UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 796-ii

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Health Committee

Commissioning: further issues

Tuesday 1 march 2011

professor calum paton, professor paul corrigan cbe, nigel edwards and stephen hocking

Dr david bennett, adrian masters, dr ron singer and Dr anna dixon

Evidence heard in Public Questions 82 – 188

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Health Committee

on Tuesday 1 March 2011

Members present:

Mr Stephen Dorrell (Chair)

Rosie Cooper

Nadine Dorries

Andrew George

Valerie Vaz

Dr Sarah Wollaston

________________

Examination of Witnesses

Witnesses: Professor Calum Paton, Professor of Health Policy, Keele University, Professor Paul Corrigan CBE, Independent Consultant, Nigel Edwards, Acting Chief Executive, NHS Confederation, and Stephen Hocking, Partner, Beachcroft LLP, gave evidence.

Q82 Chair: Ladies and gentlemen, thank you very much for coming this morning. Gentlemen witnesses, could I ask you very briefly to introduce yourselves so we know who we are talking to?

Professor Paton: I am Calum Paton, Professor of Health Policy at Keele University.

Professor Corrigan: I am Paul Corrigan and I am an independent consultant.

Nigel Edwards: I am Nigel Edwards. I am the Acting Chief Executive of the NHS Confederation.

Stephen Hocking: I am Stephen Hocking. I am a solicitor and Head of Public Law at Beachcroft LLP.

Q83 Chair: Thank you very much. I would like to open the questions, if I may, with a very general question because I am, I have to say, increasingly confused by how we should interpret the evolution of commissioning policy in the context of the Health and Social Care Bill. At one extreme, it seems to me, we have Mr Hocking and his firm explaining that there are going to be draconian powers vested in the National Commissioning Board and that, therefore, this is presumably a centralising measure. At the other extreme, we have a number of commentators saying that this is the dissolution of the National Health Service and all key decisions about its shape are going to be taken by local commissioning consortia without adequate accountability for the "national" element of the National Health Service. I would be interested to hear from each witness-but I will start with Mr Hocking because I quoted him as on one wing of this argument-where they feel we are in that debate.

There is a related question, which I would be grateful if you could cover at the same time, as to whether this new world happens overnight on 1 April 2013 or, as Sir David Nicholson appeared to be suggesting over the weekend, this is a process and the speed at which the process will be achieved is unclear. Sir David appeared to be suggesting there was going to be an assurance regime for the granting of earned independence for the consortia, very similar to the regime which has existed in Monitor for foundation trusts in the old world. Is that how we are to see it-earned independence-or is there an assumed liberty for the commissioning consortia? I would be interested in the views of each of the witnesses on those questions, starting with Mr Hocking. Thank you.

Stephen Hocking: Thank you, Chairman. Briefly, sir, it very much depends on the role that the Board carves out for itself and the approach that the Commissioning Board takes to its duties. The reference to "draconian powers"-and perhaps it was an unfortunate choice of adjective, I don’t know-is a reference to the Board’s powers to intervene in commissioning consortia. The trigger for access to those powers is very interestingly drafted because it refers to a consortium failing-that is fine-or appearing to be likely to fail. Then there is a key word that appears in a later subsection which explains that failing could mean failing properly to perform. That leaves the Board, it seems to me, with a very wide discretion as to how it interprets those enabling powers.

At one level, one could adopt a rather handsoff role and say, "Failure is something pretty serious-failure properly to perform-but still we are going to leave a lot of room for local autonomy." On the other hand, you could, it seems to me equally compatibly with the Bill, take quite a prescriptive approach and say, "I have a pretty good idea, as an experienced national body, what I think proper commissioning performance looks like and if I think you are likely not to live up to that then, at the very least, I feel I can have a dialogue with you about possibly exercising my powers of intervention." You can’t get the answer to that question from the Bill. It is very much a question of how the Board decides to define its role.

Nigel Edwards: I would agree with that. Much of this is reliant on behaviour rather than prescription. One of the interesting things about how this Bill is different from health reform over the last 13 years or so, which was very much more directive about not just what to do but how to do it in a certain amount of detail, is that this takes more the view that everything not explicitly forbidden is permitted, which is an interesting reversal of where we have been with previous approaches to legislation. It will require the Board to be very explicit about what they mean by failure and what the markers for prefailure are, and for those to be defined in such a way that it doesn’t give them a licence to intervene.

Prior to this session, I was talking with Paul and saying that the only way to deliver these reforms and the savings that are required is to devolve and to trust to devolution. You cannot manage this by centralisation. I do not buy a conspiracy theory that this is covert centralisation in the sheep’s clothing of decentralisation. I can’t see why one would do that.

I have a point on the accountability. There is a paradox here because one of the markers of success in a devolved system is being loose about those things which you should be loose about and tight on the others. The question is: are the things which should be tight tight enough? Is there enough accountability for the decisions that are made? There is some further probing to be done there about whether or not it is possible to be tight on the things that you want to be tight on for a couple of reasons. The first is that there is significant overoptimism about how easy it is to define outcomes and to measure them in provision. It is probably even harder in commissioning.

Last summer I spent quite a lot of time examining the statistical basis for standardised hospital mortality ratios, which is a binary outcome: people are either dead or not. You would have thought that was an easy thing to get agreement on. It turns out even that is hard. So there is a problem here about whether you can determine that the outcomes being produced by commissioning are going off the rails quickly enough-and that is a worry-and whether you can hold people to account.

Your second question is: overnight change or a process? A lot of the debate on this reform has been about the anatomy, the structure. The most interesting bit is the physiology, the culture change and behaviour that goes with this. Behaviour or culture change, we know, takes many years, and most healthcare reforms that seed take at least 10, if not 15, years, because that culture change takes longer. So, of course, this is a process. My preference would be to start from the basis of presumed liberty rather than earned autonomy, but, again, this is not my decision. There do need to be some agreed basics in terms of governance, systems and capability, but, again, we are in very important behavioural territory and that must not be used as an excuse for not moving forward as a proper case.

Q84 Chair: Does the Board have the power within the Bill to operate a system of earned independence, as Sir David appears to be suggesting it wants to?

Nigel Edwards: My recollection of the phrase in the Bill is, simply, that there will be an assurance process. It says no more than that. It doesn’t say anything about what the philosophical underpinning of it is, certainly.

Professor Corrigan: Everyone’s confusion may be because it is perfectly likely, when you say, "Is this either centralising or liberating?", that it is both. I know, logically, that feels odd, but there is a different sort of logic, one might say. If you are a Government, a Secretary of State, aimed at liberating something and you do it through the form of a Bill, so much of the context of a Bill in this place is inherently centralising that it is very, very difficult to structure what goes into a Bill in a way which is genuinely liberating. You could have a Bill which says, "We just stop what we are doing", but that creates an enormous amount of anxiety and fear and people then put in a load of centralising issues.

Quite genuinely, at the moment, both things are being run. There is an attempt to construct a future down there where the GPs are expecting liberation. Everyone is quite right in talking about some leadership enthusiasm for this down there-they have taken that seriously-and they are coming into contact with something which is a lot less liberating than they are expecting.

As to the point that Nigel made about culture, certainly in my experience of sitting in the centre and trying to do things-and management consultants have this lovely phrase "culture eats strategy for breakfast"-the NHS has a very, very strong centralising culture. If you want to do something liberating and you are doing it within a centralising culture, it is really hard. It is not, as Nigel suggests, that there is a hidden agenda here. It is just that if you put something into the culture that has been running the National Health Service, it starts to centralise.

Nigel Edwards: May I make clear that I don’t think I did suggest there was a hidden agenda.

Professor Corrigan: No. You said the reverse, that this is not a hidden agenda. This is, in fact, the agenda of a culture. The interesting thing is that if the NHS Commissioning Board is staffed by people from the history of the NHS with that culture, then they are likely to construct an authorisation process which is pretty topdown.

If you look at what was constructed by Monitor, it was constructed from outside of the National Health Service. It was constructed by an organisation that had a very different ethos. What they have now is an authorisation process, "Are you good enough to be?" You are in that and you now have a compliance process which is, all the time, saying, "You have a plan for next year." "It is your plan"-the FTs have said-"and you have said you are going to have a 3% growth. We are half-way through the year and it is only a 1% growth. Let’s have a conversation." That seems to me to be a different sort of performance management than has traditionally existed in the National Health Service.

If the NHS Commissioning Board is peopled by that old culture, we are likely to see something really top-down. Then the real problem starts. What happens if GPs walk away from that? This is a voluntary group of people. PCT Chief Executives, if they don’t work for the NHS, have to get a job outside the NHS. GPs have jobs. They can go on being GPs. They don’t have to do this. There is no conscription that can make them do it. You can pass a law saying they have to, but if they don’t there is a real problem. If they start to experience this, as some of them are, as something which they didn’t sign up for, then you have a much bigger problem than the one you are posing, which is people walking away from it.

Q85 Chair: You say there is some evidence of this already. Crikey. We have barely started.

Professor Corrigan: There is a piece in last week’s HSJ from Charles Alessi talking about his experience of the cluster in southwest London. If you are a Pathfinder, you have signed up to do a number of things. You want to crack on with it and, suddenly, there is someone saying, "You’ve got to do this, you’ve got to do that and you’ve got to do the other thing." I think there is a beginning of that experience.

Professor Paton: I agree, boringly, that there probably isn’t a hidden agenda, but I almost wish there was. It is almost worrying that there isn’t a hidden agenda. The most worrying thing of all is that Ministers actually believe in this, if I may put it that way.

There is another reason beyond pure culture as to why there are forces-not conspiratorial forces-towards taking it back. That is the abolition of what we academics pompously like to call the mesotiers, the strategic health authorities, the PCTs, whatever they might be. They happened to be that recently but it could have been the health authorities before 2001 or it could have been other things. My concern, still answering the question about "Is it centralism or devolution?", about the Bill is that the abolition of that whole raft of middle tiers, if you like, will lead to the inappropriate decentralisation-not devolution, but decentralisation-of some things and the inappropriate centralisation of others. That will not be because of a conspiracy. There may be those who are glad to take advantage of a chance to do that, but it is not a conspiracy, in my view, by those who wrote the Bill or had the aspiration for the policy last summer in the White Paper. It relates to the somewhat hackneyed thing now about, "Is it revolutionary or evolutionary?"

It is not evolutionary in terms of building on existing structures. It is chaotic in that sense, and I am using that word perhaps nonprescriptively. It is chaotic as a description. But, also, I don’t think it is going to be revolutionary, perhaps for cultural reasons but for other reasons too: the agenda, in terms of delivering quality, cost improvement and everything else together, and the need to do that on the hoof-mending the boat while sailing in it-and-not a personal comment at all-the need to do that using the regime of Sir David Nicholson and his staff. That is a very centralist phrase, isn’t it, "Sir David and his staff"? With Sir David and other NHS managers at the centre, it is going to happen that there will be a lot of centralisation of things which could be at what you would call a regional level, and so on and so forth. It is all about performance management. Who is going to do the performance management of the interim as well as the long term?

Another very contingent but nevertheless important thing is this: it is eccentric, is it not, that those institutions which are being abolished, which might, in a cynical frame of mind, be carrying out a scorchedearth policy, are the ones that are going to have to oversee the creation of the new future? That strikes me as extremely odd. But, again, there is no alternative. It is not a conspiracy. It is just that there is a policy, an aspiration and a vision with almost no regard, I would argue, for effective implementation.

My final point, and then I really will be quiet, is this. I don’t want to be rude about Alan Milburn and Paul in 2001 but the 2001 reform created a lot of turbulence and, in my view, inappropriately messed about with the middle tiers to such an extent that we saw a reaction against that later. I would predict-maybe because I am cynical as I get older, but maybe not-that you will see something similar having to emerge. That is my answer to the second question. It will be a process because it has to be. It is not so much a policy as a vision. A policy needs to be implemented. A vision needs policy and implementation, and that is going to have to come on the hoof.

Q86 Andrew George: If it is not a conspiracy, then is it worth us exploring whether a cockup is likely to happen? What is liberating about a proposed structure which has the current proposals for the commissioning of primary care-GPs themselves, dentistry, opticians, training and of a whole set of primary care services-which, clearly, cannot be commissioned locally? That is hardly liberating, is it? Are we not, if you like, leaping from the fear of conspiracy into a cockup?

