National Health Service (Management Inquiry)

HC Deb 25 October 1983 vol 47 cc166-75

5.1 pm

The Secretary of State for Social Services (Mr. Norman Fowler)

With permission, Mr. Speaker, I should like to make a statement on the publication of the advice given to me by the National Health Service management inquiry.

As the House will recall, I set up an inquiry into the management of the Health Service under the chairmanship of Mr. Roy Griffiths, the deputy chairman and managing director of Sainsbury's, in February of this year. I asked him to review current initiatives to improve the efficiency of the Health Service in England and to advise on the management action need to secure the best value for money and the best possible service to patients. have today placed in the Vote Office copies of the report which I have now received from the inquiry team.

The inquiry team endorses the main initiatives that the Government have already taken to make health authorities accountable for the performance of the services they provide. However, it says that an enormous programme of management action is still needed. The inquiry team found that at all levels in the National Health Service there is a lack of a clearly defined general management function. Responsibility is too rarely placed on one person. Although it would like to harness the best of the consensus management approach, it finds that, at present, consensus management can lead to lowest common denominator decisions and long delays in the management process. Another effect is that the process of devolution of responsibility is ineffective. Accordingly, the inquiry team proposes a series of changes aimed at making the existing organisation work better rather than aiming at yet another restructuring of the service.

Inside the Department of Health, the team proposes that I should set up and chair a new Health Services supervisory board. The board would have some external members and directly accountable to it would be a management board which would bring together the present management functions of my Department relating to the hospital and community services, the family practitioner services and special health authorities. A new chairman of the management board would be appointed probably from outside the service. The report also proposes that a personnel director should be recruited.

At the regional and district level, the report recommends the identification of a general manager for each authority. Such a manager would be drawn from any discipline—that is, from any of the professions engaged in the management of the National Health Service—and his job would be to secure effective management of the authority's services.

The report also recommends that hospitals and other units of management should as far as possible take all the day-to-day management decisions. Doctors should be closely involved in local management through the development of management budgets for which they be accountable. The team also recommends the identification of a general manager for every major hospital and other unit of management.

In short, the key recommendation is that a clear management responsibility should be identified for carrying out all National Health Service management functions and that this responsibility should be devolved as near to the patient as is practicable. The report is also in no doubt that major cost improvement programmes can and should be initiated in the National Health Service aimed at much higher efficiency to be sustained over much longer periods than at present.

There are three additional points to make on the report. First, the report does not propose any further structural reorganisation. All its recommendations are designed to take place within the existing statutory structure and without affecting the constitutional position of Parliament, Ministers and the health authorities. Secondly, the recommendations will not add to existing costs or staff numbers. Indeed, inside the Department of Health they should lead to a reduction of activities and staff. Thirdly, the report emphasises that the National Health Service is about delivering services to people. It is not about organising systems for their own sake. The team says that the driving force behind its advice is its concern to secure the best deal for patients and the community within available resources, the best value for the taxpayer and the best motivation for staff.

The Government very much welcome the general thrust of this advice and are very grateful to Mr. Griffiths and his colleagues.

I shall be setting up within my Department the Health Services supervisory board as recommended. Among its first tasks will be to establish the management board and to initiate action in respect of health authorities. Clearly, I shall consult the health authorities and professional and other interests involved, but subject to the outcome of these consultations I would hope that authorities would be able to start implementing the general management function from April 1984.

The National Health Service is one of the largest undertakings in western Europe. The service needs and deserves the very best management we can give it. One of the best contributions we can make to patient care is the improvement in National Health Service management along the lines recommended by the Griffiths report.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

That is a most extraordinary statement to be produced after eight months of so-called management inquiries. It means either that the Secretary of State is totally incapable of running the National Health Service, with all the civil servants and advisers at his disposal, or that he intends, in effect, to set up a completely new structure. Which is it? If 192 general managers are to be appointed throughout the service, exactly what will their function be? Will they be administrators by another name, or will they have power to override every existing mechanism in the service?

We have just gone through one of the most bruising reorganisations ever, yet the Minister is now calmly proposing to reorganise the entire system again. Napoleon may have said that we were a nation of shopkeepers, but this is ridiculous. Apart from anything else, two new quangos will be created. There will be a quango with the Secretary of State at its head, and a second, supposedly management, quango, which presumably will take the decisions which Ministers make and translate them into somewhat inadequate reality. Why is this happening now? The answer is that Ministers intend to use these quangos to dictate to the regional health authorities, the chairmen of which are not represented on the central board. It is plain that management decisions will be imposed.

