation trust reporting, NHS trusts will no longer be required to report on management costs." Will GP consortia be required to report on management costs?

  Mr Lansley: On running costs, yes, they will.

  Q549 Chris Skidmore: And will that be in part of the constitution?

  Mr Lansley: The commissioning organisations will—because they are using public funds—at every point in the system, on the commissioning side, in their use of public funds have a running cost limit directly applied to them. Hospitals, of course, have a budget to provide a service, and it's up to them how they use their budget.

  Q550 Chris Skidmore: But if they undercut that limit will those figures be published annually? I notice in your written statement you're requiring all GP consortia to have a published constitution. Will that be part of that constitution?

  Mr Lansley: Yes, as part of the accountability, they will publish their use of resources, including their running cost total for that year.

  Dame Barbara Hakin: Plainly, if they wish to use less on running costs and more on patient care then that would be within their gift.

  Q551 Chris Skidmore: The discrepancy between someone like Tribal, saying they could do it for seven quid a head, compared to—

  Mr Lansley: I think, to be fair to Tribal, when Kingsley Manning was saying that to you he would have been using the comparison with management costs that was used in the NHS, not the total running cost.

  Chair: Sarah—much delayed.

  Q552 Dr Wollaston: Yesterday, we visited City and Hackney NHS at the Lawson practice and met a number of commissioners and other representatives from the PCTs. There were several issues that they raised—in fact, four that I think are crucial. I'd just like to run through some of those until the Chair loses patience with me.

  The first one was around the choice agenda. They made the very important point that they spend a great deal of time commissioning very careful care pathways which deliver better care and save money for the NHS, with Homerton hospital, addressing all the issues, like David raised, about the number of outpatient follow-ups and so forth. The trouble is that's completely undermined when patients exercise their choice—and often these are not the most needy patients but patients who perhaps don't need to. They exercise their choice to go to University College hospital, where the costs are not controlled and there's no evidence of better outcomes sometimes. They make the point that they can spend a lot of time commissioning very good care pathways, but often they're in a position where those then are undermined by foundation trusts, perhaps that have high PFI costs, that charge a great deal of money; and they're not in a position to have the levers of power to alter that. So that's one issue.

  The second issue around choice and about practice boundaries, and indeed about the boundaries for commissioning groups, is the fact that they are concerned that patients will exercise their choice to register in fancy, smart practices in the City, when in fact they will then be left with patients who have high dependency and high costs. I wonder whether that's an issue you could perhaps refer to.

  Then, again, with the issue of boundaries, I know I asked you the last time you came about the issue of commissioning boundaries, and you said that this would be very much bottom-up and something that you would leave GP practices to determine. But will you be in a position to step in if some of those commissioning groups follow entirely illogical boundaries and people find themselves having to commission care for patients, but there are entirely separate geographical areas? That will affect their ability to work closely with local authorities and deliver the best quality care.

  On the purchaser-provider split, we have discussed before the make-or-buy decisions. I know many GPs who are keen to roll up their sleeves and get on with commissioning, but I don't know any who want to face the risks of facing European procurement rules and, potentially, face legal challenge. We've heard evidence from witnesses in this Committee from the private sector, telling us that that will happen—that they will face legal challenge.

  Finally, how to address failing practices? One of the great scandals in the NHS is not that nobody knew that doctors and practices were sometimes failing, but that everybody knew and nobody was able to step in a take appropriate action. One area that PCTs are able to address at the moment is failing practices. It's happening too slowly, but it is happening. Who will step in, in this new organisation? Will it be the Commissioning Board or will GPs be able to directly identify, exclude and take action against failing colleagues and practices? That is the end of my list.

  Mr Lansley: That is such an excellent list that I will ask Dame Barbara to start with care pathways and choice.

  Dame Barbara Hakin: Yes, interestingly, I visited City and Hackney pathways group a few weeks ago as well. We need to remember—I discussed this with them—that the tariff is designed to create, at the moment, a consistent cost for services. Therefore, the cost of a specific service, whichever secondary care provider is involved, is the same. We have said that we want to give patients a choice. I think that none of us in this room would want to deny patients the choice of where they went to receive their care.

  One issue on my visit was that, actually, the strength of commissioning and contracting to ensure that the way that they operated with the two hospitals was consistent. They were making the point that they had a better relationship with one than the other and were therefore able to design care pathways, but hopefully in the new system they will be able to strengthen the clinical commissioning, so that they can work with both hospitals equally to ensure that the costs are not driven up by inappropriate treatments that GPs don't want to see because they feel that they're not as effective and not in the best interests of their patients. But that can't be at the expense, in the final analysis, of allowing patients to choose where they want to have a specific treatment.