Nigel Edwards: Can I make a response to that now? One of the things that has not been said about these reforms, which I think is one of the most important things, is that if they have any chance of succeeding they will rely on GPs getting to grips with the quality of some of their colleagues’ performance and improving the way that general practice works with secondary care. One of the reasons why PCTs have struggled is that it is very difficult, if you are not a clinician, to have that type of difficult conversation. If you really want these reforms to succeed, you need to try giving as much power as you possibly can to the leaders of general practice in these consortia locally over everything that they are responsible for, and, in particular, general practice. To me, that is, potentially, a very important missing bit of this. It therefore follows that you would be wanting, as far as you can, to delegate as much of the function that the independent Board has over the management of some of these contractors, particularly general practice-probably not dentistry, to be honest-to the consortia.

Related to this, it is worth saying that there will be 200 or so different organisations with different levels of capability. One of the habits of mine that we will have to wean ourselves off is the idea that everyone will be universally successful all the time. There will be variation and that will feel very messy. The big anxiety, I suppose, that everyone has is: will there be enough success, in among that variation, quickly enough to deliver what we need, given the very difficult situations in which we find ourselves?

Professor Corrigan: It is difficult not to see the commissioning of primary care as an afterthought in this structure given that, across the country, it is, today, the most localised part of commissioning. Whether you want to put someone on that side of the street or that side of the street is incredibly local. That is what is important about where you place GP commissioners and where you place pharmacists. Compared to anything else, this is the most local, and suddenly that goes national. It strikes me that could only have happened because someone thought, "Oh, what are we going to do about primary care?"

A point that Nigel made is really important in making any of this work. I don’t know if you can see it, but there is a graph that nearly all GPs are walking round with at the moment-not this particular graph-about the spread of any particular activity among GP practices. It is a graph that starts up like that and goes on. There is a median that goes across. There are hundreds of these that are being clutched by GPs at the moment because that is the way in which they will make this thing work, by having difficult conversations with the people that are spending four times as much on hips than other people. They have got this data. But the ones that are the biggest outliers are the most difficult to have the conversation with because they may well be coming under Nigel’s, "You can’t shift me. I’m here." A GP-commissioning organisation cannot necessarily shift that practice because they are being commissioned by someone different. The real power to make this work is going to have to have a very close relationship between the power of a GP-commissioning leader and the right of a GP to practise.

Q87 Rosie Cooper: A GP-commissioning leader is elected by his colleagues.

Professor Corrigan: Yes.

Q88 Rosie Cooper: They won’t be staying there very long.

Nigel Edwards: That is why hospitals have moved away from elected leadership models for a clinical director. It is precisely for that reason.

Professor Corrigan: As you will know, there are majorities that elect people and there may still be people that don’t like you. I know it is difficult to imagine, but they may still be there. Under those circumstances, you organise the centre-an elected leader would organise the centre-against the outliers. If you say to the majority of GPs in a consortia, "You will all lose the quality premium if Dr Fred goes on operating that way," then there will be pressure on Dr Fred.

Q89 Chair: But that makes quality maintenance into a political process.

Professor Corrigan: It makes it into a managerial process.

Professor Paton: I agree with quite a lot of what Paul said there as to the importance of local commissioning of primary care services but also the link between what, in the jargon, are sometimes called primary care services and extended primary care services. Academics like research, or at least they like some research. I would argue that probably the biggest evaluation of most relevance to this reform-this is my subjective opinion-is something commissioned by the Department of Health Policy Research Programme from Nicholas Mays and many, many others, which was the evaluation of total purchasing pilots. Of course, it was a very different political and managerial time. I am not naive about all of that, but there is some interesting stuff in there. The most successful, enthusiastic and autonomous consortia of GP commissioners, in the broader sense at that time, were successful in which dimension? With honourable exceptions, it was not in secondary care and other areas like that, but, in terms of commissioning, what you would call, again, in perhaps HSJ jargon, the amalgam of traditional primary services and extended primary services.

My concern is, again not through a conspiracy, that the Bill-they are amending it a bit-almost does the opposite. The reason it does the opposite is that it is conscientiously trying to take account of objections to things which should not be relevant in the first place. For example, GP consortia can’t do the local commissioning because it is a conflict of interest. Yes, I understand that. But it is the old thing, "I wouldn’t start from here." There shouldn’t be one professional group among many, in my humble opinion, taking all responsibility for all commissioning. The conflict of interest is a conflict of interest of the Government’s making. As a result, in order to respond to that, they then have to drive a coach and horses through other potentially effective arrangements. That is my response on the potential lack of local commissioning of primary services.

Q90 Dr Wollaston: Given the crucial importance of controlling outlying practitioners and the ski slope that you have referred to, do you think there is perhaps a hidden agenda in keeping contracts central to allow private provision of general practice and alternative models, as it is often referred to, of general practice to come into the market? We know that GPs themselves are very committed to having the more traditional model of general practice.

Nigel Edwards: It does allow for that. I don’t know if that is the prime purpose for doing it. Professor Paton has put his finger on the policy thinking that has led to retaining contracts centrally. The hybrid solution to the problem I posed is to delegate the power. You can retain this under contracts centrally. I am nervous about conspiracy theories, but it does certainly make it much more possible to do what you are suggesting if you hold the contract centrally.

Q91 Chair: Could I ask Mr Hocking a question, which is whether you think the powers exist in the Bill as drafted to deal with some of these outlier issues? How, in practice, is that done in the context of this Bill?

Stephen Hocking: I am not sure that the Bill is set up-in fact, this clearly runs contrary to the philosophy behind the Bill-to allow a centrally mandated response to, say, the problem of the outlier GP member of a consortium. It is presumably something that could be managed by the Board through using its powers to financially reward what it considers to be good performance. One might also look at the powers to incentivise innovation, and innovation could extend to effective ways to manage performance at consortium level. The intention, as I understand it, is that this will be addressed at the local level. No doubt, the members of the consortium know in much more detail the strengths and weaknesses of their fellow members and so, in principle, are best informed about where performance can be improved. Of course, the difficulty is that for cultural and, indeed, personal reasons they may find it uncomfortable to have those conversations.

Q92 Chair: That is the central dilemma, is it not, that the knowledge about where the issue arises is local and the power to manage it is central?

Stephen Hocking: Yes.

Q93 Chair: It is not clear to me, in the context of the way the Bill is structured, that the power rests in an effective way with the Commissioning Board to use the information that is available locally even if it can be transferred to the centre.

Stephen Hocking: That is right. After all, the Board’s relationship is with consortia. It is not a direct or indirect relationship with an individual member of the consortium.

Q94 Chair: Do you think the Bill covers Professor Corrigan’s point of a GP community-with individual GPs it wouldn’t really be so critical-concluding that it wasn’t willing to be engaged in this process? How does the Board deal with that set of circumstances?

Stephen Hocking: The Board is under an obligation to ensure that there is a comprehensive coverage of England in terms of consortia. That must mean, I suppose, functioning consortia. We said earlier that the Board’s powers in respect of what it considers to be a failing consortium are-and I will use the word without apology-draconian. It can step in and do more or less anything it likes, including taking over the functions of the consortium itself. At that organisational level, the Board is well equipped. In fact, I would say that the set of intervention powers it has been provided with are quite impressive.

Of course, that only answers half of your question, sir, because it doesn’t address the problem that, at the end of the day, one still needs GPs in a locality delivering health care to the population of that locality. That can only be done, it seems to me, with their cooperation. One has to work with the grain and not against it. The extent to which one can drive GPs to do something that they feel professionally uncomfortable about doing must be very limited, or so it seems to me.

Q95 Rosie Cooper: Could I address my question to Nigel in the first point and then perhaps the whole panel could say whether they agree with the analysis. Nigel, you have stated that the proposed reforms move the NHS from a centrally managed system to a regulated industry similar to the gas and telecoms sector. For those of us who are old enough to remember, the last Tory privatisations of "Hissing Sid" and British Gas have left the consumer with the highest prices, huge profit and certainly far from exceptional service. This is all despite having a regulator. Is that what you meant?

Nigel Edwards: I was trying to identify the intellectual roots of these reforms. What conclusions you draw from how it may develop are up to you. But what I meant was-

Q96 Rosie Cooper: How do you get to that analysis?

Nigel Edwards: Let me try and explain what I mean. First off, because we have tended to spend so much time concentrating on GP commissioning, it is worth pointing out that this is a fundamental shift in how providers relate to the NHS. The UK has been unusual in the extent to which central Government has both owned and operated the provision of health care when compared with other countries in Europe. Even those with an NHS system, like Spain and Italy, are more regionalised. This Bill takes providers out of the control of the state, which is a very fundamental shift. That is the first analogy with a regulated industry. Of course, there aren’t customers in the way that there are for telecoms or other industries. You need a proxy for the customers and that is where the GPs come in.

A key question is: what is the role of the regulator? There are two regulators here and this does raise some very interesting questions related to your point. The quality regulator is a minimum standards regulator. There is an interesting question here about who drives quality other than just by lifting the bottom. We do know, from looking at improvement in other industries, that simply moving the tail of the distribution is not the most effective way of improving quality. The most effective way is to shift the mean. How does that happen? Possibly, by NICE setting commissioning standards. Possibly, by those being translated by the Commissioning Board into actions taken by the individual consortia. But that line of accountability looks relatively weak compared with what we have been used to.

Another key question would be: how effective is the economic regulator and what is its function? Is it just about promoting competition or is it promoting competition with a purpose? I felt, sometimes, that the conversation about this has missed the point. The purpose of this is to improve services to patients, which means an intelligent approach to it.

As with what we were saying earlier, if you make a number of relatively heroic assumptions about how people behave, I am quite confident that you can make that system work and that it will produce better results. The problem is that, as people learn how to operate it and as they try and learn those behaviours, and as there is some incentive in all systems for people in individual silos within the system to pursue their own objectives rather than the whole system’s objectives, there are some very significant risks.

Rosie Cooper: Absolutely.

Nigel Edwards: There is another point that should be made, of course. One of the reasons why telecoms has produced such great results in terms of reduced costs and wider availability of technology is that this has been a growing market in which new entrants have been able to come in and offer new approaches. The major driver of innovation in most markets, in fact, is new entrants. That has been possible in telecoms because of the growth in the scale of the market. That is not possible in the NHS in its current financial state, which means that new entrants need to displace incumbents or, even more challenging, incumbents need to start behaving as though they are new entrants, which is also a very big leap. Therefore, there are some issues about the fact that this kind of regulated industry model was designed in a period in which we had growth and now we do not. That may be an issue about its future performance.

Rosie Cooper: Thank you.

Professor Paton: Yes, that is a good question. My first point is more technical, but hopefully it is more than a technical answer. If the external regulators, and particularly the economic regulator, Monitor, displace internal performance management, then that will go against the grain of what I already said. I have sort of predicted the rebirth of internal performance management. But if the regulators take over what used to be internal performance management in reality, then that will be a move away from the NHS as we have known it to external regulation, with regulators having real ability to set their own agenda. If you read the reported comments of David Bennett from Monitor recently, which got some prominence in The Times, I think, last week, he, as quoted-and I don’t know if he is speaking for the whole of Monitor or not-has a very radical market vision, playing down the extent to which health care differs from other commodities. If that happens, it will be because the external regulators have won over, whether it is a battle or not, the internal regulators who still will be there, whether as regional officers of the Department or whatever David Nicholson and his friends cook up in the next year or two. There is that and that will be a battle. There has been a dress rehearsal for that battle in the past over things like FTs, where Sir David has form in being quite a doughty fighter on behalf of what one might call internal regulation or internal performance management.

Second is what the economic regulator does if there is price competition, despite the rhetoric. I know there has been a recent response to suggest price competition will be the exception rather than the rule, and I am sure that statement was made in good faith, but I am not sure if that will be the case when pressures come to bear. Without getting into the whole debate about the quality effect of price competition-and some worrying research over the years has been shown about that-that could be a major role, to move in that kind of direction. I totally agree with Nigel’s point that it won’t be like British Gas in the boom years, or whatever it was, but it will be in terms of the market dynamic in the NHS.

Thirdly, and this goes back to services for patients, at the end of the day, another absolutely crucial area is going to be the extent to which a radical market agenda, if Monitor succeeds in what it seems to want to do, displaces sensible arrangements for noncompetitive integrated care on the altar of the ideology of "There must be competition." That would be another thing to look out for, in my view.

Professor Corrigan: The one impressive thing, if I can use that word, that the regulators of privatised markets have done is not only ensured continued access but left the public feeling quite safe in the assurance of that continued access. If an economic regulator could do that with health it would be a very good thing. In a sense, if you are in Northumbria with Northumbrian Water, it doesn’t matter who owns the water as long as it keeps coming out of the tap. There is a faith that the light will come on and that this thing works. Rather than it being, as it were, the rough and tumble of an unregulated market, there is a feeling that these very important things will continue under any circumstances, and the job of the regulator is to ensure not that a particular company continues them but that there is 100% access. It seems to me that if Monitor can do that, then it is quite an important service, much more important than the other things which we are all concentrating on around price and competition. At the moment there is anxiety among the population that, if their hospital closes, they lose all the services rather than those services will continue. We have not been able to construct a compact around the Health Service which says, "We will make sure services are still there even if the people that are providing them change." There is a lack of faith that we can do that.

