Hugely disruptive, appalled, extremely concerned, illogical, false economy and flawed- Health Select Committee's views of the new Labour health plans
Health Direct is copying below the House of Commons Health Select Committee's conclusions and recommendations on the Labour Government's new set of proposals for the NHS and health care in the UK. "Hugely disruptive, appalled, extremely concerned, illogical, false economy and flawed" are just some of the comments by the Labour dominated committee.
1. Besides cost savings, the Government has stated that the main aim of these reforms is to strengthen PCTs' commissioning function, as larger commissioning organisations, similar in size to old Health Authorities, will have increased bargaining power, and can be better aligned to local authority services. However, before discussing in detail the likely impact of the Government's proposal to restructure PCTs, it is important to note that PCTs were established only three years ago, at considerable cost to the taxpayer. A return to structures which are similar in size and function to previous Health Authorities raises important questions about why the shortcomings now being identified by the Government, including increased management costs and dilution of bargaining power, could not have been easily anticipated and addressed before PCTs' introduction three years ago. As we discuss later in this report, all restructurings are hugely disruptive, and to introduce a large scale reconfiguration of NHS organisations only three years after the last root and branch reform of NHS organisations points to an ill thought-out approach to policy-making.
2. We are appalled at the continuing lack of clarity about whether or not PCTs will eventually divest themselves of their provider functions. This announcement was first made at the end of July, together with a firm timetable for its implementation, which was withdrawn in October. Various ministerial announcements have failed to clarify the position, and even our witnesses, drawn from the senior ranks of the NHS, could not agree about whether or not these changes would eventually happen, with many appearing genuinely bewildered. As far as we can see, the overall direction of travel in fact remains unchanged, and PCTs will ultimately divest themselves of provider services. We urge the Government to either confirm or deny this immediately.
3. We are deeply concerned that neither Lord Warner nor John Bacon were able to give us a confident assurance that NHS staff potentially affected by these changes would be able to retain their NHS pensions. The Government must provide clear information as to whether existing NHS staff who are transferred to other providers, particularly in the private sector, as a result of these changes will be able to retain their NHS pensions.
4. Perhaps most concerning of all is that these announcements about the future of PCT provided community services anticipate the outcome of the Government's flagship consultation Your Health, Your Care, Your Say, which is supposed to shape the Government's forthcoming White Paper on out-of-hospital care. For a Government to announce its intended direction of travel a full five months before its consultation on this subject comes to an end makes a mockery of the consultative process. Equally, if the Government is now committed to introducing changes to PCTs to a more relaxed, less prescriptive timescale, it is difficult to see why the announcement would not have been better made in a more measured, informed way, in the expected White Paper.
5. One of our witnesses argued that the Government's handling of announcements surrounding Commissioning a Patient-Led NHS gives "a clear impression that the policy is being developed on the hoof". We agree. In our view, the numerous announcements and retractions about the divestment of PCTs' provider services, in advance of a White Paper consultation designed to canvass views on precisely this area, points to flawed and incoherent policy-making.
6. The consequence of this, which could have easily been predicted before the July announcements, has been the destabilization of a very valuable workforce whose support will prove essential to the implementation of the forthcoming White Paper. The insecurity and distraction that has been caused within NHS community health services demonstrates how damaging the repercussions of ill-thought through policy announcements can be, and we therefore recommend that the Department of Health carries out an immediate review of its internal systems to ensure that this does not happen again.
7. Although the stated aim of these proposals is to design a more patient-led NHS, evidence both from NHS bodies and from Patient and Public Involvement Forums confirms that patients and the public have not been adequately consulted. We find this unacceptable. If the Government truly believes in a patient-led NHS, it should have started its reforms with a patient-led consultation process, rather than the top-down process we are clearly seeing.