  They also raised the point—it is important: we listened when we went to see them—about the funding issues, particularly for deprived areas. In terms of looking, over the next few years, at the allocations and how those work, the Secretary of State has specifically asked us to look at the funding allocation to ensure that practices and consortia serving deprived areas get the right income to allow them to deliver the care that those specific patients need. But we need to do that in a way that doesn't deny the choice of patients who want choice, which would be the other option.

  Q553 Dr Wollaston: But will you facilitate that choice? We all know that some patients find it difficult to exercise their choice.

  Dame Barbara Hakin: Absolutely. And there's a broad range of areas in the reforms where we will hopefully be able to improve, and empower patients. The central tenet of the White Paper is that, somehow or other, we have to support all patients to be in a much better position to understand the services that are offered to them and for timely information to be presented in a way that they can really understand. That means an extra effort for certain groups of patients, so that they can then make informed choices, because we need to be in a position whereby all patients can make really well-informed choices—not just a certain cohort.

  Q554 Dr Wollaston: And will we have the ability to stop hospitals initiating inappropriate follow-up appointments themselves?

  Dame Barbara Hakin: I believe that that ability is there and has been there for some considerable while. Commissioners currently have been differentially competent at managing that. We'll see that continue. The wherewithal is in the contracting mechanism at the moment.

  Q555 Chair: Can I come in on that? From my understanding of what Dame Barbara has just said, the answer to the core point being made to us yesterday is that there should be no economic difference to the commissioning consortium. If a patient chooses to go to one hospital or another, they should both be performing on the tariff; therefore, there should be no economic difference or difference to the rest of the patients in that consortium. If that is not the result—that is certainly what they were saying to us yesterday—that is the result of weakness of commissioning, not weakness of the system.

  Dame Barbara Hakin: Yes. Absolutely.

  Mr Lansley: On that thought, as far as I can see, one of the ways in which we ought to develop payment by results—the tariff structure—is to increasingly be able to commission and use a tariff along a care pathway. The way in which GPs are describing to you that they want to construct their local commissioning along care pathways should also be the basis upon which they construct their contracting. That would not close out UCL from offering that, but it would be perfectly legitimate for it to say, "You can offer a service to our patients, but you have to offer the whole care pathway. You can't just pick bits and pieces to make that happen."

  Dr Colin-Thomé: It is an opportunity, I think, for providers to be much more helpful in commissioning in this way. You could commission a provider to be the leading or principle provider of a pathway with urgent care. At the moment, I think we have separated commissioning and provision far too much. We obviously need to do that in the procurement phase, but in designing care we need the clinical input from providers. I think you'll find that GP commissioners, even though it is about GPs, will engage a lot of the clinicians in doing that.

  The other thing about City and Hackney—I have been there as well—is that they feel the power of the big beast compared with the local hospitals, which is what they were worried about. I would say that you have to be more flexible. If you feel that, you need to band together with your other PCTs, or consortia in the future, to have a bit more leverage. I think that how you organise yourself in future, rather than being rigid about your own boundaries, will be key. We are being too frozen by our structures rather than what the heck we are for. Even on practice boundaries, it sounds like the GPs want to be a bit too controlling. Whose health service is this? If a patient wants some choice, they should damn well have some choice.

  Q556 Dr Wollaston: As long as they are adequately remunerated if they are left with higher-risk patients who have greater needs. I think that is important.

  Dr Colin-Thomé: Sure.

  Mr Lansley: Can I comment on that, because I though you made an interesting point? It is particularly true that in some of the more urban areas people can exercise choice between practices. In my area, for example, plenty of people commute to London and register with a GP practice there or, more often, they register with a practice in the middle of Cambridge, even though they might live some way away. There is a discontinuity between where they live and where they are registered.

  To some extent, we are very clear that, although patients can exercise choice, GPs can't cherry-pick patients. They have to be open to the patients who put themselves forward to their practices. A lot of this depends on us being very clear as we develop— which we have begun to do in the allocations to primary care trusts for the next year—that we seek to relate the resources that are provided to general practice to the prospective burden of disease. For example, we are increasing the weighting for age and deprivation next year. We are trying to focus the resources for the NHS to be more accurately reflective, including, I hope, as time goes by, in relation to individual practices. People who live in Hackney might be registered with a brand-new practice close to them in the middle of the city, but if it mainly consists of patients who aren't ill, the level of resources that flows from it will be modest.