Q97 Rosie Cooper: People talk about rationing happening today. Using what you have just said, how are you going to convince people that rationing will not affect them and that their medical needs will be met and met locally?

Professor Corrigan: The very last word is the really crucial word. I think the NHS-all of us-have constructed quite a sloppy contract, if I can put it that way, with the public, that, "You can have everything at the end of your road." We know that can’t be the case and that we have not succeeded in constructing that picture.

Q98 Rosie Cooper: How long might that road be?

Professor Corrigan: If you want a decent piece of brain surgery, a long road. What we are learning about specialisms is that that road has to be quite long. We have not necessarily been dishonest, but we have not been open with the public about what locality can deliver. I think we need to be.

Q99 Rosie Cooper: Fundamentally, I absolutely understand what you are saying with things like stroke services and trauma centres. I don’t actually disagree. But the problem is the basis on which this Bill, commissioning and the whole regulation thing, has been sold to people-and sold to many Tory Members of Parliament, and even a Liberal Democrat. I listened to them stand up and say that this Bill will deliver them the reestablishment of the maternity service or some other service that they have just lost. Tory MP after Tory MP stood up and said it, and I couldn’t believe it. The basis of this is exactly the opposite of what they are standing up espousing. Therefore, either they are being duped or we haven’t got it.

Nigel Edwards: One of the features of this bit of the White Paper philosophy, which does resemble the regulated market model, is a sort of presumption that the invisible hand of the market will shape services. I don’t think, when you talk to GPs in consortia, they realise that quite a lot of complex services, like stroke, cancer and trauma, do require a degree of planning and that they will need to make some of those decisions. I would be very surprised if the decisions that they make will achieve the results that you are listing. That is just not going to happen.

Q100 Rosie Cooper: Those services are not going to suddenly reappear, are they?

Nigel Edwards: Not generally, no.

Rosie Cooper: No, absolutely. They are going to get more distant.

Nigel Edwards: To be honest, the forces that are propelling services in that direction are not sensitive to the type of commissioning or purchasing system that-

Q101 Chair: They are nothing to do with the Bill. They are much more to do with the budget.

Nigel Edwards: And also changes in the way that medicine is working.

Q102 Nadine Dorries: Professor Corrigan, your point about the contract with the public is an interesting one because you cited the-I suppose we call them-centres of excellence. Is it not the case, or am I wrong in thinking this, that at centres of excellence, where there are specialisms and both academic and clinical expertise is poured into those centres, the outcomes of patients are markedly better than they are on a more general distribution of services? Therefore, would you say that if the outcome of this Bill leads to good consortia with extended roles and a greater number of centres of excellence that that would be a good thing?

Professor Corrigan: Absolutely, if we could. The mechanism the Bill has to make that happen is an empowered, informed patient. I look at going there or going there. I look at the outcome and think, "I will go to the specialist centre." If we can construct a much more powerful relationship with the patient around that sort of information and make it much more normal and what people do-since they do it for cars and they do it for other things-then we have a vehicle to make those choices. However, the point being made is that that will mean something local closes that is not as good. I find that, sitting here and not in the sense of sitting there as a local politician, not a bad thing. The Prime Minister had a very interesting phrase in Prime Minister’s Questions the other day, which was "If you don’t use this". He didn’t say "If you don’t use it, you’ll lose it" but that choice is a part of this, and if you systematically don’t use your local services then you have a problem about them being there.

Q103 Nadine Dorries: Do you think the Bill does provide that empowerment to the patient?

Professor Corrigan: As to the empowerment for the patient, the Bill provides a looseness, if I can put it that way, which allows that to happen rather than a central organisation. We need something much more than a Bill can provide, which is a culture. The locality relationship for your public is very important at the moment and they choose locality over and above something they see as abstract, a set of outcome figures. All of us have a responsibility to try to change and challenge that and to say, "Let’s look at something real. I know it would be nice to have it at the end of our road, but let us look at something real."

Nigel Edwards: On outcome, I would caution that we are back to a problem. Our ability to reliably measure outcomes and distinguish between providers is not good enough to drive that. Secondly, a significant number of patients who use our services are not exercising choice because of the way the system works. They are in A&E or they are among the 20%odd of emergencies who are taken to hospital by ambulance. You need choice, but you need other mechanisms as well if you want to drive that type of change in the system.

Chair: We need to move on.

Q104 Valerie Vaz: I want to turn to accountability because some comments have come out from the patients, the people at the end of it. We have to have a discussion with people about their having to go further and that this Bill is taking things out of the state. At the end of the day, it is people and people’s lives. We are not talking about switching on light bulbs. It is something much more fundamental, and sometimes long term. It is 80% of the budget that is going to unelected people, so I think there is a huge issue about democracy and the democratic deficit. How do we explain to people that their money is going somewhere else and is being wasted? I’m not sure I could do that on the doorstep in five years’ time. I am, therefore, interested to follow up the accountability.

Obviously, Mid Staffordshire has been mentioned a number of times and we have heard evidence from people who have complained to their GPs and the GPs are still sending patients to Mid Staffordshire. How do we prevent that? And, secondly, could you-I know this is a long question-look at the accountability which we have now and what it would be like under the Bill?

Professor Paton: Very briefly, as well as being an academic, I was chairman of the big hospital up the road from Mid Staffordshire Hospital. I was chairman of the University Hospital of North Staffordshire for five and a half years so I knew, indirectly, the Mid Staffordshire because I was in the local health economy, or in the strategic health authority. My own view on the Mid Staffordshire is that there is no cause and effect between a particular form of governance at the abstract level. By "abstract", I don’t mean meaningless things. By "abstract", I mean should it be patient-controlled, should it be PCTboard controlled or whatever form of governance. There were all sorts of things going on in the hospital and outside the hospital in terms of the performance management regime and the way things were handled. A lot of agencies have a lot to answer for on that one. I see the need, however, to ensure-and, perhaps, because it is not simple to be absolutely sure-that we do not lay open conditions whereby, without being melodramatic, more quality scandals and life-and-death scandals come to pass.

There is a lot of work to be done, and I bow to my colleagues on what the detail of that might be. But, again, the issue here is that if the NHS, for example, has a democratic deficit, then this, as it stands, presumably, makes that deficit more pronounced. We have heard that, before the general election, the Liberal Democrats, for example, were talking about elected PCTs. We know that the public don’t elect GP consortia, just to state the obvious, so something is going to have to be done to widen all of that out.

I am not naive about that. I am in favour of patient involvement and public involvement wherever possible. Equally, there has been a problem in the NHS in the past that when you hold out a prospectus of that in the wrong way at the wrong time-and this relates to the earlier question-we have people pursuing local pet projects at the expense of what you might call-again, a war of words, but it means something-strategic commissioning. That is, in other words, getting commissioning done on a large enough scale with enough scope to ensure not that specialist services are commissioned nationally or regionally, because allegedly they are going to be done and that is going to be handled, but that the tier below that are effectively commissioned.

Again, it may be an anecdote from a trust chairman of a big hospital who has gone native, but from 2001 till the thing got rationalised in 2006, we, as a hospital, did not want to rule the roost but we did want commissioners to be big enough and strategic enough to know what the hell they were doing. It may be a North Staffordshire problem, but we didn’t see that because there were too many small commissioners who had been sold the rhetoric, quite rightly. They were doing what they had been told they were brought in to do, particularly the nonexecutive chairs and so on, and they sponsored altruistically what I will call-and not in a dismissive way-local pet projects at the expense of what I will call strategic commissioning. So that is a really difficult one.

My own preference, forgetting what inheritance we have, is that you have popular representation at a much higher level-in an ideal world at a regional level-but that is clearly not part of the demarcation we have here.

Chair: Can I bring in Mr Hocking?

Stephen Hocking: Yes. Thank you, Chairman. I will try and be brief. It is a complex picture, in part because accountability is not something you can purely legislate for. You will know, madam, that if you meet a voter on the doorstep and they think the Government or you personally are responsible for such and such a thing happening, that is a fact on the ground, as it were. Whatever the Bill has to say, I have no doubt that in those conversations with voters or with people writing letters to their local press they will continue to think that the Secretary of State for Health, or the Government of the day or Parliament generally-whatever it may be-is accountable for the way the taxpayers’ funds are spent in the Health Service. Perhaps that is no bad thing.

In terms of the Bill itself, I will highlight a few points. The first is I am a huge chauvinist-and probably a rather unfashionable chauvinist-for local government, and it is quite heartening to see local authorities and local government referred to in the Bill, not centre stage or anything like it-that would not be appropriate-and perhaps more on the public health side than the health care side. But opportunities are there for switchedon and creative local authorities themselves to carve out a role in ensuring accountability, and, of course, your point about democratic legitimacy. There are the Health and Wellbeing Boards as well.

The other point I would make is that, on the face of it, there is a huge amount of information flowing around in the system, most obviously in the data sets that the information centre will collect, analyse and distribute, and there is a lot of detail that remains to be seen in the regulations about how that works. That will be essential. But, even putting that to one side, there is an awful lot of report writing. Plans are produced and then they are reported on and then consortia have to have a public meeting at which they defend their report and what they have done in the last year. We don’t know whether that is going to be seized upon by local people in a really effective way to drive accountability or whether it will become something that is honoured in the breach. I suspect the answer is that in different areas there will be different pictures. And there is a challenge because, of course, without wishing to stereotype, it is easier to get people who have maybe got some time on their hands and who are comfortable and articulate to come along and hold their local consortium to account. It can be more difficult in the very areas where that accountability is most important. But there is a lot on the face of the Bill that could be used. How it will translate in practice is a more difficult question.

Q105 Chair: Would you like to have a go at how it will be translated in practice?

Nigel Edwards: It is useful to look at some practical examples, isn’t it? If a hospital like Mid Staffordshire is performing poorly, who do you talk to? If a GP consortium has decided it does not want to prescribe a highcost monoclonal antibody, what is the nature of that conversation? I am very clear-I would agree with Mr Hocking’s analysis-that there is an awful lot of accountability machinery, in theory, in the Bill. It is how it plays out with those examples which I am not fully able to articulate. I am probably not the right person, but I am not sure who you have those conversations with, other than the organisation itself. If that doesn’t work, I am not sure there is anywhere else to go, in the case of the GP consortia, but through the judicial review process, and, in the case of the foundation trust that is not performing, back through the commissioners and back through the regulator. I can see, in theory, how this all works. What I am not able to tell you is how that will play out in practice. What I can say to you, though, is that it is quite a complex system. You will have trouble explaining it on the doorstep, I think.

Professor Corrigan: Which probably means we do know what is going to happen: they will come to you. They are absolutely bound to. I would like to say that they will come to you because they are not daft. This is paid for out of national taxation that you vote for and the public really have that in their head.

Q106 Rosie Cooper: Can I give you a very quick example? I have a GPled service, a commissionerled service. It is a really brilliant service and has been operating a year. Suddenly, a few weeks ago, there was a problem-a fourandahalfhour waiting list. You are absolutely right. Where did those people come to? They came to my office. I was here. The office then phoned up the PCT. "Not us, because it is clinician led." The office phoned the clinicians and was told, "Why is an MP phoning us? Why are they going to you?" They said, "There is a fourandahalfhour waiting list." The next question came, "If they have a problem with the process, there is a complaints procedure. Log it in there." "No. These are waiting four and a half hours now." "What do you want to us do, take that patient out of order?" "No. We would like no patients to be waiting four and a half hours. What are you going to do about it?"

It went into meltdown. In that situation, yes, they will be coming to us. We will be looking to the Secretary of State-

Nigel Edwards: -who has no powers.

Professor Corrigan: The interesting thing is that is why he has the powers he has. All these draconian powers are precisely because you are going to be coming to him.

Q107 Rosie Cooper: Does this mean, then, that adjournment debates, debates on the floor of the House, are simply all going to be swamped with Health Service things because we and our constituents have no measure of getting any resolution of those difficult and local problems?

Nigel Edwards: May I clarify? The Secretary of State has no powers until things have reached a point where the commissioner, and not the provider here, so your problem is a commissioner problem, is evidently failing.

Rosie Cooper: But that is them as well.

Nigel Edwards: Is that right? Yes.

Q108 Chair: The other way of putting what Rosie was questioning you about is that I thought that is what the civil war was all about.

