HC Deb 20 January 1999 vol 323 cc873-80 12.59 pm
Mrs. Jacqui Lait (Beckenham)

I am grateful for the opportunity to raise in the Chamber the subject of the disposal of Health Services Accreditation. I welcome the Minister to the Dispatch Box. It probably is not the first time that he has been there since his appointment, but it is the first time that I have had the opportunity to address him there.

It saddens me that I have had to bring this issue into the Chamber today. My primary concern is that the work and knowledge of the effective development of standards in the national health service is not lost, but continues. HSA recently published its service standards for the care of elderly people, and there are continual demands from customers for new work in mental health, children's services, sexual health, housekeeping and catering—and, of course, in primary care.

HSA's system for the development of standards seems to me to be the most effective yet, because the standards are developed by users and are agreed on and implemented by users—hence they are owned by the people who use them. They are not imposed from above. Currently, some 50 health trusts throughout the United Kingdom are contracted to HSA, and more than 90 departments are in the process of implementing HSA's work.

My involvement began when I was Member of Parliament for Hastings and Rye. I am pleased to see my successor, the hon. Member for Hastings and Rye (Mr. Foster), in the Chamber, as I know that he has taken an interest in HSA. When I represented that constituency, I was invited to a presentation of certificates at the Conquest hospital in Hastings, which was one of the pilot sites. I was so impressed by what I learnt then that I visited HSA, based at Battle, in the constituency of my hon. Friend the Member for Bexhill and Battle (Mr. Wardle). As a result, I agreed to introduce HSA to the wider audience of Westminster—which I did when I, with the hon. Member for Lewisham, East (Ms Prentice), who continues to take an interest in HSA, sponsored a function in the House before the general election, attended by the then Ministers and shadow Ministers, including the Secretaries of State.

When I lost the seat at the general election, I returned to my previous day job and began to build up a lobbying business again. HSA asked me to advise it, which I was pleased to do, as I believed in its work. As soon as I was selected to stand for Beckenham, I cancelled all contracts, but my interest in HSA has continued.

I knew that HSA's future was uncertain because of the terms on which it had been handed over from the region. Indeed, the consortium of health authorities should have solved the problem of its home by March 1997, but agreed to continue funding until March 1998. I am told by Andrew Corbett-Nolan, who was HSA's director, that at a meeting with Sir Alan Langlands of the NHS Executive in autumn 1997, it was agreed that efforts should be made to retain HSA in the NHS. Shortly after that, East Sussex health authority, as the lead authority, extended the disposal time for HSA until September 1998.

In January 1998, the chief executive of East Sussex health authority, accompanied by the director of public health, told the HSA director at a meeting that, because of worries about overspending, HSA would be closed down at the end of March 1998 unless the director could make arrangements for it to be found a home elsewhere. I believe that, at that time, there was no discussion about invoking the formal disposal procedure governed by health service guidance (94)54, to which I shall refer.

The director went to the King's Fund, and it agreed to take HSA. The chief executive of East Sussex health authority welcomed that in a letter, but said that he had now to invoke the disposal procedure. I understand that there was then correspondence between the fund and East Sussex. I am told that on 5 March—at a meeting between the HSA director, the assistant director of finance of East Sussex health authority and the director of operations of the King's Fund—the assistant director of finance guided the King's Fund as to the terms of its offer.

By 27 April, East Sussex health authority had made no progress on the disposal procedure. The King's Fund offered the director of HSA the job of director of development of Health Quality Service—an organisation in association with the King's Fund—and he accepted that offer. He resigned from HSA that evening and began at the fund on 18 May.

To the outside world a possible conflict of interest now existed, as was also possible for the chairman of the advisory board of HSA, who had joined the board of Health Quality Service the previous autumn, in 1997. HQS was launched on 3 June 1998. Its mission is to signal to the health sector throughout the UK that we"— HQS— are the premier quality assurance and quality improvement programme", and to develop new standards of outcome measurement for patient satisfaction, staff motivation, clinical effectiveness, service efficiency and service access. The situation is as follows. One organisation has now been encouraged to bid for an NHS operation. Two people closely associated with that operation—so closely associated that they knew all the operating financial details, which were presented to the advisory board of HSA at each meeting—are now involved in the bidding organisation. I accept their word that they were never involved in the bid, but, should that situation have occurred in the private sector, some searching questions would probably have been asked at that stage.

Meanwhile, on 14 May, East Sussex had invited expressions of interest in HSA by an advertisement in the Health Service Journal, but not in the European Journal. Customers were alerted, by letter, to the disposal.

