Royal Commission on the NHS Chapter 19

 Parliament, Health Ministers and their Departments

19.1 In each of the four parts of the UK the NHS is the direct statutory responsibility of a Minister of the Crown and to help him in his task each has a health department staffed by civil servants. Health ministers devolve the day to day management of the NHS to health authorities. These authorities employ staff, provide buildings and equipment and ensure that patients receive care. Their members are appointed, as opposed to elected, for the most part by the responsible minister or, in the case of Area Health Authority (AHA) members in England, by the appropriate Regional Health Authority (RHA). They look to central   government   for   their funds.  Formal overall  responsibility to Parliament for their actions rests with the appropriate minister.

19.2 There are financial reasons for this form of organisation. More than 95% of NHS funds are drawn from general taxation and NHS National Insurance contributions, most of the balance coming from charges for certain NHS goods and services. These funds are voted annually by Parliament and it is a major function of a health minister to negotiate with his Cabinet colleagues an appropriate share of public expenditure for the NHS. He must then account to Parliament, and through Parliament to the people of the UK, for the proper use of these funds. In each health department a senior civil servant is the accounting officer  and  is  subject  to  examination  by  the  Public  Accounts Committee (PAC) of the House of Commons for all the expenditure by his department on the NHS. Health ministers are accountable to Parliament, not only for the determination of national policy but also for actions carried out by or on behalf of individual health authorities. In principle health ministers and their departments are expected to have detailed knowledge of and influence over the NHS. In practice, however, this is neither possible nor desirable and detailed ministerial accountability for the NHS is largely a constitutional That is not to say that it is without virtues.

19.3 The NHS differs from local authorities in that it has no significant independent source of income and no direct accountability to a local electorate.

19.4 Nor is the NHS like a nationalised industry where central government delegates detailed control over the management of a particular service or industry to a public corporation. Those corporations are expected to operate like businesses and have to find a large part of their own capital and resources. The NHS is thus not subject to the financial discipline of having to meet a target rate of return on capital.

19.5 The formal ministerial and central control by civil servants means that the NHS differs from those parts of the public services whose administrative independence  from  the  state  is  accepted  but  which  are  nevertheless dependent on central funds. For example, the universities derive over 90% of their income from central government, but they are independent corporations and although subject to the usual rules of financial accountability under the scrutiny of the Comptroller and Auditor General, the control and guidance exercised over them by the University Grants Committee is light.

19.6    On the other hand, the size of the NHS, the power of the health authorities and the influence of the health professions mean that central government cannot in practice administer the NHS in the detailed way that it can the social security system or the armed forces. Nor would it be sensible to try to do so. The Department of Health and Social Security put the position like this:

“Because of the size and complexity of the NHS budget, it would not be practicable for DHSS to control expenditure in great detail. In any case to attempt to do so would seriously undermine one of the major concepts on which the present structure of the NHS is based, namely, the maximum delegation to Regional and Area Health Authorities of responsibility for providing services in accordance with national policies, objectives and priorities. Broad financial control is exercised by giving RHAs fixed allocations, which they must not exceed but within which they have considerable freedom to manage as they judge best. The essential counterpart of this degree of delegation is a clear line of accountability and an efficient system of monitoring.”

It is clear that there is a gap between the formal, detailed accountability that a minister and his chief official carry for all that goes on in the NHS and every penny spent on it, and the realities of the situation described above. It is not surprising that difficulties occur.

19.7    In the remainder of this chapter, we examine in turn the parts played by Parliament, the health minister, his permanent secretary and his depart­ment. Our analysis is primarily concerned with the Secretary of State for Social Services and the DHSS. Nevertheless, much of what we say will apply to Scotland, Wales and Northern Ireland.

Parliamentary Control

19.8 Parliament supervises the NHS in a number of ways. Individual MPs can raise matters of constituency or more general interest with the minister concerned by letter, or by parliamentary question, or by initiating adjournment debates and so on. MPs will take part in debates on health policy in the NHS initiated by the government or opposition, and in the process of scrutinising legislation on the NHS. There is no select committee on the NHS but the Social Services and Employment Sub-committee of the Expenditure Committee periodically considers aspects of health services. The PAC, served by the Comptroller and Auditor General and his staff, examines the way NHS funds are spent.