The Whitley council machinery is to be looked at and manpower targets are to be changed yet again. Throughout the service we shall see total destruction. It is obvious that to Conservative Ministers, any way of destroying the National Health Service will do. This is another demonstration of that.

Mr. Fowler

That is a typically dismal response from the hon. Lady. It shows just why by the end of this week she will no longer be the health spokesman for the Opposition. She has neither read nor understood the report. That is absolutely clear.

I shall spell out one or two features of the report for the hon. Lady. The structure that we are proposing implies a reduction of staff inside the Department. It does not imply new tiers and new staff. Above all, it is a way of improving the method by which the structure works. We shall not impose new chief executives on top of the existing structure. In all probability the general managers at regional and district levels will be chosen from among the existing district medical officers and —[Interruption.] However, one member of the team will have full responsibility.

The hon. Lady was entirely wrong, completely misleading to others and misleading to herself when she addressed herself to proposals to take effect within the Department. She is misleading herself if she thinks that a new body will be imposed from outside. The reorganisation will be within the Department itself. Before tomorrow's debate takes place, I beg the hon. Lady to read the report. If she does so, she will find that the Griffiths team, which by any standards is a distinguished team of managers, is trying, above all, to make devolution work inside the Health Service. I should have thought that the hon. Lady would support that.

Mr. Roger Sims (Chislehurst)

As my right hon. Friend has said, the National Health Service is a caring service. It is also a large undertaking and it should be managed on business lines. Is my right hon. Friend aware that the report and his acceptance of it will be widely welcomed by Conservative Members? My right hon. Friend has indicated in general terms from whom the regional and district managers will be drawn. What qualifications will he be seeking in those considered for these appointments, and who will make the appointments?

Mr. Fowler

The appointments will be made by the authorities themselves and the appointees will come from within the existing group — for example, from the medical officer, the nursing officer, the administrator, the treasurer and the works officer. That will not necessarily be so, but it is most probable that the appointees will come from that group.

It is clear that there is a difference between business and the National Health Service. However, as the report makes clear, there are great similarities. Both sectors are trying to provide the best possible service for the public, and that is the relevance of the report.

Mr. Dennis Skinner (Bolsover)

Is the right hon. Gentleman aware that there are more than 750,000 people on the Health Service waiting list and that the country generally is not crying out for more quangos from the Government for the National Health Service? Is he aware also that the British people are calling out for more jobs for nurses, more kidney machines for those who need them, more hospitals and more care for young children who need bone marrow transplants? That is what they want. They do not want the edifice that the right hon. Gentleman has presented.

Mr. Fowler

I should find the hon. Gentleman's words a great deal more impressive if I did not remember that he supported the industrial action of 1982, which added to the length of the waiting lists.

Dr. Brian Mawhinney (Peterborough)

Does my right hon. Friend accept that the emphasis on better management and more patient care in the Health Service is most welcome and that he is to be congratulated on taking a long-overdue initiative? He will be aware that previous Governments have retreated in the face of the medical profession arguing its vested interest. Can he assure the House that he will proceed to do what is best for the management of the Health Service irrespective of what the doctors may say against his proposals?

Mr. Fowler

I hope that I shall take the doctors with me in my proposals. There is nothing in the report which will affect doctors' clinical decisions on individual patients. The report states that clinicians should be involved more closely in management and it does not imply that it should be imposed upon them. I hope that everyone, including the members of the medical profession, will read the report with care and not jump to some of the instant conclusions of the hon. Member for Crewe (Mrs. Dunwoody).

Mr. J. Enoch Powell (Down, South)

Will the Minister clear up some of the important constitutional problems which his statement appears to raise? Will he confirm that the scope and nature of his responsibility to Parliament will not be altered or diminished by the creation of a new board and the fact that he will chair it? If that is so, is the board wholly advisory? If it is wholly advisory, how can there be responsibility to it from the management board for the present management functions of his Department? These are grave matters of responsibility and they need to be cleared up.

Mr. Fowler

I am grateful to the right hon. Gentleman, who had experience as Minister of Health. The supervisory board will be chaired by myself and it does not imply a reduction of my statutory powers. The board will determine the objectives of the Health Service and it will receive reports on performance. It will aim to strengthen the existing arrangements within the Health Service. The management board will report to it. It will consist of a small management group which will be able to devote all its time to NHS management. It will not be there to run the NHS day by day. It will seek to ensure that the authorities do so effectively. I can assure the right hon. Gentleman on his constitutional question.

