Health Policy Commission Newsletter May 2003

Newsletter May 2003:

The health policy commission has been meeting regularly over recent months to draft its second-year consultation document, Improving Health and Social Care. In writing the document members of the commission have read through and weighed up the broad thrust of the more than 400 submissions it received in response to its first year document and used them to inform the document’s shape.

The new document looks forward to after the next general election and sets out some of the main challenges for Labour, if we win a third term, in improving the National Health Service as well as the health of the people who use it. It reaffirms Labour’s belief in the principles of the NHS. In particular, the document addresses the challenges of recruiting more staff into the NHS in a fair and ethical way; getting the right balance between local autonomy and national standards; reminding patients of their responsibilities to the health service; taking the confidence of the public with us in the genetics revolution; and cutting smoking still further.

Most of the submissions the commission received were related to the first-year document but other issues were also raised, the most significant of which highlighted concerns about the creation of new NHS foundation trusts.

During discussions about NHS foundation trusts the commission was asked to clarify exactly what they would be. They are based upon a recognition that a centrally run, one-size-fits-all approach is no longer the most appropriate way to get the best out of a National Health Service that employs over a million people. NHS foundation trusts recognise that frontline health staff and local communities have a unique viewpoint from which to determine local service need. It is for that reason that Labour wants to decentralise the health service, removing central control over local hospitals and creating a new form of local mutual public ownership. And because patients expect and deserve a minimum level of service we will do this within a framework of national standards. Some submissions raised concerns that the introduction of NHS foundation hospital trusts would create a two-tier health service with an elite group of hospitals for a few and sink hospitals for the rest. In fact, over the next four to five years every NHS hospital will get the opportunity to become an NHS foundation hospital. This is a policy for all, not for some. And a new £200 million Hospital Improvement Programme will ensure that every hospital gets the support, leadership and resources it needs to improve its performance. This is about raising standards everywhere so that no NHS hospital is left behind.

Other submissions wanted guarantees that this policy would not lead to privatisation of the health service. NHS foundation trusts will actually strengthen public ownership not weaken it. They will be owned and controlled locally by members of staff and members of the community with a democratically elected board of governors. This draws on Labour’s co-operative and mutual traditions. Nor can they be de-mutualised because their legal terms of authorisation put a lock on the use of assets to promote their primary purpose of providing NHS services to NHS patients.

NHS foundation trusts will be not-for-profit organisations, wholly part of the NHS, treating NHS patients to NHS principles and subjected to NHS standards and inspections, but no longer directed from the Health Secretary’s desk in Whitehall. Local staff and communities will be put in charge of local hospitals because they are the ones who are best placed to decide which services are better able to tackle local health problems and inequalities. Labour wants to decentralise the health service, removing central control over local hospitals and creating a new form of local mutual public ownership. And because patients expect and deserve a minimum level of service we will do this within a framework of national standards.

Report to Party Conference September 2002

Health Policy Commission Membership 2001-02

Government: Rt Hon Alan Milburn MP (Co-convenor) Rt Hon John Hutton MP Hazel Blears MP

National Executive Committee: Margaret Wall (Co-convenor), Nancy Coull, Shahid Malik

National Policy Forum: George Brumwell, Lesley Hind, Sandra Samuels, Sue Stirling

Policy development

For most British people the NHS is one of the most important public services in the country and we all have a view on how, in government, Labour should continue to improve health and social care. Consequently, the health policy document has generated a lot of discussion, not just within the party, and as such the Health Policy Commission has received a large number of submissions. People have welcomed the programme of investment and reform the Labour government has embarked on but in short, people want more and they want it faster.

The Policy Commission joins with all those who have made a submission in welcoming the extra investment now committed to the NHS to 2008. After decades of neglect, this puts the NHS on a sustainable longterm footing. Alongside these extra resources the vital reforms currently taking place will ensure that this extra money secures results. To put this in context, the Budget means that Labour’s spending on the NHS will double in real terms. There will also be a 6 per cent a year real terms growth in personal social services spending in England over the next three years – well above the historic average.

From December 2001 to February 2002, the Policy Commission’s main task was to produce the first year consultation document Improving Health and Social Care. We tried to make the document more user friendly than in previous years by keeping it short and concise.