19.9     Ministers have encouraged MPs  to  raise  points  about  the  local operation of the NHS with the appropriate health authority in the first instance, and they do so. However, the health departments told us that over 3,000 parliamentary questions were asked by MPs on health topics in session 1976/77. Our discussions with former ministers and members of the Expendi­ture Committee confirmed that MPs value the direct access to health ministers which the present system allows them, but we think that on occasion they raise matters which can and should be dealt with by the NHS and dealt with at its lowest level.  They expect health  ministers  to be in  a  position  to provide accurate and detailed  information quickly over  the  whole NHS  field  for Parliament. This requires a large and staffed intelligence gathering capacity which in practice involves both the health authorities and the health departments.

19.10 Some critics of present arrangements suggest that the creation of a public corporation or health commission would “take the NHS out of politics” in general,  and  in particular relieve ministers of much of their  present obligation to provide information  to MPs.  We discuss the merits of this proposal later, but whatever else it might do it certainly would not take the NHS out of politics. We do not believe that this is in any wider sense desirable. Obviously there are aspects of the nation’s health which would be better left out of party politics, but we believe it is both inevitable and right that the affairs of the NHS should be kept firmly at the centre of public debate.

19.11 It was suggested to us that the establishment of a select committee on the NHS would assist parliamentary control of the health service. We noted that a select committee to examine the work of the DHSS was proposed by the House of Commons Select Committee on Procedure in their 1977/78 report. We recommend that a select committee be set up. We consider that it would make a valuable contribution to public debate on the NHS, and, provided it were properly served, with the power to examine health ministers, civil servants and expert witnesses, would enable Parliament to influence health policy and keep in touch with the work of the NHS in a more systematic way. We think its establishment should be accompanied by a reduction in the volume of routine work imposed by MPs on health departments. There should be a clear understanding that matters of local significance should be raised and dealt with by the appropriate health authority. We recognise that MPs must retain their important right to raise matters affecting their constituents with the minister responsible if such matters cannot be dealt with satisfactorily locally, but we hope that they would use that right sparingly.

The Minister

19.12 The lot of a Secretary of State and his junior ministers cannot be an easy one. He is accountable to Parliament for the NHS and carries management responsibilities for it. The Secretary of State for Social Services is a cabinet minister with the heavy responsibility which any office of cabinet rank carries. He will be an MP and may hold office in his political party. The functions of the DHSS include not only the NHS but wider health matters, local authority social services in England and the administration of the social security system in Great Britain. In other parts of the UK the NHS is the responsibility of the Secretaries of State for Scotland, Wales and Northern Ireland. They carry portfolios for many other functions in addition to the NHS and the pressure of responsibilities on them means that, if anything, they are even more remote from the NHS.

19.13 We took the advice of former prime ministers and health ministers about the role of the ministers responsible for the NHS. One view was that ministers’ powers were limited and that all that could be reasonably expected of them and their departments was an inspectorial function. Another was that under present financial arrangements a large bureaucracy was required to ensure accountability to Parliament. The importance of the NHS having a voice in the Cabinet was also stressed. Our informants united in discounting the possibility of the NHS being taken out of politics.

19.14 Nonetheless, the Secretary of State for Social Services, and his colleagues with health responsibilities in other parts of the UK, are clearly overburdened at the present. We hope our recommendations in this and other chapters will relieve them to some extent.

The Permanent Secretary

19.15 It is difficult to separate the role of the permanent secretary from that of his department, but there is one feature of that role which demands separate consideration. As the permanent head of the department, he is its accounting officer. This means that he is personally accountable for the proper and efficient use of funds allocated by Parliament. His accountability is increasingly interpreted by Parliament as including the policies which give rise to expenditure as well as financial propriety. We were told by the Comptroller and Auditor General that while the DHSS permanent secretary would not be blamed for everything that went wrong in the NHS, he would be expected to make sure that faults in management that might be exposed were corrected. We think it would be possible to divide up the present accountability of the DHSS permanent secretary and devolve defined areas of it to the health authorities themselves. We recognise that this would not be achieved without a re-definition of the roles of the minister and the department responsible for the NHS.