8. Even NHS officials who otherwise supported the proposals to merge PCTs have described the initial consultation process as "flawed". In some cases, organizations were given less than a month, during the summer holidays when many key figures were absent, to put together proposals for far-reaching changes to local services. The timing also meant that many local MPs and councillors were unable to contribute to the process. We accept that organizational change causes extreme instability, and for this reason it is helpful if periods of uncertainty are kept to a minimum. However, this needs to be balanced against the time needed both to consult local stakeholders, most importantly NHS patients, and to design new organizational structures that are fit for purpose. Our evidence suggests that in this case the Government has got this balance very wrong, particularly as the White Paper has not yet been published.
9. The flawed nature of the pre-submission engagement makes the proper conduct of the formal three month NHS consultation starting on 14 December vital. The letter from John Bacon, Group Director Health and Social Care Services Delivery dated 30 November to SHA Chief Executives instructed them to "ensure that all options are presented fairly and given equal weight in your documentation" and said that "where there are sharply differing views on particular options, it would be desirable to engage the relevant PCT in preparing the document". But it is not clear how the Department of Health has ensured this has happened as the consultation documents issued by SHAs did not have to be approved by the Department. The Department of Health should ensure that the consultation is fairly conducted by all SHAs, especially where the External Panel has required SHAs to consult on additional or different options than those originally considered in the pre-submission engagement. Not to do so would leave the Department vulnerable to allegations that the result of the consultation process was pre-determined and a sham.
10. Despite the Government's repeated reassurance that this is not a 'top down' process, with change being imposed on local NHS organizations from central government, the evidence we have received from those working in the NHS at a local level suggests that it is exactly that. This is because, in their view, the most significant driver of these reforms is finance and so solutions that would best meet local needs are being overruled because they do not yield enough cost savings. Cost savings may be a legitimate and justified driver for reform, as we discuss later in this report. However, the Government must be explicit that this is its key objective. It is disingenuous to argue that these changes are being driven from the grassroots of the NHS when NHS managers have been told that the solutions that would best meet the needs of their local populations will not be adopted because they will not produce sufficient cost savings.
11. Another very serious concern raised in our evidence is that because of the uncertainty about the divestment of provider services, SHAs are having to design new organizations without a clear understanding of what their ultimate function will be. This could lead to the formation of organizations which are not fit for purpose, necessitating yet more reorganizations.
12. Because SHA senior managers are currently under threat of redundancy, not only are they having to draw up reconfiguration plans whilst 'distracted by thoughts of self-preservation', but also, in all likelihood, will no longer be in post next year to be held accountable for the reconfiguration decisions they have taken. We find this highly concerning. The Government should have taken this into consideration and planned its restructuring accordingly, first ensuring existing SHAs have an ongoing role in overseeing and being held accountable for their PCT reforms, and then changing the configuration of SHAs themselves, rather than reforming both types of organisation in tandem, threatening both the quality of, and accountability for, these reforms.
13. We are pleased that Lord Warner has given us a commitment to publish all information submitted to the external panel as soon as possible. It is essential that the external panel's responses are made public also. We also note that the Secretary of State has promised that all proposals that have not been subject to extensive local consultation will be rejected. From our evidence alone, it would appear that insufficient consultation has taken place in several areas, and we urge the Government to make clear at the earliest opportunity to make clear which proposals have been rejected.
14. In the light of our evidence, we believe that further steps must be taken to ensure that what remains of the formal consultation process in respect of changes to PCTs is as transparent and inclusive as possible, offering patients and other local stakeholders a genuine choice over how their local health services are structured. To achieve this, the Government must publish all documents submitted to its external panel as soon as possible; furthermore Ministers must ensure that all formal consultation is conducted in a fair and unbiased manner.
15. The evidence is clear: the distraction caused by these reconfigurations will set back the development of PCTs' core functions, which include commissioning services, providing community health services, and protecting public health, by at least 18 months. We consider that imposing a further structural change on organizations that are only three years old, at a time when pressure on those very organizations to perform well has never been higher, is ill-judged in the extreme.
16. There are also well-founded concerns that patient care will suffer as a direct result of the distraction caused by these reforms, and our evidence suggests that the destabilising effects are already being felt across the NHS, with clinical staff moving from community hospitals to the acute sector because of uncertainty over their future roles. It is highly ironic that while a key plank of Government health policy is now to move services away from the acute sector and strengthen community health care services, the uncertainty generated by these mismanaged policy announcements is having precisely the opposite effect, causing a drift of staff away from community health services back to the acute sector, which is now perceived as more stable. That some of these outcomes could, with more rational and coherent planning, have been predicted and avoided, makes the Government's actions in this area even more indefensible.
