HL Deb 09 November 1992 vol 540 cc40-50

5.2 p.m.

The Countess of Mar rose to move, That an humble Address be presented to Her Majesty praying that the orders be annulled.

The noble Countess said: My Lords, in view of the obscurity of meaning to the Motion on the Order Paper, I feel that I should explain that it relates to a merger which took place on 1st October 1992 between Kidderminster and District Health Authority and Bromsgrove and Redditch District Health Authority.

The Secretary of State for Health, in a statement quoted in the Health Service Journal of 18th June 1992, said about the future structure of the National Health Service: But I want to make clear that my general approach is that any further change should be with the grain".

Ministers were happy for health authorities to merge if they had local support. I believe that the noble Baroness the Minister is of the same mind.

Sir James Ackers, chairman of the West Midlands Regional Health Authority, and Mr. E. M. Nock, assistant managing director of that authority, in their minutes of 21st November 1991, stressed that the RHA were not seeking to instigate mergers. They were, however, happy to support them in circumstances where the districts concerned had themselves agreed that it would be in the best interests of both authorities and their respective populations".

In the next paragraph of those minutes Mr. Nock is reported to have said that, a year ago the two authorities had agreed to an integrated working relationship under which they had one chief executive and one director of purchasing. The benefits, including cost benefits, were felt to be such that both authorities had agreed that to achieve the full benefits a formal merger should now take place

There is a great deal of evidence available which shows that neither the Kidderminster and District Health Authority nor the population of Kidderminster asked for or wanted that merger, and yet it took place on 1st October 1992.

The matter was first raised at a seminar on 1st November 1991 on an entirely different topic for members of the Kidderminster DHA, apparently without notice. Only 30 minutes were allocated for discussion. On 31st October 1991 a non-executive member of the authority wrote: I am concerned that we have not been presented with an appraisal of all the options which would enable the non-executive members to make a decision".

He went on to say: and in any case such information as we have received regarding this"— the merger proposal— suggests that the principal objective is to reduce the number of bodies with which the regional health authority has to negotiate. I see no reason to move towards a merger for the administrative convenience of the RHA"— and— it feels that the merger issue is being driven by other imperatives and imposed upon us rather than being our own initiative".

He went on to list a number of problems in formally merging with Bromsgrove and Redditch DHA. I have already made some of these known to the Minister in a letter I wrote to her early in July.

A consultation paper was issued to a number of interested bodies. Without exception all those consulted in the Kidderminster district objected to the proposals for the merger. These included all the local authorities, the district medical advisory committees, the local medical committee, the general practitioner associations, the community health councils, the district nursing advisory committee and the trade unions and staff associations. At a meeting of the Kidderminster DHA on 27th February 1992 it was resolved that, The authority's formal response to the West Midlands Regional Health Authority consultation document be as follows: In view of the current uncertainties, and the many views which have been expressed, the authority agrees that further consideration of a possible merger between Kidderminster and District Health Authority and Bromsgrove and Redditch Health Authority should be deferred".

And significantly: Kidderminster and District Health Authority indicates its preference for a local Kidderminster-based purchasing authority".

The report of the outcome of the consultation was produced in a document on 19th March 1992. Incredibly, the responses were described as showing a fairly even spread, when in fact nine out of 34 positive responses came from four MPs, one MEP, Bromsgrove and Redditch District Health Authority and five other unrelated health authorities, the Hereford and Worcester Family Health Service Authority and Bromsgrove and Redditch District Nursing Advisory Committee. Of five listed as being inconclusive four were definitely against the merger. As a result of this report the regional health authority was recommended to resolve:

"That the Secretary of State be requested to approve the merger of the existing Bromsgrove and Redditch and Kidderminster and District Health Authorities into a single health authority to be known as the North Worcestershire Health Authority with effect from 1st October 1992".

This resolution was passed on 21st May 1992.

I believe that the people of Kidderminster have had an extremely raw deal. They were consulted, but the outcome of that consultation has been totally ignored. They have bitter memories of the period prior to 1974 when Bromsgrove unilaterally decided that it would no longer take Kidderminster maternity cases. Relationships were bad then, and knowing both areas as well as I do, I can see no reason why they should be any different now or in the future. Kidderminster has a very small physical boundary with Bromsgrove and Redditch, transport facilities are very poor and there is no community of interest.