Professor Corrigan: And we won, I would just like to point out. It would be quite interesting for the Committee to look at the accountability around foundation trusts. I do not think, when the current Secretary of State was raising this issue about Mid Staffordshire in Opposition, that Parliament had to say, "Yes, you are allowed to raise that." I don’t think the accountability was with you, as someone who was involved in that Bill. But it didn’t stop it from being raised. It didn’t stop the Secretary of State from going and answering and then going back-

Q109 Rosie Cooper: But how many people had to die to get there? That is what is so wrong with all of this. Forgive me for being angry. We have listened to people’s stories and they are dreadful-absolutely hurt and dragged through a system. I have looked at the Care Quality Commission’s way of operating. You feed it in and they will send somebody out. When they look at it, they will just refer it to another body to look at it again. Those people didn’t get the service they needed, paid for by their-taxpayers’-money. To say that so many of them have got to die and it has to be critical before anybody gets off their backsides and sorts it, is an outrage.

Chair: I think what Professor Corrigan was saying was whether or not we had the power didn’t make any difference. There was an issue-

Q110 Rosie Cooper: I appreciate that, but the point has to be made. There has to be some mechanism in here where people’s voices can be heard. It is all right saying, "You’ve got all the power to choose whoever is going to do x, y and z," but if they don’t do it, tough luck.

Professor Corrigan: Irrespective of the Bill, the Secretary of State will be held to account for the Health Service at the next election-whatever the Bill says-because the public will expect that to be the case.

Chair: Of course.

Professor Paton: Very briefly, it was interesting to see David Nicholson’s exchange with the Public Accounts Committee last week or 10 days ago. I don’t know if you have seen that, but, basically, David said, in terms of accountability to Parliament in one form or another, "If there is a problem with any of the GP commissioning consortia, it is me, Nicholson, that you talk to." That was teased out of him. With the foundation trusts, he said, "It is each of these." That is not tenable. It is this tension, isn’t it, between parliamentary accountability, which is absolutely right-and efficient, quick parliamentary accountability where it is necessary, especially in bad cases-and, on the other hand, adequately devolved management of the NHS?

I think the Bill goes wrong somewhere on that. I don’t want to be dogmatic about it, but, again, all that stuff is just forgotten about on the altar of devolution and it is having to rethink it at the last minute. I felt sorry for David Nicholson-something I’ve never done before in my life-seeing the transcript of his Public Accounts Committee because he was, in effect, having to render compatible the incompatible in order to answer the questions.

Nigel Edwards: The trainoperating companies will probably give you the analogy that you are looking for. Foundation trusts’ accountability will be similar to that of trainoperating companies. You may or may not find that reassuring, but that is my reading of how that works.

Q111 Rosie Cooper: There are some very complex things that are going to go on and happen, let me tell you. But I think foundation trust chairmen and nonexecutives are getting paid shed-loads for absolutely nothing. I tried to find out how much each of them gets paid, and, do you know, nobody will tell me? They get paid between £40,000 and £60,000 a year per foundation hospital. That is okay, but no one is accountable. They will say they are accountable locally, but can you get a list of what that is and what that amounts to? No chance. That is a drain on the Health Service.

Nigel Edwards: The role of governors and members in the new dispensation becomes extremely important and is the major route by which foundation trusts, in future, will be held to account. The measures that are in the Bill to strengthen the role of members, and governors particularly, although they don’t look very important, are extremely important because that is the bit, they are the people-

Q112 Rosie Cooper: You are looking at a former chair-albeit for a month-of a foundation hospital. Let me tell you, I watched those members. They had become an arm of management. They really do need to get far more powers and a bigger voice. The direction is great. The reality doesn’t bite anywhere near hard enough.

Q113 Chair: Shouldn’t the important accountability of a foundation trust be through the commissioner for the shape of care and the value that is delivered to patients? Do you think that accountability line, through the commissioner to, ultimately, the Secretary of State, who is responsible to the House of Commons for the budget, is strong enough in this Bill?

Nigel Edwards: It doesn’t answer the question about whether there are internal processes or whether what is paid to the chairman is appropriate-that is through the governors. But, in terms of the quality of care and care provided to the patient, then it is through the commissioners. I believe that if the commissioners are doing their job properly, then that is a powerful enough mechanism to hold them to account, yes.

Professor Corrigan: But not to here.

Q114 Chair: To the Commissioning Board and then there is the question of the-

Professor Corrigan: That is what I am unclear about in the Board. The Secretary of State talks about a mandate to the Commissioning Board. Whether that mandate means I then will answer a question about a particular locality within the year, again, force majeure, I don’t think he will have a choice. But that may not be the powers the Bill gives.

Nigel Edwards: He has no powers to intervene in individual consortium areas.

Chair: Are there any other issues here?

Q115 Rosie Cooper: Yes, if I may. Under the Bill, the Secretary of State will no longer have a statutory duty to provide health services and will only have to act with a view to securing the provision of health services in relation to the Board. How accurate is it to see this as spelling the end of a stateprovided National Health Service?

Nigel Edwards: That is precisely what it is, is it not? That is what it says. It is there in black and white. That is my reading of it as well. In fact, when every NHS hospital is a foundation trust, apart from the fact that the state would be a residual owner of roughly £36 billion of assets which belong to the taxpayer, there is no direct state control over the provision of health care except indirectly through the commissioning process. That is my reading of it.

Q116 Chair: Can I push on that because Rosie’s question was: "Is this the end of stateprovided health care?" The trusts are still owned by the state and they are delivering care in response to a taxfunded budget that is accountable, through the process we have been discussing, to the commissioning boards.

Nigel Edwards: I was taking a narrower view of the definition. But you are absolutely right, yes.

Professor Paton: I am not trying to be smart but that expresses part of the theology of the purchaser-provider split, expressed in 1989 to 1991, which was suspended in culture but not in structure between 1997 and 2001 and then was gradually rolled out again in a new and indeed more radical form. It is just putting the top hat on that. That is what it is saying, but the practical reality will be exactly as the Chairman says. In other words, the reality is that public money is in the providers by one way or another and the theology may not be worth more than that proverbial bucket of spit when it comes to the-

Q117 Rosie Cooper: Meanwhile, at the next election, each and every one of those Members of Parliament who have voted for this will be held accountable for the mess they have created and the Health Service they are or are not getting at that time.

Professor Paton: Yes.

Q118 Chair: All MPs will be held accountable for what has happened during the term of the Parliament.

Stephen Hocking: Briefly, sir, I am wary of analogies but there may be a helpful analogy to draw with other public services, and in particular perhaps with statefunded education, which, of course, has never been directly provided by the Secretary of State for Education. It has always been indirectly through local education authorities. In 1992, what is currently the further education college sector, as no doubt you will remember, madam, was carved out of local authority ownership and set loose in a way not wholly dissimilar to what is being proposed here.

Rosie Cooper: I might have a bad education, but I won’t die. Carry on.

Stephen Hocking: No doubt, both health and education are important in different ways. I accept that analogies are dangerous things. My point was simply that if one looks at the ecology of statefunded education, with voluntaryaided and voluntarycontrolled schools, with further education colleges and with universities, it would be unfair to characterise that as not being stateprovided education, albeit it is certainly not provided by the Secretary of State for Education. Maybe the analogy helps, maybe it does not. I offer it.

Professor Corrigan: Because this was something I was involved in, it seemed to me there was a very important distinction-at least it was important to me-between "These will be publicly provided but not state owned", and the creation of the public form of organisation of the foundation trust. It was very carefully constructed so that it could not be privately owned. Pushing, a little bit, what Stephen said, I don’t think it is necessary for the state to own these things for them to be public. We have a statepaidfor-a publiclypaidfor-system with public provision but not necessarily owned by the state. I think you are right, that that is the end of that.

Nigel Edwards: When I reviewed the evidence and published this in the Journal of the Royal Society of Medicine, I think we can say that the evidence seemed to suggest that ownership is not a crucial factor in the quality of health care provision, that governments probably do it worst of all and there may be some gradient between for-profit and not-for-profit, but it is highly contested. What is important is the environment in which the providers operate, the regulation that they are put to, the quality of the purchasing and the commissioning that is done to secure their services. Ownership is, at the very most, a second order issue in terms of quality of care.

Chair: Nadine has one question to do with health inequalities, and then we really need to move on, if you will allow me.

Q119 Nadine Dorries: The NHS Commissioning Board has a responsibility to reduce health inequalities. I know, Mr Hocking, that you spoke before about the Board having the right to define its role. How do you see the Board will define its role in terms of health inequalities? Will that be seen, as and when it does, as part of these-and I know you said it was a poor use of words--draconian powers, and will this just be part of the draconian, interfering kind of role it will take with regard to consortia at the point at which they interfere?

Stephen Hocking: I hope not. This is something I am sure we all feel very strongly about, and I do, personally. I welcome seeing written on to the face of the Bill provisions relating to health inequality and I think the way that that is addressed and the way health inequality is described is well done. It certainly permits-I would argue, mandates-the Board to place reduction of health inequality as being one of its very highest priorities. If I have a comment, it is that one could perhaps have gone a little further. I think of this particularly as someone who may, in due course, be advising Health Service bodies on how one goes about delivering on this objective, and of course we all know that the causes of health inequalities are complex and not easy to address.

I would have welcomed a little more air cover in the Bill for bodies that want to take a very positive and proactive approach to reducing health inequalities, to make it clear. For example, in the Equality Act there are provisions relating to, in certain circumstances, taking positive steps. In this country we have never really gone in for positive discrimination. The Equality Act still does not really, but there is an acknowledgment that, in certain circumstances, in order to address disadvantage, you may need to take positive steps. This Bill is silent on that point, and purely in terms of people feeling comfortable about taking forward the health inequality agenda, perhaps that is somewhere the Bill could have been a little more ambitious.

Q120 Nadine Dorries: Could this possibly be because health inequalities are very geographical? It depends on which part of the country you are in. There are much greater inequalities in some than in other parts of the country and therefore it is difficult to legislate within the Bill for that to the degree that you have just stated.

Stephen Hocking: That must be right, madam, in the sense that one could not write on to the face of the Bill that one must be concerned about the health inequality between men and women or people of different ethnic backgrounds or whatever. Clearly, one takes it at a global level and then allows each locality to identify both the inequalities it thinks are most serious and then the measures it can take to address them. My point was simply that a general statement in the Bill making clear that it is possible to take positive steps-to put it bluntly, to treat some people differently from others-if the objective is the overall reduction in health inequalities is something that, personally, Health Service bodies would have found helpful.

Q121 Nadine Dorries: How do you see the NHS Commissioning Board addressing this? What, practically, do you see them being able to do?

Stephen Hocking: They can do a lot. As you know, they will be issuing guidance on commissioning functions. They will be proposing draft commissioning in contracts. They can make it very clear, as you say, very positively backed up by the statements that are in the Bill, that this is to be a priority on the commissioning side. Then one waits to see what the consortia do in response and monitors them against that. Of course, there may be a role for other bodies here as well. No doubt, the Commission will keep a close eye on this, too. But I think it does have to be-and maybe, madam, it is your point-that the priorities have to be identified locally.

Q122 Nadine Dorries: To finish off on this, then, if they prescribe the way in which the consortia should deal with health inequalities and if the consortia are seen not to be abiding by this guidance-and you have described it as "likely to fail" or "failing consortia" at the point at which the NHS Commissioning Board can step in-would you see it as a fair "likely to fail" scenario if they are not meeting health inequalities?

Stephen Hocking: Yes, absolutely. If they had, in good faith, attempted to address health inequalities and, for whatever reason, had not succeeded in doing so, and they were going back and thinking again, that is one matter. But if they were not addressing the issue seriously in line with the guidance to be issued by the Board and the duties imposed on the consortia themselves by the Bill, then absolutely I would see that as a "likely to fail".

Nigel Edwards: Can I make a point? It is worth remembering that the Board will only really have powers over access to health care inequalities and that one of the major health care inequalities is, of course, access to general practice, for which the Board itself is responsible, so the Board is a cocreator of this policy locally. I am not sure that the failure will be only on behalf of the consortium because, if you are failing to deliver health inequalities, it is probably likely that your primary care system is failing too and that is the responsibility of the Board.

The other thing the Board could do that would make an impact is that it will, at some point, to make any of this policy work, need to renegotiate the GP contract. There is a proposal to put some points in the Quality and Outcomes Framework to relate to prevention and public health priorities. There are a number of responsibilities that the Board has directly, and this is another area where there may be some confusion of accountability between the Board and the consortium, perhaps.