17. We strongly support the Government's desire to improve commissioning in the NHS, but believe that this should have been addressed before, or at least at the same time as powerful incentives were being introduced which strengthened the provider sector. The fact that it was not has given rise to an uneven balance of power in the NHS that may now prove difficult to redress. We are pleased that the Department of Health has acknowledged this, and we hope that in future it will make efforts to ensure that the wider impacts of its policies are considered at a system level to avoid such a situation arising again.
18. While larger PCTs may be able to wield greater bargaining power over the acute sector, research evidence demonstrates that increases in PCT size beyond populations of 100,000 patients do not necessarily generate substantial improvements in overall performance, and that optimal size for commissioning varies widely according to services being commissioned. Health Authorities were large commissioning organisations, and their size does not seem to have made them effective commissioners. Arguably, the introduction of Payment by Results may already be giving PCTs the levers they need to commission effectively from the acute sector, without the need for restructuring.
19. We recognise the need to improve commissioning skills within PCTs. However, we remain unconvinced that instigating large-scale structural reform in order to 'retrench' commissioning expertise in larger centres is the only, or indeed the best, way to achieve this. Equally, it seems illogical that, at precisely the time the Government has committed to improving NHS commissioning, it is currently planning to spend £250 million less per year on this crucial function, further depleting management expertise from an already under-managed health system. This is more likely to weaken rather than strengthen NHS commissioning.
20. In principle, we support the aim of improving joint working between the NHS and local authorities, both in respect of social services, and other crucial local functions including housing, regeneration and education services. However, we are concerned that these reforms, while offering an opportunity to better align some boundaries, may risk setting up new barriers in other areas, and may threaten existing joint working arrangements.
21. PCTs were established to ensure that decisions about the NHS were made locally. By reverting back to the more remote structures that were abolished only three years ago, this localism will be lost. At the moment, each of the 302 PCTs in England has several Non-Executive Directors; a Patient and Public Involvement Forum; and a Professional Executive Committee of key local clinicians. While these structures clearly have a cost, they were introduced to add value. It is not clear why the Government is now unwilling to meet the cost of securing an enhanced level of local input into the NHS, only four years after this was identified as a key aim of Government health policy in Shifting the Balance of Power. Whatever the size of future PCTs, it is essential that structures to ensure clinical engagement and, most crucially, patient and public engagement are retained at their current levels, covering each natural community.
22. Practice Based Commissioning is a crucial policy which underpins the Government's proposals for restructuring PCTs, which the Government hopes will both strengthen commissioning and secure greater local engagement. However GPs, who will be responsible for implementing Practice Based Commissioning, have described a 'woeful lack of information' about the scheme, with key questions still unanswered. We therefore consider it highly unlikely that this system will be functioning effectively in all areas by the end of next year, and are concerned at the Government's complacency and unwarranted optimism over the implementation of Practice Based Commissioning. We urge the Government to address this lack of information immediately.
23. The Minister's view that Practice Based Commissioning as it is currently conceived will improve patient and public involvement in health care is not firmly based on any evidence. In fact, there is a significant gap in this area. We recommend that the Government places a specific requirement on all practice based commissioners to establish regular, formal arrangements for securing the input of their patients and local populations in the commissioning and provision of local services, just as PCTs and other NHS trusts are obliged to.
24. We are also concerned at the complacent attitude that the Government is displaying towards the very real possibility of Practice Based Commissioning introducing perverse incentives that could threaten patient choice and access to health care. It seems to us that these problems have not yet been fully anticipated or considered by the Government, which is worrying given that they hope Practice Based Commissioning will be universally implemented within a year. These potential problems need to be addressed before they arise, and to this end we recommend that the Government publish details of what actions it intends to take to counter these risks before Practice Based Commissioning is universally implemented next December.
