UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 119-iii

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

HEALTH Committee

IMPLEMENTATION OF THE HEALTH AND SOCIAL CARE ACT 2012

tuesDAY 2 JuLY 2013

RT HON JEREMY HUNT MP, UNA O’BRIEN and SIR DAVID NICHOLSON

Evidence heard in Public Questions 234 - 403

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Oral Evidence

Taken before the Health Committee

on Tuesday 2 July 2013

Members present:

Mr Stephen Dorrell (Chair)

Rosie Cooper

Andrew George

Barbara Keeley

Charlotte Leslie

Grahame M. Morris

Andrew Percy

Mr Virendra Sharma

David Tredinnick

Valerie Vaz

Dr Sarah Wollaston

________________

Examination of Witnesses

Witnesses: Rt Hon Jeremy Hunt MP, Secretary of State, and Una O’Brien, Permanent Secretary, Department of Health; and Sir David Nicholson, Chief Executive, NHS England, gave evidence.

Q234Chair: First, can I say on behalf of the Committee to all three witnesses that you are extremely welcome? All three of you have been here before, so I suggest we do not go through the normal rubric of introductions. I think you know that this was a session originally set up in the context of our review of urgent and emergency care, but, given the state of public discussion of health issues, we want to raise a broader range of topics than that, including questions on the Care Quality Commission and the implications of the spending review, and some discussion about where we have got to with the Health and Social Care Act. So it is quite a broad agenda. I am going to try to keep things moving at a reasonably brisk pace.

Can I start the questions with reference to the work we are doing on urgent and emergency care? Last week we had before us witnesses, including Barbara Hakin, who talked about the importance of urgent care boards as being part of the policy response to service pressures as they are being experienced through the emergency care system. It is fair to say that Barbara’s response to the Committee did not convince us that urgent care boards would have, or possibly were intended to have, the executive capacity to deal with the issues as they are being experienced in individual local health economies.

A general manager of one of the major hospitals in the midlands said to me that, in her experience, the urgent care board was a further delaying tactic and obstruction to effective policy response to urgent pressures, rather than a means of solving the problem. The Committee would be interested to hear from you, Secretary of State, and possibly Sir David Nicholson, what role urgent care boards are intended to perform in relieving the pressures on the urgent and emergency care aspects of the service.

Mr Hunt: Good afternoon, and thank you to the Committee for inviting me back. It is obviously the biggest operational concern facing the NHS at the moment. We have all been spending a great deal of time thinking about it. Across the system we have all believed that to tackle the challenge of A and E, which is where the pressures in any part of the system manifest themselves, we need to have short-term measures and a long-term solution. The urgent care boards are really the short-term measures to help deal with the immediate operational concerns, but we are working through long-term issues with our inelegantly named vulnerable older people’s plan, on which we will be reporting back in October, which is looking at the broader question of whether the right people are going into A and E and there is better alternative provision and more fundamental questions. But we do not want to hang around in implementing those as well.

I certainly feel confident that the urgent care boards are more than a bureaucratic exercise. We need them to do a lot more than that because they have to make a difference for this winter. One of the main new things that those urgent care boards do is decide how the 70% of tariff money that is withheld from A and Es above their 2009 baseline numbers is spent.

Q235Chair: There is an issue there, is there not, because that is not money lying around unspent; it is money that is currently being spent somewhere in the system? If the urgent care board is to regard it as a resource available to relieve urgent care pressures, it has to be taken out of some service where that money is currently being deployed.

Mr Hunt: That is correct, but that money was always intended to be used to reduce demand for A and E services by taking specific local measures. Part of the difference between urgent care boards as they are right now compared with a few months ago is that we have given them the specific task to make sure that that money is being used to reduce pressures on A and Es. That is particularly important for hospitals, because they have a seat around the table at urgent care boards. This is the first time that hospitals have had a say in how the money they are not able to receive is being used to reduce pressures on their A and E departments.

Q236Chair: But urgent care boards are definitely in your characterisation of them executive bodies empowered to make decisions.

Mr Hunt: In the case of that money, yes, but there are lots of other things they have to do about establishing proper partnership between all the bodies that have an influence on whether we are delivering urgent care satisfactorily. What happens within the confines of a care home or A and E department is the executive responsibility of the relevant chief executive, but the key executive decision they have to make is over the allocation of that money. I do not know if you would like to add to that, Sir David.

Sir David Nicholson: That is absolutely right. If you think about the difference between success and failure in the way that the emergency services are managed across the system, it depends very much on the way in which the individual hospital is organised and manages its flows within the hospital. More than that, it needs the flows and the system to be managed right the way across from primary care through to social care.

In the run-up to making a judgment about urgent care boards, some hospitals felt they were being left on their own; that the rest of the system was not sufficiently connected to take the decisions that needed to be made; and that there was a lack of transparency in the way that 70% of the resources were available. CCGs are supposed to have identified it separately. As part of the arrangements, PCTs who produced the 70% last year were not allowed to spend it without the permission of the SHA. We had a lock on it. We released that lock this year because we thought that was in the spirit of what was happening. In different parts of the country people have responded in different ways to that 70%, but the real point behind the urgent care board is that it is a forcing mechanism to ensure that people do come together at a system-wide level.

Q237Chair: Therefore, was Mike Farrar right to characterise it as rebuilding a system management capacity into the management of the NHS?

Sir David Nicholson: Undoubtedly, there is an element of that. The way the system is constructed is that people will come together in partnership to make it happen, and in lots of parts of the country that is precisely what happens-but not everywhere. It was important that it did happen everywhere, and that was the way in which we thought about urgent care boards to force that system management into the system, which, due to lack of maturity or a whole set of other reasons, was perhaps not quite operating in the way we had hoped.

Q238Chair: The Committee was left rather bewildered by Barbara Hakin last week because she appeared to imply that it was a voluntary initiative and, if a local health economy did not want to have an urgent care board, another solution would grow up; and maybe they were not a permanent part of the system, none of which has the feel of it being an effective executive agency for sorting out urgent care needs.

Sir David Nicholson: It is true that we do not have the same kind of powers over CCGs that we would have done over PCTs. I cannot direct them in that kind of way. A lot of what we do is based on the voluntary principle and people coming together in the interests of patients. That is true. If there is a better way of organising yourselves locally to do the same kind of things, we would not stand in people’s way.

Q239Chair: But, absent you or your staff being persuaded of a better way, you expect urgent care boards to be created.

Sir David Nicholson: Yes.

Q240Mr Sharma: It is argued by NHS providers that problems in emergency departments can in part be attributed to lack of available social care and patient flow blockages caused by delayed discharge. However, the LGA told us that delayed discharges attributable to social care are going down. What evidence is there that the process of discharge into social care is improving?

Mr Hunt: I think there is evidence that, taken as a whole, the number of beds taken up by delayed discharges across the whole NHS is about 3%, and that is a fairly stable figure. It has come down from where it was. I believe that about a third of those are directly attributable to discharges into the social care system. You can take some comfort from that, but, when you talk to chief executives of hospitals and to A and E departments and ask, "What is the biggest single pressure that is a worry for you in terms of hitting your 95% target?", they say it is the lack of availability of beds in the hospital to admit people who need admitting. In the last few months, nearly all the chief executives have said that they have approximately two wards full of people who could be discharged but they are not able to discharge.

That, in turn, is related to the fact that the kinds of people coming into A and E have more complex and acute conditions than they have had previously, and are therefore harder to discharge because you have to find somewhere to discharge them to. That is why there is a very strong connection between the increase in money going into the joint health and social care fund announced by the Chancellor in the spending review and our belief as to what is necessary to find a long-term solution to the problems of A and E.

Q241Valerie Vaz: Sir David, I think this is the first time you have appeared before the Committee since your resignation.

Sir David Nicholson: My retirement.

Q242Valerie Vaz: Okay-retirement. It seems to be the longest retirement note ever.

Sir David Nicholson: Thank you.

Q243Valerie Vaz: Can I also say for the record that you have been a servant of the NHS for a long time, and we should recognise that? Can I now also take you to task because you spoke to the Health Service Journal rather than MPs and announced a major review of NHS strategy? First, why did you not tell us, and, secondly, what is it?

Sir David Nicholson: My guess is that I speak to MPs probably more than almost anybody else, in the sense of the kind of job that I am in. I am constantly in front of various Committees being held to account, so there is no shortage of me talking to MPs.

Q244Valerie Vaz: Good-well, Parliament. It is a major review. It is going to cost money, isn’t it?

Sir David Nicholson: Well-

Q245Valerie Vaz: Is it?

Sir David Nicholson: NHS England was set up as a board-as an organisation. It has statutory responsibilities under the Health and Social Care Act. A part of those responsibilities is the planning and organisation of health care. In order for it to make sensible short-term decisions about the allocation of resources and what it does, it needs to have a broad idea of what it is trying to achieve and its general strategic direction. I explained to the Health Service Journal that we were doing some work to work out what that strategic direction might be. Any sensible board-any sensible organisation with the responsibilities it has-would do that, to think about the future and what it might mean for the NHS. Many of the decisions that we need to take have long-term implications.

If you think about the NHS of the future, particularly in a period when, for as long as we can see, there is going to be little or no growth in health care expenditure, how can it start to organise itself to deliver its responsibilities to be universally available and free at the point of use but within the resources it has? It seems to us sensible that we would kick off some work to enable us to do that. We are not announcing the result of it.

Q246Valerie Vaz: It is a review, isn’t it?

Sir David Nicholson: It is important that we have the widest range of discussions both locally and nationally to help us make those decisions.

Q247Valerie Vaz: How much is all of that going to cost, and who is doing it?

Sir David Nicholson: The activities involved in this will engage all health care organisations, so it is wrapped up in any running cost that you would have to run a health care system. Is the production of materials the sort of thing you are talking about? We have allocated for NHS England a budget of £3 million over the next three years to do that.

Q248Valerie Vaz: To do the review.

Sir David Nicholson: To do the work related to the review: the production of material, the engagement arrangements and all of that.

Q249Valerie Vaz: You are spending £3 million and you did not consider it appropriate even to write to us to tell us about it.

Sir David Nicholson: We have not actually done it yet.

Q250Valerie Vaz: But you told the Health Service Journal about it first. Let’s move on slightly. You feel that it is appropriate to have a review when the Health and Social Care Act is just bedding in.

Sir David Nicholson: The Health and Social Care Act gave you in a sense the architecture and building blocks. It did not give a general view about the direction that the NHS was taking. If it is right that the direction of the NHS is, on the one hand, about centralisation and specialisation of services and, on the other hand, more out-of-hospital care, what are the sorts of things that we need to do to enable that to happen?

Q251Valerie Vaz: When does this review report-to you or to the Secretary of State?

Sir David Nicholson: It does not actually report, in the sense that we do not see a kind of document that says, "This is the strategy for the NHS." We want to publish something that sets out the issues we are all tackling-the demographic changes, the constraint on resources and the technological changes going on. It sets out the drivers for change. We want to have an engagement process with the public and CCGs, so in that environment what will the services look like in your area for the next three or four years?

Q252Valerie Vaz: No one is taking notes.

Sir David Nicholson: No. The outcome of that-

Q253Valerie Vaz: So there is going to be a document.

Sir David Nicholson: The outcome of that-

Valerie Vaz: There is going to be a document.

Sir David Nicholson: No. The outcome of that-

Q254Valerie Vaz: No, there isn’t going to be a document.

Sir David Nicholson: The outcome of that will be for each clinical commissioning group a plan for their locality. They will work with their health and wellbeing board and local population to set out what that will be, so for each CCG there will be that plan.

Q255Valerie Vaz: Is it right that this is a plan separate from what they are doing under the Health and Social Care Act?

Sir David Nicholson: It is under the auspices of the Health and Social Care Act.

Q256Valerie Vaz: But it obviously was not good enough for them to do all this plan; they needed an extra £3 million from you.

Sir David Nicholson: The Health and Social Care Act does not tell you what the NHS of the future will look like.

Q257Valerie Vaz: Did you tell anybody about that when it was first put through? When did you know that you were going to have to do a review following implementation of the Act? I just find it extraordinary.