19.16 Ours is not the accepted view of Whitehall. Evidence presented to the PAC in 1977 by senior officials from the health departments, the Treasury and the Civil Service Department reviewed alternatives to the permanent secretary’s present accountability for the NHS. The departments concluded that the accounting officer responsibility of the permanent secretary must remain personal to him. In their view the alternative of separate financial accountability for each health authority would require the creation of suitable accounting officer posts in health authorities and would, in any case, not relieve the health departments significantly of the burden of responsibility. Any change in the position of the accounting officer implies significant structural change in the top management relationships of the NHS. We return to this

The Department of Health and Social Security

19.17 In considering the role of the department we found the Expenditure Committee’s report referred to above most helpful, particularly the memoranda submitted to it by the DHSS on its own organisation. We have also carefully studied the report of an enquiry into the department’s work carried out by three RHA chairmen and the very considerable documentation of  the management review carried out by the department itself. In all this, as with all other matters, we have received the fullest and friendliest co-operation of officials in the DHSS and the other health departments.

In the memorandum to the Expenditure Committee the DHSS described its functions as follows:

19.18 “Across the Health, Social Security and Personal Social Services the Department has a major policy development role. The Department is also directly responsible for administering the various Social Security schemes, for promoting the establishment of a comprehensive Health Service, for public and preventive health measures and for ensuring the provision of personal social services by local authorities. The total expenditure for which the Department is responsible is of the order of £17,000m a year. Its staff numbers about 93,000.”

The memorandum went on to distinguish the department’s role in relation to social security and to health:

“The nature of policy formation and of the administrative tasks for Social Security differ in many important ways from those for Health and Personal Social Services. Through its own network of central, regional and local offices, the Department deals direct with claimants for social security benefits in accordance with rules affecting benefits and contribu­tions laid down under statute. In its health and personal social services roles, however, the Department does not directly treat patients – except at the Special Hospitals and Artificial Limb and Appliance Centres – or advise individual members of the public. It is responsible for seeing that there is adequate organisation, with a full range of services to ensure that patients are treated and individuals helped. It is a centre for developing  general advice and guidance to the authorities concerned. It has important co-ordinating and research roles to help it discharge these responsibilities. It decides the allocation of finance among authorities and monitors expenditure. Its oversight of and assistance to authorities is generally more by administrative guidance than by legislation.”

The vast majority of staff employed by the DHSS work on the social security side of the department, but about 5,000 work on health and personal social services. About another 1,000 staff work in the other UK health departments.

19.19 The most frequent criticism of the DHSS is that it is too large and complicated. The Rt Hon Dr D Owen MP, Minister of State at DHSS 1974-76, has written:

“The department has become bogged down in detailed administration covering day to day management that has been sucked in by the parliamentary process. The answerability of Ministers to Parliament may have given the semblance of control, but on some major aspects of health care there has been little central direction or control.”

The three chairmen’s report made the following points about DHSS:

1. ” There must be a clear statement of the precise function of the department.
2. The structure of the DHSS has become complicated, partly because of the centralising tendencies of successive governments, and partly because of the confusion over the years between its executive and its advisory responsibilities.
3. The complication of functions, both advisory and executive uncon­nected with the NHS has made the lines of responsibility even more
4. The Department has in consequence grown steadily in size in recent years, to the detriment of its effectiveness, ability to take decisions, and capacity to manage the Service as it should.
5. This has resulted also in considerable duplication of effort between the Department and Regions with consequent duplications of staff and hence, of cost.”

In oral evidence to us the three chairmen expressed their disappointment that, although some progress on peripheral changes in the organisation of the DHSS had taken place as the result of their report, and of the management review in the department, in general their comments and criticisms had not been accepted.