At the launch of HQS on 3 June, Baroness Jay, who was then a Health Minister, Yvonne Moors—the chief nurse—and Lord Hunt of Kings Heath, better known as Philip Hunt of the National Association of Health Authorities and Trusts, all welcomed the amalgamation of HSA with HQS and hospital accreditation. Several people in the audience have separately told me of their surprise at those statements, bearing in mind the fact that we were only at the stage where bidders were being invited to talk to East Sussex health authority.

I understand that, in July, ESHA held its meeting to consider the bids that it had received. The guidance (94)54, with its annexe B by Price Waterhouse on the disposal process, recommends the establishment of a project team. The East Sussex team consisted of the chief executive, the director of finance and the director of public health. At paragraph 9, the Price Waterhouse document recommends that customers should be consulted about the composition and objectives of the project team. It is also important to ensure that staff on the trading body to be disposed of are fully consulted. The precise choice of who serves on the project team should strike a balance between including those with experience of the service under review and avoiding possible conflicts of interest. I am not aware of any consultation with customers except for the letter to customers, and I am told that there has been no consultation with staff that they would regard as meaningful. Indeed, some would go so far as to say that there has been no consultation.

When I put those two points to the chief executive of East Sussex health authority, he told me that the team had taken a deliberate decision to involve neither. The team felt that customers would leave HSA, and that the staff would leak to their ex-director—a recognition, I infer, that conflicts of interest existed.

I make no judgment, other than to say that the decision flies in the face of guidance from people expert in the disposal of companies, who were sufficiently highly regarded by the NHS to be invited to write the detailed annexe. That document says that the project team needs to develop detailed requirements for bidders, and, at paragraph 52, says that the findings will need to be agreed with all of the stakeholders, i.e. all those who will have the service provided for them. Care must be taken to identify all such stakeholders since there may well be 'passive' customers who are benefiting from a service at present and whose requirements will need to be included in the formal contract. In the summer, staff were also told by East Sussex health authority that they could not mount a management buy-out.

Negotiations with potential bidders continued during summer 1998, and at the end of August the director of finance of the ESHA issued the invitation to tender, with a return date of 22 September. Paragraph 55 of the Price Waterhouse annexe says: Together with the service specification, the tender and contract documentation need to form the basis of a legally binding contract. By 10 October, a very acceptable offer had been made to East Sussex health authority. I understand that the tenderer signed a confidentiality agreement to carry out due diligence, but I am told that it did not sign a legally binding contract. Staff tell me that they received no information about the winning bidder, and had to find out about the company from its website. I am not naming names because the company has now withdrawn.

However, when a company representative went to HSA to meet the staff, it was not to discuss the due diligence subjects of finance and legal obligations, but to find out about the services provided by HSA—a subject about which anyone would reasonably have thought that the company already knew, having made what should have been a legally binding offer, subject only to due diligence.

At a further meeting, a partner or client company of the official bidder also visited HSA premises. Staff report that this second team had no clear knowledge either of the organisation or the product that it was buying. Somewhat unsurprisingly, on Christmas eve the offer was withdrawn. I understand that the ESHA is now trying to resurrect the interest of the other two bidders who had submitted tenders. However, if none is forthcoming, HSA faces closure at the end of March.

I am sure that those who have taken part in the tortuous process that I have outlined have acted with the highest possible motives. I may disagree with the attitude of the East Sussex health authority towards consultation with customers and staff; that is a matter of judgment, but it seems sensible to have those two important groups on board when efforts are being made to dispose of an organisation in which they have a direct and clear interest.

I have deliberately kept my comments to a bare outline. However, while the process was continuing I raised my concerns with Ministers by parliamentary questions, both written and oral. Most recently, I wrote to the previous Minister of State. I sent copies of that letter to the head of the National Health Service Executive, Sir Alan Langlands, the National Audit Office, the Audit Commission and the chief executive of the East Sussex health authority. Other than brief acknowledgements I have received no replies.

If any hon. Member had shown the slightest interest in even the smallest frog in the NHS pool, I would have expected that to cause someone somewhere to instigate full inquiries encompassing all the players in the small drama that is the subject of the debate. My concern remains to save the work that has been done, is being done and requires to be done. We all wish there to be higher standards in the NHS.

I hope that a home can be found for the work that has been done. HSA standards fall neatly into the role of clinical excellence and the development of assurance within the NHS. The voluntary work done by so many throughout the NHS, including senior consultants from many different hospitals, the people they treat throughout the country and the staff who are involved, including porters, ambulance men, nurses, administrators and managers, should not be thrown away. I include anyone who has even in the slightest been affected by the work that has been going on and the work that has been studied. The involvement of all those concerned should not be devalued.

I urge the Minister to seek a solution that would allow everyone who uses our health service to benefit from the assurance that the work of HSA to raise standards will continue in one form or another.