Sir David Nicholson: You show me a board and I will show you a strategy. That is what boards do.

Q258Valerie Vaz: But not in writing.

Mr Hunt: I have not finished.

Q259Valerie Vaz: You said there is not going to be a document at the end of this.

Sir David Nicholson: I am just trying to explain to you what there will be. Each CCG will have its plan for the future for its locality, which it will agree with its local population and health and wellbeing board. NHS England has specific responsibilities. We are responsible for specialised commissioning. We want to engage with people and set out what specialised commissioning will look like over the next five years. We have had the experience around paediatric cardiac surgery, for example. What does that mean for the rest of the services? What are we going to do on specialised services? That is a responsibility that we as NHS England have under the Health and Social Care Act.

Secondly, we have a particular responsibility for commissioning primary care. What is primary care going to look like in the future? How are we going to define what general practitioners do, and what is going to be the balance between general practice and other services? Because we commission it, we need to understand the direction in which we want to go.

The third area is transparency, which is a really important thing for the NHS going forward. What are we as NHS England going to do? In the same way that we organise the publication of the surgical outcomes data, what other things will we do in the future to increase transparency in the NHS?

The final thing is to do something around incentives and penalties: the tariff.

There will be products for each of those things. There will be a general view about the direction and then a specific document setting out what NHS England will do in those terms.

Q260Valerie Vaz: Good. There is going to be a document. When do you expect it to report? You say it is ongoing. What did you tell the Health Service Journal?

Sir David Nicholson: We want to make sure that we have something available for when we launch the planning round towards the end of this year. We would expect some of the products to be available towards the end of this year.

Q261Valerie Vaz: Can I turn to the review generally? You mentioned transparency, which is very important. Could you somehow put in there what happened around Leeds, so there is not this conflict in data where one person is just listening to two people on the telephone about certain data and makes a decision about it, rather than listening to other people, or considering the proper data? Is that part of the review, too?

Sir David Nicholson: Transparency is really important as part of this. Huge amounts of data are becoming available. We are very keen to publish it in a form and a format that people can understand and use both for individual patients to make decisions about what they do but also to help and support clinicians doing their work, with benchmarking and all the rest of it. So we are very much in favour of all of that.

The question you ask is about intervention. What happens when the data show something? The case in Leeds is an interesting one, in the sense that it was not just the data. One of the big lessons from Mid Staffordshire is that people got very excited about the data and started to argue about them but something very bad was going on. There was a whistleblower in Newcastle about what was happening in Leeds. There were conversations between the medical director of the NHS and other paediatric cardiac surgeons elsewhere about it, and there were the data. On the basis of those three things Bruce Keogh, quite rightly, called a pause, in consultation with the trust itself, to paediatric cardiac surgery to enable proper investigations to take place, and that was what happened.

Q262Valerie Vaz: Secretary of State, can I turn to reviews under your aegis?

Mr Hunt: We all have our own reviews.

Q263Valerie Vaz: There seem to be rather a lot, but I really need to get my head round it, and probably for the public to know what is going on. A number of reviews are coming out under Francis. Could you expand on what they are? We have names like Berwick, Cavendish, Ann Clwyd and Bruce Keogh, and then there is the emergency care review. Could you set out for all of us the reviews that are going on, and when they are likely to report?

Mr Hunt: Chairman, I am not sure how long you have got, but I will give you a summary.

Q264Valerie Vaz: Are there that many?

Mr Hunt: No, of course. First of all, there is a clutch of reviews. We responded very quickly after we received the recommendations from Robert Francis. We thought it was such an important issue that we needed to give Parliament and the public a very clear sense of direction of the main changes that we wanted to make. We have been thinking about those really from the day I became Secretary of State, because we knew it was going to be such a big thing.

There were certain things within that time scale, which was only six weeks or thereabouts after receiving the Francis report, that we constructed-we published our response at the end of March and got the report at the beginning of February-which we really needed to give more thought to and we wanted to make sure that we got the right solutions. Those revolved around the right approach to patient safety-for example, whether the duty of candour should apply to individual clinicians below board level, and the whole role of health care assistants and their training. On safety, we asked Don Berwick to do a report. He will probably be reporting next month but soon. Camilla Cavendish is doing a report on health care assistant training. There was also a specific concern about the way hospital complaints procedures were operating. We asked Ann Clwyd and Tricia Hart to do a review on that.

I am, as I suspect you are, not one for getting bogged down in endless reviews. We published our initial response, and, before the end of the year, we will publish our full and final response to Francis going through what we are going to do about all 290 recommendations. In that final response, we will incorporate all the proposals from those different reviews that we intend to accept. We will publish the reviews when we get them and then we will do that. That is one clutch.

I think there is only one other really significant review.

Q265Valerie Vaz: To take you back to Cavendish and Clwyd, when are they going to report?

Mr Hunt: I am meeting Camilla Cavendish tomorrow, and I think she will be reporting before the end of this month. I would expect all those reports to be completed before Parliament sits again in September. We may not quite have all of them done by the coming recess. That is one group.

There is only one other key review that we are doing, which is what we were talking about earlier: the long-term challenges of A and E. I do not want to pretend that this is the definitive long-term answer to A and E. But when I went round A and Es, and when I have been talking to people and discussing with colleagues, people have said that one of the issues at the heart of what is creating the pressure in A and E is vulnerable older people who are going into A and E departments who could be much better looked after in the community. I happen to think that is the group of people we let down the most in the NHS at the moment anyway. We are doing a review, which we have called the vulnerable older people’s plan. That will report back early in the autumn. Again, it is a short time scale because it needs to inform the new mandate that will be published before the end of the year. For the sake of completeness, that has three strands. One is urgent and emergency care, which is Bruce Keogh’s review; another is primary care and how it looks after vulnerable older people; and the other is social care and integration. Those are the three elements of that.

Q266Valerie Vaz: That is reporting in September. What about the mortality rate?

Mr Hunt: As part of the Francis response, while we waited for the chief inspector to get going-one of the problems with the CQC was the lack of expert inspection teams; it takes time to appoint a chief inspector and get the necessary expertise inside the CQC-we decided to have an immediate look, led by Bruce Keogh, at the 14 hospitals with the most worrying mortality rates. That will be reporting back before Parliament closes this session.

Q267Valerie Vaz: And that is it.

Mr Hunt: I think that is it. Permanent secretary, have I missed out any of the many reviews that we have going? No; I think that is basically it.

Valerie Vaz: Thank you.

Q268Charlotte Leslie: I have a quick plea in looking at the children’s cardiac unit strategy and data. To avoid any doubt in the debacle we had over Leeds, something quite concerning was pointed out to me. On my rather crumpled copy, if I look at the mortality rates and those earmarked for closure-Leeds, Leicester and Brompton-I can see that Leicester and Brompton, which are circled and a bit mucky, are well down on the mortality rate data, yet Alder Hey and Guy’s are very near the alert and alarm area. I would be very happy to share this chart with the Committee and the panel, if it would be helpful.

Just so that we know, in the era of transparency, that things are being done correctly, one of the concerns raised with me-obviously, I would not raise such a concern-is that the public suspicion is that Guy’s is not there because the chief executive of Guy’s and St Thomas’ Trust is Sir Hugh Taylor, who has very good links. I know that he has worked very closely with you, Sir David. In the interests of giving people absolute faith that units are being closed with full data, and for exactly the right reasons, can we make sure that everything is out in the open? I know Imperial College had significant difficulties in accessing the data, and I have seen the correspondence. So people can have absolute faith and there is no room for any worries of the kind expressed to me in that department, can I get that assurance from all three panellists?

Mr Hunt: Let me start by saying that we are in favour of total transparency. In terms of the safe and sustainable process, mistakes were made in the way that process happened, and that was why the IRP said it needed to be halted and we needed to redo, in particular, the bit of the process that you are talking about, which is the way that units were selected for either the continuation or cessation of their services. That did not command the confidence of the public and the IRP said that it was not done properly, so we have wasted a great deal of time. It is very bad news for the NHS that this incredibly important issue is going to take longer than it should to resolve.

You used the word "debacle". I would not use that word to describe Sir Bruce Keogh’s intervention earlier in the year-

Charlotte Leslie: No, I agree.

Mr Hunt: -because I think he did absolutely the right thing. Sometimes you have to make a decision about patient safety on the basis of incomplete data and the information you have in front of you.

Q269Charlotte Leslie: And learn from Mid Staffs.

Mr Hunt: Indeed. One of the lessons we have to learn is that on those occasions we need to be quicker in stepping in.

Sir David Nicholson: For the record, the chief executive of Guy’s and St Thomas’ is Ron Kerr; the chair is Hugh Taylor.

Chair: Andrew wants to come in.

Q270Andrew George: Yes, just on the other side of the coin of the question that Virendra asked about the failure to discharge from hospital causing the back-up pressures in A and E. There is also a suggestion that the failure to admit patients from accident and emergency services into the hospital is as much the result of significant cuts in hospital beds, and the fact that so many hospitals are operating on red alert, or its equivalent, on a regular basis. You will have seen the article in the Sunday Telegraph at the weekend that pointed out that ambulance services had been backed up at A and Es and were unable to unload patients because of the pressure. In the case of the Royal Cornwall Hospitals Trust, there was an eight-hour ambulance wait with one patient and a seven-hour wait with two others. That hospital has seen a 25% cut in acute hospital beds, partly as a result of budgetary pressures but also because of the mantra that we must reduce acute hospital beds. Surely, that is also creating or adding to the pressures that the A and E services are currently experiencing. Would you not agree? It is not just a question of discharging into the community.

Mr Hunt: There may be different factors happening at different hospitals, and we do not have executive control over what happens in every single hospital. It may be that there are hospitals that have made the wrong call in terms of the number of beds they have, but it is important to disentangle from that analysis the broader picture, which is a massive increase in day cases, with people going into hospital to be treated and going home on the same day, and the overall trend in the NHS to reduce beds in response to that, which is a positive thing. It means that people are at less risk of hospital-acquired infections and often have a less traumatic operation, so they are able to go home on the same day.

across the NHS as a whole, bed occupancy over the last few years has remained broadly stable at between 83% and 87%. There has not been a dramatic spike in hospital admissions, but that is not to say that the scenario you paint is not true in an individual hospital. Part of the work of an urgent care board is to try to understand whether those are the factors and, if necessary, put them right.

Q271Andrew George: You referred to bed occupancy of between 83% and 87%, but that is across the hospital estate as a whole. In terms of acute rather than emergency receiving wards taking patients who are admitted from A and E departments, I do not have the figures here but bed occupancy levels are significantly higher than that. Is that not the figure you should be looking at and quoting rather than including the wards that have the routine elective work?

Mr Hunt: I am not aware that there have been significant cuts in the number of beds in the emergency receiving wards and medical assessment units and those areas in hospitals, but I would not be surprised if the occupancy in those beds has gone up because of the 1 million more people going through A and E and the increased acuity of the conditions of the people coming into A and E. If you cannot get people out of those beds because there are delayed discharges in another part of the hospital, that creates the problem you are talking about in terms of ambulances backing up. Again, it is difficult to have that conversation in the abstract without looking at what is happening at a specific hospital.

Q272Andrew George: Sir David, do you monitor this and do you have figures for bed occupancy in emergency receiving hospitals, or is that not something that you see as your role?

Sir David Nicholson: We do not collect the occupancy figures in the way you have described. What we do-we are just about to go through this process for the year 2013-14-is monitor the total number going into intensive care unit beds, paediatric intensive care unit beds and emergency admitting beds in the winter in order to get a view about the capacity we need for winter. We do not do that on a regular basis, but when we get into winter-the November to March period, on which we focus our attention-we have literally daily situation reporting on the utilisation of beds in those circumstances.

Q273Chair: Can I probe you a bit further on the scale of the problem of delayed discharges? When Lord Howe was here last week, he told us that 2% of discharges suffered from delays due to poor liaison with social care. Your figure is 3%. Neither figure comes close to according with the anecdotal evidence. Why is there this gap?