Q123 Nadine Dorries: Can I finish up on one last sentence? It is interesting, Mr Hocking, to hear you say that the statement that was perhaps misquoted, or you felt was a bit strong, was that the powers of the NHS Commissioning Board to step in would be draconian. But then you also say that you feel it would be an appropriate point at which to step in if they felt they were not meeting health inequalities. You can’t have it both ways. The NHS Commissioning Board has to have the power to step in if they are likely to fail on a number of criteria. That does not necessarily mean it is draconian. It means it is about accountability and about not wanting consortia to fail. We want to get in before they fail. Therefore, it is appropriate that they have the right to do that.

Stephen Hocking: I couldn’t agree more, madam, and if "draconian" was taken to be a pejorative term in that sense, I withdraw it.

Chair: If we may, it is best now that we move on to our second session. Thank you very much. That has been helpful. We are confused at a higher level, I think.

Examination of Witnesses

Witnesses: Dr David Bennett, Chair, Monitor, Adrian Masters, Director of Strategy, Monitor, Dr Ron Singer, Medical Practitioners’ Union, and Dr Anna Dixon, Director of Policy, The King’s Fund, gave evidence.

Q124 Chair: Good morning and thank you for coming to the second session. What I would like to do, if I may, is begin by asking you to introduce yourselves and then we will open the questioning.

Adrian Masters: Adrian Masters. I am the Director of Strategy at Monitor.

Dr Bennett: David Bennett. I have been Interim Chief Executive at Monitor for the last year and, as of today, I am the Chair of Monitor.

Chair: Congratulations.

Dr Bennett: Thank you.

Dr Singer: I am Ron Singer, a recently retired GP and President of the Medical Practitioners’ Union.

Dr Dixon: Anna Dixon, Director of Policy at the King’s Fund.

Q125 Chair: Thank you very much for coming. I would like to open the questioning on the subject that is at the heart of a lot of the comment about the effect of the Government’s proposals on commissioning, and that is the effect of their proposals on the establishment of stable pathways of care around the system and the effect that competition-Any Willing Provider and these concepts that have been around for some years-has on the ability of a commissioner to put in place pathways of care, relationships between care providers, that provide optimum outcomes for patients as well as value for money. Can I start with that set of issues and perhaps go to Dr Bennett first?

Dr Bennett: Yes. I will start with two points. First of all, the fundamental goal of all this, of course, is about providing the best possible care for patients, and indeed specifically in Monitor’s case we will have a duty to promote and protect the interests of users of the system. In a sense, it would be a contradiction of what I think the Bill is aiming to do if we finished up with arrangements that did not enable commissioners to commission the services that were in the best interests of their patients.

More specifically, I know people are concerned that the further introduction of competition, or indeed Any Willing Provider, might make it impossible or very difficult to arrange for different providers to collaborate and provide the sort of integrated care that you are talking about. I don’t see why that should be, not least because of the starting point, but also because we see in lots of other sectors, lots of other markets where collaboration is needed in order to meet the needs of the end user or an intermediate user, that it works perfectly well.

I am very cautious about using examples from other sectors, lest I be immediately quoted as saying "Health care is just like X", which, of course, it is not. Health care is different. But one example which I was discussing with a colleague just the other day is the way the car industry works. You have very effective competition between the manufacturers of different cars but, in practice, when you are making a car you have all sorts of suppliers working together collaborating in order to produce the finished product. Indeed, you will sometimes finish up with providers who are working with more than one manufacturer. You may think it is a big step to go from there to health care but, in practice, if what you are talking about in a similar sort of way is multiple providers working together, collaborating- maybe a couple of different groups working in competition with each other but nevertheless providing the sort of integrated or longterm care that is needed-then that should be entirely consistent with a degree of competition.

Q126 Chair: Can we take each witness in turn on those core questions and then respond? Perhaps we can go to Dr Dixon next.

Dr Dixon: Thank you. I would agree that competition and integration are not incompatible, but it really depends on how the market is going to work in practice. Commissioners need to specify products, in a way, and the Commissioning Board and Monitor specify tariffs in a way that can promote that sort of collaboration to deliver an integrated package of care for complex patients, or to deliver a pathway of care. Of course, it will probably take more than one provider to do that. We need different clinicians working together and we need different organisations working together, both public and private and the voluntary sector, to deliver integrated care. It is integrated care that we want, not necessarily organisational integration.

It is possible that the arrangements set out in the Bill about how a tariff can comprise of more than one service does allow the possibility that commissioners could use this to commission integrated pathways of care. What is fundamental as to whether this will happen in practice is to do with the extent of the Any Willing Provider market. At the moment, there is a lack of clarity about the scope for where an Any Willing Provider market will be, which is where you would get competition for patients in the market, and where there will be scope for commissioners to much more actively shape services in the way you describe through the commissioning process-clearly through an open and competitive tendering and procurement process-but be allowed to actively shape services.

That is the fundamental issue, about how extensive the Any Willing Provider market will be and whether we will be talking about an Any Willing Provider for quite small and defined bits of care, and the scope that there will be left for commissioners to really shape innovative products-pathways of care, packages of care-and seek to commission, hopefully with consortia, innovative providers across public, private and notforprofit sectors to really deliver what is the true outcome-I would agree with David-which is good value care and good outcomes for patients.

Q127 Chair: Does it come down to who has the power to define the terms of the competition?

Dr Dixon: There are two issues. One is who determines whether there is an Any Willing Provider environment for certain types of services and, therefore, the scope for tendering. It seems-and obviously this has been clarified most recently in David Nicholson’s letter-that there will be areas where Any Willing Provider will be mandated, so that will be by the Commissioning Board. In his letter he talks about "many NHSfunded services", suggesting a pretty broad scope. But in the same letter it also says that commissioners will be able to go to competitive tender and offer their services to one provider or a prime contractor. Those two things seem perhaps slightly contradictory, that many services will be under an AWP model and, at the same time, there will be scope for commissioners. It is going to be the Commissioning Board, perhaps, that will be determining this and then the question will be that Monitor will check whatever of those models is happening, that if it is competition for patients, there is competition and they are under competitive behaviour by providers, and if there is a tendering process, that the commissioners are tendering in line with procurement guidance set down by the Department which says that these are the rules by which you have to compete. The Commissioning Board is key.

Chair: I will come back to Monitor in a moment. Could I bring Dr Singer in?

Dr Singer: There are various levels at which we have to look at this. If we take something simple like a hip replacement, then, in a sense, we can split it up. We can have the physiotherapy, the preassessment, the operation and the aftercare and that can be integrated pretty easily, whoever is doing the providing. If we come to something like diabetes, it is much more difficult to get the integration that you require if there are multiple providers vying for part of that market. You can have people going here for their eyes and there for their feet. If the systems don’t talk to each other for these various providers, you then fail to get integration of care.

The third element, for me, is the integration in primary and social care because that is what we do. We try and integrate. That is the job of the GP, in a sense, to integrate all these various services. What we have found, over the last few years, is that the demise of the primary health care team, for various reasons but nevertheless the virtual demise, has been a fantastically negative factor in trying to integrate care. If we now put those sorts of scenarios into the Bill, I find it quite difficult to see how this is going to work. I find it quite easy to see for the simple stuff, and I think Any Willing Provider for cataracts, hips and hernias and all that business is going to be the patient’s choice, not the consortium’s, as I understand it. The consortium is not going to commission the elective care, as we call it.

When we come to the more integrated stuff, the diabetes care, the pathways and all that sort of thing, there will be room, perhaps, for consortia to be able to shape some of that, but my fear is that there will be provider dominance and you will get big providers who will do the commissioning. They will do the specification and they will come to the commissioners and say, "This is what we can provide for your people with diabetes." There could be a tendering process with the specifications and the commissioning done by a series of providers presented to a commissioner to make a decision. That is commissioning the wrong way round, in a sense. Nevertheless, it is a very potent part of what opening up the NHS market can do.

Dr Bennett: To pick up on Anna’s point about the scope of Any Willing Provider-and you are right that the intention is that the Commissioning Board will broaden the scope-my presumption is that one of the determinants in deciding what is and is not within Any Willing Provider will be precisely this point. If you are looking at services where it is most important that you get integrated care, then those are the services where you are more likely to see them outside than inside the scope.

On the issue of the role of providers in determining what it is that is provided, inevitably it is going to be a dialogue. It should be a dialogue between the commissioners and the providers to work out what can be provided and what will meet the needs of patients best.

Q128 Chair: If an individual commissioner takes the view in a particular locality that the service for a particular group of patients is going to be better provided by pursuing an integrated model, is that something that Monitor would take a view is open to challenge?

Dr Bennett: Not that decision per se at all. By the way, a lot of this will be complaints-driven, so it is a question, in many ways, as to whether somebody else feels it is not being done properly. Where a challenge could come and where a complaint could arise would be if commissioners decided, in their locality, that they wanted the provision on an integrated basis and they were, say, in dialogue with a provider who could, working with others, provide that care and then another provider said, "We could do this too, working with another group of providers" and the commissioner said, "No, we’re not interested. We only want to talk to you". That would be a situation where someone might complain and we would get involved.

Q129 Chair: I totally accept that point, but it is an important point, is it not, that if a commissioner has the power in the new world to determine that a particular service or group of services is better provided on an integrated basis, that is a commissioner decision and is not, itself, open to challenge by Monitor on competition grounds?

Dr Bennett: No.

Dr Dixon: I would agree.

Q130 Chair: That seems to me to respond to some of the points that you were making.

Dr Singer: Is it not open to the provider that does not get the contract to make a challenge?

Q131 Chair: Yes, but only, as Dr Bennett was saying, to challenge it on the grounds that they could have offered the same integrated service that the chosen provider did. That is a different proposition from saying, "We want to be able to offer a bit of that but not the rest of it."

Dr Dixon: I don’t think that contradicted what I was saying. The concern I have about this is what scope will remain for GP commissioning consortia at the local level to be able to have the flexibility to decide where they want to go for commissioning. A more integratedservice provision will depend largely on the scope set by the National Commissioning Board about the extent of Any Willing Provider. What will be important is what rules there will be to govern if local commissioning consortia said, "We want to commission an integrated diabetes service but the National Commissioning Board has said that there is an Any Willing Provider service for podiatry."

Let us take that as an example. It is a simple thing that you could imagine could easily lend itself to a price and an open competition of podiatry service. What flexibility would that local commissioner have as part of that commissioning process to say, "No, we have an integrated service provision. They have their own podiatry as part of that integrated package of care and, therefore, we are not going to have Any Willing Provider for a podiatry service because, for our population, we have this integrated diabetes service"?

Q132 Chair: But it follows, does it not, from what Dr Bennett said that, at least as far as podiatry is concerned for diabetes patients, it would be open to a commissioner to say, "That is part of our integrated package of care"?

Dr Dixon: Not if it is mandated that that is part of the Any Willing Provider market, unless there were exceptions.

Adrian Masters: This might help the clarification. Where the Any Willing Provider policy starts is with the choice policy. There is a question of what choices we are going to be expected to make available for patients. That is going to be set, I would say, to a significant degree, at a national level. In order to make choice operate effectively, you have to be able to standardise the offering. You have to be able to say, "Here is a standardised offering", which various providers-and this is where the Any Willing Provider point comes in-could offer at a price that has been set. To set a price we have to have a standardised and wellunderstood offer. So you start off with the choice policy, and people will expect-and NICE will expect-a certain range of choices.

If you had a new kind of service, like a very integrated service, for example, for patients with serious longterm conditions or comorbidities, etcetera, that is a new service. There is no standardised offer available. There may also be questions of scale. You would look to the commissioner to say, "Go through some kind of open process" and come up with a specification of that service that they think is appropriate and to make it go through a similar open process with other providers being able to come in and offer to provide that service. That is led by the commissioner because they are specifying the service and that wouldn’t be on the choice offer. There is no standardised offer to be putting on a choice offer.

Q133 Chair: That definition of service by the commissioner could include some elements of a service that elsewhere and for other patients is provided as standardised.

Adrian Masters: That is the critical question in the middle, isn’t it? Let us imagine podiatry is on that list as a simple service of what is on the national list and somebody comes along and says, "We can bundle this together as part of the offer for this particular group of patients and we will give an integrated offer for these groups of patients with these longterm comorbidities and conditions." The rule is going to need to be set out by the Department in the regulations that the Bill says they are going to set. My belief is that they will say, in those circumstances, that it is appropriate for the commissioners to say, "For these groups of patients we will bundle the podiatry service into this contract." It has to be written by the Department because it is the issue where that two parts of the policy-

Q134 Chair: Hang on a second. Is it the Department or is it the Commissioning Board or is it-

Adrian Masters: The legislation says the regulations are written by the Department. That is what it says. I imagine, probably, what they are going to do is say that the Commissioning Body is going to set the list of what is on the national choice menu. The legislation says the regulations are set by the Department.