  Q557 Dr Wollaston: That is great and it is good news, because at the moment it is mostly capitation based, so it is very difficult.

  Mr Lansley: It will still be capitation, but a very clearly weighted capitation reflective of the prospective burden of disease of the demographic characteristic of the population.

  Q558 Chair: But that implies—doesn't it?—an ability to link the resource to an individual rather than to a polling district or traditional structures?

  Mr Lansley: At some point, it would probably be helpful for you to hear about not only the work that we are doing, but the work that is being done on the Department's behalf by, for example, the Nuffield Trust on seeking to arrive at much better information about the prospective burden of disease of particular populations. Until now, it has not really been possible to disaggregate below PCT level and to accurately reflect that, but it is increasingly possible. Those data are being generated partly through the quality and outcomes framework and the disease registers that go with it and partly through the development of the tariff systems, too. Soon we will arrive at the point at which there will be robust data that would not only enable us to be clear about the appropriate level of allocation to consortia when the Commissioning Board takes that responsibility, but enable the consortia themselves to have access to those data so that they can make, and the board can make, very clear, robust allocations down to practice level.

  Q559 Andrew George: Does that mean that the Advisory Committee on Resource Allocation, given all of its work in recent years, is going to be ignored and you're starting with a blank sheet of paper?

  Mr Lansley: No, on the contrary. Today, I have separately published my correspondence with the Advisory Committee on Resource Allocation, in which I asked it to do this work. This is where it wants to be, and this is the work it wants to do.

  Q560 Andrew George: The advisory committee has been doing that, and it has been looking at disease prevalence, demographic issues and deprivation.

  Mr Lansley: Yes, and we are going to help it to go further in that direction. In the overall allocation today, we are devoting more weight to what is, through age and deprivation, reflective of need for health care services. You have asked what is being derated. At the end of the process, the ACRA told Ministers that they could allocate an amount of money, which might be 10, 15 or 20%, on the basis of inequalities in health outcomes. We are very clear that we are moving in due course towards separate allocations for NHS services and for public health. It is clear that the public health allocation will not exceed 10%, although we have not determined what it will be. So we as Ministers have said to the ACRA that we will set the allocation for relative health outcomes at 10% and allow, consequently, additional weight to be given to the factors, such as age and deprivation, that directly relate to health care need. That will impact on the balance of allocations in 2011-12.

  Dr Colin-Thomé: Could I just say—

  Q561 Chair: Sorry. I think Sarah asked five questions, and so far we've got to number two.

  Mr Lansley: Failing practices are very important, if Barbara would kindly address that.

  Dame Barbara Hakin: Failing practices are key, and it should be understood that under the new commissioning architecture we will not have a board that is completely distant from consortia. There will be a lot of interchange and sharing of the way we do business between the two. The board will have the overall responsibility for the primary care contracts. We are talking about practices that are failing in their provision, but if you are a poor provider, you are also a poor commissioner, because good husbandry of resource is a responsibility of a good practice—ensuring that the whole of your population get the best possible services is the duty of an individual GP and their practice.

  We see this as a joint relationship, with the board having the final sanctions, because the board will hold the contract with the individual consortium. The board, probably through its outposts, will be able to intervene where there are serious issues. The consortia leaders have very clearly said to us that, to get the most out of this new system, they feel that consortia need to have a role in driving up the quality of primary care through peer pressure. Consortia need to be able share learning across practices by demonstrating to some practices that what they are doing is significantly different from their peers. I see the role in managing failing practices as a joint venture between the consortia and the board.

  Mr Lansley: I have one additional point on that. From April 2012, the Care Quality Commission will also be registering general practice, which I know is not wholly regarded in general practice as without burdens. I hope that we can do that with as little burden as possible by also bringing to bear the Royal College's practice accreditation process.  The CQC, in those circumstances where there are failings in GP practices that prejudice levels of quality and safety, will have additional powers to intervene that are not currently available.

  Q562 Dr Wollaston: The point was made yesterday that often clinical audit, particularly in the form of notes review, is a very effective way of picking up failing practices, rather than raw data through the QOF, which can be fraudulently altered and so on. Would the responsibility for the registration process sit with the Care Quality Commission, with the board or with the consortia?