Mr Hunt: I may have been talking of a different figure. I was talking about the total number of beds in the NHS. It is a very interesting question, because we have formulated a policy based on a combination of the data and also the anecdotal evidence. We are not ignoring the anecdotal evidence, and that is why we thought it was so important to invest in this.

Q274Chair: Is it because a case is not regarded as a delayed discharge until it is accepted by the social care authority, and it is not accepted until they have got the space?

Mr Hunt: I will have to look into that and write to you. I do not know the answer to that question, I am afraid.

Q275Chair: A letter on this subject would be of interest, because it looks as though the Department is working on the basis of a statistic that, frankly, produces hollow laughs round the health service.

Mr Hunt: I can reassure you that we are doing a huge amount around the area of delayed discharges. There is an additional £2 billion going into supporting joint working between health and social care.

Q276Chair: We want to come back to that.

Mr Hunt: I am sure you will. That is predicated on, for example, the social care system receiving people seven days a week, so it is possible to discharge people at weekends. That is perhaps the single biggest thing that hospitals say is difficult, along with the bureaucracy of getting people into the social care system.

Q277Dr Wollaston: Can I turn to one of the factors that is leading to avoidable admissions to A and E, and that is the level of consultant cover? We know that you get better and faster decision making with good senior support. We heard from the College of Emergency Medicine that only 17% of emergency departments provide 16-hour consultant cover. That is Mondays to Fridays, not even the weekends. We have the problem that 50% of trainee vacancies are unfilled, so a whole cohort of the next generation of consultants is not there. When are we going to stop training postgraduates in the wrong specialties and train them in the specialties that are needed for the NHS and patients, and how are we going to do it?

Mr Hunt: First of all, the issue of recruitment to emergency medicine is a very serious problem. We do not live in a Stalinist economy, and part of the way you solve that problem is by making it attractive to go into emergency medicine. I think doctors who work in emergency medicine are some of the most remarkable people I have ever met in my life. It is an extraordinary vocation, but one of the things that will give them confidence is a sense that we have a good long-term plan for A and E going forward and we are not just going to rely on it to sort out any problems that happen anywhere else in the NHS. Part of what we are constructing at the moment with the short-term and long-term measures is something that I hope will give people confidence. This is "show, not tell"; we have to deliver this, but I hope it will give people considering a career in emergency medicine the confidence that there is a good long-term plan in place, given the demographic pressures on the NHS.

Q278Dr Wollaston: You are going to use all four factors; you are not going to disincentivise the system we currently have where we train too many doctors in the wrong specialities and have too many posts that people can choose to take in the more popular specialties, even though there are no consultant vacancies and no need for them.

Mr Hunt: I am not aware that we are training too many doctors in particular specialties. We need more doctors, full stop. We need them in most specialities because of the increase in demand across the system. We have 6,000 more doctors than we had three years ago. But there are two particular areas of pressure at the moment: emergency medicine and GPs. In both of those we need to do the same thing, which is to make sure that we have a good plan for those parts of the profession going forward that gives confidence to people that this is a good long-term bet.

Una O’Brien: One of the new organisations, following the reforms, is the creation of Health Education England. I do not know whether the Committee has yet had an opportunity to take evidence from the chair, Sir Keith Pearson, and the chief executive, Ian Cumming, but one of the things the Secretary of State and Dan Poulter have set for Health Education England in their mandate was for it seriously to look at, with local education and training boards, the future needs and how specialist training needs to develop to prepare in a more confident and systematic way for the changes you are referring to.

Q279Valerie Vaz: I do not know what is Stalinist about it. If there is a gap you need to fill it, and that is something you can do. I asked you a question in the Chamber and you promised me you were going to do something about it. The problem is that for three years the retention or take-up rate is 50% and then you have to bring in locums. That is the problem, isn’t it, and you need to do something about it? It is no good having a plan for the future; no one can wait for that. What are you going to do about it now?

Mr Hunt: The starting point is that you have to have a plan.

Q280Valerie Vaz: Don’t you have one?

Mr Hunt: I can sense a career in "Newsnight" coming on here. But then you have to implement that plan.

Valerie Vaz: I think I am too old for that.

Mr Hunt: In this case the pressures on A and E are something that has emerged relatively recently, but we have 6,000 more doctors than we had three years ago and we are recruiting more doctors into the NHS. Protecting the NHS budget has made that possible. That does not mean that new pressures do not emerge. Looking forward, emergency medicine is one area. As Sir David said earlier, much more emphasis on primary care and prevention is going to become increasingly important, and that is why in our mandate to Health Education England we have said that, for example, we want another 2,000 GPs. So things are happening.

Q281Valerie Vaz: You are in charge. Can I suggest that you have a chat with the General Medical Council because they might have some ideas on how to do that?

Mr Hunt: I do talk to the General Medical Council on a regular basis, and I also talk to Health Education England whose job it is to make sure that we have the right number of doctors and nurses with the right skills in the right areas, and that is a very important part of my role.

Q282Dr Wollaston: I have a quick question on emergency medicine, following up a personal bugbear. Have you made an assessment of the impact of alcohol on delays in A and E? Can I press you, Secretary of State, to give your personal backing for a minimum price for alcohol in the strategy?

Andrew Percy: Can I press you not to?

Mr Hunt: Let me find a middle path between two views on it.

Dr Wollaston: A third way.

Mr Hunt: I am in favour of any measures that reduce alcoholism, and that is definitely a pressure, particularly on inner city A and Es.

Q283Dr Wollaston: And every town around them.

Mr Hunt: Yes, and particularly at weekends. That is definitely one of the things that we need to address. Linked to that is much better access than we currently have to mental health services for people going into A and E. One thing that people in A and E departments frequently say is an issue is that it is difficult to refer people on to mental health services; it takes too long. They are never completely sure that they will get access to the services they need, and they are back again in A and E a few days later. That is very much linked to that issue.

Q284Dr Wollaston: But you have not answered my question. Would you be supporting a minimum price for alcohol which is evidence-based and called for by those in public health as a way of addressing what you have described as the importance of reducing alcoholism?

Mr Hunt: Can I put it in a very weasel-worded way and say that the Government are currently considering their response to that issue and will be making an announcement?

Q285Dr Wollaston: I am asking whether you would personally give your support to the measure.

Mr Hunt: It goes without saying that I am one of the key people crafting the Government’s response to this issue. Do I think we need to do more in this area? Yes, I do.

Chair: I do not think we have invited the Rt Hon Jeremy Hunt in a personal capacity.

David Tredinnick: You probably have.

Dr Wollaston: I see; all right. I will leave it.

Q286David Tredinnick: Secretary of State, I want to ask you where we are with NHS 111. When NHS Direct came before us, they said that the Department "will get patients to the right place, first time." That is the objective. Professor Matthew Cooke, then national clinical director responsible for NHS 111, made it clear that "NHS 111 was not introduced to reduce use of [the] NHS. It was introduced to simplify and improve access to urgent care services for the public and patients." However, there has been some controversy over the service. I put it to you that, because it relies on untrained call handlers, it tends to operate a risk-averse information technology system.

In what way can 111 create a better signposting for patients than the safest option for the call handler and the service as a whole, which is to direct patients to the accident and emergency department?

Mr Hunt: That is a very reasonable question to ask. We have had teething problems. It is available now in nearly 90% of the country, and operationally we are getting close to meeting our targets for 111. The underlying concept is one that everyone can agree with: it is a simple number that everyone can remember; the fact you are connected directly to a clinician, if you need to speak to one, rather than being called back is something people like; the idea that you are triaged only once and do not have to repeat your story lots and lots of times is a good one; and the fact you can have a service that is broader than the old NHS Direct and can direct you to the nearest 24-hour pharmacy, for example, if that is what you need, is a good concept. Despite the controversy, I do not think we should throw the baby out with the bathwater. It is a good idea. The initial piloting of the concept started under the last Government and continued under the coalition.

As to user experience, in the surveys we do, on the whole people say they are pretty satisfied with 111, but they also say that sometimes there is a sense of frustration in talking to someone in a call centre for a while before getting to a clinician. One of the things that Bruce Keogh is looking at in his review, Ms Vaz, which will be completed promptly, is whether it is quick enough getting through to a clinician. If when people dial that number they need to speak to a doctor or nurse, they want to do so quickly.

Q287David Tredinnick: That pre-empts my second question. NHS Direct added in their evidence that, following the roll-out, the most significant issue was that calls took more than twice as long as expected. Is that something you are going to address?

Mr Hunt: The time it took to answer calls was a matter with which we experienced operational problems when the service was launched. The volumes were much higher than anyone had predicted, but we are getting that particular element under control in terms of the time it takes. We are getting close to meeting our operational targets.

Q288David Tredinnick: Was that a problem with information technology and there just was not capacity in the call system to get the calls properly routed, or was it that there were not enough people?

Mr Hunt: It was mainly the latter.

Q289David Tredinnick: Is it the fact that the use of non-clinical call handlers has meant that we have had to train a whole new work force, presumably at some expense and difficulty? Have we in a sense recreated a wheel that was running reasonably well in the first place?

Mr Hunt: The concept behind 111 is an improvement on NHS Direct. There is a role for nonclinical people taking calls at the very early stages, just as the receptionist in an A and E department is not always a clinician and can often do a fantastically useful role, because they develop a great deal of knowledge and are trained to do their job.

The reason we need to ask the question, which is the right one to ask, is that in a 24/7 society people want advice quickly if they have a medical concern. Sometimes they do not know whether it is urgent or is an emergency, so they will do whatever is the easiest thing. One of the reasons for the pressure on A and E departments is that they have become, out of hours, the easiest way to get a quick answer to whatever is your medical concern. That has created unsustainable pressure, which we now have to address. We need to make sure that 111, as an alternative that can give people the other things that are available, apart from A and E, is extremely easy and quick to use; otherwise, people will just pop up to their nearest A and E.

Q290Andrew Percy: In our inquiry into urgent and emergency care we have heard about the role of NHS 111, hospital trusts and the role of the CCGs. Secretary of State or Sir David, what is the vision, and what role do you see for the ambulance service? What needs to change in the ambulance service, and what role do you feel they have in addressing the problem that we have seen in urgent care? I ask that question partly because most of my constituency is largely rural and a lot of the solutions to the problems we have heard about are urban ones, whether that is a walk-in centre or an intermediate care facility. Those tend to be in urban settings. So for a rural constituency such as mine it is either ring 999 or you might be lucky and there might be out-of-hours doctors, but that is about it. What do you think needs to change about the ambulance service, and where do you feel they fit into it in trying to address the pressure?

Sir David Nicholson: You are absolutely right about the distinction between urban and rural settings. I think you had before you Keith Willett, who is kicking off a lot of work around rural health services. I do not know whether we have done it yet, but we are about to appoint a national clinical director for rural health services, because we think this is an area that has not always been at the top of everyone’s agenda in terms of planning services. You make a really important point. In rural areas, ambulances have an absolutely critical responsibility here.

Some time ago a document was put out by the then chief ambulance officer, which I think was called "Taking the Hospital to your Home." That was all about the way in which paramedics and ambulance services could provide a much greater and more comprehensive service in rural and other areas, to be fair. For a whole variety of reasons, first because of some of the changes that we are making in terms of commissioning but also in terms of the changes ambulance services have been making, we have not made the progress that we should have done. Some areas, but not all, have done a lot. We have not created a tariff or payment structure that incentivises the ambulance service to do that. The priority for us over the next period is to make sure that the payment structures give the right incentives to enable ambulance services to play a much wider role in providing health services. You will know that, when they are run well, they are good organisations that can provide great services to patients.

Q291David Tredinnick: Have you talked to the fire service at all about the possibility of playing a part in supporting the ambulance service?

Sir David Nicholson: Yes, we have. In most areas you will see they have memoranda of understanding and arrangements with the local fire service and other emergency services to cross-cover, help and support each other.

Q292David Tredinnick: Is that something that you see developing in the future?