Chair: I now have a number of colleagues wanting to come in.

Q135 Andrew George: As to the integration of the service, in this carassembly plant-or whatever analogy is operating-as far as diabetes is concerned, I can see that. But as to an integrated service which commissioners may want to ensure is provided so that acute services, particularly acute emergency services, have sufficient capacity around them to deal with the range of emergencies that arise-which tend not to arise in car assembly plants, I have to say-to what extent does this model allow a commissioner to design that, which one might call a general hospital-in other words, with all the services that are necessary in order to receive a range of emergencies coming in? To what extent is that model of, one might call it, a general hospital put at risk by this commissioning process?

Dr Bennett: Adrian, you may want to have a go too, but this is again getting to the heart of the decisions the Commissioning Board will need to make. I am sure what we will see is the services currently provided by a DGH being, to some extent, broken up into separate services commissioned or provided on an Any Willing Provider basis separately, but you are right to say, of course, that there is the need to work out what that implies for the connections between the services. If you have a DGH that is providing a range of services, all of which are provided under Any Willing Provider, and they are successfully providing all of them, then they will be able to go on providing the whole set of services even though patients are making choices about individual services. To some degree, that is the way it is working now.

Q136 Andrew George: Are you saying that if a commissioning consortia defined a package of service that was equivalent to a DGH, you, as Monitor, would defend those other providers of services and say, "No, we could provide elements of this, so we are going to disallow the consortia from designing that particular service because it is too big, too integrated and it is skewing the market in favour of a particular provider"?

Dr Bennett: Those are separate points. If you got into a situation where a commissioner wanted to commission such a large integrated package of effectively everything a DGH currently provides, almost certainly that will run counter to what the Commissioning Board will be trying to do through Any Willing Provider. Many of those services are going to be provided under AWP anyway, so there will be the fundamental difficulty in trying to do that. It is not an issue for Monitor at all. It is a Commissioning Board issue.

Chair: Can I bring Dr Dixon in?

Dr Dixon: Your question raises a number of very important points and we are uncertain exactly how this will work. The intention is that, in future, commissioners will be less focused on commissioning organisations. So there will be less about having a contract for an organisation for all it does and it will be much more focused around service lines and so on. It is unlikely that that type of commissioning specification would take place.

But you raise some very important points about how we commission for services such as emergency and ICU, where you need to assure a certain amount of capacity regardless of activity. They are not suited to the type of volumebased contracting or AWP models or

activitybased models. We do need commissioners to have other types of contracts which ensure that they are commissioning for capacity regardless of activity. We know in things like urgent care there is also a need for not just focusing on the DGH and what currently is provided there, but systems and networks of urgent care provision which link up your outofoffice, walkin centres and so on. Even in an area like urgent care, it is likely, in future, that there should be people looking to commission. The difficulty here is that GP-commissioning consortia are probably too small and too local to look at the sorts of regional network structures for different levels of urgentcare provision that are needed.

The final point that you raise by your question is the interdependencies between services currently provided by single institutions. These reforms do have, by creating greater transparency about separation of price, separation of service line and, indeed, through designation of services-which I think we may come on to a bit later, and I don’t want to pre-empt your questions but that is the issue here-a lot of hidden crosssubsidies. There are a lot of hidden interdependencies that I don’t think we particularly understand that well. These reforms will start to tease out some of those and make them more transparent. For example, if your orthopaedic surgery is under an Any Willing Provider and patients and GPs refer elsewhere and that diminishes-it is not designated-you, as an FT, say, "We are not getting any patients. We are not making money on this. We are going to close down our orthopaedics." But you have an A&E and there are interdependencies. You need those trauma surgeons around to continue to run your emergency service. Do we then have to designate part of your orthopaedic services and subsidise them, even though they are not making money under the choice environment? There are some really, really important questions that will be very challenging to work out and I don’t think we will know the answers to these things on day one of implementation.

Q137 Dr Wollaston: This is obviously going to be incredibly expensive and risky, particularly over the transition.

Dr Dixon: I think that that is the case. This is an enormous technical challenge, even-looking down the table at colleagues from Monitor-in making the market work, in setting the right prices and having the right feedback loops to tell you whether your prices are handing large windfall gains to certain providers, whether you really have an efficient price, what is the evidence for designation, how can we be clear about the impacts and benefits of competition? To make the market work, this is going to be a big job. It is going to have costs.

Q138 Dr Wollaston: Do you think it is compatible with delivering the Nicholson challenge?

Dr Dixon: I think there is a high risk that it will be too slow to deliver, given that we need to make the productivity savings now.

Q139 Valerie Vaz: Who does that job of pulling it all together?

Dr Dixon: Which job?

Valerie Vaz: The one that you just described, pulling it all together.

Dr Dixon: It is not clear who in the system will, at least at the strategic level, drive the sorts of reconfigurations of service across whole systems of care that are absolutely necessary and are necessary now. There is a real tension between the strategic commissioning and this hand of the market. As I say, it is going to take quite a long time before we can see the beneficial effects of the hand of the market on shaping services, and there is really a job to be done now. Obviously, PCT clusters are not in a great position, I don’t think at the moment, having gone through a lot of reorganisation, to be continuing to lead some of the work around strategic reconfigurations of services which are necessary. You had the previous discussion about "We can’t have everything at the end of our road." That is the point. In order to deliver the productivity challenge, we need to change where and how the services are delivered. Those things, if they are to be done, need to happen sooner than waiting for this new mechanism.

Then there is the question of whether that new mechanism will do it and do it effectively. I am not going to judge on that, but your point about the transition is that we haven’t got the time to wait for that. We need another mechanism now, and that has been the need for strategiclevel commissioning. But with no SHAs, with PCT clusters obviously looking inwards and GP consortia and pathfinders not yet in a position ready to do that, there is a question mark about where and how that happens in the system.

Q140 Andrew George: This will require armies of accountants, will it not?

Valerie Vaz: Or management consultants. GPs can’t do this, can they?

Andrew George: In order to be able to identify those costs, there is going to be an enormous amount of work and it is going to be contested as well.

Dr Dixon: David and Adrian may want to say more about the skills, but certainly Monitor and the National Commissioning Board will need a very different set of skills, I think, than the traditional NHS manager skills, whether that be in actuarial risk pooling. There are all sorts of new terms that we are going to get a lot more familiar with. Yes, to set efficient prices we are going to need more than the current number of civil servants sitting in Skipton House working out the national tariff.

Chair: I am going to bring in Dr Singer, and then perhaps Dr Bennett would like to comment on the armies of accountants point.

Dr Singer: We are beginning to discover that what was offered to the GP body was they would have 80% of the budget and control of the NHS. This is simply not viable. Consortia can be more than two practices-6,000 patients-and we are talking about reconfiguring, in the case of A&E, for a population base of 500,000 to 1 million. A&Es have to have 24 hour access, 365 days a year, to everything. There is no point in having an A&E if you have no orthopaedic surgeon on call 24 hours a day. That is obvious.

It is not clear at all how consortia, even if they have a 500,000 population, are going to manage this because we have lost the next tier up. I don’t know who is going to do that job and I don’t know how a hospital with the local A&E is going to be able to survive if there are failing departments within that hospital and that is not attended to or there is a better tender. This is a big issue. A&E is obviously crucial to everybody’s feeling about the NHS, and we know about trolley waits. It is absolutely crucial that that bit works, and I don’t see how it can do unless you designate the whole lot, which, of course, is exactly what this is designed not to do.

Dr Bennett: On the armies of accountants point, Anna is right that one of the things that is needed is a more detailed and even clearer understanding of the costs of all these different services and how they interact and so on. There is an element of that done by the Department at the moment through the PbR and tariff setting, but there is a lot more that should be done. We, in Monitor, will be responsible for that. Indeed, we will need analysts capable of doing that analysis, but obviously, in the belief that by having that clearer and deeper understanding you can then promote greater efficiency in the way the services are delivered.

Q141 Rosie Cooper: Could you incorporate this in your answer? Do you intend to regulate providers of commissioning support arrangements?

Dr Bennett: I don’t think that is in our remit, no, but you are getting to the question that Anna raised and Dr Singer picked up on as well, which is about issues like reconfiguration and how you do the strategic commissioning. It clearly has to be in there. It is very much an issue for the Commissioning Board and not for Monitor. But, in some way, the new system has-with the combination of the GP consortia, the support provided to those consortia as commissioners and the NHS Commissioning Board collectively-to be able to do that sort of strategic commissioning.

Q142 Chair: Two thoughts strike me from what has been said so far. I am not clear about the difference of concept between commissioning integrated care for diabetes patients and commissioning integrated care for A&E patients. It seems to me they are precisely the same concept. If you can defend the integrated pathway for the diabetes patient as a commissioner, then, presumably, you can defend the critical mass required to deliver an integrated A&E service as a commissioner through exactly the same principle. My second thought is that if you have that power as a commissioner to defend your concept of the integrated service you are seeking to commission, where does designation come in? Is that not simply superfluous?

Dr Singer: Designation has to come in because you have to have the A&E open. My problem is everything around it.

Q143 Chair: No. I am sorry. My point is that if, as a commissioner, you have to have A&E and you have the power to defend whatever is required to deliver A&E, why do you need a power to designate?

Dr Bennett: On the designation question, the issue there is what happens if the provider of the service is the only provider of that particular service that is available to its local community but the provider gets into difficulty. Designation is all about making sure that there is continuity of the provision of the service even if the provider themselves gets into difficulty where there is no alternative provider.

On the integrated care for A&E, yes, there are similarities. I think the critical issue is where you draw the boundaries. If you finish up in a situation where you define the boundaries around A&E as being the whole of the DGH, then you have somewhat frustrated the policy, but I don’t think that should be necessary.

Q144 Chair: I understand that, but simply to say, "We are defining this integrated package to be whatever happens to be provided at a particular moment in time on a particular site" is presumably a view that could be contested.

Dr Bennett: Yes.

Q145 Chair: But with a proposition that, "This is what is required to deliver an integrated A&E service", it seems to me, if you can defend it for the diabetes patient why can’t you defend it for the A&E service?

Dr Dixon: If I may come in, you are right that, in principle, there is no reason why you couldn’t commission an integrated service. The difference is that for A&E, for stroke and for some of these other services, the level, that is, the population size, at which you would need to commission that integrated service has to be on a much larger scale. At the moment, it seems in the guidance and provisions in the Bill, the expectation is that GP consortia would come together in order to do this and, if they failed to, the Commissioning Board could do this on behalf of the consortia. In our view, it will be necessary for there to be some types of service that are commissioned at a more strategic, higher level, whereas, obviously, the prevalence of diabetes means that any commissioning consortia, one would hope, would be very well placed to commission an integrated diabetes service, with some innovations around that.

The other thing is we were making the distinction between these easytomeasure defined episodes of care, that we might have an elective and saying that they lend themselves to Any Willing Provider, but nothing in the area of chronic disease, or whatever, would. In time, there is no reason why you couldn’t have a national specification, based on NICE standards, for an integrated diabetes service. If we had good information about what a really high quality, integrated offer with selfmanagement support actually looked like, it would be possible to come up with a tariff-a year of care, riskadjusted capitated price-and have quite a lot of nationally specified standards, contracts, prices, for an integrated diabetes offer. So even in areas like that, over time, I think the Commissioning Board could choose. Again, that would seriously constrain GP commissioning consortias’ ability, perhaps locally, to do that, but do we want repeated innovation and different contracts written? We could waste a lot of energy and, given the small management costs that consortia are going to have, they are not going to have the capacity to take every service and do a redesign on it locally. We have to strike a balance between national standards, what we know to be best practice, and the ability for local clinicians to work together to adapt that and how they want to offer the service locally.

Adrian Masters: If you can specify and set a price, you can give choice to patients, and get competition for improvements in quality. That would be the direction we would like to move the service in over time.

Q146 Nadine Dorries: Dr Dixon, where do you think the GP’s patient fits in all of this? We hear so many conflicting stories-we know that 4,000 GPs are signing up for this so they are probably not peddling these stories-that GPs may feel patients will look at them with suspicion because they will feel that they are commissioning in a way that is not appropriate or in a patient’s best interests. Some people feel that patients will now be almost lobbyists in their own right and become more empowered. I have to say I buy into that, about the patient going to tell the GP what they would like to do and have far more power. But where do you think the patient will be in all of this? Will they be better off as a result of GP commissioning? Will they be more empowered or will they look at their GP suspiciously? What do you think?

Dr Dixon: There are a couple of things. There have been concerns aired about whether any financial interests that the GPs might have as a consequence of being part of commissioning consortia might affect the level of trust that patients have in their clinical decisions.