  Mr Lansley: As it happens—Barbara will correct me if I'm wrong—I actually think what you're describing is likely to be part of the integral process of a consortium looking at the clinical governance arrangements in its area.

  Dr Colin-Thomé: There is a thing called the global trigger tool, where you go through case records that have been deposited in hospitals, which would have picked up something of the hospital, and the institute has been doing some work with general practice on that particular thing. You get a lot of information from a random selection of notes.

  Chair: Before we move off that subject, Yvonne has a question.

  Q563 Yvonne Fovargue: I want to take that a bit further. As a last resort, if a practice within a consortium is failing, will it be possible to expel that practice? If so, what happens if that practice cannot go into any other consortium? If no one else will accept them, what will happen to the patients within that practice?

  Mr Lansley: The NHS Commissioning Board will have a responsibility to ensure that there is a continuing service to patients. It will be possible for a consortium to say, "We can no longer support this practice in its current form." But, essentially, under those circumstances—Barbara will correct me if I'm wrong—we are proposing that they wouldn't be able to take a practice out of their area, because remember there is an area responsibility, as well as a commissioning responsibility, and not only for their registered patients, but for their resident population. To that extent, I think the consortium would have to ask the Commissioning Board to intervene in relation to that practice, because it will have the intervention powers.

  Dame Barbara Hakin: Yes. In answer to your question, it was in the White Paper, and certainly in the response, that the consortia have to have a geographical basis. Therefore, I think that answers your point, but it leads us into your question, which I think is a very good one, because it would be very difficult for a practice that is right in the middle of a consortium to be anywhere else. It is important to remember the difference between provision and commissioning, and the board has responsibility for provision. A consortium that was not playing an enormous part in commissioning would probably remain in the consortia, with the board working with the consortium to improve that. If a practice—

  Mr Lansley: A practice not playing a part.

  Dame Barbara Hakin: Yes, sorry. A practice that was not playing a part. I am getting the words wrong.

  If a practice is really so poor that it is are having an impact on the commissioning at the consortium, that practice is really poor at provision. Therefore, there are methods that occur now that are currently available to PCTs who hold the contract, but will, in time, be with the board that holds the contract, actually to deal with that poor provision, which would be initially perhaps through clinical governance, as you've talked about, but, in the final analysis, would be through the provision contract.

  It is important to remember that practices are not going to be told that they cannot provide services for patients because they are not playing a big part in the consortium that is commissioning. They will be supporting the practices to play more of a part in commissioning with the consortium, but their ability to provide services would still be there.

  Chair: I don't think that we can get totally bogged down in this, but there is some interest in failure regime for practices.

  Q564 Valerie Vaz: Just as a follow-up, the consortia will have geographical boundaries but the GP practices won't. Is that right?

  Dame Barbara Hakin: The majority of GP practices have a practice boundary.

  Q565 Valerie Vaz: But they don't have to under these proposals, do they?

  Mr Lansley: No. They don't.

  Q566 Valerie Vaz: So how will that work?

  Mr Lansley: Because there is a combination of responsibilities. The consortia will have a responsibility to commission services for the registered population of the practices that are their members as well as for the resident population in the area that they cover. The individual practices will be open to receiving applications to register as patients with them from wherever people happen to live. One of the things that the previous Government said was that they wanted to abolish practice boundaries, but they hadn't, which I think is necessary, put in place a clear understanding that that doesn't mean that individual practices must undertake, as it were, home visiting in any part of the country. GP practices must be able, through their prospectus as a practice, to be clear about where they will visit and where they won't.

  Separately, part of the development of commissioning is that we're looking for that area responsibility of consortia to be a responsibility for the provision of unscheduled care in their area. A practice might be part of another consortium, but if it has registered patients who are living in the area of another consortium and if they access that unscheduled care there will, of course, be—as there is at the moment between PCTs—a transfer of resources into that consortium to provide their unscheduled care, even though the patients happen to be registered with another practice.

  Q567 Chair: So in plain English there will be a map.

  Mr Lansley: Yes.

  Q568 Chair: And a consortium will have a map of an area where it has a geographical responsibility.

  Mr Lansley: Yes.

  Q569 Chair: And no part of the country will not be allocated to one consortium and no part will be allocated to two consortia.

  Mr Lansley: That's right.

  Q570 Valerie Vaz: But the GPs don't. As a patient, am I going to be told that my GP is part of consortium A and consortium B?