Mr. Toby Jessel (Twickenham)

Will the new general managers be able to handle the lease and sale of surplus land? Under the present system the regions generally decide that the districts cannot keep the proceeds of any such sales. Therefore, the districts do not want to go ahead and sell. This means that resources are not maximised and patients suffer from lack of resources, as is the case in the Hounslow and Spelthorne district health authority and at two community hospitals within my constituency.

Mr. Fowler

The property function is one of the functions highlighted in the report. We want to see the maximisation of the resources to which my hon. Friend has referred, with the aim of directing the proceeds from the sale of property to the district locally. I hope that over the coming months we shall be able to offer the improvements that my hon. Friend seeks.

Mr. Allan Rogers (Rhondda)

I find the Secretary of State's statement incredible. Also incredible is his hysterical response to the legitimate criticism that is voiced by my right hon. and hon. Friends. I hope that we shall not see the sorry sight of two Ministers dissembling publicly and the Government collapsing.

Mr. Skinner

Why not?

Mr. Rogers

The Government say that the National Health Service is in their hands. Until we can manage to take it over, I hope that they will handle it gently. I wish to put a simple question to the Minister and I hope that I shall have a non-hysterical response. The right hon. Gentleman has said that the NHS is about service and not about organising systems. Against that background, what does he intend to do with the supervisory boards, management boards, general managers, personnel managers and general managers of hospitals? Is he not setting up a parallel structure? How much will it cost to implement the report's proposals?

Mr. Fowler

My advice to the hon. Gentleman, whose opposition I find less than incisive, is to read the report. If he does so, he will find the answers to most of his questions. I think that even the hon. Gentleman will concede that whatever resources go to the Health Service, good management of those resources must be a prerequisite. That is what the report is about and his description of it bears no relation to reality.

Mr. Tim Smith (Beaconsfield)

Does my right hon. Friend agree that, in the final analysis, the concept of management by consensus is a contradiction in terms? That being so, the proposal for general managers and for a clear line of management responsibility from the Secretary of State down to the district authorities and the hospitals is most welcome. Will he give the House an assurance that the best people with the best management skills and experience will be appointed to the new positions, regardless of vested interests?

Mr. Fowler

I can certainly give the assurance that my hon. Friend seeks on appointments. I hope that we shall be able to harness the best of consensus management by drawing in the opinions of the relevant individuals. It is proposed that the general manager should settle the disagreements which clearly arise, initiate action and follow it up. That is the importance of the general management process.

Mr. Michael Meadowcroft (Leeds, West)

I am sceptical about the value of the two central bodies proposed, but I can see the value of having chief officers in each of the health authorities. Does the Secretary of State accept that they will be hopelessly ineffective if the problems of clinical freedom are not tackled? The right hon. Gentleman mentioned them in reply to an earlier question, but they are not touched on in the report. Does he further accept that one of the great bars to efficiency in the NHS is continual Government interference with the capital and revenue money that is made available, which makes it virtually impossible to manage the Health Service, whatever its structure?

Mr. Fowler

I am grateful for the hon. Gentleman's muted response. He will find on page 2 of the report a central recommendation of the team, which is that responsibility should be pushed as far down the line as possible. That is entirely in line with what the hon. Gentleman would like to see in the Health Service. With regard to clinical freedom and responsibility, the report says that clinicians should be involved more closely in management. I hope that that will be one of the results of the process.

Mr. Christopher Murphy (Welwyn Hatfield)

Will my right hon. Friend's new boards consider funding and manpower in the East Hertfordshire District health authority and make appropriate recommendations in the light of the increasing aging population?

Mr. Fowler

I think that that would be one of the matters for the regional health authorities. The relationship with the regional health authorities would remain the same as it is now.

Mr. Mark Fisher (Stoke-on-Trent, Central)

Is not the Secretary of State's statement a calculated insult to management in the NHS? It is not likely to demoralise it and all the staff in the service? Does he not recognise that the management in the NHS is probably the most cost-efficient in the world, that the cost is less than 5 per cent. of total budget costs and that in my district health authority it is less than 4 per cent. of total budget costs? Will the right hon. Gentleman clarify exactly what the role of the general manager will be? If he is not the chief administrator in district health authorities, what is the relationship between the chief administrator and the new general manager? If he is the chief administrator, is not the name merely being changed? The statement appears to be nonsense.