25. Evidence from those working in the NHS suggests that PCTs are collaborating with one and other and, as a result, bringing about improvements without the need for large-scale reorganization. In our view, Lord Warner's suggestion that improvements in PCTs have been "patchy" does not constitute a valid argument for imposing radical structural reform across the board, dismantling organisations that are performing well as well as those that are performing badly. A more rational, constructive approach would be to support the evolutionary changes that are already taking place.
26. As a senior NHS chief executive told us, there is no such thing as a 'holy grail' of a perfect size for a commissioning organisation. There is a clear trade-off between the increased bargaining power and better co-terminosity of larger organisations, and the enhanced local engagement of smaller PCTs. Practice Based Commissioning may achieve local clinical engagement, but will leave serious gaps in terms of patient involvement. In order to improve commissioning, PCTs need better skills and information systems. Restructuring is not necessary to achieve this.
27. Given our evidence that the majority of PCTs are already involved in successful collaborative working, we believe that the most effective way to improve commissioning is to allow PCTs to develop organically, enabling them to evolve into larger organizations where this clearly best meets local needs. A managed approach to sharing best practice should be adopted to ensure that the poorest performers learn from the expertise of the best performers, and support should be specifically targeted towards developing commissioning in the poorest performing PCTs.
28. We were very concerned to learn that, prior to the publication of Commissioning a Patient-Led NHS, there was no consultation with public health professionals at all about its potential impact on PCTs' crucial public health function. In our view, debate about Commissioning a Patient-Led NHS has also given insufficient prominence to this. In order to safeguard local public health initiatives, we recommend that where PCTs merge leaving only one Director of Public Health, other consultants in Public Health are retained with responsibility for public health delivery, working with local authorities and local strategic partnerships. Further to this, steps must be taken to provide continuing support to community health professionals who play an equally important part in securing public health improvements.
29. The Government has downplayed the financial motivation for these reforms, concentrating instead on its aim of strengthening commissioning. However, our witnesses were clear that this was the key consideration in drawing up plans for reform, to the extent that plans which would better meet local needs were discounted because they did not yield sufficient savings. While achieving efficiency savings is a legitimate aim, this needs to be stated explicitly so that it can be subject to proper scrutiny.
30. In fact, the evidence to date suggests that this reconfiguration is unlikely to yield the savings the Government is hoping for. Figures put to us by PCT officials suggested that current proposals for reconfiguration might save between £60 and £135 million, well short of the target figure of £250 million. If proper clinical and patient involvement is to be retained, further local structures will need to be put in place at a sub-PCT level, which will generate additional costs. Equally, the costs of Practice Based Commissioning, which are at present unclear, will need to be taken into account. The NHS will also have to bear costs associated with redundancies, as well as the cost of reduced productivity over the next 18 months.
31. It is vital that NHS organisations deliver value for money. However, while the enhanced local perspective PCTs have brought to the NHS clearly has a cost, the benefits they have brought may well justify this cost. In addition to this, PCTs are currently responsible for spending 80% of the NHS's £76 billion budget. At a time when PCTs' commissioning role is crucial to the success of the NHS, it is a false economy to deplete the NHS's managerial resources still further in an attempt to save only a fraction of that total amount.
32. Whether or not PCTs should divest themselves of their provider services is a huge question which is outside the scope of this short inquiry. However, inevitably our witnesses raised many important concerns about the divestment of PCT provider services, most notably that it would lead to fragmentation of services, and make joined-up care even harder to deliver. Equally, it is not clear whether sufficient alternative providers exist to provide a market in community services. We urge the Government to address these crucial questions in its forthcoming White Paper on out-of-hospital care. (Paragraph 181)
33. We were extremely concerned at evidence we received about proposals to tender out the commissioning function in Oxfordshire before the new PCT Board has even been appointed. When we put this to Lord Warner he reassured us that this would not be allowed to happen, and we are relieved to see that Thames Valley SHA has now reconsidered its plans. However, we believe that the idea of outsourcing commissioning represents a significant departure from current policy, which has the potential of reducing transparency about the disposal of public funds. Further consultation and discussion is absolutely crucial before the Government allows any PCT to proceed down this route.