19.20 It is never easy for the outsider to obtain a balanced and accurate view of how large organisations operate. This is perhaps particularly true of government departments whose organisation is affected by political factors and which have many traditional and advisory functions. Simple management models are rarely relevant. Organisational change in very large institutions always takes a long time to come fully into effect and usually longer than others estimate. These considerations caution us against recommending hasty structural change in the top management of the NHS. We were also impressed by Professor Kogan’s finding that at working level in the NHS there was little sign of widespread dissatisfaction   with the DHSS or the other health Nevertheless, we have been left with a sense of unease about the present size and structure of the DHSS and with the way it controls the NHS.

19.21 The two main functions of the Secretary of State for Social Services are to give general directions and policy guidance to the NHS. We consider that wherever he gives guidance to the NHS which has financial consequences, he must provide the resources necessary to follow his guidance. Again, if he feels that savings can be made the Secretary of State should indicate what he expects these savings to be. To do less than this is to raise expectations on the part of the public which the NHS is unable to fulfil.

19.22 We think we detect some lack of co-ordination between policy formation within the department which leads to the development of priorities in health spending and the reflection of this policy through the RAWP formula which mainly determines the financial allocations made by the DHSS to the regions. In our view the DHSS has tended to give too much guidance to the NHS both on strategic issues and matters of detail. Too often national policies have been advocated without critically evaluated local experiment. As we noted in Chapter 6 close co-operation with other government departments responsible for social policy is also important.

19.23 It seems to us that the fact that the Secretary of State and his chief official are answerable for the NHS in detail distorts the relationship between the DHSS and health authorities. It encourages central involvement in matters which would be better left to the authorities. In consequence no clear line is drawn where the department’s involvement ends. In our view the essential functions of the DHSS in the health field are to:

• obtain, allocate and distribute funds for the NHS;
• set objectives, formulate policies and identify priorities;
• monitor the performance of health authorities so as to enable the Secretary of State to discharge his responsibilities;
• undertake national manpower planning;
• deal at national level with pay and conditions for NHS staff;
• advise on legislation;
• liaise with other government departments on matters related to the NHS and health policy;
• take a lead in promoting policies designed to improve the health of the nation and prevent ill-health;
• promote experiment, evaluation and the exchange of ideas on health questions.

In addition there will inevitably be a departmental involvement in such matters as capital building, supplies and international health.

The other health departments

19.24 Although some of the comments we have made about the DHSS apply to the health departments in Scotland, Wales and Northern Ireland they operate in a very different context. In general relations between them and the health authorities, professions and trade unions are more direct and informal. This is probably because their scale of operation is smaller, their populations being analogous to that of an RHA in England, and because many contentious issues, such as the settlement of pay and conditions for health service workers, are handled nationally. At reorganisation central agencies were set up in Scotland, Wales and Northern Ireland to deal with functions, such as supplies, which it made sense to administer centrally. Our impression is that for the most part these organisations work well and have proved useful innovations.

19.25 We received some evidence that a regional tier in Wales was The Association of Welsh CHCs and the Society of Secretaries of Welsh CHCs told us in oral evidence:

“with the passing of the Welsh Hospital Board, there was no longer an all Wales body with widespread geographical representation which could debate health topics in public. Administration by Welsh Office civil servants did not fill the gap.”

These remarks about the structure of the NHS in Wales are consistent with our general view that greater power should be devolved from the health departments.

Alternative Models

19.26    The problems we have identified in the top management of the NHS have led us to consider a number of alternative forms of top management which have been proposed to us. We have looked at four broad approaches to the problem:

• transferring the NHS to local government;
• the establishment of a health commission;
• devolving power to health authorities; and
• strengthening the arrangements for monitoring the quality of services which are the responsibility of health authorities.

The local government option

19.27     We concluded in Chapter 16 that transferring the NHS to local government would not be desirable. Further consideration of the joint administration of the NHS and local authority services might be appropriate if regional government became a serious possibility in England.

A health commission

19.28 A health commission is usually seen as having management functions in relation to the NHS, but a central monitoring body or super-inspectorate is sometimes advocated.

19.29 The establishment of an independent health commission or board to manage the NHS was one of the solutions most frequently advocated in evidence.  There   are a number of possible models including the British Broadcasting Corporation, the Post Office, the University Grants Committee and the Manpower Services Commission. Although most of those who favoured the proposal were not specific about the role of a commission, some of the functions suggested were the co-ordination of planning by health authorities, pay and conditions for NHS staff, manpower planning and training, research and guidance in areas such as hospital building and equipment, and perhaps the allocation of funds to health authorities within guidelines laid down by Parliament.