  Dame Barbara Hakin: No. The practice will be part of a consortium. One imagines that still the vast majority of patients registering with a practice will live locally. But in exactly the same way as now, if you are part of a PCT, through being part of a practice, and you need urgent care because you happen to be somewhere else in the country, you would still have access to that urgent care and the charge would go back to your PCT. In the same way, significant numbers of patients aren't registered with a general practice and every consortium—they will cover the whole country—will have to be responsible for the care of all the patients who live within their geography.

  Mr Lansley: Technically, it's a simplification relative to where we are at the moment. For example, I have a constituency surgery that is a branch surgery of a practice in Hertfordshire. That practice, technically, now has to be both in Hertfordshire and in Cambridgeshire PCT areas. In future, for the whole of its practice area, it can choose to be in consortium A or consortium B, let's say.

  You'll find that, to some extent, the consortiums will tidy up what are at the moment rather awkward boundary issues for GP practices, which are created by the fact that the PCTs have boundaries. But you as a patient are registered with a practice, and that practice is responsible for your service. The fact that it has commissioning arrangements through a consortium is not something that, from your point of view, would necessarily be the central issue. The issue for you is that your practice is responsible for your care.

  Q571 Chair: I think—if I may say so—that that's relatively clear and we've still got two of Sarah's questions to answer.

    Mr Lansley: We did boundaries. Make or buy, and European procurement rules, which we can't escape—

  Q572 Dr Wollaston: No, but it is a big issue for practices, which have financial responsibility, and personal responsibility, in some cases. For some GPs, that is acting as a deterrent to getting on board, because some of them tell me—some have told the Committee—that they would be put off by the thought of having their shoulders constantly looked over by Monitor and facing the threat of legal challenge on their commissioning decisions. Could you comment on that?

  Dame Barbara Hakin: We're clear that we want a situation whereby practices can deliver better primary care and general practice in a more unfettered way than at the moment and then reduce resources and secondary care. However, it is equally important that if a group of practices or a consortium wants to offer a service that could be offered by someone else, we abide by the law, so those services would appropriately be tendered or would follow European law—the Secretary of State says that we can't get away from that.

  Over the next few weeks and months, we need to get through to practice, and give them the comfort that there will be a lot of commissioning support around them and they will have a considerable running-cost resource to have the people with them who can advise them which services they need to tender so that, if tender is necessary, they can do that complicated process of procurement. The idea is that we will, through the clusters, create quite comprehensive commissioning support arrangements that consortia could draw on so that, if they felt that they wanted to create a new service, they would get the right legal advice on European law saying, "Is this something that you can simply go ahead and do or do you need to tender it, otherwise Monitor will view this as anti-competitive?" If they need to move to the process of undertaking that complex tendering process, they will have managers to support them within their individual consortium, or they can buy in help to do it.

  Q573 Dr Wollaston: So, in other words, every commissioning pathway that they design—say through Homerton hospital; we met the commissioners yesterday—won't be subject to legal challenge and they won't have to put it out to competitive tender. They'll get clear advice.

  Dame Barbara Hakin: They will get clear advice. Certainly they will not all be subject to competition. There is a broad range of times when they would not be subject to competition, but they will have access to advice that will help them to understand whether what they were proposing could be deemed as anti-competitive.

  Dr Colin-Thomé: And their personal money won't be put at risk—that is a fear that GPs often express to me, too—because there is quite a separation between their provision and their commissioning responsibility.

  Mr Lansley: I won't read them out to you, but paragraphs 6.87 to 6.90 of the Command Paper specifically address how we will think about the process of regulating for competition on the commissioner's side. Monitor will have a responsibility, and the Secretary of State will have a power to issue regulations setting out how that works. We will consult about that in due course.

  I would just say this: our intention is that Monitor will have a concurrent competition jurisdiction in health and social care. Clearly, we cannot leave commissioners out of it because they may behave in an anti-competitive fashion, but we will be clear that the focus should be on significant breaches where there is a significant risk of anti-competitive behaviour. There will not be high levels of ex-ante regulation of purchasing; it will be specifically about addressing abuse. People behaving in a reasonable fashion should not really be having the competition authority looking over their shoulder.

  Q574 Dr Wollaston: So we won't see a race to the bottom, with everyone chasing the lowest cost.

  Mr Lansley: Absolutely not, because from the patient's point of view and the commissioner's point of view, quality is the principal criterion on which they will be seeking to commission. The reward, not least to patients and to the commissioners, is in delivering better outcomes.