Kidderminster and District Health Authority is well managed. In fact it was described in another place as being one of the 30 best in the country. The parlous state of the finances of the Bromsgrove and Redditch Health Authority is no secret. It is not surprising that Kidderminster feels that it will not be treated fairly. This would seem to be demonstrated by the appointment of the non-executive members to the new North Worcestershire Health Authority. The two members for Bromsgrove and Redditch were members of the previous authority, while the two appointed for Kidderminster and District have no previous health service experience. The chairman of the new authority was chairman of the Kidderminster and District Health Authority. It was by his casting vote that an amendment completely to withdraw from the merger was defeated. Incidentally, two executive members voted against that amendment without declaring an interest.

Originally, the merger was expected to give financial savings of £250,000 a year. That sum was soon reduced to £100,000. In response to a letter from the GP adviser to the authority, on 15th June 1992 the chairman of Kidderminster and District Health Authority, wrote: However, I would not expect significant changes in the current level of costs because, as has often been said, the management arrangements of the two health authorities have already been merged".

Kidderminster and District Health Authority was never given the opportunity to discuss alternatives to the merger. There is considerably more community of interest between that health authority and those of Dudley, with which it was already working, and Worcester. The authority felt that it might have had a fairer deal if there had been a merger with Worcester, Bromsgrove and Redditch and itself; but, though the question of alternatives was raised at meetings, they were never allowed to be discussed.

Letters to the chairman of the Kidderminster and District Health Authority, the chairman and the assistant managing director of the West Midlands Regional Health Authority and the Secretary of State remain unanswered or have been ineffectively answered to this day. Some were not even acknowledged. Is that really the way the consultation process should be conducted?

I am praying that the orders be annulled because there is no indication whatever that the correct procedures have been followed. The words of the Secretary of State and the chairman of the West Midlands Regional Health Authority have a nasty hollow ring when they talk about the wishes of people in the locality. A director of public health for Stockport—incidentally, Kidderminster is to lose its public health director—Dr. Stephen Watkins is reported in the British Medical Journal of 17th October 1992 to have said: We are being intimidated into accepting proposals for merging district health authorities".

Is Kidderminster merely one of many? What is the policy of the Government? Why are they disregarding the wishes of the people directly concerned when they and their appointees have repeatedly said that those wishes would be paramount? The new arrangements are of no apparent benefit to the people of Kidderminster. The hospitals are so far apart that there is unlikely to be any joint use of them. We have already heard that there are unlikely to be any savings. The suspicion is that Bromsgrove and Redditch will be the main beneficiaries and the suspicion has also been expressed to me that the managers and the chairman of the larger authority will not suffer either.

I am hoping that the noble Baroness will be able to explain the real reason for the merger, and that she will be able to assure me that no other mergers will take place in the face of such strong public opposition.

Moved, That an humble Address be presented to Her Majesty praying that the orders be annulled—(The Countess of Mar.)

5.12 p.m.

Lord Carter

My Lords, The House will be most grateful to the noble Countess, Lady Mar, for drawing our attention to the matter and for covering the ground so well. It means that I can be brief. I am afraid that this is much more of a post-mortem than a prayer to annul because, as we know, the merger has actually taken place. It seems to be a good example of how not to conduct such an operation. It seems to have happened extremely quickly and the consultation, or lack of it, is I believe the prime cause of the concern expressed by so many local people. It appears that the motion for the merger was moved at a seminar rather than in a properly constituted meeting. I shall be interested to hear the Minister's comment on that aspect. The main reason for the merger is not clear; it has never been properly explained. Was it cash savings? Was it administrative convenience for the regional health authority, or what? There have been conflicting answers as to the reason for the merger. So, again, it would be helpful if the Minister could clarify the matter.

As we have heard, it was strongly felt to be an imposed decision with very little account being taken of local feelings and responses. Can the Minister say what was the consultation process; for example, who was consulted, how were they consulted and have the responses been published? There is a peculiar matter upon which I should appreciate some enlightenment. Although the merger is to be effective from 1st October of this year, it is to be reviewed at the end of the year after three months. I find that hard to understand, but perhaps I misunderstood the point. It would be helpful if the Minister could explain the position. I understand that it may be that the intention is to see whether there have been any cash savings. Various figures have been quoted in this respect throughout the procedure starting, I believe, with a figure of £250,000, which was then reduced to £100,000 and now there is the hint that there will be no cash savings at all. Can the Minister say what will happen if no cash savings are apparent at the time of the review at the end of December as regards a merger which only took place on 1st October?

As we heard, there are some question-marks over the role of the executive members and the way that their votes are cast on matters affecting their jobs. Is there machinery in place to ensure that they always declare an interest? Again, we can all certainly agree with the noble Countess when she says that there should be a community of interest between merged districts; for example, that there should be good transport links together with natural community links.