1.13 pm
The Minister of State, Department of Health (Mr. John Denham)

I congratulate the hon. Member for Beckenham (Mrs. Lait) on having secured the debate. I am grateful to her for her kind remarks at the beginning of her speech. I know that this is an area in which she has continued to take a great interest since she became the Member for Beckenham. I pay tribute also to my hon. Friend the Member for Hastings and Rye (Mr. Foster), who has written on several occasions on the future of Health Services Accreditation, which is located, as the hon. Lady has recognised, in his constituency.

I shall take, first, the national picture. Quality in the NHS is a subject which the Government take extremely seriously. Quality improvement is a central plank of the programme for modernising the NHS. That was set out in the White Paper "The New NHS" in December 1997. Last summer, as a follow-up to the White Paper, we published our consultation document entitled "A First Class Service: Quality in the new NHS". This document set out a three-pronged strategy to support the delivery of more consistent and higher quality care to patients. The main elements of that strategy are as follows: first, clear national standards for services and treatments through national service frameworks and a new national institute for clinical excellence; secondly, local delivery of high-quality health care through clinical governance underpinned by modernised professional self-regulation and extended lifelong learning for health professionals; thirdly, effective monitoring of progress through a new commission for health improvement, an NHS performance assessment framework and a new national survey of patient and user experience.

We shall shortly be publishing feedback on the results of that consultation exercise, but overall the reaction of the more than 600 respondents was overwhelmingly positive. It has demonstrated strong support both for our overall aim of driving up quality standards in the NHS and for the specific proposals that we have put forward to help to achieve that.

The House will be well aware that the Queen's Speech set out the Government's intention to bring forward legislation to establish the new commission for health improvement and to create a new statutory duty of quality for NHS organisations. Regulations will also be laid shortly for the establishment of the national institute for clinical excellence as a special health authority.

The Government have sent a clear signal that we are committed to putting quality of care back at the heart of the NHS, and we are putting in place a national framework to support and monitor that process. Locally, however, it must be for NHS organisations themselves to choose which of the range of quality improvement tools that are now available—including various accreditation mechanisms—they use to help them improve their services.

I shall now take up some of the points made by the hon. Member for Beckenham. The hon. Lady has recognised that I am fairly new in my present position. However, I shall ascertain whether there is outstanding correspondence from her and from my hon. Friend the Member for Hastings and Rye and endeavour to reply to it as swiftly as possible.

Before I turn to Health Services Accreditation, I shall refer to Health Quality Service, which was mentioned by the hon. Lady. It is a new organisation which was launched last year by the King's Fund. Essentially, it offers consultancy support to health service organisations on quality improvement, quality assurance and service development, building on the work of the well-established King's Fund organisational audit process.

It appears that HSA's sponsoring health authorities feel that the impression was given at the HQS launch that HQS has absorbed HSA. There may be a misconception that HQS is a formal part of the Government's NHS quality improvement strategy, perhaps arising from press reporting of the launch, and that it has been unfairly singled out for support. That is not the case. The King's Fund and HQS are independent of the Government. In the speech that my right hon. Friend Baroness Jay made at the launch of the new organisation, she was careful to emphasise that local services must be able to explore and adopt those methods and resources that best fit their needs. As was the case with the King's Fund organisational audit, NHS organisations that enter into arrangements with the new HQS will do so on their own initiative.

As the hon. Member for Beckenham has outlined, HSA is a ground-breaking organisation which was originally set up by the South East Thames regional health authority as a mechanism for maintaining and improving quality in the NHS. It operates by developing standards for particular services using multi-disciplinary working to help develop these standards and accreditation instruments to assess whether they have been achieved. In 1996, when regional health authorities were disbanded, local health authorities in the then South Thames region took over responsibility for HSA. The task of managing it fell to the East Sussex, Brighton and Hove health authority, and it has invested a considerable amount of both management effort and resources to ensure HSA's continued existence.

Over time, HSA developed an income stream by selling its accreditation process to trusts and health authorities throughout the United Kingdom, but it has needed an income guarantee to ensure that it could carry out its work effectively. That was provided by local health authorities within the South Thames region.

However, with HSA's increasingly nationwide focus, the local health authorities did not consider it appropriate to continue to fund and underwrite HSA. Accordingly, with HSA's agreement, the decision was taken for its transfer out of the public sector to another, more appropriate organisation. That has, understandably, caused concern not only to hon. Members, but to those currently working for HSA and some members of the working groups who helped to develop standards.