  Q575 Rosie Cooper: Secretary of State, are you saying that there won't be a more litigious climate, and that private providers won't take action if they don't think that they are getting enough of a bite of the cherry? Are you really saying that?

  Mr Lansley: They can't take legal action to get, as it were, a bite of the cherry. They can go to Monitor as the competition authority, as we propose, as they can now go to the Office of Fair Trading. They could go to the competition authority and say that there is an abuse of competition, and the authority would have a responsibility to investigate and take action if there was an abuse, but that is no different from now.

  Q576 Chair: Can we move on? Grahame Morris wants to ask questions on the timing of the Commissioning Board.

  Grahame M. Morris: Actually, some of that is covered in the framework—

  Chair: You have the advantage of having read it. Do you want to pass in that case, Grahame?

  Grahame M. Morris: I wanted to raise the issue of wider determinants of health, and whether that will be reflected, but we have covered that, in essence.

  Chair: Fine. Do you want to go there?

  Grahame M. Morris: No, we have already covered it, Chair.

  Chair: Fine. Rosie wants to talk about local authorities.

  Q577 Rosie Cooper: I am not sure where we are, but let me, if I may, ask a question about consortia and holding meetings in private or public. Will the commissioning boards be placed under a statutory duty to meet in public? If not, why not?

  Mr Lansley: We are not proposing that we should prescribe in detail how the commissioning consortia conduct their own activities internally. We are requiring them to be transparent. For example, they will have to publish a constitution, and act in response to it. They will be accountable for the outcomes that they achieve. Clearly, they will be accountable for financial control and the use of public money, and there will be clear accounting rules about how that is exposed.

  Their own internal management will not be accountable on a day-to-day basis. There will be specific proposals in legislation for them to publish their commissioning plan each year, and for them to publish through their annual report how they have gone about doing their business. The conclusion that we have reached is that they must be prospectively clear about their commissioning plan, which must be in line with the joint health and well-being strategy and available to the public and to the local authority through the board. That is prospectively the right way to do it. Retrospectively, as it were, through their annual report, we want them to be clear about what they have done, how they have achieved it, and what they are accountable for. If we try to intrude large amounts of prescription about the way they manage themselves internally, we will end up with primary care trusts.

  Q578 Rosie Cooper: Obviously, I would not share that view. What you have described has patients nowhere near the heart of decision making, or having any great influence on that.

  You have described HealthWatch. How will that be able to influence commissioning? If patients are not going to be at the heart of it, who will really be there to ensure it does happen?

  Mr Lansley: First, I think your characterisation is completely wrong. What we will do, through commissioning consortia, will give patients much greater involvement in commissioning. Let us be clear about that. How many patients across England think that the primary care trust is an organisation that at the moment responds to local patient voice? I have not been inundated with people explaining to me how great is the patient involvement in primary care trusts.

  Q579 Rosie Cooper: It's all pretty dreadful; I get that. This is not going to make it any better.

  Mr Lansley: We are going to put the board and the consortia under a legal duty to involve patients and the public in their commissioning. As I explained, the Command Paper says how we are going to strengthen the role of HealthWatch locally and nationally. That will give patients and the public a real champion locally and nationally. We are where we are. The last Government abolished community health councils; they set up patients' forums and then abolished them; and they set up LINks. We have to do something that is stronger in the long run, as a basis for health representation and health and social care on behalf of patients and the public. HealthWatch will do that. The linkage directly into the local health and well-being board is important; they will be able to do that locally. The use of statutory powers—frankly LINks have few statutory powers—will strengthen their role in the future using, if need be, the powers of CQC for quality enforcement.

  Q580 Rosie Cooper: You have described the patient as the best person to know, and yet you are not allowing the patient to be at the table taking part—as would be best—or holding meetings in public so that the patient can see the decisions being made at the consortium. I think it is flawed at the core. We disagree yet again, Secretary of State, because we spoke before about people waiting longer on the waiting list and you disagreed with me. NHS information centre data show that the number of people waiting 18 weeks for treatment in the NHS has increased by 15% since the coalition Government abandoned the 18-week target. That is 6,000 more people waiting.

  Mr Lansley: That was the August figure. It is all to do with the summer. That's ridiculous.

  Q581 Rosie Cooper: I beg your pardon.

  Mr Lansley: That is all to do with the summer. You have to do a seasonal adjustment on that.

  Q582 Rosie Cooper: Forgive me, you are going to get a reputation not for the Lansley challenge but the Canute challenge: "It is not because I say so." When will the facts get in your way?