The brief from the Department of Health on the prayer headed, "Merger of Bromsgrove & Redditch and Kidderminster Districts", says: The proposal to merge was the subject of local consultation". That is a statement of fact. Can the Minister say whether it is correct that only nine out of the 34 organisations consulted actually supported the merger? In his 1991 annual report the chief medical officer of health of the department referred to the difficulties for public health doctors when health authorities merged to strengthen their purchasing function: they were less able to respond to the needs of small local populations. He also said that if all mergers were being pushed through with the minimum of opposition then the battle was lost. As I said earlier, there is something of a mystery about the reasons for the merger. I understand from the minutes of the West Midlands and Regional Health Authority on the matter that a, Mr. Nock reminded Members that financial savings of at least £100,000 would result from this". That was in May and I understand from the latest round of discussion on the matter that there is now no hint of cash savings. But at that time Mr. Nock stressed that such a saving, was not the driving force for the proposals". If the cash savings were not the driving force for the proposals, perhaps the Minister can tell us what was.

There was an excellent letter from a Dr. J. Adams, who is the GP adviser to the district health authority, to the Secretary of State on 22nd June. I understand that there has been no reply. It was pointed out to the Secretary of State that, following the decision to defer the merger on 27th February 1992, no further discussion took place at the Kidderminster and District Health Authority's meetings on the subject. In view of the stated intention of the regional health authority not to proceed with the merger without the agreement of the local authority and of the local population, it is inexplicable as to why the RHA decided to proceed with the proposal.

Dr. Adams continues in her letter to list a number of errors and misunderstandings that have arisen. She points out that the response to the 34 organisations has not been reported correctly. I referred earlier to the minutes on 21st May when financial savings of at least £100,000 were mentioned. In her letter, Dr. Adams points out that in a letter from the chairman of the Kidderminster and District Health Authority dated 15th June—that is less than a month after the minutes from the regional health authority —it is now stated that, significant changes in the level of costs are not expected". So here we have the regional health authority of 21st May saying that it expects financial savings of £100,000 and we have the chairman of the district health authority in less than a month stating that significant changes in the level of costs are not expected. I hope that the Minister will agree that there has been some confusion in the matter. I believe that the people of the district, the doctors and others who have expressed their concern are entitled to an explanation.

In conclusion, the BMA points out that doctors, campaigned…to oppose the proposed merger but, despite the overwhelming opposition to the merger from the vast majority of the medical staff at the hospitals, the general practitioners and others locally, the decision was taken for the merger to go ahead". The association expresses the concern that the projected savings—and we still do not know what they are; whether they are £250,000, £100,000 or nothing—which in fact are a very small proportion of the health authority's budget in any event, could easily be swallowed up by additional expenditure for higher graded managerial salaries and other administrative expenses". Also, as their views are ignored in the consultation process, the doctors in the two health authorities which were merged are anxious to know how the medical representation is to be affected by the merger.

Uncertainty was expressed about the new health authority's ability to provide the services which are needed and whether those services will be responsive and accessible to patients.

To sum up, this has not been at all a happy scene. It seems that there has been crass mishandling of the whole subject by the RHA. There was a lack of consultation and it seems that what little consultation took place was ignored. We hope that the Minister can enlighten the House regarding this rather sorry affair.

5.20 p.m.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege)

My Lords, the prayer against the order which brings into effect the merger between Bromsgrove and Redditch District Health Authority and Kidderminster District Health Authority provides me with a welcome opportunity to explain the Government's policy on health authority mergers and to state the reasons why we decided that this particular merger, to create the North Worcestershire District Health Authority, was in the interests of local people and their health services.

Since the introduction of the NHS reforms in 1990, 12 mergers have taken place in England involving 25 DHAs, bringing the total number of district health authorities to 177. Mergers between district health authorities are a natural and expected consequence of the NHS reforms which changed the role of DHAs and gave them an explicit responsibility for purchasing local health services. In the pre-reform days the focus of DHAs was very much on running and providing services. One of the key objectives of the new reforms was to make service management the clear responsibility of individual hospitals and community units or trusts, while at the same time giving DHAs the job of assessing the health needs of their population and purchasing appropriate health services to meet those needs.

For many DHAs the challenge of developing a new purchasing role and shedding responsibilities for service management has meant a re-assessment of resources and the way in which they do their job. Some have decided to set up purchasing consortia with neighbouring DHAs to make the best use of purchasing expertise. They recognise that two DHAs in partnership have a greater influence in commission-ing health services for their local populations than the two alone acting separately. Other DHAs have decided to go one step further and to seek approval for a formal merger on the basis that it would enable them to maximise their combined purchasing skills and contracting power. Such was the case with Bromsgrove and Redditch DHA and Kidderminster DHA, where both authorities recognised that the combination of two budgets and two sets of purchasing skills would make for more effective purchasing of health care for the people of North Worcestershire.