http://www.publications.parliament.uk/pa/cm200506/cmselect/cmhealth/646/64611.html
1. Besides cost savings, the Government has stated that the main aim of these reforms is to strengthen PCTs' commissioning function, as larger commissioning organisations, similar in size to old Health Authorities, will have increased bargaining power, and can be better aligned to local authority services. However, before discussing in detail the likely impact of the Government's proposal to restructure PCTs, it is important to note that PCTs were established only three years ago, at considerable cost to the taxpayer. A return to structures which are similar in size and function to previous Health Authorities raises important questions about why the shortcomings now being identified by the Government, including increased management costs and dilution of bargaining power, could not have been easily anticipated and addressed before PCTs' introduction three years ago. As we discuss later in this report, all restructurings are hugely disruptive, and to introduce a large scale reconfiguration of NHS organisations only three years after the last root and branch reform of NHS organisations points to an ill thought-out approach to policy-making.
2. We are appalled at the continuing lack of clarity about whether or not PCTs will eventually divest themselves of their provider functions. This announcement was first made at the end of July, together with a firm timetable for its implementation, which was withdrawn in October. Various ministerial announcements have failed to clarify the position, and even our witnesses, drawn from the senior ranks of the NHS, could not agree about whether or not these changes would eventually happen, with many appearing genuinely bewildered. As far as we can see, the overall direction of travel in fact remains unchanged, and PCTs will ultimately divest themselves of provider services. We urge the Government to either confirm or deny this immediately.
3. We are deeply concerned that neither Lord Warner nor John Bacon were able to give us a confident assurance that NHS staff potentially affected by these changes would be able to retain their NHS pensions. The Government must provide clear information as to whether existing NHS staff who are transferred to other providers, particularly in the private sector, as a result of these changes will be able to retain their NHS pensions.
4. Perhaps most concerning of all is that these announcements about the future of PCT provided community services anticipate the outcome of the Government's flagship consultation Your Health, Your Care, Your Say, which is supposed to shape the Government's forthcoming White Paper on out-of-hospital care. For a Government to announce its intended direction of travel a full five months before its consultation on this subject comes to an end makes a mockery of the consultative process. Equally, if the Government is now committed to introducing changes to PCTs to a more relaxed, less prescriptive timescale, it is difficult to see why the announcement would not have been better made in a more measured, informed way, in the expected White Paper.
5. One of our witnesses argued that the Government's handling of announcements surrounding Commissioning a Patient-Led NHS gives "a clear impression that the policy is being developed on the hoof". We agree. In our view, the numerous announcements and retractions about the divestment of PCTs' provider services, in advance of a White Paper consultation designed to canvass views on precisely this area, points to flawed and incoherent policy-making.
6. The consequence of this, which could have easily been predicted before the July announcements, has been the destabilization of a very valuable workforce whose support will prove essential to the implementation of the forthcoming White Paper. The insecurity and distraction that has been caused within NHS community health services demonstrates how damaging the repercussions of ill-thought through policy announcements can be, and we therefore recommend that the Department of Health carries out an immediate review of its internal systems to ensure that this does not happen again.
7. Although the stated aim of these proposals is to design a more patient-led NHS, evidence both from NHS bodies and from Patient and Public Involvement Forums confirms that patients and the public have not been adequately consulted. We find this unacceptable. If the Government truly believes in a patient-led NHS, it should have started its reforms with a patient-led consultation process, rather than the top-down process we are clearly seeing.
8. Even NHS officials who otherwise supported the proposals to merge PCTs have described the initial consultation process as "flawed". In some cases, organizations were given less than a month, during the summer holidays when many key figures were absent, to put together proposals for far-reaching changes to local services. The timing also meant that many local MPs and councillors were unable to contribute to the process. We accept that organizational change causes extreme instability, and for this reason it is helpful if periods of uncertainty are kept to a minimum. However, this needs to be balanced against the time needed both to consult local stakeholders, most importantly NHS patients, and to design new organizational structures that are fit for purpose. Our evidence suggests that in this case the Government has got this balance very wrong, particularly as the White Paper has not yet been published.