Q147 Nadine Dorries: Is there evidence of this from the fundholding days?

Dr Dixon: I am not sure about any evidence, but obviously at that point my understanding was that the issues were about reinvestment and practices rather than direct personal financial gain. Obviously, in the current proposals, GPs personally won’t be able to pocket any savings they make on the commissioning budget, so that would need to be made clear to members of the public. Obviously, practice income would be contingent on the outcomes they achieve as commissioners. That is what the quality premium is around. But I suppose you could argue how different is that from achievements on QOF, where the higherperforming practices get a higher practice income, or indeed on some of the localenhanced service payments. I am not sure that the principle is particularly different.

What is perhaps more fundamental is GPs’ role in future in making rationing and priority decisions. The extent to which they are seen to be doing that could have a fundamental impact on the relationship between patients and GPs. There is some discussion about the role of NICE in that respect. The further away some of those difficult priority decisions are, or at least the evidence for those decisions is generated nationally, the better because they are necessarily going to be fraught for local GPs if they have to do that.

Q148 Nadine Dorries: However, if NICE assumes that role, it means patients are left with very little power again.

Dr Dixon: Of course, one does want some variation in what purchasers prioritise because we want it to be in relation to the needs of the people they are serving. That is the case already with primary care trusts, so it is getting the balance right between justified variation, because of differences in population need and population priority, and unjustified variations, which might arise in the different services that are funded.

The other element on the patientGP relationship is in relation to choice. With other organisations, we, at the King’s Fund, did the Department of Healthfunded evaluation of patient choice at point of referral, which is, to date, the main example of where we have patient choice and Any Willing Provider. GPs that we spoke to-and these were enthusiastic GPs on the whole-were quite reluctant to be routinely offering patient choice. They made their own decisions about who valued choice and the differences regarding how routine or specialised the onward referral was.

I think there is a tension there between raising patients’ expectations about their abilities to choose and how involved they are going to be in decision making and the realities of a busy clinical surgery and how willing the professionals are, both GPs and, to some extent, around choice of treatment, secondary care, to take the time to involve and inform patients in decisions both about where they go and about their choices of treatment. We have an awfully long way to go. We know from survey data that patients want to be more involved than they are in decisions and, certainly from the evidence that we had, only about half of patients are offered a choice. Many of them are happy to rely on a GP recommendation as to where to go, but people do think choice is important and it is not always the people that you imagine who value choice. There are a lot of stereotypes about it being the articulate middle class, and our evidence does not support that. I am happy to share more on our choice work with the Committee if that is helpful.

Q149 Dr Wollaston: Following up on that point, in substance is it meaningless for GP commissioners to be commissioning integrated care pathways if patients can have a choice to go anywhere they like? Could they still choose to go outside that commissioned pathway if they wanted to?

Dr Dixon: That was our earlier conversation. We are not sure at this moment what degree of flexibility there would be, or indeed rights, for the patients, at least for parts of that care, to opt out of the commissioned package. That is yet to be determined.

Q150 Dr Wollaston: Or wholly outside the commissioned package.

Dr Dixon: Or wholly outside it, yes.

Q151 Nadine Dorries: Would that be a conversation between the patient and the GP based on the decision by the GP? Or is that where you see NICE stepping in if the patient has an appeal, if you like, to the alreadycommissioned pathway? Would that be the point at which you see NICE coming in?

Dr Dixon: This points to the need to be very clear about how GP commissioning groups will engage patients and the public in their commissioning. Clearly, they are not necessarily going to be required to have a public representative in the governance, but they do have a duty to involve them. It would be very important to involve them in the "what" is being commissioned. But, obviously, once that is commissioned, there is a question about whether GPs, who are providers but are associated with that consortia, have to then refer patients into that preferred provider arrangement-the integrated package-or whether GPs, with their patients, have the right to choose to not be part of that. Those issues will have to get worked out locally. I don’t think there is anything that has been specified about that.

Dr Singer: Because I am in danger of coming across as very negative, I want to bring some good news. The experience of talking to patients about swapping their drugs on the advice of prescribing advisers-because they are coming off patent, there is a cheaper deal or whatever-is that you can engage patients in a sensible, rational discussion and patients will come in and say, "That’s fine. How is your budget going?" There is an understanding out there that there is this thing called "a budget" and GPs hold it. It is a misconception, often, where they think there is a practice budget and you can’t overspend. But never mind. There is at least an awareness of that.

There are conflicts of interest, because you can have GPs on the Commissioning Board who are not only GPs locally but are directors of a private company that has a tender locally, and there could be difficulties in explaining to patients their choice, pushing people in one direction or the other. The other thing that happens-and this happened in the days of the 18month waiting list-is what we call the blunting of perception. That is, you are aware there is an 18month waiting list and you tended to refer people later for their hip or their knee replacement because you knew that if you just bunged them on the waiting list they would be there 18 months anyway. That is established.

There could be a similar blunting of perception here. If you are aware that your consortia is overspending, there is a conflict between the ethical responsibility to do the best for the patient in front of you and the wider public health responsibility to stay within budget for the consortia. Already, GPs get letters from PCTs regularly saying, "You can no longer do this because we are over budget on this elective. Can you hold on and wait till April comes when the new budget comes in?" All those things will come into play but in a much, much bigger form. My younger colleagues are going to have difficulty in disentangling some of these issues.

Q152 Andrew George: In view of that, if competition is being encouraged on the one hand and patient choice is being freed up and made more available on the other, and I know this has been partly teased out, perhaps this is an attempt to try and bring Monitor into this difficult conundrum as to how you can widen patient choice in the kind of scenario that Dr Singer was describing, in other words one where, inevitably, there is going to be-I don’t think anyone is disagreeing with this-greater rationing, or at least the prospect of greater rationing. A supplementary is that it is not just the treatment when all of the diagnosis is agreed and the prognosis understood and you know that it has to be a hip replacement, or whatever-it is something very straightforward and everyone understands, an easy to define, mechanical solution treatment-but how much patient choice is there, for example, in the process of defining what that treatment should be? In other words, what if that patient is saying to the GP, "Sorry, I want to be referred to another specialist because I disagree with that specialist’s proposed treatment, which is more physiotherapy rather than a hip replacement"? Then you have clinicians not necessarily agreeing with each other on the best way forward. I can’t see how patient choice is going to be provided in this system.

Dr Bennett: I will attempt to answer some of those points. On the rationing, of course it exists today. You are quite right to say it will be done in a different setting in the future, but I don’t think these changes fundamentally change the nature of the problem. They do move where the problem lies.

In terms of choice, clearly there is an issue if the budget is exhausted in a particular consortium, say, or for a particular activity within a consortium. Indeed, the consortia are going to have to work out, with guidance from the Commissioning Board, how they deal with that. I don’t know the answer yet. In terms of choice, once it is agreed that there are no issues about the rationing or budgetary constraints, then, in principle, the initial point of choice is where the patient is referred. If we get into a situation where a patient is referred somewhere and then is, in some way, unhappy with the care they have received, which I think is what you were postulating, clearly that has to come back to the GP. Exactly how they deal with that, to be honest, I am not sure, but, in principle, the fact that there is a set of providers ought to mean that another provider can be chosen.

Q153 Andrew George: A GP, as part of a consortia, will have commissioned particular providers and now he or she is offering choice to their patients who may opt for a provider that they have not commissioned.

Dr Bennett: A lot of what you would be talking about would be under Any Willing Provider, so they are not being commissioned by the GP consortia. They are providing a service under Any Willing Provider, accredited in some way.

Adrian Masters: They might just go on the national Choose and Book menu, for example.

Q154 Andrew George: So they may go from Cornwall to the north of Scotland or-

Adrian Masters: If there’s family. It has happened.

Dr Bennett: If, for some reason, they wanted to, in principle, yes.

Adrian Masters: Yes. They may have family locally in Newcastle and maybe they want to do it up there. It is plausible.

Q155 Andrew George: Yes, under that arrangement, of course. And you don’t think that that will conflict in any way with the attempt to encourage competition among providers.

Dr Bennett: In a sense, it is at the heart of it. In so far as you have a significant number of willing providers, all accredited, providing a similar service, with users making their choices based on the quality of the service and whatever else they are concerned about in deciding where to go, then, effectively, you have competition among those willing providers. If you have a provider who is not getting as many referrals as they would like, then, hopefully, they will look to why it is that patients are choosing to go somewhere else and understand how they are making their decision and adjust.

Q156 Andrew George: Can they then compete on price?

Dr Bennett: No.

Q157 Chair: Can I probe you on that? In the circumstance where a provider agrees with a commissioner that it makes sense to both sides to do it at lower cost, below tariff, but there are other AWP providers at tariff, does the patient have the freedom to choose to go to a more expensive provider outside the reduced cost?

Dr Bennett: It is not clear to me-and I think Adrian would agree-how a commissioner could agree a lower price. Within Any Willing Provider the prices will be set by us as national tariffs for a given service.

Q158 Chair: But commissioners are agreeing to it every day and have been for years.

Dr Bennett: Under the current system, yes.

Q159 Chair: So those concessions will have to be withdrawn, will they?

Dr Bennett: That is our understanding of how it is meant to work.

Q160 Chair: So costs go up.

Adrian Masters: The key question is: are you committed to the choice offered to the patient? If you are committed to giving them a choice, you can’t say, "Here is the one provider I have made a deal on the unit cost with and you have to go there." I would say you would start off by saying, "What is the choice offer that we are making to patients?"

Q161 Valerie Vaz: What he is trying to say is that you can’t have it both ways. You can’t have it both ways. Can I follow up on that? Does that mean that you license Any Willing Provider and do you license them with conditions or not?

Dr Bennett: There are three issues. A provider will have to be registered with the CQC to make sure they are providing a safe service. They will have to be licensed by us, and that is how we will set prices and so on, but they also have to be accredited by the commissioners in some way to say they have met any other condition.

Q162 Rosie Cooper: Mid Staffordshire was licensed, credited and all the rest of it. It has an NHS badge on the front door. It still killed some of its patients.

Dr Bennett: There were problems in Mid Staffordshire, absolutely.

Rosie Cooper: That does not really give me any great comfort.

Q163 Valerie Vaz: The answer to that is, yes, is it?

Dr Bennett: What is the specific question?

Q164 Valerie Vaz: Do you license Any Willing Provider or do you have conditions?

Dr Bennett: There are three different things. The CQC register any provider that is meeting the required standards. Mid Staffordshire had issues, but, hopefully they will be picked up under the new system. We would license any provider that meets our conditions, but our licence is mostly the mechanism through which we are able to do things like set prices. Then there needs to be an accreditation by the commissioners.

Adrian Masters: There are two other steps. Of course, we would want to give the patient information about the quality of the various providers and we would want them to get advice from their GP, who will say, "I would advise you go for this provider rather than that one because I think they are better quality for your purpose."

Chair: Dr Dixon has been trying to get in and Dr Singer.

Dr Dixon: There are a number of issues. The whole issue of price competition, and so on, is still very vexed. There has been a bit of exaggeration, I think both ways, about what is or is not implied by a maximum tariff. Clearly, if you have an Any Willing Provider market, as we have just discussed, that is, where you have market entry based on meeting minimum quality standards and it is about being licensed by the regulator and about saying, "We meet the contractual standards as set down by the commissioners"-probably set down once by the Commissioning Board would make sense-certainly the CCP’s recent report is suggesting that the move away from a single national contract, which currently operates for choice at point of referral, the extended choice network, and the move to having PCTbased contracts is a complete nonsense because of high transaction costs. If you are going to have this, you may as well have one contractual basis and then you need a fixed price.

The issue, we know, is that even when you offer patients a choice, many of them value local providers-convenience-and are quite loyal to local providers, particularly if they have had a positive experience. If they have not had a good experience, there is a very high predictive that they will go somewhere else. That is what our research on choice tells us.

If you are a commissioner and you know you can predict that, even if you offer a fully informed choice to every patient, about 70% of your patients for a particular procedure are likely to choose that, then you are a bulk purchaser for that provider and you don’t necessarily want to be paying the full price. You are not guaranteeing that provider volume, but you are predicting that it is more or less likely you will be one of their significant buyers over the course of the year. Given you have to make some productivity savings, you might want to negotiate a bulkpurchase deal, and that means going below the tariff price. The question is whether that would all be allowable. I am saying it is not guaranteeing the volume but it is making a pretty good prediction and therefore you want to negotiate with that provider. You are still giving patients a choice. Would that be allowable?

Q165 Andrew George: Dr Bennett has already told you that it is not.

Dr Bennett: Our assumption-

Q166 Chair: Dr Bennett said he was not sure.

Adrian Masters: Probably not-

Q167 Andrew George: Are you saying absolutely not, because this is quite critical?