Sir David Nicholson: We certainly see it developing. We do not see a structural issue here. We very much think that ambulance services are part of the comprehensive local health services. We do not want to get into a position where people start talking about structural changes, mergers and all that. We absolutely do not want to go there, but we think there is lots of scope for fire services operating as first responders and things of that nature.

Q293Andrew Percy: One of my follow-ups was to be about the fire service. In large parts of the country the only people who will co-respond are retained firefighters. We have full-time firefighters who do an incredibly important job but are called out less and less year on year and who refuse to do it because their union tells them to, and that needs addressing. That question has been asked.

My other follow-up is about the tariff structure. You said that a review of it is being undertaken at present. When is that likely to be concluded?

Sir David Nicholson: We want to finish that by the end of this year and be ready for the next planning round.

Q294Andrew Percy: Will that look at how ambulance services are paid for reducing their call levels?

Sir David Nicholson: Yes.

Q295Andrew Percy: The example I have used before are nursing homes, which are often a source of a lot of calls. The ambulance service that goes in and tries to reduce those calls is penalised by the fact it is not conveying people to hospital. So that will be done by the end of the year.

Sir David Nicholson: Yes, absolutely.

Q296Rosie Cooper: Secretary of State, could you describe your understanding of the current complaints system in the NHS and whether you think it is fit for purpose? What improvements could you make in the short term and long term, if indeed you think there is room for improvement?

Mr Hunt: The answer is that it varies very dramatically from hospital to hospital and surgery to surgery, and we need to have more consistently high standards. If you want to have in a nutshell what I think a complaints system should be about-this comes on the basis of someone who is a new boy to the NHS, apart from being a patient in it myself-over the last 10 months I have met a number of the families who suffered at Mid Staffs. They always say that their complaints were ignored, but they really wanted to know that the hospital had learned from what went wrong and had changed its behaviour and processes in response to that. That was far more important to them than any kind of compensation.

Q297Rosie Cooper: What do you think the process is? My contribution to one of the health debates was on this topic. Genuinely, you as the Secretary of State, what do you think the process is? If I have a serious complaint-I am not talking about suing and getting into all those things-and I make it, what do you think happens from the day I make it to it getting perhaps to the ombudsman? You are the Secretary of State. What do you think happens?

Mr Hunt: The first thing you should do is complain to the hospital or provider.

Q298Rosie Cooper: Did you say to the hospital board?

Mr Hunt: The hospital will have a person whose job it is to receive those complaints, but the chief executive is absolutely fine. Then they go through a process. If you are not satisfied with that process, you can take it to the ombudsman.

The difference between places that do this well and the places that don’t is not just about the responsiveness in terms of time; it is about whether they are really listening to the complaint received. I look at a number of complaints myself. People write to me and often enclose a copy of their correspondence with the hospital, so I see those letters. I saw one this week, for example, where the chief executive of the hospital had not even signed the letter himself; he had pp’d it, which I thought was totally unacceptable, because it was a very serious complaint. There is a difference between hospitals where that happens and other hospitals, such as Salford Royal, which has one of the best safety records in the country, where you know that it is of huge interest to the chief executive and he wants to know what needs to be learned from each and every complaint.

Q299Rosie Cooper: Absolutely, and more power to his elbow. If it is not sorted out locally, it goes to the ombudsman. Do you know what percentage of health cases the ombudsman receives would be investigated?

Mr Hunt: It is very, very low.

Q300Rosie Cooper: It is very, very low-to the point where, if you can withstand the pressure in the hospital, i.e. the chief executive, or locally it is not resolved, you know the chances are, as you did in Morecambe Bay, Mid Staffs or wherever else, you will get away with it. Are you happy that that situation continues under your watch?

Mr Hunt: Not at all, but let me just say-perhaps you would not mind my answering your question.

Q301Rosie Cooper: You never managed to answer it the first time you were asked, which is whether you think it is fit for purpose. You ducked that. What improvements do you think there could be long term and short term? If you tell us now, I won’t say another word.

Mr Hunt: With respect, I obviously do not think it is fit for purpose if I have commissioned Ann Clwyd and Tricia Hart to do a review of hospital complaints procedures as part of our response to the Francis report. Obviously, I want to wait until I get their response before deciding what needs to happen. As I was going to say, there is something else that we have done or something else that is open to someone who wishes to make a complaint, which is to contact the CQC, which is the organisation that is supposed to be there as the nation’s whistleblower. They deal with safety concerns and complaints from patients. The whole time they have a team of people listening to those and they decide whether to do snap inspections. Through the recruitment of a chief inspector of hospitals and a whole specialist team, we have significantly strengthened the CQC’s ability to perform that role. Lots of things are available, but it is patchy throughout the NHS, which is why I hope that, through the new inspections regime, where the complaints procedure is not fit for purpose we will be able to motivate trusts to do better.

Q302Rosie Cooper: Do you think the media and public understand the CQC’s role as regulator? In your description of it then, it is almost the case that it gets past every other post, because the CQC will not investigate each of those complaints and go back to those families; it looks at the hospital and the regulation. Therefore, by not giving the ombudsman more resources, or whatever it is, to enable it to do more investigation, people are not getting their cases dealt with, and there is confusion between the role of the regulator and the role of the ombudsman.

Mr Hunt: We will see what the review of complaints procedures comes back with in terms of its recommendations with respect to the ombudsman and the resources at her disposal, and we will consider that very carefully. The role of the CQC under the new structure should not be underestimated. The problem is exactly as you describe. The public did not have either an understanding of what the CQC was there to do or have very much confidence that it would do it. By creating a structure that is modelled on Ofsted, where you have an independent organisation with no other responsibilities than to tell the public if the care at a hospital is safe or not, taking an overall view and looking at each department in a hospital in language that the public can understand, I think we will see a dramatic increase in accountability.

Q303Rosie Cooper: Absolutely, but it is really important that the direct questions that families have about care are answered and answered properly. For example, to say that it should be determined locally by the chief exec and no external light is shone on it is a big flaw. Sixteen babies died at Morecambe Bay; police are investigating 300 deaths at Mid Staffs. We can safely say that the CQC are not responsible for those deaths, but those responsible are the hospitals, boards, managers and front-line staff. Do you see the CCGs and GPs having any responsibility in the future? I know they will not have responsibility retrospectively, but in the future they will have responsibility, because they are commissioning that care from those bodies. My GP knows where they would send their family, and, if it would not be to one of these places, why am I going? How much responsibility do you think the CCGs and GPs have in it? Do you believe they do?

Mr Hunt: I do. Before I answer that, I think my permanent secretary wants to add a brief point in answer to your earlier question.

Una O’Brien: I completely understand the point you are making about second stage complaints. I know the Committee has looked into this on a number of occasions. We have had problems in the past with a possible conflict of interest in having the second stage done at the trust. We all agreed a few years ago that it was right to take it to the Parliamentary and Health Service Ombudsman. Dame Julie Mellor has identified the very point you have raised-i.e. her capacity to look at the right number. It is not so much the number but the number that needs to be looked at at the second stage. It is something that we are already discussing, and I hope very much that we can pick it up in the review. We recognise that there is an issue of capacity there.

Q304Rosie Cooper: We did a report on this about two years ago saying that. Why was it not picked up then?

Una O’Brien: I think it is being looked at now.

Q305Rosie Cooper: But so many people have died in the interim; so many people have suffered in that time. This Committee did a report; you as the Government responded, and you are acknowledging it now. The real frustration of people with the health service is that everyone goes, "Yeah, yeah, yeah, yeah. We acknowledge that; we do this and we do that." Then they don’t do it, and down the line they say, "Oh, dear." Well, oh dear, people died. It cannot be acceptable.

I was chair of a hospital for nine and a half years. I drove everyone mad with complaints, simply because, if you cure the complaints at their core, the hospital tomorrow is a better one, so it drives what you do. Those complaints in summary form came to the board. I know about the Francis recommendations and all of the rest of it, but, unless the board sees them and owns them, and knows that clinical professionals could be asked about their judgment, this will go on and on. To know that we did a report two years ago, that people have died in the interim and you are now saying, "Yes, okay," is for me really tragic and not acceptable.

Mr Hunt: Can I respond to that because I agree? I think that is the heart of the problem we have, which very urgently needs to be addressed, so you are not saying this to a Secretary of State in two years’ time. The heart of it is not just about the identification of problems, which the new, much tougher and independent Ofsted-style assessments will help. To answer your question briefly about the role of commissioners, they have a very important role, but one of the things that will help them in that is independent credible assessments of how good different providers are. That is not information that is always easily available.

The other matter is that it has not been clear, and is not always clear even now, who is responsible for sorting out problems when they are identified. We have had a system where hospitals are able to continue carry on performing badly year in, year out. People do make efforts but the problem is not really gripped. If I am lucky enough to be doing this job in two years’ time, invite me back, because this is the point of the changes that we are introducing this year with the new inspections and failure regime. One of the points about the new failure regime is that it is time-limited. When a hospital gets an inadequate inspection result from the new chief inspector of hospitals, there will be a maximum period of a year-I hope it will be less than a year-within which the problem has to be sorted out or the hospital board is suspended and it moves into administration. I hope we can address that problem.

Rosie Cooper: That is superb. In my role as an MP, I have had cases involving letters of complaint not being signed by chief execs but just signed by a manager or pp’d by a secretary or whoever. I absolutely insist that he signs every one so I see them. More importantly, I met with the non-execs and, with the permission of my constituents, put cases in front of them. They were absolutely shocked and had no idea. The non-execs on the boards need to see what is going on.

Q306Charlotte Leslie: I will pick up some points, but, first, Sir David, I would just like to thank you. Sir Hugh is of course the chairman of Guy’s and St Thomas’ Trust and not the chief executive. Thank you for correcting me on that.

Sir David, you told us and the Francis inquiry that Mid Staffs was an isolated case. Of course now we know differently. Do you think you are making the same mistake with Morecambe Bay?

Sir David Nicholson: I did not say it was an isolated case. I said that-

Q307Charlotte Leslie: With due respect, in the Francis inquiry it is there.

Sir David Nicholson: I said that the scale and nature of the issues made it unusual. I did not say that there was not poor care in other hospitals; there is poor care in other hospitals.

Q308Charlotte Leslie: Do you think we are at risk of making a similar mistake with Morecambe Bay in assuming that this is a one-off appalling incident and is not a symptom of something wider? Can you assure us that that is not the case, or do you think we can expect more horror stories down the line?

Sir David Nicholson: First of all, it is a horror story and terrible for the families and individuals involved that all of this has happened. Certainly the hospital itself has taken it very seriously. We have a new chair and chief executive in there-

Charlotte Leslie: Do you think it is isolated or do you think we can expect more?

Sir David Nicholson: -who are actively working on this at the moment to put right what needs to be put right at that hospital, and they deserve our support. They are really first-class people. We have now identified someone to lead an independent inquiry into what happened there.

Charlotte Leslie: I will repeat my question. I appreciate all that. I am just asking a very simple question as to whether it is isolated or we can expect more. I am aware that other people have questions, so I do not want to take up too much time.

Sir David Nicholson: There will be cases in other hospitals where things go wrong. That is true. Our job is to minimise them and, when they do go wrong, to take immediate action.

Q309Charlotte Leslie: Do you think we can expect something of the scale of Morecambe Bay to arise, or is that unlikely?

Sir David Nicholson: We have put a whole set of things in place after Mid Staffordshire, from the medium-term stuff that the Secretary of State talked about: the appointment of chief inspector of hospitals, all of those sorts of things. We have the Keogh review of the 14 organisations. We are now making huge efforts to identify where there are problems and take action to put them right. We have also put things in place.

Q310Charlotte Leslie: Has that been going on since Mid Staffs, so hopefully we can expect that there will not be another occurrence of Morecambe Bay because of the lessons learned from Mid Staffs? I am sorry; I just want to clarify what you are saying.

Sir David Nicholson: Clearly, we are going to work really hard to do everything we can to avoid issues like Morecambe Bay and Mid Staffordshire happening in the future, and we have put in place a whole set of things to enable us to say that with more confidence than we had before.