Mr. Fowler

When the hon. Gentleman has had time to reflect, he will come to a different conclusion. I pay tribute to the quality of many individuals in the Health Service. Many would like a much better management process than there is at the moment. If the hon. Gentleman thinks that the management process in the NHS is ideal, he cannot have been listening to the public very much. The general managers, at both district and regional levels, will probably be selected from officers who are already there. The general manager will settle disagreements that come into the consensus management approach and he will also ensure that action is not only initiated but followed up.

Mr. Tim Rathbone (Lewes)

Does my right hon. Friend accept that we welcome the publishing of the report, which is an admirable example of open government? However, does not this management level call into question the continuation of regional authorities, which were due to be examined, during 1984, under the previous reorganisation? Will my right hon. Friend reassure the local health authorities that that management level will underpin their actions rather than challenge them, as they are only just coming to grips with their new responsibilities?

Mr. Fowler

I entirely accept my hon. Friend's second point. The purpose of the management action that we propose is to support the district health authorities. My hon. Friend will see that in the report the continuation of the regional health authorities is proposed. We shall consider that proposal as well as others. We believe that the relationship between the Government and the regional health authorities and regional chairmen is essential for the smooth running of the Health Service.

Mr. Laurie Pavitt (Brent, South)

Does the right hon. Gentleman recall that the last time the Government were obsessed by efficiency the right hon. Member for Leeds, North-East (Sir K. Joseph), the then Secretary of State, reorganised the Health Service, having had business advice from America which he thought was good, and that afterwards his successor had to unscramble what had been done and start all over again? Therefore, it is welcome that at least the right hon. Gentleman will not touch the structure.

If the general manager has a much more executive function, does that mean that he will have at his fingertips greater control than at the moment and that the Elephant and Castle will be able to make up its mind and control what will happen at regional and district level? Does the right hon. Gentleman think that an executive operation at this level will be accepted by the Royal College of Nurses and the Professions Supplementary to Medicine, as well as by the medical manpower organisations, which feel that, whichever party from one of the present disciplines becomes the manager, it will disadvantage the others?

Mr. Fowler

I hope that those people will take a more constructive attitude than the hon. Gentleman. I challenge what he said. When the management process is weak, decisions come up to the centre. They are not taken at the centre. One of the aims of the report is that districts, hospitals and units are freed to get on and manage that service. The hon. Gentleman's analogy with the 1974, reorganisation is peculiarly misplaced. There are no new tiers of staff. I advocate a careful study of the report to the hon. Gentleman.

Mr. Sydney Chapman (Chipping Barnet)

Did Mr. Griffiths' inquiry team look at the method and cost of building new NHS hospitals and at evidence which suggests that lack of efficient management decision-making during the construction of hospitals can contribute, and has contributed, to hospital costs being up to 30 per cent. more than they need be? If Mr. Griffiths did not look at that evidence, will my right hon. Friend promise that the Minister for Health will do so?

Mr. Fowler

Mr. Griffiths mentions the works function in his report. A review of the whole works function is currently taking place. I know of my hon. Friend's interest in that matter and will seek to keep him informed of progress.

Mr. Robin Corbett (Birmingham, Erdington)

Are the managers about whom the Secretary of State is enthusiastic the same as those whom he abuses as bureaucrats? How can the right hon. Gentleman say that the adjustment will cost neither money nor jobs? Does he propose to sack more nurses and doctors to make room for it?

Mr. Fowler

If the hon. Gentleman had listened to my statement he would have heard me say that by the reduction of functions at the centre—at the Department of Health and Social Security — there should be an opportunity to reduce staff.

Mr. Tony Favell (Stockport)

Opposition Members have shown concern for patient care. Does my right hon. Friend agree that the best way to ensure patient care is for the NHS to be properly managed, which at the moment it patently is not? [Interruption.] Opposition Members have stated that patients are not being cared for properly. Examples were given by the hon. Member for Bolsover (Mr. Skinner). To ensure that proper patient care and moneys are available to provide the care that we all want to see, is it not right that the NHS should be properly managed? Is there any reason why managers should not be drawn from outside the Health Service, in the same way as in nationalised industries?

Mr. Fowler

There are proposals related to my hon. Friend's second point. I agree entirely with his main point. The NHS is about providing care for patients. It is a patient-oriented service, not a provider-oriented service, as so many Opposition Members seem to believe.

Several Hon. Members

rose——

Mr. Speaker

Order. I must protect the business of the House. I propose to let questions on this statement run until 5.35.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

While not in need of conditional support for his announcement, does the Secretary of State agree that before he entirely abandons the principle of consensus management in the NHS, which has served it well in many areas, he should at least consider testing the proposals which he intends to enact to create general managers? They should be tested on a regional basis through pilot schemes before they are fully imposed in April next year, as the right hon. Gentleman suggested.