19.30 Setting up a commission would radically affect the relationship of the health departments, and indeed of Parliament itself, with the NHS. The departments would lose their direct involvement in the management of the NHS, and MPs would have to raise local issues with the commission or the health authorities. The very large sums of public money required by the NHS would, however, make some continued parliamentary supervision inevitable. Parliament would, as now, be involved in legislation, the provision of funds and securing financial accountability. The Secretaries of State and the health departments would continue to have major functions, for example in appointing the commission’s chairman and members, negotiating the appropriate level of funding and setting priorities and objectives. A commission might act as a buffer between the NHS and Parliament but the NHS would remain dependent on the willingness of Parliament to vote funds. The effect, therefore, might be to duplicate functions that at present are carried out, however unsatisfactorily, by the health departments and the top tier of health authorities. The latter’s role would be little changed.

19.31 On the other hand, a health commission might have the important advantage of providing the permanent and easily identifiable leadership which the service at present lacks. An NHS view would be presented publicly by a body representing the whole of the NHS and only the NHS. Planning and decisions on use of resources would be seen to be carried out by an independent

19.32 Although many of the arguments presented to us in favour of setting up a health commission are attractive, we have not been persuaded that the management of the NHS would benefit from a major structural innovation of this kind. Improvements are possible within the existing structure. A commission would be necessary only if it became clear that the health departments and authorities could not discharge their responsibilities satisfactorily and that no improvement could be achieved within the existing framework. We consider that this is an important matter about which it is not possible to be categorical at this time, and that it is one that ministers should keep under review.

Devolving responsibility to health authorities

19.33 We have ruled out the two most radical approaches to resolving the inconsistency between the theoretical responsibilities for the NHS carried by health ministers, permanent secretaries and health departments, and the practical realities. There is a third approach, and we think it is one which the government should pursue, though the temptation not to will be strong. In our view the direct and detailed accountability for the NHS which Parliament requires can best be provided by health authorities themselves. In England, RHAs should become accountable to Parliament for matters within their This would include most of the activities of the NHS, but not those, such as apportioning revenue and capital funds between RHAs, which clearly have to be undertaken centrally. A more precise division of responsibil­ity would have to be worked out.

19.34 The main reason for transferring to regional health authorities the accountability at present held by the DHSS is that it would transfer formal responsibility to the authorities responsible in fact for running the service. The RHA chairman, or some nominated officer, or both, would appear before the Enquiries from MPs about local matters would be routed to and dealt with by health authorities. The representatives of RHA chairmen told us in oral evidence that they would welcome an arrangement of this kind. As we noted above, the main problems appear to be the practical difficulty of finding a suitable accounting officer, and the need to define the responsibilities respectively of health authorities and the DHSS. We think these problems could be overcome and recommend that accountability at present held by the DHSS should be transferred to RHAs.

19.35 The formal transfer of responsibility from the DHSS to health authorities should result in a smaller range of functions for the DHSS. Time-consuming parliamentary business should be reduced, and it should no longer be necessary for the department to intervene to the same extent in the way health authorities discharge their responsibilities. A contraction in the present DHSS regional liaison and service development functions could be achieved. This should have two important benefits: a closer integration within the DHSS of policy making and resource allocation; and for the NHS a clearer view of where particular  responsibilities lie within the department. The responsibilities of health authorities under the new arrangement would need to be spelled out.

Monitoring quality of service

19.36    Mechanisms for reviewing services in NHS hospitals were set up in 1969 in England and Wales and in 1970 in Scotland following public disquiet about conditions in a number of long-stay hospitals. Originally the remit of the Hospital Advisory Services (HAS) in England and Wales and in Scotland was confined to long-stay hospitals, but in 1976 the HAS in England and Wales was renamed the Health Advisory Service and its remit extended to cover community services, including those provided in collaboration with local authorities. The needs of the mentally handicapped are dealt with separately in England by the Development Team for the Mentally Handicapped.