Q311Charlotte Leslie: Lovely; thank you. To help me in my next question, how is your working relationship, and how do you work and have worked in the past, with people like David Coates, who is a member of your department? Do you have a good working relationship with him? Do you work closely with him? I am just trying to get some background.

Sir David Nicholson: I am sorry; I do not know who he is.

Q312Charlotte Leslie: You don’t know who David Coates is. What about Richard Douglas?

Sir David Nicholson: Yes, I know Richard Douglas and I work well with him.

Q313Charlotte Leslie: Eric Bottrell.

Sir David Nicholson: I think I have met Eric Bottrell twice. I have no reason to believe I have not got a decent working relationship with him.

Q314Charlotte Leslie: I am looking at another incident that you said was a one-off and, a bit like Mid Staffs, sadly, it turns out not to be. I am referring to judicial mediation. You said at our previous Committee meeting on 5 March, in answer to Q217 put by Barbara Keeley: "In terms of the judicial mediation, it is the first time in my experience that I have ever seen that done. I have asked round and I do not expect there is another example of that at all." Who did you ask round in making your inquiries?

Sir David Nicholson: I asked my colleagues, including Una, whether they had ever heard of judicial mediation at that particular time.

Q315Charlotte Leslie: Did you ask anyone in your financial performance team, who obviously oversee this kind of thing and liaise with the Treasury on this?

Sir David Nicholson: This is the team that works on the compromise agreements from the Department.

Q316Charlotte Leslie: Yes, and who I imagine would be the team expert in the area we are talking about, since they deal with things like severance and compensation payments.

Sir David Nicholson: I cannot remember the name of the lady, but I have undoubtedly spoken to someone in that team.

Q317Charlotte Leslie: It was just one person; you did not go straight to them as the Department that handles that kind of thing.

Sir David Nicholson: No. I relied on my management colleagues, SHA chief executives, to say, "Has anyone heard of judicial mediation as an old hand?"

Q318Charlotte Leslie: Given that it is quite an issue-I know the culture has changed since the Mid Staffs revelation, but I am sure transparency was an issue back then, and I expect you took it very seriously-did you not feel that it might have been relevant to make a few more inquiries?

The only reason I ask is that I have an e-mail from Eric Bottrell in the financial team to DAC Beachcroft solicitors about judicial mediation and Treasury approval. It reads: "Dear [solicitor], Yes, you are correct. We have received confirmation from HM Treasury that judicial mediations do not need their approval as they are made by the consent of the parties…by the judge. As these payments are made by court order, they are reflected in HS accounts as compensation payments made under legal obligation rather than as a severance payment." He goes on to say, "I hope this gives sufficient clarity for your purposes, but please refer back if needed." That was dated Thursday, 9 September 2010.

I am wondering whether you made sufficient inquiries and you still stand by your statement that you had never heard of it. You had done some asking around and had never seen it done or heard of anything like that.

Sir David Nicholson: I am struggling to follow the point. I cannot remember seeing that document.

Q319Charlotte Leslie: Essentially, you said you had been asking around about judicial mediation-

Sir David Nicholson: Yes.

Q320Charlotte Leslie: -and you said that no one had really ever seen or heard of it before.

Sir David Nicholson: Of the people I had spoken to.

Q321Charlotte Leslie: Yet it is quite apparent that in your Department they were discussing with the Treasury whether they needed Treasury approval for such mechanisms.

Sir David Nicholson: Yes.

Q322Charlotte Leslie: You accept that.

Sir David Nicholson: Well, you have just told me that they did.

Q323Charlotte Leslie: I am afraid I have just presented evidence.

Sir David Nicholson: Evidence? I thought it was-

Q324Charlotte Leslie: It is an e-mail, Sir David, that probably is evidence, and I am very happy to discuss that further.

Moving on, in terms of burying bad news, making sure that transparency and patient safety are at the heart of everything-you have often said and often confirmed to us that patient safety is at the heart of everything you do-the NHS managers’ code of conduct requires you to "make the care and safety of patients my first concern and act to protect them from risk." Do you agree-I am sure you do-that it will be absolutely critical for your successor in NHS England and anyone on your board to share this priority of putting patient safety first?

Sir David Nicholson: I think the code of conduct is really important and people should support it.

Q325Charlotte Leslie: In that spirit, do you think that things such as waiting times targets should be put second to patient safety and demand and not come before patient safety and demand? I know that you have often talked about hitting the target and missing the point. Do you think patient safety is more important than hitting targets regardless of demand?

Sir David Nicholson: I do not see the dichotomy that you have just described, in the sense that, if you take many of the access targets that we have, they are genuinely an issue of patient safety-the cancer ones being the most obvious example of that.

Q326Charlotte Leslie: One of the things we learned from Mid Staffs was that good hospitals are a bit like good schools. Good schools can deliver an excellent service and, in the nature of that, they will hit the targets in their good guidelines. As you said, targets do have their place. What we know about bad hospitals is that, when they are struggling, there is a pressure to meet the targets regardless of the reality of patient safety. I know that is one of the dichotomies that you have talked about in terms of-

Sir David Nicholson: That can never be right.

Q327Charlotte Leslie: Yes-and it can never be right to put targets before actual patient safety. Is that correct?

Sir David Nicholson: Absolutely. The hitting of a target in itself is not the issue. The issue is, what is the experience of the patient and the impact on the patient? For some waiting time issues, it is absolutely a patient safety issue and people should deal with it.

Q328Charlotte Leslie: But waiting time targets should not be met whatever the demand and whatever the price, cost and clinical consequence of meeting those targets.

Sir David Nicholson: Of course not.

Charlotte Leslie: One of your leadership team, the deputy chief executive of North Lincolnshire trust, wrote a note in 2009 about such an effect at the United Lincolnshire Hospitals NHS Trust, saying-I am afraid I have it here handwritten-that there is a "need to meet targets whatever demand." It is handwritten and is signed by your now deputy, Barbara Hakin. This was in 2009.

Chair: I do not think you can expect Sir David Nicholson to respond to something he does not have in front of him and has not had a chance to see in advance-nor do I see that it is relevant to the Care Quality Commission.

Q329Charlotte Leslie: With respect, Chair, it has been mentioned. I appreciate that perhaps I should have made this available to the Committee; for that I apologise. We now know that in 2013 there was the case of Ray Law, who died after prostate cancer on the same day that a surgeon raised serious concerns about exactly this-targets being met whatever the demand. Given that we know this, and given what you have just said about the managers’ code of conduct, do you think it is appropriate for you perhaps to rethink the choice of deputy? I know that you approached her and understand that you did not notify the Secretary of State before appointing her. Do you think that choice is appropriate, given the focus you rightly put on the managers’ code of conduct?

Sir David Nicholson: I have not had access to any of the bits of paper that you have described. I cannot comment on the particular circumstances. All I can say to you is that that whole area is hotly contested between a variety of people who were engaged in the oversight and leadership of United Lincolnshire health care at that time.

Q330Charlotte Leslie: What is very interesting is that, although there has been a lot of contest of people’s differing stories, one thing that has emerged as true in all of these is that I struggle to think of a time when, sadly, a whistleblower or someone saying that something is bad and wrong has not been proved right.

Julie Bailey-proved right. David Bowles in Lincolnshire-proved right, I am afraid. There have been some horrific cases. Kay Sheldon-proved right. Amanda Pollard-proved right. I am sure there are other whistleblowers out there who, sadly, will be proved right.

Sir David Nicholson: And there are hundreds, if not thousands, of NHS leaders working hard every day to improve services for patients.

Charlotte Leslie: Absolutely. I do not doubt it.

Sir David Nicholson: And Barbara Hakin is one of them.

Q331Charlotte Leslie: Do you stand by that whatever the evidence shows?

Sir David Nicholson: Of course I do not stand by it whatever the evidence shows. All I know is that what you have described there is hotly contested. There will be a hearing, no doubt, at the GMC-

Q332Charlotte Leslie: Sir David, I thought that you had not seen this handwritten note. You have just implied that you have seen it, because you have just said that it was hotly contested.

Sir David Nicholson: No. The issue that you raised about the relationship between Barbara Hakin, as chief executive of the East Midlands Strategic Health Authority, and Gary-

Q333Charlotte Leslie: I am just wondering whether this new piece of evidence, which you have said is new to you, makes you at least reconsider your position on your appointment. If it is genuinely new evidence, I would have thought that you might have wanted to see it before you pronounced a judgment on whether or not you needed to reconsider. I am just interested in how you reach your decisions.

Sir David Nicholson: I am happy to have a look at any evidence that you want to give me.

Q334Charlotte Leslie: I am concerned that, given what you have just said, you may not consider it without prejudice.

Sir David Nicholson: I will consider anything that you send to me, but the reality is that Barbara Hakin has worked her whole lifetime as a general practitioner and as a leader in the NHS. She has improved services for patients wherever she has been-

Q335Charlotte Leslie: It sounds like you have reached a conclusion.

Sir David Nicholson: No. I am saying all of those things, because you are casting aspersions about her motivations and all the rest of it.

Q336Charlotte Leslie: As you will have noticed, I have not said that any of that is not true. I will not even contest what you have said, because I am sure that all of that is true. Can I ask another question? We are moving back to the CQC here. Who was on the panel when Cynthia Bower was appointed head of the CQC?

Sir David Nicholson: I do not know.

Q337Charlotte Leslie: Were you on the panel?

Sir David Nicholson: No, I was not.

Q338Charlotte Leslie: Did you provide any references for her, since she was your successor at-

Sir David Nicholson: I have thought about that. I may have done. I do not have the records, so I do not know. I am sure that, if Cynthia Bower had asked me to be a referee for a job as chief executive at the CQC, I would have provided her with a reference.

Q339Charlotte Leslie: If you are able to find that, I would be grateful if you could submit it to the Committee.

Sir David Nicholson: Given that I was the chief executive of the NHS and she was the SHA chief in the West Midlands, in those circumstances, it would be normal for people to ask me to be a referee.

Q340Charlotte Leslie: If you are able to clarify it for the Committee in your own time, that will be-

Sir David Nicholson: I will not have that information.

Una O’Brien: I can give you the information.

Q341Charlotte Leslie: Could you? That would be very kind.

Una O’Brien: Would you like it now?

Charlotte Leslie: Yes, please.

Una O’Brien: The people who were on the panel were the shadow chair at the time, the non-executive director and the Department’s permanent secretary, Sir Hugh Taylor.

Q342Charlotte Leslie: That is lovely. Thank you very much. Now I want really to look at the root causes of the scandal at Morecambe and then Mid Staffs. Again, a recurring theme is the burying of bad news.

Do you stand by what you told Barbara Keeley at this Committee last time-unfortunately I was not here-on 5 March? Referring to the mortality data-the HMSRs-you said, "The point is that the data that was available to the PCT"-Mid Staffs-"to the general practitioners, to the regulators, to all of those, did not indicate at that time that there was a problem in that organisation." Do you still stand by that?

Sir David Nicholson: In 2005-06, when they were gleaning the data.

Q343Charlotte Leslie: Do you stand by the statement I have just read out? I can read it out again, if you would like.

Sir David Nicholson: The Francis report says there was no individual organisation that had all of the data that, when put together, indicated that that hospital was in serious trouble. That is true. I spent 11 hours being cross-questioned by a barrister. It is all on the public record-there are 500 pages of it.

Q344Charlotte Leslie: I have read quite a bit of it. It is a great bedtime read.

Sir David Nicholson: If you want to go through all of that, it is for you-

Q345Charlotte Leslie: There is a tremendous public interest. If you have nothing to worry about, I am sure that, like Barbara Hakin, who approached me afterwards to say how grateful she was for having been given her the opportunity to say her piece, you will be grateful for the opportunity to do that.

Sir David Nicholson: I have had the opportunity on a number of occasions to say my piece.

Charlotte Leslie: The problem with this is that these data were available to people, because they were published on 21 January 2001 in The Sunday Times, on 10 March 2002 in The Mail on Sunday, on 6 April 2003 in The Sunday Times, in 2004 in The Sunday Times, in 2005 in The Telegraph, in 2006 by Dr Foster and Saga-

Chair: Charlotte, where is this leading?