  Dame Barbara Hakin: Just for interest, City and Hackney—which has had a long-standing group of practices doing some work, which you and I have visited—has an excellent way of involving patients and the public in what it does. It has grown that from the bottom up; I would be happy to let you have details. It is not specifically about one individual board meeting. It has a comprehensive system for trying to involve patients and the public.

  Q583 Rosie Cooper: If you really believe that, make the board meetings open to the public—let them see it happen. If you really believe it, walk the walk and let them see.

  Dame Barbara Hakin: It is about ensuring that these organisations have a way of ensuring the patients and the public are involved.

  Rosie Cooper: What are you hiding? Why has it got to be in secret? What on earth is going on?

  Q584 Andrew George: Can I come back to the issue of looking forward to the consortia themselves and how they relate to local accountability? In your statement today, you say that there will be a "joint health and wellbeing strategy" for local authorities and the consortia to work on together. I welcome that as an important step forward from what might otherwise have been a relative fracturing of local accountability on the one hand, relating only to social care, and the consortia that commission NHS services. It seems to me that you're moving back towards the coalition agreement by doing that. In other words, to establish joint health and well-being strategies, it's inevitable that local authorities and consortiums will have to work very much hand in glove. You're bringing the two back into what is, if not a joint commissioning board, almost a joint planning board for their geographic area. Would you say that is a fair reflection of where you're going with this?

  Mr Lansley: I think that's an entirely fair summary. Indeed, it is dreadfully underestimated how important this is in the White Paper. For example, on the day the pathfinder consortiums were published, I went to see the GPs in Bexley. It was no surprise I went to see them. They were working with their primary care trust. The chief executive was there, and so were the chief executive and the leader of the council.

That is because they are all working together. This is happening now.

  Q585 Andrew George: Okay. That's good. That's my interpretation of where it's going. That's very encouraging, and I welcome that. What then concerns me—this is partly reflected by the different populations being served by the 52 pathfinders, which range from 17,000 to 650,000—is the lack of coterminosity between the consortiums and the local authorities. Shouldn't you be not micro-managing and therefore instructing, but encouraging the consortiums, wherever possible, to establish coterminosity with their local authorities? That seems to be the direction in which it is going.

  Mr Lansley: The direction in which it's going is being determined by the groups of GPs coming together. They are clearly making judgments themselves. They are making different judgments in different places, and I think that's often for good reasons. Sometimes—I am only illustrating the point, and these are not the exclusive reasons—they are doing that for reasons of coterminosity. For example, I was in Widnes talking to the Runcorn GPs among others. It is not a big area, but if I recall correctly, the GPs in Runcorn said, "We have 65,000 patients and we want to have a consortium, or at least a cluster within a consortium, that is coterminous with the local authority, because we're working with the local authority." That is fine.

  There are other places where a group of GP practices that is coming together feels that it wants to construct a consortium that broadly reflects the catchment of a particular hospital. That may be a judgment that is perfectly reasonable to make. In the way that Dr Wollaston said, GP practices might be thinking about having a range of contracts, and they want to feel that they are the dominant commissioner in relation to a set of health care providers so that they can establish through their contracts the structure of care pathways that they are looking for and have real weight when they do so.

  These are differing factors. We've always been clear on the experience of primary care trusts. When there were 304, or whatever it was, the geography wasn't right. Then we moved to 152, and the geography wasn't right. We'll go to clusters, and people will argue about the geography. The point is not to prescribe this; the point is to let it be governed by circumstances and, in truth, to have a flexible structure, which the Bill will provide, so that if commissioning consortia feel that the geography is not right, they can shift and they can do that easily.

  Q586 Andrew George: But the logic of that statement is that it would make sense for coterminosity to exist—

  Mr Lansley: No.

  Dr Colin-Thomé: Except that in all the years I've spent in the health service, coterminosity hasn't produced anything unless there are good relationships and good leadership. What we're trying to tap into in these reforms is about going with the energy of people, rather than rigid structures.

  Mr Lansley: My experience is that people are building relationships at a local level around the White Paper and that those relationships are the basis on which you really best structure this.

  Dr Colin-Thomé: All the GP leader organisations meet the Local Government Association to discuss this at a national level, too.

  Chair: I was going to say there are seven minutes left to deal with conflicts of interest, but there are now six. Valerie and David both have questions.

  Q587 Valerie Vaz: Before that, I just have a factual question. Did you do your own survey of GPs to establish whether they wanted to go down this road?