The document did not focus on the funding of our health and social services as the Wanless report into long-term health funding was published in March.

It pointed out that it had been the size of the under-funding, rather than the method of health funding, that explains the difference in the performance of the NHS compared with other European countries. The key arguments on different funding systems were addressed in the appendix, leaving the focus of the document on the key challenges that remain to improve the NHS.

On reducing health inequalities, many submissions highlighted the fact that the policies needed to address many issues of inequality are really the shared remit of other policy documents, for example, welfare reform, transport and education. There was a lot of positive comment on the fact that this was the first section of the health document. Most submissions highlighted the need for government departments and local government to work together to tackle this persistent problem. There was a general feeling expressed in many policy forums that in any discussion of health inequalities, we should start at the other end of the spectrum and define what we mean by well-being and what we can do to support people in their attempts to stay well. This focuses the discussion on what services, particularly in the community, can we provide to prevent ill health. Many submissions suggested we should focus on the NHS being a service to assist people to keep well rather than an ‘ill-health’ service. The Policy Commission concurs with the general feeling that mental health services should be given a greater priority in government and in the redrafted policy document. The commission welcomes the recent consultation on the draft Mental Health Bill.

There are many dilemmas that need to be considered when reforming our health services. At one and the same time it is important to develop and maintain national standards as well as make sure that decisions are taken as close as possible to the frontline. How we involve local people in determining the shape and delivery of health services in local communities also needs more consideration. Contributors supported the government’s commitment to support staff by improving pay, reforming pay systems and in finding more flexible ways of working, including changing the skill mix if that is what it takes to deliver better services for patients.

There was general support for the principles of increasing patient choice within the NHS and redesigning the service around the needs of the patient, with requests for more information on how these principles could effectively be put into practice.

To introduce more choice into the system, we need to build up capacity in both the health and social care sectors. The commission is pleased that the NHS is today the fastest growing health service of any major country in Europe and that there is extra funding for social care too. While there are huge amounts of investment going into growing existing NHS capacity, to reduce waiting times and improve the health service for patients we need every bit of extra capacity we can. This includes using the private sector or international health care providers. This means that NHS patients will get their treatment faster and still be treated as NHS patients with care that is free, based on need not ability to pay.

Staff recruitment and staff retention are two issues that receive a lot of attention in submissions and it is right that we need to continue to look for more imaginative ways that the government, working in conjunction with the NHS, can make life better for staff. To this end, we have invited Bob Fryer, Chief Executive of the NHS University, to our next meeting to discuss staff development in the NHS.

Two other issues that submissions say need more attention in the document rewrite is the use and compatibility of information technology; several good ideas came forward on this issue. The other was the impact of the genetic revolution. The commission upholds the view that as a party we need to develop our thinking on this much more and views as to how we can do this are very welcome.

The last section of the document was on social care. The commission agrees with participants of policy forums who felt that in future the redraft needs to be given this section more prominence. We need a bigger and more innovative drive to help more people to avoid going into hospital and to provide more help for people to leave hospital. The taxpayer will benefit because hospital based treatment is often the most expensive form of care. And the patient benefits because it helps people especially elderly people – maintain or regain their independence. That is why we need to stop thinking only about the NHS as though it were only about hospitals and acute care. We strongly believe we need to take a whole system approach.

There is also a very large social care agenda in its own right. Our aim must be to provide services that will assist people to live in their own homes. This must include support for carers, extension of domiciliary care and the development of supported housing.

Securing the changes we want to see requires more investment. In social services as well as in the health service, extra investment however is conditional on more reform. Joint working must become the norm for all and not just for some. The powers to pool budgets and form Care Trusts, so that health and social care functions are merged, must be taken up. We will need to explore new initiatives to get health and social care working as one to end the decades-old culture of buck passing and cost-shifting.

The commission will continue its work over the summer, culminating in an away day in August to review all submissions in depth and draw out the main themes to be developed in the second year policy document. We also hope to organise a visit to a health service Organisation and invite an external speaker to talk on the genetic revolution and what this will mean for future health policy.

Dialogue on current issues


Many submissions have pointed out how good management can make or break any organisation. The Policy Commission would like to see every part of the NHS benefiting from the best managerial talent available. Staff and patients deserve no less. Franchising is a new approach for the NHS. It basically means bringing in the best managers to help turn around NHS hospitals with the most persistent problems.