Mr. Fowler

We are not abandoning the consensus approach; rather, we are trying to harness the best of consensus management. However, we are saying that, at times, consensus management does not work. If that is the case, it must be up to the Government to make proposals to break through the log-jam. We shall propose several pilot projects and experiments in due course. I hope that they will satisfy the hon. Gentleman.

Mr. Tony Marlow (Northampton, North)

As one of the management problems that district health authorities face is that senior consultants are employed by regional health authorities rather than by the districts, will my right hon. Friend change matters, as, at the moment, the most important employees of district health authorities are not employed by district health authorities?

Mr. Fowler

The Griffiths report covers that point. It does not recommend a change such as my hon. Friend proposes. We shall consult widely on the report and no doubt we shall have an opportunity to hear more points of view.

Mrs. Jill Knight (Birmingham, Edgbaston)

Is my right hon. Friend aware that, following the implementation of the Salmon report, it was widely believed that far too many nurses had been taken off nursing duties in favour of management duties? Is there any hope of implementation of the Griffiths report reversing that state of affairs?

Mr. Fowler

I am sympathetic to my hon. Friend's point, but I want nurses to be involved in the management structure of the NHS. That, too, is important. Nevertheless, I shall bear what my hon. Friend has said in mind.

Mr. Max Madden (Bradford, West)

If there is an irreconcilable difference between a general manager and a consultant, whose view will prevail and what sanctions will the general manager have to ensure that his or her view prevails over that of the consultant? Will the arrangements which the Secretary of State has announced today impinge on the contract between consultants and the NHS? Is he aware that many people cannot understand and are deeply worried by the Government's claimed concern for patient care in the face of cuts, reductions in the number of beds, hospital closures and the sacking of nurses and doctors? Rather than more managers, the public want more Government resources for the MHS to enable it to meet the rising needs that it confronts.

Mr. Fowler

The public and the Health Service want resources, but more than that they want a guarantee that those resources are used to the best effect. There is evidence to suggest that that is not so. All hon. Members should agree that getting the best value for money out of the Health Service must be a No. 1 aim.

Mr. Albert McQuarrie (Banff and Buchan)

I welcome my right hon. Friend's statement. Is he aware that some health authorities in Scotland are far too highly administered? How will his statement affect the NHS in Scotland?

Mr. Fowler

My statement is confined to England, although its relevance will be examined by my right hon. Friend the Secretary of State for Scotland.

Mr. Tom Clarke (Monklands, West)

Will the Secretary of State say a little more about the duties of the general manager? Will he assure the House that he does not believe that Mr. Ian MacGregor would represent an admirable appointment to that post? As the Secretary of State has said so much about personnel management and industrial relations, does he intend to consult unions such as the National Union of Public Employees and the Confederation of Health Service Employees about the report?

Mr. Fowler

I intend to consult the unions, the professional organisations and the health authorities. There will be general managers at district and regional levels as well as the post at the centre which I have already mentioned. I believe and hope that most of the hon. Gentleman's fears will dissolve when he studies the report.

Mr. Ioan Evans (Cynon Valley)

Is the Secretary of State aware that the greatest mismanagement in the NHS followed the reorganisation of the Health Service by his predecessor, now the Secretary of State for Education and Science? Bearing that in mind, will he, as an act of good will, suspend the reduction in resources for the NHS, as such a reduction will entail a cut in the number of doctors, nurses and ancillary workers? Will he suspend moves to privatise laundry, catering and other services?

Mr. Fowler

The answer to the hon. Gentleman's last question is no.

Mrs. Dunwoody

Will the Secretary of State now tell us one simple thing: if there is a dispute between the various disciplines, what powers will the general managers have? Will they be able to override the interests of anyone else in the hospital system?

If the Secretary of State has such great admiration for the administrators, why is he suggesting that the chairman of the management committee, who will be an exceedingly powerful figure, with enormous central powers, should be appointed from outside the service and thus be selected from people who have no experience of how the NHS works?

Mr. Fowler

That is a proposal in the Griffiths report. We shall have to consider who will fulfil that function. I refer to the general manager at DHSS level, as I understand the hon. Lady to be referring to that post rather than to those at district and regional levels.

Although I want consensus management to work—I have emphasised that the best consensus management must be preserved—disagreements arise and a course of action must be followed through. At that point, responsibility must lie with the general manager, who can settle such a disagreement and follow action through. That is the purpose of a general manager.