  Mr Lansley: Before?

  Q588 Valerie Vaz: Before the White Paper. Did you do your own survey of GPs? A number of surveys have come out about whether GPs want this, or want to handle this £80 billion.

  Mr Lansley: After the election, but before the White Paper, no.

  Q589 Valerie Vaz: Going on to conflicts, 25% of GPs have a stake in private companies or have their own private companies. Do you see this happening more? What safeguards are there for patients in terms of conflicts of interest?

  Mr Lansley: I have no view about whether it is going to happen more or less.

  Q590 David Tredinnick: Can I add my question? I am concerned that with all this extra money GPs are not going to be properly accountable, that there won't be any checks or balances on the services that they buy, and that they can buy from providers with whom they may have special relationships. There are no checks to prevent that.

  Mr Lansley: We knew this was a problem when there was fundholding in the mid-1990s. GPs were in a position where they had a conflict of interest, in the sense that they could spend less on treatments for patients and have a financial benefit to the practice by spending the money on their own practices. They had a conflict of interest because they could send patients to a connected provider. We are dealing with those conflicts of interest. It will not be possible for GPs to save money on their commissioning budget and for that to become money in their pocket. It just doesn't work like that. The only way they can benefit themselves is if they improve the outcomes for patients by the value for money that they achieve with their commissioning budget.

  In terms of having contracts, we are in a much better place. They can have contracts with providers—with themselves as provider or a connected interest—but they can do so only through the consortium. To that extent, it will be transparent. We touched on it earlier; if there is an abuse, there will be a competition regime, the purpose of which is to investigate and, if necessary, to act against any such abuse.

  Q591 David Tredinnick: One of the most impressive aspects of going to Hackney yesterday was the doctors saying that under the new structure, "We are not setting up a business, we are not going to form ourselves into business, we are going to be a co-operative." There is a danger here: if doctors form into a commercial unit, and if there are no inducements, it is certainly convenient at times to be influenced by the fact that it is a commercial organisation rather than one that isn't. Certainly doctors yesterday expressed that view. They said, "We're not going down that route. We want to be a non-profit-making organisation." Perhaps Valerie can help me on that.

  Mr Lansley: I am not aware of anything in the White Paper that, in itself, leads to any difference—any greater likelihood—that general practitioners individually or collectively would engage in an additional commercial practice. They can do it at the moment; they can do it in the future.

  Q592 Valerie Vaz: What about safeguards? They could send the patients to their own company, couldn't they?

  Mr Lansley: Well, the safeguards are partly that that is safeguarded against by the fact they will have a legal duty and a contractual duty to maximise patient choice. They can't just refer patients into their own connected interests. They must give patients access to choice. To that extent, if they own an additional provision and it is clearly contracted for on a basis that is competitive, I don't have a problem with it. If they are trying to do it in a way that is anti-competitive or that deliberately seeks to restrict competition, it is anti-competitive. We're going to have a proper competition regime, which at the moment the NHS doesn't really do. There are limitations on the proper application of measures to combat abuse of competitive situations.

  Dame Barbara Hakin: I think there are three or four other safeguards. The first is that the paper makes it very clear that they have to conduct their business in an open and transparent way and in line with principles of the public service. That should mean that under circumstances where practitioners find themselves acting in a commissioning environment and making commissioning decisions where they had an interest in the provision, they would need to declare that interest and stand aside from that decision. You've then got the Commissioning Board, which oversees and authorises.

  Q593 Valerie Vaz: Every decision?

  Dame Barbara Hakin: Not every decision, but it oversees and authorises the way that the organisations do their business. We've got the safeguarding of patients, as the Secretary of State said, because they will have choice. The final safeguard is that where there is clear anti-competitive behaviour, there will be a body that can intervene. That is four levels of safeguards against what is a reasonable thing for us to be concerned about.

  Q594 Valerie Vaz: So your view would be to have lots of providers, and that that would make it more competitive and better?

  Mr Lansley: I hope that there will be plurality of provision, certainly.

  Q595 Valerie Vaz: So more down the privatisation road, then?

  Mr Lansley: No, absolute provision is not the same thing as privatisation.

  Chair: And it's fair to say that these conflicts of interest are not new.

  At this point—rather against my expectation—at precisely 11.30 am, the Committee has concluded its agenda. I thank you all for coming and answering our questions.


1   Note by witness: It was on 21 October. Back


 
previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 21 January 2011