9. The flawed nature of the pre-submission engagement makes the proper conduct of the formal three month NHS consultation starting on 14 December vital. The letter from John Bacon, Group Director Health and Social Care Services Delivery dated 30 November to SHA Chief Executives instructed them to "ensure that all options are presented fairly and given equal weight in your documentation" and said that "where there are sharply differing views on particular options, it would be desirable to engage the relevant PCT in preparing the document". But it is not clear how the Department of Health has ensured this has happened as the consultation documents issued by SHAs did not have to be approved by the Department. The Department of Health should ensure that the consultation is fairly conducted by all SHAs, especially where the External Panel has required SHAs to consult on additional or different options than those originally considered in the pre-submission engagement. Not to do so would leave the Department vulnerable to allegations that the result of the consultation process was pre-determined and a sham.
10. Despite the Government's repeated reassurance that this is not a 'top down' process, with change being imposed on local NHS organizations from central government, the evidence we have received from those working in the NHS at a local level suggests that it is exactly that. This is because, in their view, the most significant driver of these reforms is finance and so solutions that would best meet local needs are being overruled because they do not yield enough cost savings. Cost savings may be a legitimate and justified driver for reform, as we discuss later in this report. However, the Government must be explicit that this is its key objective. It is disingenuous to argue that these changes are being driven from the grassroots of the NHS when NHS managers have been told that the solutions that would best meet the needs of their local populations will not be adopted because they will not produce sufficient cost savings.
11. Another very serious concern raised in our evidence is that because of the uncertainty about the divestment of provider services, SHAs are having to design new organizations without a clear understanding of what their ultimate function will be. This could lead to the formation of organizations which are not fit for purpose, necessitating yet more reorganizations.
12. Because SHA senior managers are currently under threat of redundancy, not only are they having to draw up reconfiguration plans whilst 'distracted by thoughts of self-preservation', but also, in all likelihood, will no longer be in post next year to be held accountable for the reconfiguration decisions they have taken. We find this highly concerning. The Government should have taken this into consideration and planned its restructuring accordingly, first ensuring existing SHAs have an ongoing role in overseeing and being held accountable for their PCT reforms, and then changing the configuration of SHAs themselves, rather than reforming both types of organisation in tandem, threatening both the quality of, and accountability for, these reforms.
13. We are pleased that Lord Warner has given us a commitment to publish all information submitted to the external panel as soon as possible. It is essential that the external panel's responses are made public also. We also note that the Secretary of State has promised that all proposals that have not been subject to extensive local consultation will be rejected. From our evidence alone, it would appear that insufficient consultation has taken place in several areas, and we urge the Government to make clear at the earliest opportunity to make clear which proposals have been rejected.
14. In the light of our evidence, we believe that further steps must be taken to ensure that what remains of the formal consultation process in respect of changes to PCTs is as transparent and inclusive as possible, offering patients and other local stakeholders a genuine choice over how their local health services are structured. To achieve this, the Government must publish all documents submitted to its external panel as soon as possible; furthermore Ministers must ensure that all formal consultation is conducted in a fair and unbiased manner.
15. The evidence is clear: the distraction caused by these reconfigurations will set back the development of PCTs' core functions, which include commissioning services, providing community health services, and protecting public health, by at least 18 months. We consider that imposing a further structural change on organizations that are only three years old, at a time when pressure on those very organizations to perform well has never been higher, is ill-judged in the extreme.
16. There are also well-founded concerns that patient care will suffer as a direct result of the distraction caused by these reforms, and our evidence suggests that the destabilising effects are already being felt across the NHS, with clinical staff moving from community hospitals to the acute sector because of uncertainty over their future roles. It is highly ironic that while a key plank of Government health policy is now to move services away from the acute sector and strengthen community health care services, the uncertainty generated by these mismanaged policy announcements is having precisely the opposite effect, causing a drift of staff away from community health services back to the acute sector, which is now perceived as more stable. That some of these outcomes could, with more rational and coherent planning, have been predicted and avoided, makes the Government's actions in this area even more indefensible.
