§ The Parliamentary Under-Secretary of State, Department of Health (Lord Warner)
My right honourable friend the Secretary of State for Health has made the following Written Ministerial Statement today.
On 30 October, I announced to the Health Committee that the department would be conducting a review of its arm's length bodies (ALBs). The first stage of this has now been completed. I wanted to update the House on the decisions that I have taken and how the review will move forward to the next stage.
In his Budget speech, my right honourable friend the Chancellor of the Exchequer remarked on the importance that the Government attach to improving public sector efficiency and reducing bureaucracy. In the Budget report, he set out that "the pursuit of efficiency also includes reducing bureaucracy, which both cuts 38WS headquarters' administration costs and frees up time of front-line professionals to respond better to the needs of their customers". The department's ALB review needs to be seen in this context and related to the work of Sir Peter Gershon in reviewing public sector efficiency. It is about putting the front line first, and it is clear from the first stage of the ALB review that, although much good work continues to be done by ALBs, there is considerable scope for improving efficiency and reducing bureaucracy.
The review covers bodies undertaking national functions sponsored by the department that were in existence or in the pipeline in 2003–04. The 42 ALBs included in the review are listed below. In a full year, ALBs spend more than £2.5 billion and employ more than 22,000 staff. If left unchanged, they would employ about 10 times the number of staff of the department itself after completion of its change programme. It is clear from the analysis we have done during the first stage of the review that:
- there are overlapping and duplicated functions;
- there is scope for reducing unnecessary regulatory and policy activities;
- back-office functions such as human resources, finance, information technology and estates could be carried out more effectively;
- a considerable number of bodies could be merged, thereby reducing overheads and integrating like functions;
- some bodies could be moved to a more independent status with greater stakeholder control; and
- there is scope for significant efficiency and productivity gains particularly in the area of services acquired centrally for the National Health Service.
The ALB sector has grown over several decades and, as currently constituted, does not best meet the health and social care needs of today and tomorrow. I have therefore asked my department to take forward with the sector a reform agenda that delivers the following objectives:
- maximum devolution of responsibility to frontline NHS and social care;
- improved efficiency across the sector with minimal bureaucratic overhead;
- closer working across the boundaries between health and social care; and
- minimised burden of inspection and regulation on health and social care services without reduced effectiveness.
These objectives are aimed at putting the front line first and improving services for the public while ensuring value for public money.39WS
In light of preliminary findings of the first stage, I have set the parameters for the next stage of this review. These are, against a baseline year of 2003–04:
- a 50 per cent reduction in the number of ALBs;
- a saving in expenditure by ALBs of £0.5 billion by 2007–08; and
- a reduction in posts of 25 per cent in the same period.
Changes on this scale will enable considerable extra resources to be redeployed to the front line. For example, another £0.5 billion would provide for four new hospitals, or 20,000 more nurses, or 6,250 consultants, or 7,500 general practitioners.
I recognise that the changes in prospect will cause uncertainty and disruption, but they are needed. I intend for the next stage of the review to be completed as quickly as possible, within my parameters, and taking into account the need for proper discussion with the ALBs concerned and the devolved administrations. The department will be in touch with ALB chairs and chief executives shortly to discuss our ideas for change. We want to work with them on the detail of our proposals over the next two months. We are hoping to complete this next stage by the end of June so that decisions can be announced before the summer recess.
LIST OF ALBs CONSIDERED IN THE REVIEW
ALBs in 2003–04
- 1. † CHI—Commission for Health Improvement
- 2. CPPIH—Commission for Patient & Public Involvement in Health
- 3. CRHP—Council for the Regulation of Health Care Professionals
- 4. † DPB—Dental Practice Board
- 5. DVTA—Dental Vocational Training Authority
- 6. FHSAA—Family Health Services Appeals Authority
- 7. GSCC—General Social Care Council
- 8. HDA—Health Development Agency
- 9. HFEA—Human Fertilisation & Embryology Authority
- 10. HPA—Health Protection Agency
- 11. † MHAC—Mental Health Act Commission
- 12. MHRA—Medicines & Healthcare products Regulatory Authority
- 13. NBA—National Blood Authority
- 14. NBSB—National Biological Standards Board
- 15. † NCSC—National Care Standards Commission
- 16. NCAA—National Clinical Assessment Authority
- 17. NHSAC—NHS Appointments Commission
- 18. NHS CFSMS—NHS Counter Fraud & Security Management Service
- 19. NHS Direct
- 20. NHS Estates
- 21. NHS IA—NHS Information Authority
- 22. NHS LA—NHS Litigation Authority
- 23. NHS Logistics Authority
- 24. NHS Modernisation Agency
- 25. NHS PASA—NHS Purchasing & Supplies Authority
- 26. NHS PA—NHS Pensions Agency
- 27. NHS Professionals
- 28. NHSU
- 29. NICE—National Institute for Clinical Excellence
- 30. NPSA—National Patients Safety Agency
- 31.† NRPB—National Radiological Protection Board
- 32. NTA—National Treatment Agency for Substance Misuse
- 33. OIR—Office of the Independent Regulator of NHS Foundation Trusts
- 34. † PHLS—Public Health Laboratory Service
- 35. PMETB—Postgraduate Medical Education & Training Board
- 36. PPA—Prescriptions Pricing Authority
- 37. † ROC—Retained Organs Commission
- 38. UKT—UK Transplant
† These separate organisations have now gone or are planned to go.
OTHERS COVERED BY THE REVIEW
These are now operational:
- 39. CHAI—Commission for Health Care Audit & Inspection
- 40. CSCI—Commission for Social Care Inspection
These are planned hut not yet operational:
- 41. Dental Special Health Authority
- 42. HTA—Human Tissue Authority