Charlotte Leslie: The point I was just trying to make is that I think it is very important that Select Committees get correct information. I think it would be an insult-

Chair: But this is not an inquiry into everything that has happened in the health service.

Q346Charlotte Leslie: No, no, certainly, but I think the public would also agree that what people knew about when is an important part of this, particularly at a time when they are looking at the CQC. I am just making the point that it was claimed at this last Committee meeting that no one knew that there were data around, but in fact they had been published since 2010. Also, West Midlands SHA acute trust employees had accessed those data over 8,000 times. During your tenure, they had accessed them 3,223 times, so it is not true that people-

Sir David Nicholson: I have never been the chief executive of the West Midlands Strategic Health Authority.

Q347Charlotte Leslie: I know. You were there during the reconfiguration and were chief executive of Shropshire and Staffordshire while you were overseeing the reconfiguration; I understand that. You also said that the data did not indicate a problem. You said that to Barbara Keeley on 5 March 2013, but, as we know, the published data in the Francis report in 2009 demonstrates that the HMSRs in Mid Staffs were indeed high. They had gone from 99 in 1996-97 to 127 in 2007. During your tenure, they were 115, 124 and 127. That is high, so it was false to say when you came to the Committee that no one knew those data were high.

Sir David Nicholson: Endless hours have I talked about this. I have given information in public-11 hours of it, as I said. I think I have said all that I need to say in relation to Mid Staffordshire.

Charlotte Leslie: But I think it is still rather telling that the public still have so many questions. It is a shame that you have spent so much of your time talking about it, but there still remain so many uncertainties and so many questions.

Chair: Carry on for the moment, but your colleagues on the Committee want to ask questions about last week’s public expenditure announcements. We also want to ask some questions in the context of the Health and Social Care Act implementation review, which is why the witnesses are here.

Charlotte Leslie: Of course. Thank you, Chair.

Chair: Go on.

Q348Charlotte Leslie: It is fine; I will move on. It is just to clarify, because a lot has been said about the three reports that were commissioned in 2008. There are still some questions that possibly need very briefly to be clarified, for the Committee’s sake as well. I am sure you respect Don Berwick’s opinion-is that right-since he is now overseeing zero harm?

Sir David Nicholson: Don Berwick is a really good leader and an expert in patient safety.

Q349Charlotte Leslie: In that case, may I try to understand and clarify why you said that his IHI report in 2008, along with some other reports, was not significant overall-your deputy, David Flory, actually called them caricatures-yet elsewhere the Department claims that it drew heavily upon them? As you probably know, that was disputed by one of the authors of the reports, who said that he found that disingenuous at best. Can you clarify to me whether they were dismissed as caricatures by people in the Department or drawn upon heavily, particularly since a lot of the concerns that you will know Don Berwick raised in 2008 are exactly the same as the ones that Francis raised, and exactly the same as the concerns arising from the CQC scandal today? Can you clarify whether or not they fed in heavily?

Sir David Nicholson: Certainly. They were all commissioned by the chief medical officer, Sir Liam Donaldson. On the back of that, he wrote a report to Ara Darzi, which became part of the next stage review report.

Q350Charlotte Leslie: Given that the next stage review report started by saying, "On its 60th anniversary, the NHS is in good health," and other reports talked about a culture of fear and compliance and of inadequate inspection regimes, but an attitude where people felt afraid to speak out-which is exactly what has happened in the areas of the NHS we are most concerned about five years later-do you think that the next stage review report in any way reflected the concern that was raised by those three reports? I know you commissioned those reports because they were a fresh view and were from people outside, not from people inside, but it does seem to onlookers that the minute they came up with something difficult you dismissed it. What would you say to that?

Sir David Nicholson: That is absolute nonsense.

Q351Charlotte Leslie: Really?

Sir David Nicholson: Yes, absolutely.

Q352Charlotte Leslie: Then why do you think we are in the position we are in now, Sir David?

Sir David Nicholson: The next stage review was a comprehensive review at the time, led by an eminent and well-respected surgeon, who came to the conclusion that at that particular time neither was there an understanding across the NHS about what quality was, nor was quality part of the organising principle of the NHS. So it absolutely took on board many of the criticisms that people were making-

Q353Charlotte Leslie: But why did you not publish the reports? Half a million pounds was paid for those three reports. The free ones you published, but the ones the public paid money for could be got out only by freedom of information requests. Who made the decision?

Sir David Nicholson: I have no idea.

Q354Charlotte Leslie: You have no idea.

Sir David Nicholson: There were lots of reports produced for the next stage review, but they all fed in.

Q355Charlotte Leslie: Yes, but there were only three that were paid for, weren’t there?

Sir David Nicholson: I genuinely do not know.

Q356Charlotte Leslie: So you do not know who ran past that payment, and you had no part in any discussion about those three reports.

Sir David Nicholson: I certainly did not have any about whether they should be published or anything of that nature. What I do know is that in the next stage review we acknowledged that there were serious issues for the NHS to face.

Q357Charlotte Leslie: Why did you not reflect that in that next stage review?

Sir David Nicholson: I think saying that there was no agreed definition of quality and that quality was not the organising principle of the NHS is a fairly strong view about where we thought the NHS was at that particular time. What we focused our attention on, as you might expect, was what we were going to do about it and how we were going to improve it. That is exactly what we did.

Q358Charlotte Leslie: So you reflected it, but, as we have seen recently, it did not get implemented. Thank you very much. I am sorry for taking up so much of the Committee’s time.

Sir David Nicholson: On the contrary, lots of things have been implemented that have significantly improved the quality of service to patients since the publication of the next stage review. We can go through them if you want.

Q359Charlotte Leslie: I think many people would differ, given the headlines, but thank you.

Sir David Nicholson: I do not think the evidence supports that.

Chair: Andrew George would like to lead us into last week’s announcements.

Q360Andrew George: That is right, but before I do so, I have one quick question to the Secretary of State on the CQC. You said that the CQC is the nation’s whistleblower. On one of your other pleasurable duties, coming before us on 23 April, in answer to a question I raised about Kay Sheldon’s position on the CQC board, you acknowledged that there had been long-running acrimony between Kay Sheldon and the CQC board and said that you would be meeting her shortly regarding her case. Going forward and having reviewed the situation since 23 April, I wonder whether, given that Grant Thornton has identified Kay Sheldon herself as a whistleblower in the context of its report, you have come to any kind of conclusion about the future position of Kay Sheldon on the CQC.

Mr Hunt: Yes, I have. First, let me say that we now know information about what Kay did that we did not know when I came before the Committee previously, and she has been proved right. She has been remarkably tenacious at fighting for the truth to come out about some very serious problems at the CQC, which I think have shocked everyone, so she did a very, very important job. I am very pleased that, on Monday, I received a letter from David Prior, the chairman of the CQC, recommending that she be reappointed for a third term on the board of the CQC. I have accepted that recommendation and am delighted that she will have an ongoing role in that organisation.

Q361Andrew George: Moving on to the spending review and the budget proposed for 2015-16, which represents 0.1% real-terms growth in plans, could you give us an indication of whether that represents a challenge that will be more or less than the 4% efficiency gain that Sir David set the NHS some years ago?

Mr Hunt: I think the broad picture is unchanged. It is that demand for NHS services is going up by around 4% a year because of the ageing population and other factors, but in real terms the amount of money the NHS has to spend is barely moving. It is going up by that 0.1%, which amounts to £2.1 billion in cash terms. That is not insignificant, of course, but we have very real challenges in finding the efficiency savings that we need to make in order to meet that demand. That will be a very big part of what NHS England has to do over the coming months, because, if the savings are to be made in order to meet the demand that happens in 2015-16, obviously that is not a process that starts in April 2015. It is a process you have to start earlier than that if the savings are going to be realised in 2015-16. That is not very far away, so it will be very challenging, yes.

Q362Andrew George: So it will be very challenging. Given the fact that we can project forward the anticipated spend and that you know a certain amount in terms of projections of the demands on service, can you not at this stage give an indication of whether the 4% year-on-year efficiency gain, if it were 4%, is something that would exceed what is necessary within the NHS or whether the efficiency gain would need to be significantly more than the 4% originally set?

Mr Hunt: That may be the efficiency gain overall, but within parts of the NHS it will need to be higher than that. It will need to be higher than that in the hospital sector, because part of the way that we are going to deal with the long-term challenges of the ageing population is by giving people better primary care. A significant amount of the additional £2 billion that the Chancellor talked about going to joint commissioning of health and social care budgets will be spent outside hospitals, but I think everyone agrees that that is the right thing to do, because very often vulnerable older people are better looked after outside hospital. So I cannot say that there will be a uniform 4%, but I think it will be uniformly challenging everywhere.

Q363Andrew George: In terms of transparency of how the resource will be allocated, in the world prior to 1 April this year one could see and track the resource allocated to PCTs and was aware of the target that had been set by the Department, the distance from target and whether there was any movement at all-there was pretty imperceptible movement, I have to say-in terms of the speed at which it was anticipated that those PCTs would ultimately reach their target. Now that CCGs are in place and many of the services that were originally commissioned by PCTs are now commissioned from NHS England, how can one track-in the relatively transparent way that was previously the case-and ensure that resource is being allocated fairly across the country?

Mr Hunt: Sir David may want to add to this, but my understanding is that we will have absolutely as much information about how the new CCGs are spending their money as we had about the PCTs. The direction of travel is more transparency, not less transparency.

Sir David Nicholson: What we need to be able to do is to demonstrate it health and wellbeing board by health and wellbeing board, because in a sense that is the unit of account in the new arrangements, with the transfers, for how much NHS England is spending on primary care and specialist commissioning by health and wellbeing boards. In that way, I think you will see the transparency.

Q364Andrew George: And that will give the global figure for NHS England.

Sir David Nicholson: Yes.

Q365Andrew George: Will that also set the target? Will it be clear what the target is according to the formula, as well as what the allocation is?

Sir David Nicholson: We decided to review the formula last time and are currently coming to the conclusion of that. We will do it for the next round. We will be able to set the target-the fair share, if you like-against how much is being allocated. The question is whether we can make any progress, given the amount of growth and where money is going, but that should certainly be transparent in the new system.

Q366Andrew George: Can you describe-without our having to go into darkened rooms with wet towels-how the formula itself is changing? Which elements are changing most significantly this year?

Sir David Nicholson: The big issue that we are reviewing is what is described as unmet need. In the particular population, the way it is structured, there is a view that there is unmet need. How you measure that is quite complicated. We have been looking at different ways in which you can do that, because, if you can quantify the unmet need, it gives you the indication of what the fair shares would be. That is the kind of process we are involved in at the moment.

Q367Andrew George: But market forces factors and things like that will still come into it.

Sir David Nicholson: Yes, all of those things still apply.

Q368Dr Wollaston: Following on slightly from Andrew’s point-just to be clear about this-Devon, for example, is the fourth oldest county demographically. We all know that age is the greatest marker for need, but currently the formula tends towards recognising inequality rather than that need. Are you saying that you think there will be a shift towards recognising that there is this huge need that is being unmet for the elderly populations?

Sir David Nicholson: There was a review of the formula that took place early on in the coalition’s life. It came to the conclusion that the number of older people was the big determinant that you need and that, in a sense, the relationship between the number of older people and health inequalities needed to change and shift more in favour of older people. We acknowledged that, but we did not believe that it was properly tested and that it actually did take account as much of unmet need over and above what the number of older people in an area had. That is what we have been reviewing-to see where it is.

Q369Dr Wollaston: So it remains under review.

Sir David Nicholson: Yes.

Q370Dr Wollaston: When are we likely to have the final results?

Sir David Nicholson: Obviously we have a whole set of discussions to have now with the Treasury and the Department about the allocation of resources and then about whether we will do a two or a one-year allocation-how that is going to be. We would hope to get the allocations out as fast as we can.

Q371Dr Wollaston: Will it also recognise the challenge of rurality, for example, which is often unrecognised within health care allocations?

Sir David Nicholson: I would have to give you a note on that particular issue.