The Government do not have a blueprint for the number or shape of DHAs in England; our policy is to enable health authority mergers to take place where that is desired locally and where it can be shown to be the best way for those authorities to develop their role as purchasers. Although our approach to mergers is very much one of responding to changes generated by the service rather than one of pushing from the top, what is emerging from recent changes on the ground is the view that health authorities, to carry out effectively their new role as purchasers, need to be in the range of between a quarter and half a million in population size in order to be effective.

There are four main benefits to be realised from a merger: first, it can allow for a pooling of purchasing expertise and greater strength in the labour market in attracting high calibre staff. This is particularly important when it comes to attracting good public health physicians. Secondly, a merger brings economies of scale with regard to purchasing overheads and helps to save on administrative costs. Thirdly, by combining two budgets, a merger can bring considerable increased buying power and enhances the ability of a purchaser to get the best possible contracts from local providers. Fourthly, mergers can help towards better links and joint working with other agencies such as local authorities; indeed many of the mergers to date have resulted in co-terminous boundaries between health and local authorities which in turn bring benefits of a closer, more co-ordinated method of working.

Turning now to the merger of Bromsgrove and Redditch and Kidderminster Districts, I do of course recognise the natural anxieties and local loyalties which are aroused by proposals of this sort. Local commitment—"ownership", in the jargon—is vitally important in the management of the health service. The noble Countess, Lady Mar, has left us in no doubt of her strength of feeling on this aspect. But we must also consider how best to arrange provision of efficient, effective and responsive health care for local residents.

It is our judgment and that of the West Midlands Regional Health Authority that in North Worcestershire this is best achieved by bringing together these two districts and harnessing their combined strengths—a view shared by the officers of the two authorities and their chairmen. It is they who initiated a merger in order to maximise the benefits of joint working and to overcome the considerable degree of administrative and financial duplication associated with placing two sets of contracts for what had essentially become a single purchasing authority. I understand that the creation of a single authority would in this case save at least £100,000 a year from administration to be spent on direct patient care.

I was surprised that the noble Lord, Lord Carter, questioned that figure since only this afternoon it was confirmed to me yet again by the newly appointed chief executive. I think that some of the confusion may have arisen through the fact that, if the authorities had continued to operate separately and not used joint purchasing, savings would then have been made of £250,000.

Lord Carter

My Lords, I am sorry to intervene but I did not question it. It was the chairman of the Kidderminster District Health Authority—I do not have the quote with me—who said that significant cost savings were not now expected. It was not I who said it; it was the chairman.

Baroness Cumberlege

My Lords, I am assured by the chief executive, who has the day-to-day running of the organisation, that savings of £ 100,000 are expected to be made.

An essential feature of all health authority mergers is that they are subject to public consultation, and the merger between Bromsgrove and Redditch and Kidderminster DHAs generated, as we know and have heard this afternoon, a considerable debate locally and a fair degree of opposition. Most local concern focused on the perception that the merged authority would be remote and unresponsive to local needs and patients would have to travel long distances to receive hospital care.

There is no statutory requirement to consult but a reasonable expectation that there should be consultation. I understand that in the National Health Service and Community Care Act 1990 there is no statutory requirement, but in this case consultation was carried out over a period of three months between 1st December 1991 and the end of February 1992. Thirty-four organisations were invited to comment, of which 11 opposed and 23 supported, did not respond or gave an inconclusive reply. Eight others offered their views, six were against and two in favour. I can assure noble Lords that we did not ignore local views but weighed up the responses and balanced them against the need for better management arrangements in order to purchase the best possible health care for the people in the two districts.

There is no evidence to suggest that larger DHAs are less sensitive to the differing needs of people in various neighbourhoods; indeed a greater focus on purchasing based on small communities is entirely compatible with a larger district and can be achieved at the same time. In the cases of Bromsgrove and Redditch DHA and Kidderminster DHA, both districts had since the reforms were introduced taken a lead in setting up pilot systems to ensure that purchasing decisions were sensitive to local needs—usually by focusing decisions on areas covering groups of GP practices. It is the intention of the North Worcestershire authority to extend this work so that there is even greater locality-based purchasing than in the past. The Government attach great importance to sensitive purchasing, and in approving the merger the Secretary of State specifically requested that the newly merged DHA be encouraged to continue its work on this front. I also understand from the chief executive this afternoon that the authority plans to increase its use of local hospitals rather than the reverse. That intention is published in the authority's purchasing plan for next year.