Dr Bennett: It is, and the reason that we are maybe expressing slightly different views at its fundament is because these are issues to be resolved in their final detail. Our assumption is, because it is difficult to have choice of Any Willing Provider if you start negotiating on price-you could do it in the way you are suggesting, but you can see difficulties in that-it is unlikely that that is the way it should go, and we are particularly concerned that we don’t have competition on price in a way that starts to drive down quality. That is what we are worried about.

Q168 Andrew George: I know, but there is the pressure. If there is genuine competition, all the market signals that any provider would want to give would include price. It is inevitable, is it not, that there will be pressure, particularly in a crowded market, for that to happen? Signals will be given. How are you going to resist that? I can’t see how you can resist it.

Adrian Masters: The payment that is expected is a nationally set tariff. The prices are fixed. Then you compete on quality.

Andrew George: But you are saying, in response to Dr Dixon’s comment-

Q169 Chair: It might be easier if I can interrupt. That has been the theoretical public policy for some years and we now discover, when we go and talk to PCTs, that nobody has taken any notice.

Dr Bennett: It is not entirely working the way it is supposed to, I think we would say. Yes.

Dr Dixon: There are also always going to be services, as we have described previously, that are not appropriate to have an activity base, or are not subject to Any Willing Provider. The issue there is we already have within PCTs, within block contracts and other mechanisms, in effect, local price negotiations. So even where we have had this system of transparent fixed prices, there have always been elements of care that have been subject to negotiation. The issue is not "Are we having no price competition or are we having fullblown price competition?" The issue is about how we strike a balance between the two, where it is appropriate and where it is not appropriate. I agree that one of the fundamentals of having an Any Willing Provider is that you have to have a fixed choice. You have to have certainty, both from the point of view of the payer and of the provider, that if a patient turns up, takes their referral and shows up, they know what they are going to get paid. You do need that.

Q170 Chair: It is worth also rehearsing, is it not, the argument that is used on the ground for the flexibility that has grown up, which is that insisting on tariff prices in each case creates a whole series of perverse incentives in particular health economies where costs are different in one provider as compared with another? If you apply a tariff in a health economy where the costs associated with that procedure are lower than the national average, what you do is create a perverse incentive for high activity in an area where what you want to see is resources released in order to meet a real demand rather than an artificial demand.

Dr Dixon: Agreed.

Dr Singer: I just want to say this is a crucial issue for my organisation because, for us, it is the issue of what is on the face of the Bill. We can all agree here to be benign about what is on the face of the Bill and later people may agree not to be quite so benign. But if the Bill states that there will be a national tariff and there will be a maximum price, there is no point in stating that unless people can get under that price. Why else do you have a maximum price? This features very heavily in the chapter on pricing and in the chapter on competition. If we are going to have a system where competition is a very big element-and part of that has to be price, it just has to be, and I can’t see any reason why it would not be-we are going to go into this scenario that I think is extremely dangerous because we will not have quality data on new entrants. Let us be very clear about that. I, as a GP, am sat there trying to advise my patient, there is a new person just arrived on the list-and this is happening at the moment, where people are getting on the list that comes up under the Choose and Book programme-and I haven’t a clue about them. There is no data on them in terms of their NHS provision and you cannot get data out of the Freedom of Information Act on them because it doesn’t apply to them. So we are in a situation where we are saying that the GP will help the patient to decide and the GP will not have data. This is not really fair.

Q171 Rosie Cooper: If I may, I would just broaden this a little. In many of the conversations we have had this morning, we have talked about the commissioners and we have talked about the NHS Commissioning Board. To me, the relationship between Monitor and the Commissioning Board is one of the big unknowns at the moment. The Commissioning Board, subject to the approval of the Bill, will have a very wide remit. I would like to ask Dr Bennett, as Monitor, how Monitor would distinguish between, as I see them, the three roles of the NHS Commissioning Board. First, national leader for quality improvement, promotion of choice and working with you in the design of tariffs. Secondly, it is also the body accountable to the Secretary of State for managing the overall commissioning revenue limit, delivering specified outcomes and, in turn, holding consortia to account. And, thirdly, it has a role as a commissioner for services. It is almost Chinese walls. What is your relationship going to be with the National Commissioning Board in relation to their activities in those three spheres? For me, there is potential for conflict and interrelationships there.

Dr Bennett: If you take the first of your three categories, which is around designing tariffs, promoting choice and promoting quality improvement-I think that was your first bucket-we will have to work very closely with them on that. There is no question about it. But I don’t see any fundamental conflict. On things like quality improvement, if, for example, the Commissioning Board, or together, we felt that there was some way of structuring tariffs to incentivise improvements in quality-

Q172 Rosie Cooper: How, in practice, will you get there?

Dr Bennett: How will we work together? We have to work that out. I can only say what you said, really. It is going to be incredibly important that we have a very effective working relationship in all sorts of ways to do that because it has to be hand in glove for that to work.

Q173 Rosie Cooper: Forgive me-and I don’t mean this in a wrong way, I am saying it genuinely constructively and it is just the use of words-but, before, when we were talking about complaints and organisations not working properly and you said you hoped it would be picked up, the great body of NHS users will be thinking, "Hope is not a strategy." They need more than that. They need to know that it is not going to happen again. We talk about Any Willing Provider. How do we know that certain hospitals are not going to be left with the complex stuff and Any Willing Provider does the easy stuff? I know that was the old line, but there is still some truth in it. How will Any Willing Provider drive innovation? And clinical training? Where does it all fit? How do we make this better? People tell me all the time it is going to be okay. I don’t see the evidence base.

Dr Bennett: You raise a lot of different issues in that. Earlier on, you were going back to the issue around Mid Staffordshire because I had said I would hope it would be picked up. I would like to address that specifically because, obviously, that is a very important issue. All the evidence indicates that that was a trust providing care which was not of a sufficient standard for too long.

Fundamentally, the way I believe the system should now prevent that from happening again is the way CQC works, the quality regulator. CQC, of course, wasn’t around when the major problems were happening in Mid Staffordshire and-

Q174 Rosie Cooper: Is that true?

Chair: It was the Healthcare-

Dr Bennett: It was the Healthcare Commission. But I think that is an important change. When CQC was formed from the merger of the HCC and some of the other regulators, they decided to take a different approach. I am not here to defend the CQC, but if you look at the sorts of things they are doing, their objective is much more to spot problems at an earlier stage and intervene as soon as they do. That is the main line of defence for the quality issue, and it should apply just as much once these reforms are in place as it should today.

Q175 Rosie Cooper: Will you have any input in seeing whether it has enough resources to be able to deliver the service?

Dr Bennett: We, Monitor? No. That will be an issue for the Department, absolutely, of course-

Q176 Rosie Cooper: But if you are relying on it?

Dr Bennett: The whole system does today and should in the future rely on CQC as the main line of defence, beyond the trust boards themselves, to make sure providers are providing safe care to an appropriate standard.

Q177 Andrew George: But how do you address the point that Dr Singer just mentioned, that newcomers to the marketplace have no pedigree?

Dr Bennett: This is really a question for the CQC. But I believe what they would say is that, first of all, any newcomer into the market has to be registered by CQC. They would be inspected and would have to meet their standards. The moment they are in the system, they will be subject to CQC’s regular processes of inspection. They have this quality risk profile where they maintain a constant monitor using all sorts of data that they collect, including soft intelligence. One of the things that I think went wrong at Mid Staffordshire was that soft intelligence, things like trends in patient complaints and so on, wasn’t being used. They are now trying to use that to spot where there may be problems. That is the way that should go.

Q178 Chair: We are at one o’clock and there is one question we would like, if we may, to put in particular to Dr Bennett. The impact assessment for the Health and Social Care Bill says that existing NHS providers have a 14% cost advantage over independent providers. In your evidence to the Public Bill Committee you appeared to suggest that not only might that not be right but there might be a cost advantage the other way. This is, shall we put it, salient if we are going to start setting national tariffs, is it not?

Dr Bennett: Yes. The point is that the impact assessment lists out a number of different ways in which there are advantages and disadvantages for the public sector versus voluntary or private sector providers. It then goes on to put a number on just a few of those. For whatever reason, it just puts numbers on those which are advantages for the public sector providers. The first thing I said is that that is an incomplete analysis. You cannot draw any conclusion from that 14%. In fact, we are not in a position to say whether the 14% is right, but whether it is or not, there are definitely big chunks in the analysis that would need to be done, including quantifying the cases where the public sector is disadvantaged. Only when you have done that analysis as carefully as you possibly can, can you say, in net, who is advantaged or disadvantaged.

Q179 Chair: But it needs to cover such things as training costs and the other free-rider costs that, as is often argued, exist in the private sector.

Dr Bennett: Exactly. Those are the sorts of things which are not quantified at the moment.

Dr Singer: So there will be different prices for different providers?

Dr Bennett: No, that doesn’t follow. There are different costs for different providers and if those different costs in some way represent an unfair advantage, then at some point we will need to think what to do about them.

Dr Singer: Who will pay that? If you have a skewed thing because of expenses in the system and you have got the consortia having to choose or advise, then how does that happen? They are going to go for the cheapest, presumably.

Dr Bennett: That is a good reason why price competition needs to be dealt with very carefully. Any Willing Provider or fixed national tariff, from the commissioner’s point of view and from the user’s point of view, they all cost the same.

Dr Singer: Who pays the difference?

Dr Bennett: Under those circumstances, the providers will have different costs, but they are all facing the same price. The users of the system, the people paying for the care, pay the same amount wherever the user goes.

Q180 Chair: But there remains a public policy question. If you are then seeking to equalise the costs in a national tariff for providers who do meet costs that other providers do not, in particular training costs-which is the one that is always quoted-you can’t simply provide the money and pay it to the private provider and not collect a training cost out of the private provider, presumably?

Dr Bennett: That is an example of the way you might want to tackle it. You make sure that everyone is making their own fair contribution to training costs, exactly.

Q181 Rosie Cooper: When will you be in a position to know that and, therefore, feed that into this new system? You are obviously not able to say that today.

Dr Bennett: At a technical level, we take over our role in April next year, but, frankly, a lot of these issues are going to have to evolve over a period of many years, and they are issues that exist today. They are not new issues.

Q182 Rosie Cooper: But if Any Willing Provider will be knocking on your door the day after, how are you going to deal with it?

Dr Bennett: We will have to set priorities. We will have to decide which things we are going to focus on first-which are most important.

Q183 Rosie Cooper: So some could get by?

Dr Bennett: Some?

Q184 Rosie Cooper: Let us say you are focusing on hips, for example, and you are doing all that part of it, and someone comes along with a bright idea for doing ankles-

Chair: Doing primary care-make it interesting.

Rosie Cooper: Okay, doing primary care. Will they get through the door quicker because you haven’t been able to set the price, incorporating all these other things like training-the kind of things I was talking about, complexity?

Dr Bennett: If you take the level playing field issues, what it may mean is that, in so far as there are some advantages and disadvantages today in the system, they will remain for a while until we can get round to dealing with them.

Q185 Rosie Cooper: Absolutely, but an Any Willing Provider coming along and knocking on your door-but knocking on the wrong door because you are not working on that bit at the minute-may look as if they are competing on cost or quality and get through. But when you then come later to analysing it to the same degree, you will find that they are not providing the same things.

Dr Bennett: On the quality front, that is absolutely for the mixture of CQC and the commissioners. I can’t see circumstances in which they will be providing fundamentally different quality. They have to provide what the commissioners want. What might happen is that a private sector provider may say, "We think we have got a cost disadvantage because our pensions aren’t being subsidised", or whatever they think is the source-that is a common one that the private sector will mention. We will say in due course-

Q186 Rosie Cooper: But they may not be contributing to training.

Dr Bennett: And that’s what the public sector would say and we would say, "That’s the way it has been for quite some time and that’s the way it is going to stay until we are able to take a considered view about what the real situation is and what we can do about it." If, in the meantime, they are, nevertheless, willing to provide the service, then that is good. Even if they feel they have a cost disadvantage but they are still willing to provide the service-

Q187 Rosie Cooper: But then they have a major advantage.

Dr Dixon: If it is the other way, they could make a windfall.

Dr Bennett: They could make a windfall today.

Rosie Cooper: Exactly.

Dr Bennett: So our objective over time ought to be to address these issues.

Rosie Cooper: But how long-

Chair: We are already on borrowed time and we are unlikely to resolve this issue before people-

Q188 Rosie Cooper: How long do you think that "over time" would be?

Dr Bennett: My key point is that it is us fixing issues that already exist today. It is not that we are creating new issues.

Chair: Thank you very much. That was an interesting and useful session. The story will run.