Corporate Governance (Hansard, 12 July 1993)

Mrs. Bottomley

The public must have confidence in the way in which the business of their public services is conducted. As both citizens and taxpayers, individuals have a right to expect that those who use their money to provide services carry out their jobs with responsibility and honesty and to the highest possible standards. I have every confidence that most national health service work is384W conducted in such a fashion. Indeed, the Audit Commission—which, since this Government extended its remit in 1990, has carried out independent and external scrutiny of the NHS—has reported that the overall financial management of all NHS activities has shown a significant and welcome improvement.

In an organisation the size and complexity of the NHS, there can never be any room for complacency. As one or two well-publicised cases have shown, the NHS is not immune from lapses in management standards. We have acted decisively in light of these reports. Sir Duncan Nichol, chief executive of the national health service, has issued guidance to the service on the "Standards of Business Conduct" which places obligations on NHS employers as well as management and staff, and set out our expectations of their integrity and professionalism.

We need to consider, however, what more can be done. On 18 June, I announced that Sir Duncan has set up a task force to spearhead an urgent review of the current guidance to the NHS on corporate governance. The task force will report to the NHS management executive by 31 December 1993. Its findings will help strengthen the existing system of non-executive oversight which is already an important feature of the NHS and a valuable pillar in upholding high public service standards in the health service.

The task force's terms of reference are published today: To consider, in the light of the recommendations of the Cadbury report and good practice in NHS organisations, the following aspects of corporate governance in the NHS: how standards of public business and public service values in the NHS may be reinforced; how the role and functions of chairmen and non-executive directors may be matched with their part-time commitment; improvements in the arrangements for induction and training of chairmen, non-executives and boards as a whole; the role, responsibilities and functions of non-executive directors of health authorities and NHS Trusts in matters of finance and audit. Membership Corporate governance in the NHS—Steering Group Membership John Shaw (Chairman), Director of Corporate Affairs: NHSME Jonathan Charkham, Adviser to the Governors: Bank of England (retired) Mavis Foden, Chairman: Walsall Hospitals NHS Trust Rennie Fritchie¹, Chairman: South Western RHA Sir Bruce Martin QC¹, Chairman: North Western RHA David Hunter, Director: Nuffield Institute, Leeds University Ken Jarrold¹, RGM: Wessex Regional Health Authority Barbara Stocking¹, RGM: Oxford Regional Health Authority Dr. Martin McNichol¹, Chairman: Central Middlesex NHS Trust and NHS Trust Federation William Wells¹, Chairman: Royal Free Hampstead NHS Trust Anthony Merifield, Head of Public Appointments: Cabinet Office Elspeth Metcalfe¹, Chairman: Hereford and Worcester FHSA, Non-executive Director West Midlands RHA Zahida Manzoor¹, Chairman: Bradford HA Ray Rowden, Director: IHSM Michael Schofield, Chairman: Bradford Community Health NHS Trust, Deputy Chairman NAHAT Chris West¹, General Manager: Portsmouth and SE Hampshire HA, Member of the Audit Commission John Sherring¹, Regional Director: West Midlands Audit Commission Dr. Donald Irvine, GP Fundholder: Ashington, Northumberland 385W An official from each of:

Corporate Affairs Directorate NHSME
Finance Directorate NHSME
Performance Management Directorate NHSME
¹ Members working in partnership.

Working Groups: Chaired by Sir Bryan Askew, Chairman, Yorkshire Regional Health Authority The reinforcement of public service values in the NHS. Chaired by Dr. Stuart Burgess, Chairman, Oxford Regional Health Authority Matching the role and functions of chairmen and non-executive directors with their part-time commitment. Chaired by Mr. Michael Marchment, Chief Executive, Premier Health NHS Trust The induction and training of chairmen, non-executive directors and Boards as a whole. Chaired by Mr. Ken Punt, Senior Fellow and Head of Centre for Healthcare Financial Management, Health Services Management Unit, Manchester The role of non-executive directors in finance and audit. Time Scale The task force will report to the NHS management executive by 31 December 1993.