There is much concern over the variations in performance that exist between local health services. This is not primarily about money, it is more about management and organisation. It is an issue that we simply can not ignore.

For the second year, local health services have received a star rating for their performance. For those NHS organisations that are in trouble, new management teams – whether from the public, voluntary or private sectors – will be brought in through the franchising process to turn them round.

Already new management teams have been announced for the first five NHS trusts to have their management franchised. Applications for this first round of franchising were restricted to existing NHS managers with proven track records of delivery. However, the government is establishing an approved list of managers to help turn around NHS trusts with severe performance problems.

This is a fundamental change. Not in how the NHS is funded or the values on which it is founded, but in how it is organised. As long as these individuals or organisations – whether from inside or outside the NHS – can demonstrate a commitment to public service, expertise in turning around under-performing organisations and an excellent track record in human resource management and working in partnership then this development should be welcomed. It is the reason for star rating the performance of local health services so that those who are doing less well get more help and everyone benefits from decent local health care services.

NHS Foundation hospitals

At the other end of the spectrum, the best performing NHS organisations will be able to become NHS Foundation Trusts. Put simply, this proposal will mean greater freedom for the best performing hospitals. Run on a new ‘Foundation’ basis, they will no longer be subject to strict financial and management control from Whitehall. The government will be assessing the details of the foundation scheme over the course of the next few months with the best performing hospitals and PCTS.

Some say that this may be a form of backdoor privatisation or will lead to a two-tier NHS. Ministers are clear that this will not be the case. For example, there will be a lock on the assets of NHS Foundation Trusts so that they work for NHS patients. None of this means the abandonment of national standards as some contributors have suggested. It is precisely because over these last five years the government has put in place such a rigorous framework of standards nationally that the centre of gravity can now shift to how improvements can be delivered locally. Clearly, tension exists between national standards and local autonomy, however the experience from healthcare elsewhere in Europe is that securing improvements in performance actually requires both.

NHS Foundation Trusts will operate according to NHS principles. They are there to serve NHS patients by providing high quality care that is free and delivered according to need, not ability to pay. As national control over day to day management of the NHS reduces, there is a real opportunity for genuine local community input which submissions suggest would be a welcomed move. Foundation hospitals will have the ability to develop governance arrangements that enable staff, patients and the public to play a more effective part in the running of the NHS at local level. This will build on our plan to replace community health councils with greater public and patient involvement in the NHS.

Use of Private Sector/Private Finance Initiative

The commission continues to receive submissions on the use of private sector, in particular the Private Finance Initiative. The infrastructure of the NHS has suffered from decades of under-investment. Too often NHS patients are treated in hospitals that pre-date the NHS itself. The commission thinks this is unacceptable but notes the concerns over public-private partnerships like the Private Finance Initiative, particularly over value for money and the treatment of staff. As a commission, this is an issue we will continue to discuss. (The Economy Policy Commission deals with PPPs in the wider sense.) However, PFI has enabled the government to set in train one of the largest capital building programme in the history of the NHS. Already 14 have opened since 1997 and 14 more are under construction. Without PFI these hospitals would simply not get built. Important steps have also been taken to protect staff as part of PFI deals, as promised in our manifesto, including retention of employment in the NHS.

Private expertise may also be used to develop and run some of the new diagnostic and treatment centres that will provide extra capacity by concentrating on elective surgery in those procedures with the longest waiting lists.

On the more general use of the private sector, there seems to be broad support. People want the NHS to use all available capacity to treat patients. It is wrong to let patients wait and suffer knowing there are places where they could be treated. The NHS should use existing spare capacity in private hospitals and to import clinical teams and doctors from abroad as part of long-term capacity building. Care will remain free whoever provides it. That is the big divide between Labour and the Tories.

Residential care/care home beds

A significant number of submissions focused on social services and in particular residential care for the elderly. It has become clear that in many areas the care home market needs stabilising. For many frail or disabled older people, care homes – thanks to the efforts of care home staff – offer the best security and support. As part of its efforts to stabilise the care home sector, the government has recently announced that local authorities will be able to pay higher fees to care homes and has amended the regulations giving care homes more discretion on certain environmental standards. The government has also allocated more money to pay for better training for social care staff.