Q372Dr Wollaston: Can I return to the issue of pooled budgets? It is fair to say that this Committee has always thought it is a good idea to move towards integration of health and social care, but there is one challenge. If we shift £3.8 billion into social care, is there a danger that social care will withdraw and concentrate its priorities elsewhere? The call I am often hearing is that we also need to ring-fence the social care budget so that we do not end up just replacing existing funding. I wonder how that is going to be addressed, because it is certainly a worry in my area.

Mr Hunt: Let me address that, because it has been fundamental to the plan that was announced by the Chancellor that we could agree the terms on which we would make this investment and pool budgets. It is an absolutely key part of the condition of accessing this pooled budget that the level of service will be ring-fenced-not the budget, because everyone needs to make savings, but what we do not want is people cutting their service levels on the basis of expecting money from this budget.

There is a much greater degree of oversight in terms of access; there will actually be ministerial oversight for all the 150 local authority areas. However, we want to make it light touch and to make it fast, so the intention is that the processes will be completed this year for this pot of money, which is for 2015-16. The reason we want to complete it this year is because a lot of areas may want to start implementing these plans before 2015-16; there is a lot of enthusiasm to do this. However, before we approve anyone accessing these plans, we will make sure that they are not using this as a back-door way of reducing service level provision.

Q373Dr Wollaston: An important concern has been raised that, if we have national eligibility criteria, in some areas they will actually be less than they are currently providing. Are you saying that any area that is currently providing a higher eligibility will not be allowed to fall back to national eligibility criteria, if they are lower, when it moves forward with these plans?

Mr Hunt: The intention in moving to national eligibility criteria is to remove the postcode lottery. Overall, our intention is that more people should benefit across the country from better care post-making this change than currently benefit. When it comes to individual areas, I do not want to make rules now that prevent the development of a good, strong, locally originated plan. All I will say is that we are looking in all of these plans to see an improvement in services. The point of these pooled budgets is to see more than an improvement-it is to see a dramatic improvement, not just in the joined-up services but in the quality and level of service offered. We want to have an accountable clinician who knows what is happening to every single one of the vulnerable people the plan is aiming to cover.

Q374Dr Wollaston: We have heard evidence that this was one of the best drivers for integration, but, as I say, the important concern was that in some areas we might see, with national eligibility, a reduction. If you are saying that no one is going to be allowed to drop their level of service-

Mr Hunt: If you find anywhere that is dropping their level of service-in order to access this budget, we are saying that one of the things is that service levels must be protected. I hope that is clear.

Q375Chair: Will it be held by you or by the Communities and Local Government Department?

Mr Hunt: The budget is NHS England’s budget, and it is joint commissioning-a pooled budget for an agreed set of services, which will be agreed by CCGs. We will be asking CCGs and local authorities to come up with a joint plan. There will be a short but very tightly defined list of minimum criteria, one of which will be that service levels are protected. Another will be complete data sharing. There will be a few others, but then we will be asking them to come up with the plans.

Q376Chair: It will be a budget held by NHS England accountable to Ministers.

Mr Hunt: Yes.

Q377Chair: And signed off by Ministers.

Mr Hunt: We will be overseeing the whole plan and we will not approve or allow plans to go ahead unless we are satisfied. Basically, as you know, because the Committee has thought about this a great deal, there is tremendous enthusiasm in some parts of the country. We want to let those people get on with it. Torbay is a good example. But there are other parts of the country that we would like to be more ambitious, and so the reason we set up this process, which we intend to complete before the end of the year, is because we want to make sure that every area is being as ambitious as we want them to be for this really important agenda.

Q378Dr Wollaston: Going back to Torbay, one of the areas that has concerned them is the area of risk-pooling. Is there any sense in which there will be a ring fence around social care spending as well as there is around-

Mr Hunt: As I say, we decided the right approach, because of the pressures on councils, was to go for a ring fence of service level provision rather than of actual budget.

Chair: That leads us in to Grahame Morris, who wants to ask about ministerial accountability.

Q379Grahame M. Morris: I want to touch on this spending review that we are on, but I want to raise ministerial accountability as well. It is a tremendous commitment to true transparency, which we all subscribe to, but the problem is, when politicians say that, sometimes the public can see through them.

In relation to the Comprehensive Spending Review, the Government have again made a commitment that the budget for the NHS is going to increase by a relatively small amount-0.1%-and we are aware that Sir Andrew Dilnot raised concerns about this. He sent a letter taking either you or the Prime Minister to task when the budget was analysed. But I wonder if you could aid my understanding. If we are taking something like £1 billion from the NHS in 2014-15 and 2016-17, and something like £3.8 billion into a separate pool for social care, does the consequence of that not mean that you have a 2½% cut in the funding of the NHS, and will that shortfall have to be made up by further efficiencies?

Mr Hunt: No.

Q380Grahame M. Morris: Would you explain that then?

Mr Hunt: Let me explain both the points you made. First of all, with regard to the point about the letter from Sir Andrew Dilnot, there was a disagreement when we talked about growth in real-terms spending and what the baseline was. At the time of the letter there was a growth in real-terms spending from the 2010-11 budget, which was the baseline the Government were using, but not from the 2009-10 spending, which was the last full year of the previous Government. Subsequent to that letter being sent and that particular disagreement, about which we had an Opposition day debate in Parliament and much discussion in the media, the GDP deflator has been revised and there is in fact a real-terms increase in spending from the 2009-10 baseline. So I hope that clarifies any concerns that you may have or worries that spending has not in fact increased. I am hoping that it might just lock itself right there, Mr Chairman, but I hope that might reassure you on that.

There is a real-terms increase in spending from the 2009-10 baseline. This is not taking £1 billion or £2 billion from the NHS. This is reflecting what this Committee has said on many occasions. There is huge waste in the system-money that could be spent on patient care and looking after people with dignity and compassion, money that is wasted because we are pushing people from pillar to post and they are falling between the cracks in the health and social care system. The biggest cost to the NHS in that is unplanned admissions to A and E. With regard to the level of that waste, some local authorities say there is a saving in cost terms of as much as 20% by proper integration of services, but other people say it is not quite as much as that. But there is a lot of waste.

If we are going to severely constrained financial circumstances, where demand for an NHS service is going up by 4% a year but the budget for the NHS is not going up by 4% a year, then the sensible thing to do is to eliminate that waste. That is what this pooling of budgets is designed to achieve. It is designed to create an incentive. Yes, the NHS is putting money on the table, but the NHS is saving money, because we have said that the other condition, to go back to Sarah’s point earlier, is that there is an element of payment by results in this budget. To get this money, you have to deliver a reduction in unplanned A and E admissions, which are a big cost to hospitals and the NHS. If you do not, then the NHS will get some of the money back. This is a really important and significant step towards integration, and I hope that we can deliver joined-up services for the 5% of people who are most ill, who most need the NHS and who often get the worst service from the system as a whole, although no one obviously wants to give them bad service. I hope it can transform the services they get.

Q381Valerie Vaz: Can I just clarify a couple of things? This is a one-off payment, is it not? It is not the recurring one. It is just 2015-16.

Mr Hunt: We have only settled the budget for 2015-16. The spending round as a whole is for 2015-16.

Q382Valerie Vaz: There was an underspend from the NHS that went back to the Treasury. It is probably not new money. It is probably the same savings that the NHS made that went back to the Treasury. Is that right?

Mr Hunt: No, because the budget-

Q383Valerie Vaz: There was an underspend and it did go back to the Treasury.

Mr Hunt: Yes, but the budget has increased by £2.1 billion in cash terms for 2015-16, and so we are able to spend up to that new budget level, and indeed there have been underspends for many years in the NHS, including under the last Government, which you do not need me to remind you about.

Q384Grahame M. Morris: Given the Minister’s commitments there on transparency, has the Minister had a chance to consider whether he would publish the risk register or the legal advice that accompanied the very controversial section 75 regulations we debated in the House in reducing competition?

While you are thinking about that, can I ask you another question, which relates to lines of accountability? As a Committee, in our terms of reference, one of the issues we are considering is lines of accountability-not just in relation to patient safety that Charlotte highlighted but also adequate service provision. I think promises from politicians are important and I think the public think that too. In this new structure-the new architecture from 1 April-do you believe we can still hold Ministers to account for promises, for patient safety and for the delivery of adequate service provision?

Mr Hunt: Yes. I am responsible for the NHS. I am accountable for every penny of the £95 billion that gets handed to CCGs through NHS England. I am accountable to Parliament and to the media-and indeed at the general election, if the Prime Minister is good enough to keep me in my post until then-for how well the NHS is doing. But I believe the NHS will do better and will deliver higher levels of service if we give people more local autonomy and local discretion in the way those funds are spent, and that is the purpose of these reforms.

Do you want me to answer your other question about the risk register?

Grahame M. Morris: I will, but I just wanted to come back to-

Mr Hunt: We will stack them up then, shall we?

Grahame M. Morris: I have been very good-I have been very quiet and I am waiting my turn. So I would like to take the opportunity before we run out of time.

Chair: The floor is yours, Grahame.

Q385Grahame M. Morris: I thank the Secretary of State for his answer, but, in relation to the issue of ministerial accountability, and as one of the Members who served on the Health and Social Care Bill-and I have still got the scars on my back from 40 sessions in Committee-we were at pains at the time to point out, not to your predecessor but to the Minister of State who led for the Government, about the loss of ministerial accountability. Indeed, the duties that are placed upon a Secretary of State have fundamentally changed. In fact, the Labour leader Ed Miliband has said that, when we win the election in 2015, he will restore those duties on the Secretary of State.

I did raise questions with one of your ministerial colleagues in relation to targets that the Prime Minister had given an undertaking to meet about access to therapeutic radiology services, and the response that I received back was, "Well, it’s no longer my responsibility. It’s one of the Commissioners." If that is indicative of the way that the Health and Social Care Act is operating, it should be cause for concern, both for Parliamentarians, who are here to hold Ministers to account, and for the general public, who are seeing a diminution in their services.

Mr Hunt: Do you want me to answer the risk register question and then the accountability question?

Grahame M. Morris: I want you to answer all of those.

Mr Hunt: Okay, I am delighted. We can do proton beam therapy as well if you want to sneak that one in, as you often do.

On the risk register, we believe very strongly in the power of transparency to drive up standards, but, as a Minister, I also need to be able to be given advice by officials that they can write down, which can be full and frank and can have what they think are all the concerns and risks of any particular proposed course of action. Ministers would not be able to do their job if officials could not write full and frank advice that they knew was confidential. That is the reason why Andy Burnham, when he was Health Secretary, refused to publish the NHS risk register, and I don’t think it is right to publish the risk register that you are talking about now. It is not because I don’t want to be public. We have just published surgeon outcome rates, which is a first in the world, and that is something I am very proud of doing.

All I would say to you is this. Because you hold me accountable on this Committee and in Parliament for how well I do my job, do you think I would be able to do my job well if my officials were only able to communicate with me verbally? I think it would be a big mistake in terms of the abilities of Ministers to do their job if we inadvertently create a world where no one can put anything down on paper. That is why I think you have to have some private space where Ministers are able to read papers that have been put together by officials on a confidential basis-and this falls into that category.

Q386Grahame M. Morris: In relation to that, you have kind of turned the argument on its head to the questions that members of the Committee were putting to you about patient safety in the wake of Francis. You have in terms of being completely open and transparent. Here is a report that identifies quantifiable risks to the whole of the structure of the NHS. Surely it is in the interests of the Committee and the public to know what those risks are. Then, if necessary, you could take steps to ameliorate those risks or mitigate against them.

Mr Hunt: I am in favour of transparency, but I have just explained, I hope very clearly, why I think for Ministers to do their job there does need to be some private space where officials are able to write things down in confidence so that proper consideration can be given to every course of action before you decide on it. I would defend that. Even as an Opposition MP with a subsequent Government, it is important that Ministers have that private space, and I think that we do a better job for you and a better job for the country if people are able to write to us in that way.