17. We strongly support the Government's desire to improve commissioning in the NHS, but believe that this should have been addressed before, or at least at the same time as powerful incentives were being introduced which strengthened the provider sector. The fact that it was not has given rise to an uneven balance of power in the NHS that may now prove difficult to redress. We are pleased that the Department of Health has acknowledged this, and we hope that in future it will make efforts to ensure that the wider impacts of its policies are considered at a system level to avoid such a situation arising again.
18. While larger PCTs may be able to wield greater bargaining power over the acute sector, research evidence demonstrates that increases in PCT size beyond populations of 100,000 patients do not necessarily generate substantial improvements in overall performance, and that optimal size for commissioning varies widely according to services being commissioned. Health Authorities were large commissioning organisations, and their size does not seem to have made them effective commissioners. Arguably, the introduction of Payment by Results may already be giving PCTs the levers they need to commission effectively from the acute sector, without the need for restructuring.
19. We recognise the need to improve commissioning skills within PCTs. However, we remain unconvinced that instigating large-scale structural reform in order to 'retrench' commissioning expertise in larger centres is the only, or indeed the best, way to achieve this. Equally, it seems illogical that, at precisely the time the Government has committed to improving NHS commissioning, it is currently planning to spend £250 million less per year on this crucial function, further depleting management expertise from an already under-managed health system. This is more likely to weaken rather than strengthen NHS commissioning.
20. In principle, we support the aim of improving joint working between the NHS and local authorities, both in respect of social services, and other crucial local functions including housing, regeneration and education services. However, we are concerned that these reforms, while offering an opportunity to better align some boundaries, may risk setting up new barriers in other areas, and may threaten existing joint working arrangements.
21. PCTs were established to ensure that decisions about the NHS were made locally. By reverting back to the more remote structures that were abolished only three years ago, this localism will be lost. At the moment, each of the 302 PCTs in England has several Non-Executive Directors; a Patient and Public Involvement Forum; and a Professional Executive Committee of key local clinicians. While these structures clearly have a cost, they were introduced to add value. It is not clear why the Government is now unwilling to meet the cost of securing an enhanced level of local input into the NHS, only four years after this was identified as a key aim of Government health policy in Shifting the Balance of Power. Whatever the size of future PCTs, it is essential that structures to ensure clinical engagement and, most crucially, patient and public engagement are retained at their current levels, covering each natural community.
22. Practice Based Commissioning is a crucial policy which underpins the Government's proposals for restructuring PCTs, which the Government hopes will both strengthen commissioning and secure greater local engagement. However GPs, who will be responsible for implementing Practice Based Commissioning, have described a 'woeful lack of information' about the scheme, with key questions still unanswered. We therefore consider it highly unlikely that this system will be functioning effectively in all areas by the end of next year, and are concerned at the Government's complacency and unwarranted optimism over the implementation of Practice Based Commissioning. We urge the Government to address this lack of information immediately.
23. The Minister's view that Practice Based Commissioning as it is currently conceived will improve patient and public involvement in health care is not firmly based on any evidence. In fact, there is a significant gap in this area. We recommend that the Government places a specific requirement on all practice based commissioners to establish regular, formal arrangements for securing the input of their patients and local populations in the commissioning and provision of local services, just as PCTs and other NHS trusts are obliged to.
24. We are also concerned at the complacent attitude that the Government is displaying towards the very real possibility of Practice Based Commissioning introducing perverse incentives that could threaten patient choice and access to health care. It seems to us that these problems have not yet been fully anticipated or considered by the Government, which is worrying given that they hope Practice Based Commissioning will be universally implemented within a year. These potential problems need to be addressed before they arise, and to this end we recommend that the Government publish details of what actions it intends to take to counter these risks before Practice Based Commissioning is universally implemented next December.
25. Evidence from those working in the NHS suggests that PCTs are collaborating with one and other and, as a result, bringing about improvements without the need for large-scale reorganization. In our view, Lord Warner's suggestion that improvements in PCTs have been "patchy" does not constitute a valid argument for imposing radical structural reform across the board, dismantling organisations that are performing well as well as those that are performing badly. A more rational, constructive approach would be to support the evolutionary changes that are already taking place.