On a related but different issue, it has become evident that over the last few months some care home providers have used the opportunity afforded by the introduction of free nursing care to increase rather than reduce the fees of residents. The government announced a package of measures to stop some care home providers taking advantage of this. Free registered nursing care for all nursing home residents came into affect on 1 October 2001. An estimated 42,000 residents have so far benefited from this.

While some continue to argue for free personal care, we believe the resources we have should be devoted to building up new services for elderly people and others who need them.

On social services, we have acknowledged the pressure they have been under and the government is now committed to a six per cent annual real terms growth in resources for social services. There has been a real terms increase in provision for social services in each year Labour has been in office. This extra investment must be accompanied by more reform. It is necessary not least to stabilise the care home market and to develop new rehabilitation, intermediate and home care services that can promote people’s independence. Here the evidence is that putting in resources delivers results.

The extra resources the Labour Government has provided to help councils reduce the number of delayed discharges have helped free up 1,000 beds that would otherwise be occupied by people who are ready to move on from hospital . But we cannot be complacent. The NHS and local authorities should continue to work together to deliver a sustained reduction in the number of beds blocked. To this end, the government will introduce legislation giving social services responsibility for providing care for patients whose discharge from hospital would otherwise be needlessly delayed.


Strengthening patient choice is a recurrent theme in submissions, particularly from policy forums held up and down the country. While most agree that in principle this is a good thing, in practice people want to know how it will work. Current policy initiatives, for example sending patients overseas for operations, illustrate how choice is being incorporated into the NHS.

For example, starting in July this year, all patients in England waiting more than six months for heart surgery are being offered a choice to have their treatment more quickly in another hospital whether this hospital is in the public sector, the private sector, in this country or abroad. Some patients may choose to wait at their local hospital while others will prefer to travel to get faster treatment. The important point is that it will for the first time be the patient’s choice.

To make it easier for patients to exercise informed choice over which GP to register with or which hospital to be treated at, the commission agrees that a much wider range of information will need to be published. Within a GP practice, services can and ought to be provided by other healthcare professionals where appropriate. Booked appointments will mean patients have more choice over hospital treatment. By 2005, every patient will be able to book a hospital appointment and elective admission at a convenient date and time rather than being assigned a time by the hospital.

Pay reform and pay deals

As many members have pointed out, we need to modernise the NHS pay system. We want better career progression, more staff development and simpler conditions of service, with fair rewards acknowledging staff contributions. The government’s Agenda for Change pay modernisation programme is still being negotiated with the health departments, NHS employers and NHS trade unions and staff-side organisations.

It is planned, however, that the new NHS pay system will allow greater allowance for regional cost of living differences, and more scope to design new jobs breaking down traditional occupational demarcations. In seeking to expand the size of the healthcare workforce, a careful balance will be struck between the need to pay staff competitive rates in tight labour markets, and the need to ensure productivity gains on a par with the wider economy. The government’s proposals to reform pay are a key part of the modernisation agenda.

Consultant contract

A number of participants have written in regarding the new framework consultant’s contract which was agreed by the BMA, the UK health departments and the NHS Confederation and will soon be out to ballot with the consultants.

The new contract deals with the vexed issue of private practice on which we have received many submissions. It removes a long-running sore which dates all the way back to 1948. The relationship between private practice and NHS work for consultants has for too long been clouded by a lack of clarity and accountability. The new contract is designed to prevent any conflict of interest, based on one overriding principle: that an NHS consultant’s first and foremost commitment is to the NHS and to their NHS patients.

For the first time it will be explicitly part of the consultants’ contract of employment that NHS patients come first and the NHS always has first call on consultants’ time. It does this first of all by giving exclusive use to the NHS of up to 48 hours of a newly qualified consultants’ time each week the maximum the NHS could demand under the Working Time Directive. Under the new contract this exclusive use of newly qualified consultants’ time will apply for the first seven years of their careers, as was proposed in the NHS Plan and welcomed by many members at the time. There will be a new rule book governing consultant private practice.

The new contract is good news for NHS patients and for NHS consultants. It is a something-for-something deal. It offers more pay for NHS consultants – but only if NHS patients get more.