HL Deb 20 May 2004 vol 661 cc37-40WS
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 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.

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. 1. † CHI—Commission for Health Improvement
  2. 2. CPPIH—Commission for Patient & Public Involvement in Health
  3. 3. CRHP—Council for the Regulation of Health Care Professionals
  4. 4. † DPB—Dental Practice Board
  5. 5. DVTA—Dental Vocational Training Authority
  6. 6. FHSAA—Family Health Services Appeals Authority
  7. 7. GSCC—General Social Care Council
  8. 8. HDA—Health Development Agency
  9. 9. HFEA—Human Fertilisation & Embryology Authority
  10. 10. HPA—Health Protection Agency
  11. 11. † MHAC—Mental Health Act Commission
  12. 12. MHRA—Medicines & Healthcare products Regulatory Authority
  13. 13. NBA—National Blood Authority
  14. 14. NBSB—National Biological Standards Board
  15. 15. † NCSC—National Care Standards Commission
  16. 16. NCAA—National Clinical Assessment Authority
  17. 17. NHSAC—NHS Appointments Commission
  18. 18. NHS CFSMS—NHS Counter Fraud & Security Management Service
    19. WS40
  19. 19. NHS Direct
  20. 20. NHS Estates
  21. 21. NHS IA—NHS Information Authority
  22. 22. NHS LA—NHS Litigation Authority
  23. 23. NHS Logistics Authority
  24. 24. NHS Modernisation Agency
  25. 25. NHS PASA—NHS Purchasing & Supplies Authority
  26. 26. NHS PA—NHS Pensions Agency
  27. 27. NHS Professionals
  28. 28. NHSU
  29. 29. NICE—National Institute for Clinical Excellence
  30. 30. NPSA—National Patients Safety Agency
  31. 31.† NRPB—National Radiological Protection Board
  32. 32. NTA—National Treatment Agency for Substance Misuse
  33. 33. OIR—Office of the Independent Regulator of NHS Foundation Trusts
  34. 34. † PHLS—Public Health Laboratory Service
  35. 35. PMETB—Postgraduate Medical Education & Training Board
  36. 36. PPA—Prescriptions Pricing Authority
  37. 37. † ROC—Retained Organs Commission
  38. 38. UKT—UK Transplant

† These separate organisations have now gone or are planned to go.

OTHERS COVERED BY THE REVIEW

These are now operational:

  1. 39. CHAI—Commission for Health Care Audit & Inspection
  2. 40. CSCI—Commission for Social Care Inspection

These are planned hut not yet operational:

  1. 41. Dental Special Health Authority
  2. 42. HTA—Human Tissue Authority