I think it is fair to say that of the responses to the consultation on this merger the most vocal concerns that we heard were from people in Kidderminster who feared that they might be disadvantaged by the merger. I hope that what I have already said about the new authority's commitment to local communities will be a clear signal that this is by no means a retrograde step for Kidderminster; indeed, health care for the people of the former Kidderminster DHA will benefit from the merger, precisely because the new authority will be able to get better value for its contracts and its purchasing decisions will be based on more reliable public health data than could have been the case for an authority with so small a population base. The chairman of the new authority, Mr. Malcolm Cooper, was formerly chairman of Kidderminster DHA, and —I take up the points made by the noble Countess —I understand that three of the five non-executive directors live within the boundaries of the former Kidderminster district; that surely is a signal that the interests of the people of Kidderminster will be fairly served.

In its approval of the merger the West Midlands Regional Health Authority agreed that the two existing community health councils should continue in their respective roles. CHCs have a vital part to play in keeping local health authorities informed of consumer views and future aspirations and I know that the new North Worcestershire Health Authority places great store by its relationship with the Kidderminster and Bromsgrove CHCs.

The noble Lord, Lord Carter, asked what the benefits of mergers were. I mentioned earlier that DHA mergers can bring benefits in terms of closer working between health and other authorities, and this merger is no exception, for while it has not created entirely common boundaries it has enabled working relationships to be streamlined and for duplication to be minimised. The local family health services authority covers the whole of Hereford and Worcester and I know that the creation of a merged authority in North Worcestershire has considerably helped to improve working relationships. There is now a plan to set up a joint commissioning forum between the family health services authority and the district health authorities in the area. This will have obvious benefits for primary care and community health services.

The local county council embraces the whole of Hereford and Worcester and the new DHA of North Worcestershire will cover the same area as one of the intended new areas for the county's social services department. This should result in improved inter-agency working on community care which is especially important at this time when authorities have to work so closely together to ensure that elderly and vulnerable people get the health and social care most appropriate to their needs.

In conclusion I have outlined the benefits of a merger between Bromsgrove, and Redditch DHA and Kidderminster DHA in the context of government policy on the new and changing role of DHAs as purchasers. This merger is an essential response to the change which gives service management responsibility directly to hospitals and community units. Despite the current unease, it is a change which will, I feel, over time bring considerable benefits to the future health care of the people who live in the towns and villages of North Worcestershire.

Lord Carter

My Lords, I am not sure whether I missed the point I am about to refer to. Did the Minister explain the rather curious point about the merger on 1st October which is to be reviewed on 31st December? I am not sure that the Minister mentioned that point when she replied.

Baroness Cumberlege

My Lords, I understand that that was a decision reached in order to go out to consultation. The final decision was obviously reached after consultation when everybody's views had been taken into account. That was carried out in a formal meeting.

The Countess of Mar

My Lords, I am grateful to the Minister for her reply. But I am not entirely happy about this business of consultation. Why is it that Ministers and executives of the various authorities place so much importance on consulting with the local community and then take an "Auntie knows best" attitude? It is as if they are saying, "We might have asked your opinion, but I am sure that our opinion is better". Would it not be better to say, "We know anyway what we are going to do"? In fact this merger was reported to be on its way in the House of Commons Hansard of 15th June of this year. Obviously it was a fait accompli regardless of what anyone said.

The Kidderminster and District Health Authority merged its purchasing nearly two years ago, but the motion to defer the complete merger asked that its purchasing should be separated from that of Bromsgrove and Redditch. No account was taken of that request and no reply has ever been given to it. The district health authority is not happy about that. I have with me a letter from the chairman of the district health authority in which he says there are not expected to be any changes in the current costs. If the Minister wishes to see that letter after this debate I shall be happy to show it to her. Apparently no economies are to be made. As I have said, the buying power was already put in place by the merger of the two health authorities' purchasing facilities some two years ago. There is no community of interest between Bromsgrove and Redditch and Kidderminster. In all the social and charity work I have done I have never been able to get the two communities to work together. They have a far greater community of interest with Worcester and Dudley, as I have said.

As regards the newly appointed members of the newly formed North Worcestershire Health Authority, admittedly there are two from the Kidderminster and District Health Authority but they have no experience, whereas both the members of the Bromsgrove representation have previous experience as members of the authority.

I was pleased to hear what the noble Baroness said about community care as I am keenly concerned with that. I realise that the boundaries of the Hereford and Worcester Social Services Department will coincide with those of the new authority. That, as far as I can see, is the only benefit to be gained from the measure. In view of the fact that this measure is already a fait accompli, I have no intention of dividing the House. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.