26. As a senior NHS chief executive told us, there is no such thing as a 'holy grail' of a perfect size for a commissioning organisation. There is a clear trade-off between the increased bargaining power and better co-terminosity of larger organisations, and the enhanced local engagement of smaller PCTs. Practice Based Commissioning may achieve local clinical engagement, but will leave serious gaps in terms of patient involvement. In order to improve commissioning, PCTs need better skills and information systems. Restructuring is not necessary to achieve this.
27. Given our evidence that the majority of PCTs are already involved in successful collaborative working, we believe that the most effective way to improve commissioning is to allow PCTs to develop organically, enabling them to evolve into larger organizations where this clearly best meets local needs. A managed approach to sharing best practice should be adopted to ensure that the poorest performers learn from the expertise of the best performers, and support should be specifically targeted towards developing commissioning in the poorest performing PCTs.
28. We were very concerned to learn that, prior to the publication of Commissioning a Patient-Led NHS, there was no consultation with public health professionals at all about its potential impact on PCTs' crucial public health function. In our view, debate about Commissioning a Patient-Led NHS has also given insufficient prominence to this. In order to safeguard local public health initiatives, we recommend that where PCTs merge leaving only one Director of Public Health, other consultants in Public Health are retained with responsibility for public health delivery, working with local authorities and local strategic partnerships. Further to this, steps must be taken to provide continuing support to community health professionals who play an equally important part in securing public health improvements.
29. The Government has downplayed the financial motivation for these reforms, concentrating instead on its aim of strengthening commissioning. However, our witnesses were clear that this was the key consideration in drawing up plans for reform, to the extent that plans which would better meet local needs were discounted because they did not yield sufficient savings. While achieving efficiency savings is a legitimate aim, this needs to be stated explicitly so that it can be subject to proper scrutiny.
30. In fact, the evidence to date suggests that this reconfiguration is unlikely to yield the savings the Government is hoping for. Figures put to us by PCT officials suggested that current proposals for reconfiguration might save between £60 and £135 million, well short of the target figure of £250 million. If proper clinical and patient involvement is to be retained, further local structures will need to be put in place at a sub-PCT level, which will generate additional costs. Equally, the costs of Practice Based Commissioning, which are at present unclear, will need to be taken into account. The NHS will also have to bear costs associated with redundancies, as well as the cost of reduced productivity over the next 18 months.
31. It is vital that NHS organisations deliver value for money. However, while the enhanced local perspective PCTs have brought to the NHS clearly has a cost, the benefits they have brought may well justify this cost. In addition to this, PCTs are currently responsible for spending 80% of the NHS's £76 billion budget. At a time when PCTs' commissioning role is crucial to the success of the NHS, it is a false economy to deplete the NHS's managerial resources still further in an attempt to save only a fraction of that total amount.
32. Whether or not PCTs should divest themselves of their provider services is a huge question which is outside the scope of this short inquiry. However, inevitably our witnesses raised many important concerns about the divestment of PCT provider services, most notably that it would lead to fragmentation of services, and make joined-up care even harder to deliver. Equally, it is not clear whether sufficient alternative providers exist to provide a market in community services. We urge the Government to address these crucial questions in its forthcoming White Paper on out-of-hospital care. (Paragraph 181)
33. We were extremely concerned at evidence we received about proposals to tender out the commissioning function in Oxfordshire before the new PCT Board has even been appointed. When we put this to Lord Warner he reassured us that this would not be allowed to happen, and we are relieved to see that Thames Valley SHA has now reconsidered its plans. However, we believe that the idea of outsourcing commissioning represents a significant departure from current policy, which has the potential of reducing transparency about the disposal of public funds. Further consultation and discussion is absolutely crucial before the Government allows any PCT to proceed down this route.
http://www.publications.parliament.uk/pa/cm200506/cmselect/cmhealth/646/64611.html
posted by Dr Search- Principal Consultant at the Search Clinic at
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