We recognise and understand those concerns. That is why, when it was decided that the transfer was the appropriate way forward, a firm timetable was agreed and an evaluation panel was set up to ensure that there was the utmost propriety and that all interested parties received equal treatment. That reflected the guidance set out in the health services guidelines, "NHS Trading Agencies: Future Arrangements", a copy of which is available in the Library. It was also important for the panel to ensure that the NHS maximises the value of the techniques that HSA has worked to develop over the past few years—work that was undertaken voluntarily by a considerable number of clinicians and others in the NHS.

As regards consultation, I understand that the health authority wrote to all customers and contributors on 7 May last year advising them of the planned disposal, and that there was ample opportunity to respond to the health authority expressing views about HSA's disposal.

Mrs. Lait

I have seen a copy of that letter. It informed people that HSA was up for disposal—stop and end.

Mr. Denham

I shall look into that point again, but, given the time scale that evolved, people who might have been concerned about the disposal could certainly have expressed their views on the consequences of that disposal.

In line with the timetable set for the transfer, formal proposals were received and, initially, 32 organisations asked for information packs. Five organisations subsequently expressed an interest in taking over HSA. Of those, three were shortlisted and invited to tender through a formal tendering process. All three were assessed by the panel, which considered one to be unsuitable. In accordance with standing instructions, an offer was made to the preferred bidder of the remaining two—a consortium outside the NHS—to proceed to due diligence. Sadly, during this stage, just before Christmas, the consortium withdrew its bid.

Following that withdrawal, there seem to be four options. The preferred option is to find another appropriate organisation that will take on HSA. The East Sussex, Brighton and Hove health authority wasted no time and, as soon as possible, entered into discussion with one of the other bidders. I understand that that organisation has written to the health authority today outlining its decision on whether to proceed, and that the health authority is considering its response. That is the current position, but it is probably appropriate to review the other options that have been suggested at various times.

The second option, which I believe was proposed by the hon. Member for Beckenham, is for the Department of Health to absorb HSA into one of the two new bodies that we are creating, the national institute for clinical excellence or the commission for health improvement. I understand why the suggestion was made, but I have strong reservations about that course. Neither NICE nor the commission are intended to be accrediting bodies, and both will need to develop their own ways of working that best fit the purposes for which they were established. I am not convinced that either could comfortably absorb HSA.

The third option, which I believe was suggested by my hon. Friend the Member for Hastings and Rye, is for the Department of Health to take on the role of supporting HSA. Again, I am not convinced that that would be an appropriate course. Several other players are active in providing quality assurance and improvement services to the NHS. Indeed, it is worth noting that when the South Eastern regional health authority was abolished, a consortium of local health authorities was seen as performing that function more appropriately than the Department of Health. It is to the health authorities great credit that they continued to support HSA beyond the terms of their original commitment.

The fourth and least attractive option for everyone concerned, including those working for the organisation, is for HSA in its present form to wind up. I understand those concerns. I know that the local health authority and the NHS executive will do all that they can to find an appropriate home before that happens.

I am sorry that I cannot give more reassurances today to the hon. Lady and my hon. Friend. I can, however, reassure them on a number of points. First, the Government are committed to doing all that they can to drive and support improvements in the quality of clinical care in the NHS. To that end, we are putting in place a comprehensive national package of measures. The work carried out by HSA and other organisations in the area of quality improvement provides a range of options that the NHS can use in helping to improve and assure quality.

Secondly, we do not see a conflict between our proposals for quality improvement and the continued existence of free-standing, self-financing accreditation schemes. Indeed, the renewed focus on service quality should give NHS organisations an even stronger incentive to examine ways in which they assure themselves and their patients of the standard of services provided.

Thirdly, we believe that decisions on the use of particular quality improvement tools are, in general, best taken by services themselves, drawing on the range of products available. As I stated earlier, there was little in the response to "A First Class Service" that would lead us to alter that view.

Fourthly, the hon. Lady did not make any allegations about the process, but raised concerns about it. The NHS Executive has looked into the transfer process which, in its view, is robust, with all information being shared equally. There is little scope for undue influence or conflicts of interest to arise.

I am aware that the hon. Lady has written to the Comptroller and Auditor General expressing her concerns about the transfer process, and that those concerns are being investigated. Under the National Audit Act 1983, the National Audit Office has a responsibility to ensure that public money is spent wisely and properly. One aspect is to determine whether good value for money has been achieved when public assets are sold. I can assure the hon. Lady that both the Department and the East Sussex, Brighton and Hove health authority will provide every assistance to help the National Audit Office with any investigations.

Finally, the health authority has put in a considerable amount of both management effort and resources to ensure HSA's continued existence. The authority will happily discuss the transfer with hon. Members and will continue to do all that it can to transfer HSA out of the public sector to the best advantage of the NHS.