What can HS2 teach the NHS?

1          Introduction Healthcare Audit Consultants

Although HS2 may at first seem unrelated, it possesses many of the features of the NHS reconfiguration debate: strong vested interests; a lot of money at stake; many people sympathetic to the vague goals of the project but without a clear idea of the costs, benefits or alternative options. Additional common features are the tendencies of the powers that be to seek to commit at an early stage; to pursue “aspiration-based planning techniques” that respond to uncertainty by the clever device of making it up or as it is called ‘adjusting to circumstances’ as the project proceeds. This is in contrast to a plan-based approach that perhaps futilely seeks to predict the future and runs the risk of being discredited and exposing project managers and sponsors to ridicule as events unfold and veer away from the predicted path.

Both HS2 and NHS reconfiguration also provide examples of governance issues, as in each case there can be top-level endorsement provided long before the case is proven and decisions have to be made. It is almost as though our leaders are in “war mode”. Faced with huge risks, massive costs, contentious benefits and the existence of easier alternatives, to ‘back-down’ is unacceptable and a sign of weakness unbecoming to someone who aspires to be a leader. Yet as we approach the anniversary of the start of WW1, as we contemplate the hubris around the collapse of RBS and the financial services industry, it seems that for government ministers the forces prompting the temptation to press the GO button outweigh the cautious forces on the side of the WAIT button.

Measured debate and due process can frustrate those who want to dive into the specifics of NHS reconfiguration proposals in a locality and who thrive in the cut and thrust of winning the arguments around the committee tables of power but the lesson drawn is there is much to be learnt from recognising similarities across government departments.

2       The National Audit Office report on HS2

The starting point for this blog is the NAO report of May 2013 ‘High Speed 2: A Review of Early Programme Preparation’  I wish simply to highlight findings and features of HS2 as discussed by the NAO, which both resonate with me and seem of relevance to the reconfiguration debate in the NHS. It is taken as read that high speed rail is a good thing but that opinion is divided as to whether the costs are worth it, the benefits big enough and whether or not better options to achieve the same objectives are not more readily available.

The NAO as part of the decision-making process was asked to review the programme and to advise Parliament. First I summarise their findings and then discuss the implications for the debate within the NHS on reconfiguration.

The key NAO findings were:

  • The Department of Transport’s strategic reasons for developing HS2 are not presented well in the business case. The ‘savings’ were not well related to the objective of ‘rebalancing regional economies’. There was limited evidence for demonstrating future capacity needs, and why alternatives were not considered to deliver capacity. It is not clear how HS2 will deliver the Department’s strategic objective of delivering/rebalancing economic growth. Major uncertainties exist in the calculations of benefits.
  • The benefit-cost ratio will change during the lifetime of the project; it was 2.4 to 1 but was now only 1.4 to 1.
  • The benefit-cost ratio calculated for phase 1 has twice contained errors and the Department has been slow to carry out its own assurance of the underlying analysis.
  • The Department and HS2 Ltd should update the data underpinning key assumptions in the benefit-cost ratio. Current calculations were found to be out of date, inaccurate and potentially misleading.
  • Project management is over-ambitious in timetabling.
  • The Department’s management and oversight of the programme must be improved.
  • The clarity of objectives must be improved. The largest quantified benefit is unclear. The Department has not structured its management and how to achieve strategic goals.
  • The Department is not sufficiently engaged with stakeholders. There are misunderstandings about approvals processes.
  • The Department has been slow to respond to issues raised by external and internal assurance. Recommendations made have still not been fully implemented.
  • Cost estimates used are still not reliable.
  • There is no mechanism to agree in-principle funding for the life of the project.
  • The NAO is concerned at the capacity to manage projects, in the light of other demands and the experience of considerable organisational change.

The NAO concluded that it could not recommend the HS2 project as value for money. Moreover the strategic need was not established. The NAO acknowledged recent work being undertaken but said it was building on a weak foundation for securing and demonstrating success in the future.

3       How is this relevant to the NHS reconfiguration debate?

The subject matter is different, the specifics unique and any comparisons with the case for reconfiguration in the NHS only of curiosity value; perhaps. On the other hand, as illustrated recently by Professors Anthony King and Ivor Crewe in ‘The Blunders of our Government’, there is a tendency amongst government agencies to display common proclivities when it comes to making claim on our resources for little apparent benefit, when other alternatives are more readily available. Thus when it comes to NHS reconfiguration there are the following common grounds for complaint.

Strategic Muddle

It is not clear that if the declared desire to improve quality is an imperative that reconfiguration is either necessary or essential. Simply implementing the European Working Time Directive would sort most problems. Nor if balancing the books is such an urgent task is it clear why spending hundreds of millions of pounds (if not billions overall) on expensive reconfiguration is the priority. The Government’s favourite consultants, McKinseys, have identified reconfiguration as potentially only delivering 7% of necessary savings and the King’s Fund concluded in its investigation of reconfiguration there would be little or no short- to medium-term savings.

There is no compelling business case

The costs of reconfiguration are often not much less than estimated benefits without there being either confidence in delivery or risks being quantified. Examples exist of early business cases containing fundamental errors, and having to be replaced by amended versions of different scope, adjusted to show a benefit, but quite different to those discussed with stakeholders at an earlier stage. There is no compelling exemplar site or unambiguously positive model for local stakeholders to be referred to.

Assurance issues remain unresolved

Issues raised by NCAT (National Clinical Advisory Team), IRP (Independent Reconfiguration Panel) and NHS strategic quality assurance processes can remain unresolved and uncertain right up to the point of public consultation and beyond.

Modelling is unconvincing

It is difficult to receive, understand and be convinced by financial and patient flow analysis of the implications of reconfiguration; for example, changes in South London only caused further problems and outcomes were markedly different to those predicted.

Approvals processes for necessary capital investment are unclear.

It is by no means certain that the Treasury will approve reconfiguration proposals prepared by the NHS. I have seen examples of business cases flouting Treasury guidance, not properly considering ‘do-minimum’ options, failing to assess total costs and failing to present a compelling business case. This for schemes and projects costing billions and at a time of national austerity.

Project management is weak

Projects typically cover a wide area, encompassing many competing independent organisations, involving multiple stakeholders, and with only vague mutual commitment. Even with the best will in the world management would always be difficult. Each reconfiguration proposal is unique, calling for local expertise, commitment and resources. These must all be in doubt.

Does this sound familiar?

4       Concluding remarks

There is much to be learnt from the HS2 affair. Boys like their trains but there comes a time in every boy’s lifetime when he must put aside childish emotions and consider objectively the business case, risks, evidence and make a balanced, informed judgement. Taking account of history, examples from other spheres of life, can all help in that judgement. I hope all those approaching the arguments for and against reconfiguration show the wisdom to make the best judgement. And I hope we will not have to read NAO reports about NHS reconfigurations in due course.

Roger Steer

Healthcare Audit Consultants