19.37 These institutions are doing useful work, but it is clear that in some places the quality of NHS services still falls seriously below an acceptable An extreme example may be seen in the report of the inquiry at Normansfield Hospital. We were aware that Normansfield was not an isolated case of a disastrous decline in standards of patient care, and that the HAS had visited this hospital in 1970 and 1972.

19.38 The HAS and Development Team perform an advisory service and function by persuasion rather than coercion. Because they deal with matters that impinge on the clinical responsibilities of staff the limitation of their powers may be inevitable if they are to be acceptable to those who are looking after patients, However, we received evidence from Mr Frank Pethybridge, the Administrator of the North Western RHA, supported by his regional administrator colleagues, that the function of these services should be considerably extended and centralised. He pointed to the existence of inspectorates in other fields, for example the police, the probation service and education. We do not think that developing these existing services in this way would be appropriate.An inspectorate would be costly and unlikely to be effective outside the management system of the NHS.

19.39 We have referred in other chapters to the importance for safeguard­ing high standards of patient care, of the high quality and integrity among all of the health professions, expressed in their own self-scrutiny, peer reviews and clinical audits. The health departments have a responsibility to promote and facilitate this professional activity. But there is also a case for separate administrative monitoring services. This is the responsibility of the health departments and the health authorities. Standards of care are very closely linked with the facilities provided for care. One of the main ways in which health ministers and their departments can raise standards is to ensure that more resources are devoted to underdeveloped services. Services where stan­dards of care have been so poor that there have been public outcries and enquiries have almost without exception been the under-funded and adminis­tratively neglected areas of the NHS. Ministers must face the need to make their priorities stick. It is neither just nor efficient to allow one scandal after another to erupt, to institute an enquiry and then to pillory those who have drifted into these often neglected services.

19.40 The necessary priorities will not be established at any level of the NHS unless there is strong continued public concern and pressure. In the next chapter we propose that the public contribution to management of the NHS should be at the lowest administrative level, and in Chapter 11 that community health councils should be assisted to carry out their functions more effectively. These changes would help public concern to be expressed more effectively. However, at all levels health authority members should play an active part in visiting the institutions and services for which they are responsible. If health ministers and health authorities are unable to monitor services effectively within the structure then we suggest that stronger measures may be called for. One possibility would be to set up an independent special health authority for the purpose. We do not think that this is required at the present time provided that the other changes that we recommend are adopted.

Conclusions and Recommendations

19.41 The roles of health ministers, permanent secretaries and the health departments, and their relations with the NHS, seem to us to stem from the way that the NHS is financed. Arrangements for accounting for NHS finance follow the classic Whitehall model under which the minister is answerable to Parliament, and the permanent secretary personally accountable, for every penny spent and every action taken in the NHS. This arrangement seems to us to be quite inappropriate to an organisation the size of the NHS whose staff are not civil servants and some of whom – for example, doctors – may not be answerable to anyone else for the expenditure they incur. The system has been made to work by those immediately concerned, to their credit, but there is nonetheless a gap between the theoretical and the actual position. The effect of this may be seen in the uncertainties over the respective roles of the health departments and the NHS.

19.42 After a good deal of reflection, and having considered a number of alternatives, we concluded that the best solution to this fundamental difficulty was to place responsibility for the detailed working of the NHS in England with the regional health authorities themselves. We mention the position outside England in paragraphs 19.24 and 19.25. This would end the anomalous position of the Secretary of State for Social Services and his permanent secretary being held responsible for actions over which in practice they can have little control. The division of responsibility between the regional health authorities and the DHSS would need to be worked out, but in broad terms we see the former as accountable for the delivery of the service and the latter for national policies and functions.

19.43 It is clear that neither the DHSS and the Welsh Office nor some of the health authorities in England and Wales, are carrying out their monitoring functions adequately, and this responsibility should have their urgent attention.

19.44 We recommend that:

1. a select committee on the NHS should be set up (paragraph 19.11);
2. formal responsibility,   including  accountability  to   Parliament,   for   the delivery of services should be transferred to RHAs (paragraph 19.34).