On the point you made about accountability though, more generally I remain absolutely accountable for the performance of the NHS, for ministerial commitments, for the operational targets, but I happen to believe that we are more likely to achieve those if there is a degree of operational independence there. It has not been the case previously, and that is what the new structures are designed to achieve.

Q387Grahame M. Morris: Perhaps there are some issues that I can take up in correspondence because I know we have limited time and there are other people who want to ask questions as well.

Mr Hunt: Only if you are happy for it all to be published.

Grahame M. Morris: I am always happy for complete transparency.

Chair: Have you finished, Grahame?

Grahame M. Morris: We look forward to a Minister of the Parliamentary Labour Party.

Q388Andrew Percy: On the national eligibility criteria for social care-this was an issue raised by my council leader this very weekend-there will be national minimum standards. If a local authority wishes to go beyond those, they will still be able to do that, won’t they?

Mr Hunt: Absolutely.

Andrew Percy: Thank you. That is a simple and timely clarification.

Q389David Tredinnick: It has been argued by the NHS Confederation and by this Committee that the only way the NHS would be able to sustain and improve its service to the public is by greater integration and reconfiguration. This is something that has already come up. In the new system, who is able to drive that integration and reconfiguration, and will it be possible to do that quickly enough?

Mr Hunt: It is a very good question as to whether it can be done quickly enough. We will have to see over the next few years. It is very important that we have a flexible system. One of the hopes that I have of the new structures is that some service changes will be less politically controversial because they will be driven by local clinicians. That may be a forlorn hope, but certainly that was one of the intentions behind the reforms.

Service change is going to be a very important part of delivering the savings we need and the improvements in services. You just have to look at the improvement in stroke survival rates in London since the last Government took the bold decision to reduce the number of hospitals offering stroke services in London from 32 to eight to see that it can have very dramatic effect.

Q390David Tredinnick: When we first heard of integrated health and social care or integrated health care, I rather felt that the term had been hijacked. Over many years I have been strongly involved in trying to integrate a broader range of health treatments into the health service. Indeed, there is a Committee here, which I have the honour to chair, called the Parliamentary Group for Integrated Health Care. Over the years, we have managed to encourage such things as the integration through statutory regulation of the osteopaths and chiropractors.

You said earlier on that there is perhaps a saving of 20% through integration generally. We are now faced with a critical issue of the integration, I hope, of herbal medicine properly into the health service legal framework. I know that this is something on which one of your Ministers has been working.

The statutory regulation of herbal medicine was proposed in the Science and Technology report published by the House of Lords Select Committee 13 years ago. It put forward a proposal for patient safety and also to make sure that we have a well regulated service out there for the public. This happened before the Traditional Herbal Medicinal Products Directive came on the scene in Europe.

I am suggesting to you that there is a third stage of this integration. You have integration of health and social care, but you need to bring in the wider diaspora. I would like you to comment on that.

Mr Hunt: When I was preparing for this afternoon I looked at the list of topics and thought, "We are not going to do proton beam radiotherapy and we are not going to do herbal medicine." How wrong I was on both counts. I congratulate you on your ingenuity in bringing it up.

That particular issue is being considered at the moment by Daniel Poulter, and so I am not able to comment until he has concluded on what the right answer is with respect to the regulation of herbal medicines. I am afraid I am not going to be able to be of much help to you.

Q391David Tredinnick: I just put it to you that it is a fairly crucial issue. By accident, I happened to be sitting across the table from Lord Wilson at lunch in the Lords at another House function. He was the penultimate Governor of Hong Kong. I asked him about the issue and he introduced statutory regulation when he was Governor of Hong Kong. He said that he did this partly to stop the fighting between the medical establishments.

One of the problems that we very often have with so-called complementary medicine is that there is a turf war going on. I want to crave your indulgence, Chairman, and say one other thing. I have been ridiculed over the years, Secretary of State, for defending the homeopaths. I have done this doggedly because I believe there is a huge injustice being perpetrated against them and that those who criticise them do so not from any knowledge of the subject but because they are frightened that it will impact on their own profession.

The problem I have with the way we treat the homeopaths in the UK is that it is completely out of line with Europe and the rest of the world, where it is widely accepted and widely used. In France, where it is widely used and is available in every chemist, and there are a large number of doctors practising it, what they found is that, where you combine conventional medicine and homeopathy, you reduce the drugs bill and get increased patient satisfaction.

I want to suggest to you that there is a way forward for dealing with this. If the medical establishment won’t accept or consider trials that show that homeopathy works, can we not have some better evidence on which to base judgments in this country? Could you not commission further work so that not just arnica is available to all of us when we get bruises, but the other remedies are out there too?

Mr Hunt: First of all, without wanting in any way to sound patronising, I should congratulate you for being prepared to take up a lone cause. I think in the earlier discussion we were having today about Kay Sheldon it is incredibly important in democracies that people do take up causes. Sometimes history proves those people right. Whether or not I agree with you on homeopathic medicine, it is a noble thing for anyone to do-to be prepared to argue things against the prevailing wisdom.

My approach to this as Secretary of State is to follow the scientific evidence. If you have evidence for what you are saying is the case in France, please send it to me and I will look at it. The right approach for me in terms of instructions I give to NHS England through the mandate and the approach we take to medicines and the availability of medicines in general has to be one based on what the evidence says. I will happily look at any evidence with which you supply me.

Q392David Tredinnick: This is my last point on this. This may sound a little bit odd, but would you then be prepared to look at the evidence of the homeopathic vets? There are a large number of farmers in this country who use homeopathic medicine. Of course randomised controlled trials don’t apply to animals. I put it to you that part of the problem is the fact that we no longer take sufficient notice in health care, or perhaps in other walks of life as well, of observation of what happens in patients. We are relying too much on trials. If you look at animals, you can see-and we have had presentations in the House-how they can benefit from this system of medicine. Why is it that we just ignore the obvious? I find this so frustrating.

Mr Hunt: I am happy to look at any evidence you provide to me.

David Tredinnick: Thank you, Secretary of State.

Q393Andrew George: Can I move from herbs to fruit and raise questions about cherry picking, if I may? I do apologise.

Chair: There have been better links.

Andrew George: I am sorry; I was doing my best. I am sure an occasion that you will remember and cherish was a previous evidence session with the Health Select Committee on 13 November, when the issue of cherry picking was raised by me then. Indeed, we had been in correspondence on the subject. At that stage you set out, with the assistance of Richard Douglas, the clear intention of the Government to ensure that you establish a tariff structure that fairly reflected tariffs that would be paid to those providers of elective services especially that might take on, let us say, the more complex patients, as against those other providers that might seek to cherry pick those with lower anaesthetic risk and so on.

In terms of going forward, I understand that both Monitor and NHS England have a role in ensuring that the management of the tariff structure operates in such a manner as I think your stated intention was, at least at that stage, of avoiding a situation where cherry picking of the kind that many of us fear might happen will happen going forward. I would be interested to know what progress you have made, bearing in mind that we are into a new regime as from the end of April.

Mr Hunt: We do absolutely hold to that position. We don’t want people to cherry pick unfairly. We do want the tariff to accurately reflect the case mix that people take on when they do hips, knees or whatever the operations are. Perhaps Sir David might tell you how the process works in terms of when the tariff is changed. It is done by Monitor, is it not?

Sir David Nicholson: Both NHS England and Monitor have powers in relation to the tariffs. We have set up a joint tariff executive-a jump between NHS and Monitor-to take all of this work forward. We are working through it at the moment. We have put out a joint statement between NHS England and Monitor setting out the principles on which we wanted to take the tariff forward. The competition is driven by commissioners. It is all the sorts of things that you might have expected us to do. The new tariff will be available later this year.

Q394Andrew George: More precisely, what timetable will be set? When you say "later this year," is it the calendar year?

Sir David Nicholson: To be honest, the issue is that, because of the way in which the spending review has been announced and the commitment we have to getting certainly a one-year allocation and perhaps two-year allocations, and the need to get the plans in place, we are having to review all of our timetables at the moment to ensure that we can make the progress that we need to.

Q395Andrew George: Whose decision will it be when a final decision is needed regarding the actual tariffs for the procedures?

Sir David Nicholson: The way the legislation is set up is that NHS England and Monitor have to agree. If they don’t agree then it goes to the Department, but we have to agree. It is a joint decision; we are locked together.

Q396Andrew George: You are not just gathering evidence on it but also consulting providers no doubt on the process.

Sir David Nicholson: yes.

Q397Andrew George: And they know they are being consulted at the moment.

Sir David Nicholson: We do what we call the road test, which is that we broadly consult all providers. That will be later. At this moment in time we are consulting providers as we go along.

Q398Andrew George: Are you content, having undertaken that work, that there is indeed a need to address this issue, because if it is left unaddressed there may be some unintended consequences of work being taken away from hospitals that clearly need to get the critical masses of patients through?

Sir David Nicholson: It is clearly a worry for many people who run hospitals. It is a worry for populations. I don’t know whether the entire solution is within the tariff, because there are contractual levers that we can have as well to help us with that, but when you take both things together we think it needs addressing.

Chair: I have one eye on the monitor because there is a vote coming within the next five minutes. Sarah wants to ask a quick question about mergers and Valerie wants a quick final shot.

Q399Dr Wollaston: I have a quick question. Where you have a hospital trust, a foundation trust or a community trust wanting to merge, even where that is recommended by Monitor on quality and financial grounds in the CQC, what would you anticipate if, for example, the OFT blocked such a merger? Have you looked at the delays that arise as a result of the OFT reviewing these mergers? Can you say what you are doing to try and speed that process up, because in some cases it is leading to financial instability?

Mr Hunt: It is a concern to me. We are in new territory here because the OFT have decided that under the Enterprise Act 2002 they have the right to be involved. Indeed, the legislation in the Health and Social Care Act confirms that. They have to look at the issues of choice and competition and also weigh that against the benefits to the public of a merger. I want to make sure that they properly consider the benefits and also that it doesn’t take too long, because I think these mergers are going to be a very important part of the way we get efficiencies.

I want to add this quickly. We are about to start new hospital inspections with a chief inspector of hospitals, who is going to be very robust, Ofsted-style. Hospitals will be categorised as inadequate in the way that schools are, and that will demand changes. If you look at the schools sector, one of the things that have been very important is to be able to get links between outstanding schools and failing schools so that you can benefit from the leadership in good schools. Again, that is going to be a reason why we will want more links between hospitals that are doing well and hospitals that are doing less well. It is something that I am watching very closely.

Q400Dr Wollaston: Would you consider a change in the legislation? This was the whole purpose of Monitor, wasn’t it? Monitor undertook this role. What changes in the legislation could you make?

Mr Hunt: If we thought there was a serious problem in terms of the structures as they are at the moment not reflecting what we believed was in the interests of patients, then we would consider it, yes.

Q401Valerie Vaz: I want to ask quickly about the Health and Social Care Act. Things have now been in place for a couple of months. Could you give us a figure on what the total cost of the reorganisation was?

Mr Hunt: The latest figure I have seen is between £1.5 billion and £1.6 billion of cost and a total saving during the course of this Parliament of £5.5 billion.

Q402Valerie Vaz: That brings me on to my last question, which is linked to driving up standards. You have made a couple of comments in the press about the NHS coasting and you blame the GPs for various things. Are you aware that morale is fairly low? Obviously pay has been kept at a certain level to make savings. When do you think that the NHS is going to turn the corner?

Mr Hunt: I think the NHS is doing extremely well. If I could, with respect, correct you, I have never talked about a coasting NHS. I have talked about coasting hospital management, as has the new Chairman of the CQC. I think that we need to bear down on management that has accepted standards at a level where they can and do need to be improved. That is a very important part of what needs to happen in the NHS. I also have huge respect for GPs. What I have criticised is the GP contract, which I don’t believe allows us to get the most out of people who work extremely hard.

Q403Valerie Vaz: When will the NHS turn the corner?

Mr Hunt: I think the NHS is doing extremely well under great pressure, but it faces new challenges and we have to be there to help the NHS face up to those challenges.

Chair: Thank you very much. The bell indeed draws it to a natural close.

Prepared 3rd July 2013